Exhibit 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
the 1st day of December, 2001, by and between MetaSolv Software, Inc., a
Delaware corporation (the "Employer"), and T. Xxxxxx Xxxxxx (the "Executive").
RECITALS
A. The Employer desires that the Executive continue to provide
services for the benefit of the Employer and its affiliates and the Executive
desires to continue such employment with the Employer.
B. The Employer and the Executive acknowledge that the Executive is
and will continue to be a member of the senior management team of the Employer
and, as such, will participate in implementing the Employer's business plan.
C. The Employer recognizes that the changing economic market can
distract its key management personnel from maintaining a long term vision for
the Employer.
D. The Employer has determined that it is essential and in the best
interest of the Employer and its stockholders to retain the services of the
Executive and to ensure his continued dedication and efforts in a changing
global economic environment.
E. In order to induce the Executive to remain in the employ of the
Employer, the Employer desires to enter into this Agreement with the Executive
to provide the Executive with certain benefits in the event his employment is
terminated.
F. In the course of employment with the Employer, the Executive has
had and will continue to have access to certain confidential information that
relates to or will relate to the business of the Employer and its affiliates.
The Employer desires that any such information not be disclosed to other
parties or otherwise used for unauthorized purposes.
NOW, THEREFORE, in consideration of the above premises and the following
mutual covenants and conditions, the parties agree as follows:
1. Employment. The Employer shall employ the Executive as its Chief
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Operating Officer and President, and the Executive hereby accepts such
employment on the following terms and conditions.
2. Duties. The Executive shall work for the Employer in a full-time
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capacity. The Executive shall, during the term of this Agreement, have the
duties, responsibilities, powers, and authority customarily associated with the
positions of Chief Operating Officer and President. The Executive shall report
to, and follow the direction of, the Board of Directors of the Employer (the
"Board"). The Executive shall diligently, competently, and faithfully perform
all duties, and shall devote his entire business time, energy, attention, and
skill to the performance of duties for
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the Employer or its affiliates and will use his best efforts to promote the
interests of the Employer. It shall not be considered a violation of the
foregoing for the Executive to serve on corporate, industry, civic, religious
or charitable boards or committees, so long as such activities do not
individually or in the aggregate significantly interfere with the performance
of the Executive's responsibilities as an employee of the Employer in
accordance with this Agreement.
3. Executive Loyalty. The Executive shall devote all of his time,
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attention, knowledge, and skill solely and exclusively to the business and
interests of the Employer, and the Employer shall be entitled to all benefits
and profits arising from or incident to any and all work, services, and advice
of the Executive. The Executive expressly agrees that during the term of this
Agreement, he shall not engage, directly or indirectly, as a partner, officer,
director, member, manager, stockholder, advisor, agent, employee, or in any
other form or capacity, in any other business similar to that of the Employer.
The foregoing notwithstanding, and subject to Paragraph 9 below, nothing herein
contained shall be deemed to prevent the Executive from investing his money in
the capital stock or other securities of any corporation whose stock or
securities are publicly-owned or are regularly traded on any public exchange,
nor shall anything herein contained be deemed to prevent the Executive from
investing his money in real estate.
4. Term of Employment. Unless sooner terminated as hereinafter
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provided, this Agreement shall be entered into for a period of two (2) years,
commencing December 1, 2001 (the "Initial Term"). The term of employment shall
be renewed automatically for successive periods of one (1) year each (a
"Renewal Term") after the expiration of the Initial Term and any subsequent
Renewal Term, unless the Board provides the Executive, or the Executive
provides the Board with written notice to the contrary at least twelve (12)
months prior to the end of the Initial Term or any Renewal Term; provided,
however, that notwithstanding any such notice by the Employer not to extend, if
a Change in Control (as defined in Paragraph 7D below) shall occur during the
term hereof, the term of this Agreement shall not expire prior to the
expiration of twenty-four (24) months after the occurrence of a Change in
Control.
5. Compensation.
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A. The Employer shall pay the Executive an annual base salary
of $250,000.00 (the "Base Salary"), payable in substantially equal installments
in accordance with the Employer's payroll policy from time to time in effect.
The Executive's salary shall be subject to any payroll or other deductions as
may be required to be made pursuant to law, government order, or by agreement
with, or consent of, the Executive. Changes to the Base Salary, as adjusted,
may be made following an annual salary review, the first of which shall take
place in or around February 2002, and all subsequent reviews shall occur in or
around February of each year thereafter.
B. The Executive shall have the opportunity to participate in
the Employer's Performance Bonus Plan, pursuant to the terms and conditions of
such Performance Bonus Plan. The Board shall determine, in its sole discretion,
the Executive's target performance bonus under the Performance Bonus Plan. For
calendar year 2001, the Executive shall be eligible for a target bonus of 60%
of Base Salary for the period ending December 31, 2001, if the Executive and
the Employer have achieved certain defined and documented annual goals. If the
Executive and the
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Employer overachieve these goals, the bonus may be as high as 75% of Base
Salary for such period. For calendar year 2002, and for each calendar year
thereafter, the Executive shall be eligible for a semi-annual target bonus, to
be set by the Board as a percentage of the Executive's then current Base Salary
for each six (6) month period if the Executive and the Employer have achieved
certain defined and documented annual goals. If the Executive and the Employer
overachieve these goals, this reward may be set as a higher percentage of Base
Salary for each such six (6) month period. The Board may amend the terms and
conditions of the Performance Bonus Plan at any time in its sole discretion.
