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EXHIBIT 10.28
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
XXXX X. XXXXXXXX
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into
as of the 15th day of January, 1999, by and among BROADWAY & SEYMOUR, INC.
("Employer"), and XXXX X. XXXXXXXX, an individual having an address at 0000
Xxxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 ("Employee"), and amends and restates
in its entirety the Employment Agreement dated September 1, 1995 by and among
Employer and Employee, as previously amended (the "Prior Agreement").
Background Statement
Employee is currently the Chairman of the Board, Chief Executive
Officer and President of Employer. This Agreement sets forth the parties'
agreement with respect to Employee's employment in such capacities.
Statement of Agreement
NOW, THEREFORE, for valuable consideration, the receipt of which is
hereby acknowledged, the mutual duties and obligations set forth herein, and
intending to be legally bound, the parties hereto agree as follows:
1. Employment. Employer hereby agrees to employ Employee and Employee
hereby agrees to serve Employer upon the terms and conditions set forth in this
Employment Agreement in the capacities set forth on Exhibit A attached hereto,
with the duties and responsibilities of such positions to be determined from
time to time by the Board of Directors of Employer.
2. Term. The term of this Employment Agreement shall begin on January
15, 1999, and end on January 14, 2001, and shall automatically renew for
successive two-year terms unless one party notifies the other in writing of its
intention to cancel 180 days prior to the expiration of the term.
3. Compensation, Incentives and Employee Benefits.
(a) Base Salary. Employer shall pay to the Employee for his performance
of services hereunder a base salary ("Base Salary"), which for the first year of
employment hereunder shall be at a rate of Three Hundred Thousand and No/100
Dollars ($300,000.00) per year, subject to applicable withholding for taxes. The
Employee's Base Salary rate shall be reviewed by Employer annually and may be
increased from time to time with the approval of the Compensation Committee of
the Board of Directors of Employer. From and after the effective date of any
such change the increased rate shall become the Base Salary rate applicable
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thereafter. Base Salary shall be paid in accordance with Employer's general
payroll practices as established from time to time.
(b) Annual Bonus Compensation. Each year during the term of this
Agreement and the Prior Agreement (commencing with the year beginning January 1,
1997), Employer shall pay to Employee annual bonus compensation with respect to
Employee's and Employer's performance during the prior fiscal year as determined
by the Compensation Committee of the Board of Directors. The Compensation
Committee shall consider the following (and other) factors in determining the
amount of annual bonus compensation payable to Employee, though it need not
assign any particular weight to such factors or articulate its rational by
reference to such factors: Employer's financial performance during the fiscal
year, including earnings per share, Employer's operational performance during
the fiscal year, Employee's satisfaction or progress toward goals established by
the Compensation Committee or the Board of Directors. Bonus compensation payable
under this subsection, if any, shall be paid in connection with annual bonus
payments generally made to the executive officers of Employer, and in no event
later than fifteen (15) days after Employer files its Annual Report on Form 10-K
with the Securities and Exchange Commission.
(c) Incentive Compensation. In the event that a sale of Employer's
Customer Relationship Management business to a third party purchaser (other than
Employee or an entity of which Employee owns directly or indirectly more than
10% of the equity interests thereof) (a "CRM Transaction") is consummated (i.e.
the transaction is closed) on or prior to December 31, 1999, Employer shall pay
to Employee, on the 10th business day following the Measurement Date, a bonus
equal to 10% of the amount equal to (i) the excess, if any, of the Fair Market
Value of Employer's Common Stock, $.01 par value ("Common Stock"), as of the
Measurement Date, over $7.25 (ii) multiplied by the number of shares of
Employer's Common Stock outstanding on the Measurement Date. In the event that
(A) a CRM Transaction does not occur and (B) a "Change of Control" as defined
solely in Sections 5(b)(i) and (iii) of this Agreement (a "Company Transaction")
occurs prior to December 31, 1999, Employer shall pay to Employee, on the 10th
business day following the effective date of such Company Transaction, a bonus
equal to 10% of the amount equal to (i) the excess, if any, of the Fair Market
Value of Employer's Common Stock as of the effective date of the Company
Transaction over $7.25, (ii) multiplied by the number of shares of Employer's
Common Stock outstanding on the effective date of the Company Transaction. For
purposes of this Agreement, "Fair Market Value" shall mean (x) in the case of a
CRM Transaction, the average of the closing prices per share of Employer's
Common Stock for the 10 trading days preceding the Measurement Date as reported
by NASDAQ; (y) in the case of a Company Transaction as defined in Section
5(b)(i), the average of the closing prices per share of Employer's Common Stock
for the 10 trading days preceding a person becoming a 40% holder, as reported by
NASDAQ; and (z) in the case of a Company Transaction as defined in Section
5(b)(iii), the average price per share received by Employer's shareholders in
such merger or consolidation. The "Measurement Date" shall be the 10th trading
day following the closing of the CRM Transaction. Notwithstanding any provisions
of this Agreement to the contrary, if Employee's employment hereunder is
terminated for any reason other than for Cause or as a result of Employee's
voluntary resignation without Good Reason, then Employee (or his estate or
representative, as applicable) shall continue to be entitled to be
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paid (and Employer shall pay) any bonuses due under this Section 3(c) as a
result of the consummation of a CRM Transaction or a Company Transaction, so
long as such termination occurred within 120 days prior to consummation of such
transaction.
(d) Stock Options. Employer shall award to Employee such stock options
and other stock-based compensation at times and in amounts as deemed appropriate
by the Compensation Committee of the Board of Directors of Employer.