C. During the term of this Agreement, the Employer shall:
(1) include the Executive in any life insurance,
disability insurance, medical, dental or health insurance, savings,
pension and retirement plans, employee stock option and stock
purchase plans, and other benefit plans or programs (including, if
applicable, any excess benefit or supplemental executive retirement
plans) maintained by the Employer for the benefit of its
executives;
(2) include the Executive in such perquisites as the
Employer may establish from time to time that are commensurate with
his position and at least comparable to those received by other
executives of the Employer; and
(3) provide the Executive with such amount of paid time
off per annum as is provided under the Employer's standard
employment policies.
6. Expenses. The Employer shall reimburse the Executive for all
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reasonable and approved business expenses, provided the Executive submits paid
receipts or other documentation acceptable to the Employer and as required by
the Internal Revenue Service to qualify as ordinary and necessary business
expenses under the Internal Revenue Code of 1986, as amended (the "Code").
7. Termination. The Executive's services shall terminate upon the
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first to occur of the following events:
A. At the end of the term of this Agreement, including any
Renewal Terms, as set forth in Paragraph 4 of this Agreement.
B. Upon the Executive's date of death or the date the Executive
is given written notice that he has been determined to be disabled by the
Employer. For purposes of this Agreement, the Executive shall be deemed to be
disabled if the Executive meets the requirements for long term disability under
the Employer's long-term disability plan or program in effect on the date of
the notice; alternatively, if the Employer does not have such a long-term
disability plan or program in effect, then the Executive shall be deemed to be
disabled if the Executive, as a result of illness or incapacity, shall be
unable to perform substantially his required duties for a period of four (4)
consecutive months or for any aggregate period of six (6) months in any twelve
(12) month period. A termination of the Executive's employment by the Employer
for disability shall be communicated to the Executive by written notice and
shall be effective on the tenth
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(10th) business day after receipt of such notice by the Executive, unless the
Executive returns to full-time performance of his duties before such tenth
(10th) business day.
C. On the date the Employer provides the Executive with written
notice that he is being terminated for "Cause." For purposes of this
Agreement, and as determined by the Employer in its sole discretion, the
Executive shall be deemed terminated for Cause if the Employer terminates the
Executive after the Executive:
(1) shall have been convicted of any felony including,
but not limited to, a felony involving fraud, theft,
misappropriation, dishonesty, or embezzlement;
(2) shall have committed intentional acts of misconduct
that materially impair the goodwill or business of the Employer or
cause material damage to its property, goodwill, or business; or
(3) shall have refused to, or willfully failed to,
perform his material duties hereunder; provided, however, that no
termination under this subparagraph (3) shall be effective unless
the Executive does not cure such refusal or failure to the
Employer's reasonable satisfaction as soon as practicable after the
Employer gives the Executive written notice identifying such
refusal or failure (and, in any event, within thirty (30) days
after receipt of such written notice).
No act or failure to act on the part of the Executive shall be considered
"willful" unless it is done, or omitted to be done, by the Executive in bad
faith or without reasonable belief that his action or omission was in the best
interests of the Employer. A termination of the Executive's employment for
Cause shall be effected in accordance with the following procedures. The Board
shall give the Executive written notice ("Notice of Termination for Cause") of
its intention to terminate the Executive's employment for Cause, setting forth
in reasonable detail the specific conduct of the Executive that it considers to
constitute Cause and the specific provision(s) of this Agreement on which it
relies, and stating the date, time and place of the Board Meeting for Cause.
The "Board Meeting for Cause" means a meeting of the Board at which the
Executive's termination for Cause will be considered, that takes place not less
than ten (10) and not more than twenty (20) business days after the Executive
receives the Notice of Termination for Cause. The Executive shall be given an
opportunity, together with counsel, to be heard at the Board Meeting for Cause.
The Executive's termination for Cause shall be effective when and if a
resolution is duly adopted at the Board Meeting for Cause by a two-thirds
majority vote of the entire membership of the Board, excluding the Executive
from the count of such membership, stating that in the good faith opinion of
the Board, the Executive is guilty of the conduct described in the Notice of
Termination for Cause, and that such conduct constitutes Cause under this
Agreement.
D. On the date the Employer terminates the Executive's
employment for any reason, other than a reason otherwise set forth in this
Paragraph 7, provided that the Employer shall give the Executive thirty (30)
days written notice prior to such date of its intention to terminate such
employment.
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E. On the date the Executive terminates his employment for
"Good Reason." For purpose of this Agreement, Good Reason means:
(1) a change in the Executive's status, title, position
or responsibilities (including reporting responsibilities)
inconsistent in any respect with Paragraph 2 of this Agreement; the
assignment to the Executive of any duties or responsibilities
inconsistent with Paragraph 2 of this Agreement; or the removal of
the Executive from or failure to reappoint or reelect him to any of
such positions, except in connection with the termination of his
employment for disability, Cause, as a result of his death, or by
the Executive other than for Good Reason;
(2) the Employer's requiring the Executive to be based
at any place outside a 60-mile radius of the location of the
Employer's corporate headquarters as of the date of this Agreement,
except for reasonably required travel;
(3) following a Change in Control (as defined in this
Paragraph 7E), the failure by the Employer to (a) continue in
effect (without reduction in benefit levels and/or reward
opportunities) any material compensation or employee benefit plan
in which the Executive was participating at any time within ninety
(90) days preceding the date of a Change in Control or at any time
thereafter, unless such plan is replaced with a plan that provides
substantially equivalent compensation or benefits to the Executive
or (b) provide the Executive with compensation and benefits, in the
aggregate, at least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each other employee
benefit plan, program and practice in which the Executive was
participating at any time within ninety (90) days preceding the
date of a Change in Control or at any time thereafter;
(4) any material breach by the Employer of any provision
of this Agreement; or
(5) following a Change in Control (as defined in this
Paragraph 7E), the failure of the Employer to obtain an agreement,
satisfactory to the Executive, from any Successors and Assigns (as
defined herein) to assume and agree to perform this Agreement.
Any event or condition described in this Paragraph 7E that occurs prior to a
Change in Control, but which the Executive reasonably demonstrates (1) was at
the request of a third party, or (2) otherwise arose in connection with, or in
anticipation of, a Change in Control that actually occurs, shall constitute
Good Reason for purposes of this Agreement notwithstanding that it occurred
prior to the Change in Control.
For purposes of this Agreement, a "Change in Control" means the first to occur
of (a) the completion of the acquisition by any entity, person, or group of
beneficial ownership, as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, of more than 50% of the outstanding capital
stock of the Employer entitled to vote for the election of directors ("Voting
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Stock"); (b) the completion by any entity, person or group (other than the
Employer or an affiliate of the Employer) of a tender offer or an exchange
offer for more than 50% of the outstanding Voting Stock of the Employer; (c)
the effective time of (1) a merger or consolidation of the Employer with one or
more corporations as a result of which the holders of the outstanding Voting
Stock of the Employer immediately prior to such merger or consolidation hold
less than 50% of the Voting Stock of the surviving or resulting corporation, or
(2) a transfer of substantially all of the property or assets of the Employer
other than to an entity of which the Employer owns at least 80% of the Voting
Stock; and (d) the election to the Board, without the recommendation or
approval of the incumbent Board, of the lesser of (1) three directors, or (2)
directors constituting a majority of the number of directors of the Employer
then in office.
For purposes of this Agreement, "Successors and Assigns" shall mean a
corporation or other entity acquiring all or substantially all of the stock,
assets and/or business of the Employer whether by operation of law or
otherwise.
8. Compensation Upon Termination.
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A. If the Executive's services are terminated pursuant to
Paragraph 7B or 7C, the Executive shall be entitled to his salary through his
final date of active employment plus any accrued but unused current paid time
off for which the Executive is eligible. The Executive shall also be entitled
to any benefits mandated under the Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA) or required under the terms of any death, insurance, or
retirement plan, program, or agreement provided by the Employer and to which
the Executive is a party or in which the Executive is a participant, including,
but not limited to, any short-term or long-term disability plan or program, if
applicable.
B. Except as otherwise provided in Xxxxxxxxx 0X, 0X or this
Paragraph 8B, if the Executive's services are terminated pursuant to Paragraph
7A, 7D or 7E, the Executive shall be entitled to his salary through his final
date of active employment, plus any accrued but unused current paid time off
for which the Executive is eligible. The Executive also shall be entitled to a
single sum payment payable within thirty (30) days after the Executive's
termination date and equal to one (1) times his Base Salary, plus one (1) times
his annual target performance bonus as determined pursuant to the Employer's
Performance Bonus Plan, provided (a) he signs an agreement acceptable to the
Employer that (i) waives any rights the Executive may otherwise have against
the Employer, (ii) releases the Employer from actions, suits, claims,
proceedings and demands related to the period of employment and/or the
termination of employment, and (iii) contains certain other obligations which
shall be set forth at the time of the termination (including, but not limited
to, a reaffirmation of the Executive's obligations under Paragraph 9 of this
Agreement), and (b) the Employer shall be permitted to offset from the
severance pay hereunder any salary paid to the Executive during the thirty (30)
day or one (1) year written notice period, whichever is applicable, if the
Executive performs no substantial services during such thirty (30) day or one
(1) year written notice period. In addition, all options to purchase common
stock of the Employer granted to the Executive pursuant to the Employer's
Long-Term Incentive Plan shall immediately become Vested Shares as defined in
any Stock Option Agreement(s) between the Employer and the Executive, and the
Executive shall have one (1) year following the date of termination to exercise
any unexercised options held by him as of such
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date. The Employer shall also pay for up to six (6) months of outplacement
services for the Executive (or, if earlier, until the Executive obtains
full-time employment), to be provided by an outplacement service provider
selected by the Employer. Additionally, the Executive shall be entitled to any
benefits mandated under COBRA or required under the terms of any death,
insurance, or retirement plan, program, or agreement provided by the Employer
and to which the Executive is a party or in which the Executive is a
participant. If the Executive elects COBRA continuation coverage for himself
and/or his dependents, the Employer shall pay for such coverage for so long as
the Executive is eligible for COBRA continuation coverage; provided however,
that nothing herein shall be construed to extend the period of time mandated by
statute over which such COBRA continuation may otherwise be provided to the
Executive and/or his dependents.
C. If the Executive's services are terminated pursuant to
Paragraph 7A, 7D or 7E at any time during the twenty-four (24) month period
following a Change in Control, the Executive shall be entitled to his salary
through his final date of active employment, plus any accrued but unused
current paid time off for which the Executive is eligible. In lieu of any
entitlements under Paragraph 8B, the Executive shall be entitled to a single
sum payment payable within thirty (30) days after the Executive's termination
date and equal to two (2) times his Base Salary, plus two (2) times his annual
target performance bonus as determined pursuant to the Employer's Performance
Bonus Plan, provided (a) he signs an agreement acceptable to the Employer that
(i) waives any rights the Executive may otherwise have against the Employer,
(ii) releases the Employer from actions, suits, claims, proceedings and demands
related to the period of employment and/or the termination of employment, and
(iii) contains certain other obligations which shall be set forth at the time
of the termination (including, but not limited to, a reaffirmation of the
Executive's obligations under Paragraph 9 of this Agreement), and (b) the
Employer shall be permitted to offset from the severance pay hereunder any
salary paid to the Executive during the thirty (30) day or one (1) year written
notice period, whichever is applicable, if the Executive performs no
substantial services during such thirty (30) day or one (1) year written notice
period. In addition, all options to purchase common stock of the Employer
granted to the Executive pursuant to the Employer's Long-Term Incentive Plan
shall immediately become Vested Shares as defined in any Stock Option
Agreement(s) between the Employer and the Executive, and the Executive shall
have one (1) year following the date of termination to exercise any unexercised
options held by him as of such date. The Employer shall also pay for up to six
(6) months of outplacement services for the Executive (or, if earlier, until
the Executive obtains full-time employment), to be provided by an outplacement
service provider selected by the Employer. Additionally, the Executive shall be
entitled to any benefits mandated under COBRA or required under the terms of
any death, insurance, or retirement plan, program, or agreement provided by the
Employer and to which the Executive is a party or in which the Executive is a
participant. If the Executive elects COBRA continuation coverage for himself
and/or his dependents, the Employer shall pay for such coverage for so long as
the Executive is eligible for COBRA continuation coverage; provided however,
that nothing herein shall be construed to extend the period of time mandated by
statute over which such COBRA continuation may otherwise be provided to the
Executive and/or his dependents.
D. If a "change in control" shall occur (as defined in Section
280G(b)(2)(a)(i) of the Code), and a determination is made by legislation,
regulation, ruling directed to the
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Executive or the Employer, or court decision, that the aggregate amount of any
payment made to the Executive hereunder, or pursuant to any plan, program, or
policy of the Employer in connection with, on account of, or as a result of,
such change in control constitutes "excess parachute payments" under the Code
that are subject to the excise tax provisions of Section 4999 of the Code, or
any successor sections thereof, the Executive shall be entitled to receive from
the Employer, in addition to any other amounts payable hereunder, an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes, other than interest and penalties imposed by reason of
the Executive's failure to file timely a tax return or pay taxes shown due on
his return), including, without limitation, any income taxes (and any interest
and penalties imposed thereon) and any excise tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the
excise tax imposed; provided, however, if the aggregate amount of payments to
the Executive, without regard to the Gross-Up Payment, does not exceed one
hundred ten percent (110%) of the maximum amount that the Executive could
receive without regard to the payments being subject to the excise tax
provisions of Section 4999 of the Code (the "Tax Limit"), then (i) no Gross-Up
Payment shall be made hereunder, and (ii) the payments shall be reduced to the
Tax Limit. All determinations required to be made under this Paragraph 8,
including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a certified public accounting firm designated
by the Employer and reasonably acceptable to the Executive which is one of the
five largest accounting firms in the United States (the "Accounting Firm"),
which shall provide detailed supporting calculations both to the Employer and
the Executive within fifteen (15) business days of the receipt of notice from
the Executive that there has been an excess parachute payment, or such earlier
time as is requested by the Employer. All fees and expenses of the Accounting
Firm shall be borne solely by the Employer. Any Gross-Up Payment, as determined
pursuant to this Paragraph 8 shall be paid by the Employer to the Executive
within five (5) days of the receipt of the Accounting Firm's determination. As
a result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Employer
should have been made ("Underpayment") consistent with the calculations
required to be made hereunder. In the event that the Employer exhausts its
remedies hereunder and the Executive thereafter is required to make a payment
of any excise tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Employer to or for the benefit of the Executive. The Executive shall
notify the Employer in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Employer of the Gross-Up
Payment. Such notification shall be given as soon as practicable but no later
than ten (10) business days after the Executive is informed in writing of such
claim and shall apprise the Employer of the nature of such claim and the date
on which such claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the thirty (30) day period following the date
on which he gives such notice to the Employer (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the
Employer notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
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(1) give the Employer any information reasonably
requested by the Employer relating to such claim;
(2) take such action in connection with contesting such
claim as the Employer shall reasonably request in writing from time
to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably
selected by the Employer;
(3) cooperate with the Employer in good faith in order
effectively to contest such claim; and
(4) permit the Employer to participate in any
proceedings relating to such claim;
provided, however, that the Employer shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any excise tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provision of
this Paragraph 8D, the Employer shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Employer shall
determine. Notwithstanding anything herein to the contrary, if, after the
receipt by the Executive of an amount advanced by the Employer pursuant to this
Paragraph 8D, the Executive becomes entitled to receive any refund with respect
to such claim, the Executive shall (subject to the Employer's substantial
compliance with the requirements of this Paragraph 8D) promptly pay to the
Employer the amount of such refund plus interest at an annual rate equal to the
Applicable Federal Rate provided for in Section 1274(d) of the Code from the
date the Gross-Up Payment was paid to the Executive until the date of the
repayment to the Employer.
9. Protective Covenants. The Executive acknowledges and agrees that
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solely by virtue of his employment by, and relationship with, the Employer, he
has acquired and will acquire "Confidential Information," as hereinafter
defined, as well as special knowledge of the Employer's relationships with its
customers, and that, but for his association with the Employer, the Executive
would not or will not have had access to said Confidential Information or
knowledge of said relationships. The Executive further acknowledges and agrees
(i) that the Employer has long term, near-permanent relationships with its
customers, and that those relationships were developed at great expense and
difficulty to the Employer over several years of close and continuing
involvement; (ii) that the Employer's relationships and goodwill with its
customers are and will continue to be valuable, special and unique assets of
the Employer; and (iii) that the Employer has the following protectable
interests that are critical to its competitive advantage in the industry and
would be of demonstrable value in the hands of a competitor:
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pricing models, formulas, software applications and designs and other
technologies and devices utilized in the management of communications. In
return for the consideration described in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and as a condition precedent to the Employer entering into this
Agreement, and as an inducement to the Employer to do so, the Executive hereby
represents, warrants, and covenants as follows:
A. The Executive has executed and delivered this Agreement as
his free and voluntary act, after having determined that the provisions
contained herein are of a material benefit to him, and that the duties and
obligations imposed on him hereunder are fair and reasonable and will not
prevent him from earning a comparable livelihood following the termination of
his employment with the Employer.
B. The Executive has read and fully understands the terms and
conditions set forth herein, has had time to reflect on and consider the
benefits and consequences of entering into this Agreement, and has had the
opportunity to review the terms hereof with an attorney or other
representative, if he so chooses.
C. The execution and delivery of this Agreement by the
Executive does not conflict with, or result in a breach of or constitute a
default under, any agreement or contract, whether oral or written, to which the
Executive is a party or by which the Executive may be bound. In addition, the
Executive has informed the Employer of, and provided the Employer with copies
of, any non-competition, confidentiality, work-for-hire or similar agreements
to which the Executive is subject or may be bound.
D. The Executive agrees that, during the time of his employment
with the Employer and (i) in the event the Executive's services are terminated
pursuant to Paragraphs 7A, 7D or 7E of this Agreement, for such period as the
Executive is receiving termination pay under Paragraph 8 of this Agreement, or
(ii) in the event the Executive's services are terminated pursuant to
Paragraphs 7B or 7C of this Agreement, for a period of one (1) year after such
termination, the Executive will not, except on behalf of the Employer, anywhere
in the United States of America or in any other place or venue where the
Employer or any affiliate, subsidiary, or division thereof now conducts or
operates, or may conduct or operate, its business prior to the date of the
Executive's termination of employment:
(1) directly or indirectly, contact, solicit or direct
any person, firm, corporation, association or other entity to
contact or solicit, any of the Employer's customers or prospective
customers (as hereinafter defined) for the purpose of providing any
products and/or services that are the same as or similar to the
products and services provided by the Employer to its customers
during the term hereof;
(2) solicit or accept if offered to him, with or without
solicitation, on his own behalf or on behalf of any other person,
the services of any person who is a then current employee of the
Employer (or was an employee of the Employer during the year
preceding such solicitation), nor solicit any of the Employer's
then
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current employees (or an individual who was employed by or engaged
by the Employer during the year preceding such solicitation) to
terminate employment or an engagement with the Employer, nor agree
to hire any then current employee (or an individual who was an
employee of the Employer during the year preceding such hire) of
the Employer into employment with himself or any company,
individual or other entity; or
(3) directly or indirectly, whether as an investor
(excluding investments representing less than one percent (1%) of
the common stock of a public company), lender, owner, stockholder,
officer, director, consultant, employee, agent, salesperson or in
any other capacity, whether part-time or full-time, become
associated with any business involved in the design, manufacture,
marketing, or servicing of products then constituting ten percent
(10%) or more of the annual revenues of the Employer; or
(4) act as a consultant, advisor, officer, manager,
agent, director, partner, independent contractor, owner, or
employee for or on behalf of any of the Employer's customers or
prospective customers (as hereinafter defined), with respect to or
in any way with regard to any aspect of the Employer's business
and/or any other business activities in which the Employer engages
during the term hereof.
E. The Executive acknowledges and agrees that the scope
described above is necessary and reasonable in order to protect the Employer in
the conduct of its business and that, if the Executive becomes employed by
another employer, he shall be required to disclose the existence of this
Paragraph 9 to such employer and the Executive hereby consents to and the
Employer is hereby given permission to disclose the existence of this Paragraph
9 to such employer.
F. For purposes of this Paragraph 9, "customer" shall be
defined as any person, firm, corporation, association, or entity that purchased
any type of product and/or service from the Employer or is or was doing
business with the Employer or the Executive within the twelve (12) month period
immediately preceding termination of the Executive's employment. For purposes
of this Paragraph 9, "prospective customer" shall be defined as any person,
firm, corporation, association, or entity (i) contacted or solicited by the
Executive (whether directly or indirectly) or (ii) to the Executive's
knowledge, contacted or solicited by any other employee or representative of
the Employer, or (iii) who contacted the Executive (whether directly or
indirectly) or (iv) to the Executive's knowledge, who contacted the Employer
within the twelve (12) month period immediately preceding termination of the
Executive's employment for the purpose of having such persons, firms,
corporations, associations, or entities become a customer of the Employer.
G. The Executive agrees that both during his employment and
thereafter the Executive will not, for any reason whatsoever, use for himself
or disclose to any person not employed by the Employer any "Confidential
Information" of the Employer acquired by the Executive during his relationship
with the Employer, both prior to and during the term of this
Page 11 MetaSolv Confidential Information
Agreement. The Executive further agrees to use Confidential Information solely
for the purpose of performing duties with the Employer and further agrees not
to use Confidential Information for his own private use or commercial purposes
or in any way detrimental to the Employer. The Executive agrees that
Confidential Information includes but is not limited to: (1) any financial,
engineering, business, planning, operations, services, potential services,
products, potential products, technical information and/or know-how,
organization charts, formulas, business plans, production, purchasing,
marketing, pricing, sales, profit, personnel, customer, broker, supplier, or
other lists or information of the Employer; (2) any papers, data, records,
processes, methods, techniques, systems, models, samples, devices, equipment,
compilations, invoices, customer lists, or documents of the Employer; (3) any
confidential information or trade secrets of any third party provided to the
Employer in confidence or subject to other use or disclosure restrictions or
limitations; and (4) any other information, written, oral, or electronic,
whether existing now or at some time in the future, whether pertaining to
current or future developments, and whether previously accessed during the
Executive's tenure with the Employer or to be accessed during his future
employment with the Employer, which pertains to the Employer's affairs or
interests or with whom or how the Employer does business. The Employer
acknowledges and agrees that Confidential Information does not include (x)
information properly in the public domain, or (y) information in the
Executive's possession prior to the date of his original employment with the
Employer, except to the extent that such information is or has become a trade
secret of the Employer or is or otherwise has become the property of the
Employer.
H. In the event that the Executive intends to communicate
information to any individual(s), entity or entities (other than the Employer),
to permit access by any individual(s), entity or entities (other than the
Employer), or to use information for the Executive's own account or for the
account of any individual(s), entity or entities (other than the Employer) and
such information would be Confidential Information hereunder but for the
exceptions set out at (x) and (y) of Paragraph G of this Agreement, the
Executive shall notify the Employer of such intent in writing, including a
description of such information, no less than fifteen (15) days prior to such
communication, access or use.
I. During and after the term of employment hereunder, the
Executive will not remove from the Employer's premises any documents, records,
files, notebooks, correspondence, reports, video or audio recordings, computer
printouts, computer programs, computer software, price lists, microfilm,
drawings or other similar documents containing Confidential Information,
including copies thereof, whether prepared by him or others, except as his duty
shall require, and in such cases, will promptly return such items to the
Employer. Upon termination of his employment with the Employer, all such items
including summaries or copies thereof, then in the Executive's possession,
shall be returned to the Employer immediately.
J. The Executive recognizes and agrees that all ideas,
inventions, patents, copyrights, copyright designs, trade secrets, trademarks,
processes, discoveries, enhancements, software, source code, catalogues,
prints, business applications, plans, writings, and other developments or
improvements and all other intellectual property and proprietary rights and any
derivative work based thereon (the "Inventions") made, conceived, or completed
by the Executive, alone or with others, during the term of his employment,
whether or not during working hours, that are within the scope of the
Employer's business operations or that relate to
Page 12 MetaSolv Confidential Information
any of the Employer's work or projects (including any and all inventions based
wholly or in part upon ideas conceived during the Executive's employment with
the Employer), are the sole and exclusive property of the Employer. The
Executive further agrees that (1) he will promptly disclose all Inventions to
the Employer and hereby assigns to the Employer all present and future rights
he has or may have in those Inventions, including without limitation those
relating to patent, copyright, trademark or trade secrets; and (2) all of the
Inventions eligible under the copyright laws are "work made for hire." At the
request of the Employer, the Executive will do all things deemed by the
Employer to be reasonably necessary to perfect title to the Inventions in the
Employer and to assist in obtaining for the Employer such patents, copyrights
or other protection as may be provided under law and desired by the Employer,
including but not limited to executing and signing any and all relevant
applications, assignments or other instruments. Notwithstanding the foregoing,
the Employer hereby notifies the Executive that the provisions of this
Paragraph 9 shall not apply to any Inventions for which no equipment, supplies,
facility or trade secret information of the Employer was used and which were
developed entirely on the Executive's own time, unless (1) the Invention
relates (i) to the business of the Employer, or (ii) to actual or demonstrably
anticipated research or development of the Employer, or (2) the Invention
results from any work performed by the Executive for the Employer.
K. The Executive acknowledges and agrees that all customer
lists, supplier lists, and customer and supplier information, including,
without limitation, addresses and telephone numbers, are and shall remain the
exclusive property of the Employer, regardless of whether such information was
developed, purchased, acquired, or otherwise obtained by the Employer or the
Executive. The Executive also agrees to furnish to the Employer on demand at
any time during the term of this Agreement, and upon the termination of this
Agreement, any other records, notes, computer printouts, computer programs,
computer software, price lists, microfilm, or any other documents related to
the Employer's business, including originals and copies thereof. The Executive
recognizes and agrees that he has no expectation of privacy with respect to the
Employer's telecommunications, networking or information processing systems
(including, without limitation, stored computer files, email messages and voice
messages) and that the Executive's activity and any files or messages on or
using any of those systems may be monitored at any time without notice.
L. The Executive acknowledges that he may become aware of
"material" nonpublic information relating to customers whose stock is publicly
traded. The Executive acknowledges that he is prohibited by law as well as by
Employer policy from trading in the shares of such customers while in
possession of such information or directly or indirectly disclosing such
information to any other persons so that they may trade in these shares. For
purposes of this Paragraph L, "material" information may include any
information, positive or negative, which might be of significance to an
investor in determining whether to purchase, sell or hold the stock of publicly
traded customers. Information may be significant for this purpose even if it
would not alone determine the investor's decision. Examples include a potential
business acquisition, internal financial information that departs in any way
from what the market would expect, the acquisition or loss of a major contract,
or an important financing transaction.
M. The Employer does not wish to incorporate any unlicensed or
unauthorized material into its products or services or those of its affiliates.
Therefore, the Executive agrees that
Page 13 MetaSolv Confidential Information
he will not knowingly disclose to the Employer, use in the Employer's business,
or cause the Employer to use, any information or material which is confidential
or proprietary to any third party including, but not limited to, any former
employer, competitor or client, unless the Employer has a right to receive and
use such information. The Executive will not incorporate into his work any
material which is subject to the copyrights of any third party unless the
Employer has a written agreement with such third party or otherwise has the
right to receive and use such information.
N. It is agreed that any breach or anticipated or threatened
breach of any of the Executive's covenants contained in this Paragraph 9 will
result in irreparable harm and continuing damages to the Employer and its
business and that the Employer's remedy at law for any such breach or
anticipated or threatened breach will be inadequate and, accordingly, in
addition to any and all other remedies that may be available to the Employer at
law or in equity in such event, any court of competent jurisdiction may issue a
decree of specific performance or issue a temporary and permanent injunction,
without the necessity of the Employer posting bond or furnishing other security
and without proving special damages or irreparable injury, enjoining and
restricting the breach, or threatened breach, of any such covenant, including,
but not limited to, any injunction restraining the Executive from disclosing,
in whole or part, any Confidential Information. The Executive acknowledges the
truthfulness of all factual statements in this Agreement and agrees that he is
estopped from and will not make any factual statement in any proceeding that is
contrary to this Agreement or any part thereof. The Executive further agrees to
pay all of the Employer's costs and expenses, including reasonable attorneys'
and accountants' fees, incurred in enforcing such covenants.
10. Notices. Any and all notices required in connection with this
-------
Agreement shall be deemed adequately given only if in writing and (a)
personally delivered, or sent by first class, registered or certified mail,
postage prepaid, return receipt requested, or by recognized overnight courier,
(b) sent by facsimile, provided a hard copy is mailed on that date to the party
for whom such notices are intended, or (c) sent by other means at least as fast
and reliable as first class mail. A written notice shall be deemed to have been
given to the recipient party on the earlier of (a) the date it shall be
delivered to the address required by this Agreement; (b) the date delivery
shall have been refused at the address required by this Agreement; (c) with
respect to notices sent by mail or overnight courier, the date as of which the
Postal Service or overnight courier, as the case may be, shall have indicated
such notice to be undeliverable at the address required by this Agreement; or
(d) with respect to a facsimile, the date on which the facsimile is sent and
receipt of which is confirmed. Any and all notices referred to in this
Agreement, or which either party desires to give to the other, shall be
addressed to his residence in the case of the Executive, or to its principal
office in the case of the Employer.
11. Waiver of Breach. A waiver by the Employer of a breach of any
----------------
provision of this Agreement by the Executive shall not operate or be construed
as a waiver or estoppel of any subsequent breach by the Executive. No waiver
shall be valid unless in writing and signed by an authorized officer of the
Employer.
12. Successors; Binding Agreement.
-----------------------------
Page 14 MetaSolv Confidential Information
A. This Agreement shall be binding upon and shall inure to the
benefit of the Employer and its Successors and Assigns, and the Employer shall
require any Successors and Assigns to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Employer
would be required to perform it if no such succession or assignment had taken
place.
B. Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive or his beneficiaries or
legal representatives, except by will or by the laws of descent and
distribution, and this Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
13. Entire Agreement. This Agreement and the Stock Option Agreements
----------------
referenced herein set forth the entire and final agreement and understanding of
the parties and contains all of the agreements made between the parties with
respect to the subject matter hereof. This Agreement supersedes any and all
other agreements, either oral or in writing, between the parties hereto, with
respect to the subject matter hereof. No change or modification of this
Agreement shall be valid unless in writing and signed by the Employer and the
Executive.
14. Severability. If any provision of this Agreement shall be found
------------
invalid or unenforceable for any reason, in whole or in part, then such
provision shall be deemed modified, restricted, or reformulated to the extent
and in the manner necessary to render the same valid and enforceable, or shall
be deemed excised from this Agreement, as the case may require, and this
Agreement shall be construed and enforced to the maximum extent permitted by
law, as if such provision had been originally incorporated herein as so
modified, restricted, or reformulated or as if such provision had not been
originally incorporated herein, as the case may be. The parties further agree
to seek a lawful substitute for any provision found to be unlawful; provided,
that, if the parties are unable to agree upon a lawful substitute, the parties
desire and request that a court or other authority called upon to decide the
enforceability of this Agreement modify those restrictions in this Agreement
that, once modified, will result in an agreement that is enforceable to the
maximum extent permitted by the law in existence at the time of the requested
enforcement.
15. Headings. The headings in this Agreement are inserted for
--------
convenience only and are not to be considered a construction of the provisions
hereof.
16. Execution of Agreement. This Agreement may be executed in several
----------------------
counterparts, each of which shall be considered an original, but which when
taken together, shall constitute one agreement.
17. Recitals. The recitals to this Agreement are incorporated herein as
--------
an integral part hereof and shall be considered as substantive and not
precatory language.
18. Arbitration. Any controversy, claim or dispute between the parties
-----------
relating to the Executive's employment or termination of employment, whether or
not the controversy, claim or dispute arises under this Agreement (other than
any controversy or claim arising under Paragraph 9), shall be resolved by
arbitration in accordance with the National Rules for the
Page 15 MetaSolv Confidential Information
Resolution of Employment Disputes ("Rules") of the American Arbitration
Association through a single arbitrator selected in accordance with the Rules.
The decision of the arbitrator shall be rendered within thirty (30) days of the
close of the arbitration hearing and shall include written findings of fact and
conclusions of law reflecting the appropriate substantive law. Judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof in the State of Texas. In reaching his or her decision,
the arbitrator shall have no authority (a) to authorize or require the parties
to engage in discovery (provided, however, that the arbitrator may schedule the
time by which the parties must exchange copies of the exhibits that, and the
names of the witnesses whom, the parties intend to present at the hearing), (b)
to interpret or enforce Paragraph 9 of the Agreement (for which Paragraph 19
shall provide the exclusive venue), (c) to change or modify any provision of
this Agreement, (d) to base any part of his or her decision on the common law
principle of constructive termination, or (e) to award punitive damages or any
other damages not measured by the prevailing party's actual damages and may not
make any ruling, finding or award that does not conform to this Agreement. Each
party shall bear all of his or its own legal fees, costs and expenses of
arbitration and one-half (1/2) of the costs of the arbitrator.
19. Governing Law. This Agreement shall be governed by, and construed
-------------
in accordance with, the laws of the State of Texas, without reference to its
conflict of law provisions. Furthermore, as to Paragraph 9, the Executive
agrees and consents to submit to personal jurisdiction in the State of Texas in
any state or federal court of competent subject matter jurisdiction situated in
Collin County, Texas. The Executive further agrees that the sole and exclusive
venue for any suit arising out of, or seeking to enforce, the terms of
Paragraph 9 of this Agreement shall be in a state or federal court of competent
subject matter jurisdiction situated in Collin County, Texas. In addition, the
Executive waives any right to challenge in another court any judgment entered
by such Collin County, Texas court or to assert that any action instituted by
the Employer in any such court is in the improper venue or should be
transferred to a more convenient forum.
IN WITNESS WHEREOF, the parties have set their signatures on the date
first written above.
EMPLOYER: EXECUTIVE:
METASOLV SOFTWARE, INC., a
Delaware corporation
/s/ T. Xxxxxx Xxxxxx
--------------------
By: /s/ Xxxx X. Xxxxx T. Xxxxxx Xxxxxx
-----------------
Xxxx X. Xxxxx
Its: Chairman of the Board
Page 16 MetaSolv Confidential Information