(e) Employee Benefit Plans. In addition to the Base Salary and
additional compensation provided for above, Employer shall provide to the
Employee the opportunity to participate in all life insurance, medical, dental,
optical, disability, and other employee benefit plans (collectively, "Employee
Benefit Plans") sponsored from time to time by Employer and covering its
employees generally or a particular group of its employees of which the Employee
is a member (including participation by the Employee's spouse and dependents to
the extent they are eligible under the terms of such plans), subject to the
terms and conditions of such benefit plans.
(f) Reimbursement of Expenses.
(i) Employer shall pay or reimburse Employee for all reasonable travel
expenses incurred by him in connection with his travel to and from
offices established as permitted under Exhibit A to Employer's
principal offices in Charlotte, North Carolina; provided that Employer
shall not reimburse or pay for Employee's expenses for housing
(temporary or permanent) in Charlotte. Employer shall pay or reimburse
Employee for all reasonable moving expenses incurred if Employee
relocates to facilitate performance of services hereunder.
(ii) Employer shall pay or reimburse Employee for dues charged by
business clubs (including dining clubs) of which Employee is currently
a member, but shall not reimburse Employee for dues or other expenses
of country clubs (including golf or tennis clubs) unless Employee is
requested to join any such club by the Board of Directors.
(iii) Employer shall otherwise pay or reimburse Employee for all
reasonable travel and other expenses incurred by him in performing his
obligations under this Agreement.
(iv) Employer shall reimburse or pay Employee's reasonable legal and
accounting expense incurred in connection with the negotiation of this
Agreement.
(v) All such expenses shall be appropriately submitted to Employer and,
with respect to expenses to be paid or reimbursed pursuant to
subparagraph (f)(iii), approved in accordance with the policies
approved by the Board of Directors of Employer.
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(g) Vacation. Employee shall be entitled to paid annual vacation of up
to 4 weeks per year.
4. Duties. During the term hereof, Employee shall devote all of his
business time, attention, skills and efforts to the business of Employer and the
faithful performance of his duties hereunder; provided, however, that (i)
nothing contained herein shall prevent Employee from making outside investments
and relationships not inconsistent with the provisions contained herein, and for
that purpose may continue to operate Stanford Associates, LLC, and (ii) with the
approval of the Board of Directors of Employer, from time to time Employee may
serve, or continue to serve, on the boards of directors of, and hold any other
offices or positions in, companies or organizations which, in the reasonable
judgment of the Board of Directors of Employer, will not present any conflict of
interest with Employer, or materially affect the performance of Employee's
duties pursuant to this Agreement. Except for such incidental matters as may be
assigned by Employer from time to time, Employee shall neither be demoted from
his position as set forth on Exhibit A, nor shall the duties or responsibilities
normally associated with those positions be reduced during the term of this
Agreement.
5. Termination.
(a) Termination By Employer Without Cause. The parties recognize (i)
that the Board of Directors of Employer has the duty to use its judgment in the
best interests of Employer in determining whether to remove Employee as an
executive officer of Employer even though there may be no legal cause therefor
under this Agreement, and (ii) that any action or inaction of the Board of
Directors of Employer pursuant to clause (i) shall not prejudice the rights of
Employee under this Agreement. Accordingly, the parties agree that, subject to
all other provisions of this paragraph 5, Employer shall have the right at any
time during the term of this Agreement to terminate Employee's employment
hereunder without cause. Such right of termination may be exercised by removal
of Employee by the Board of Directors of Employer or the failure of the Board of
Directors of Employer to elect or reelect Employee as an executive officer of
Employer or otherwise. Termination under this Section 5(a) shall be deemed to
occur on the date that Employee is notified thereof.
(b) Termination by Employee. Employee may terminate his employment with
Employer, for any reason or without reason, during the term of this Agreement.
Such termination must be accompanied by the delivery of at least 60 days'
written notice delivered to Employer, unless the termination is for "Good
Reason" (as defined below), in which case termination shall become effective ten
(10) days after delivery to Employer by Employee of a notice of termination. For
purposes of this Agreement, "Good Reason" shall mean (x) a "Change of Control"
of Employer (as defined below), (y) a Constructive Termination of this Agreement
(as defined below) or (z) a failure by Employer to comply with any material
provision of this Agreement which has not been cured within ten (10) days after
written notice of such noncompliance has been given by Employee to Employer. For
the purpose of this Agreement, a "Change of Control," shall mean if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act,
other than any underwriter or member of an underwriting syndicate
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or group with respect to a public offering of securities of Employer registered
under the Securities Act of 1933, as amended, Employer or any "person" who on
the date hereof is a director or officer of Employer or whose shares of
Employer's stock are treated as "beneficially owned" (as defined in Rule 13d-3
under the Exchange Act, as in effect on the date hereof) by any such director or
officer), is or becomes the beneficial owner, directly or indirectly, of
securities of Employer representing 40% or more of the combined voting power of
Employer's then-outstanding securities, (ii) less than a majority of the members
of the Board of Directors of Employer are persons who were either nominated for
election by the Board of Directors or selected by the Board of Directors of
Employer, (iii) a merger or consolidation of Employer with any other corporation
is consummated, other than a merger or consolidation which results in the
"Voting Securities" (as defined below) of Employer outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into "Voting Securities" of the surviving entity) at least 40% of the
total voting power immediately after such merger or consolidation, or (iv) a CRM
Transaction is consummated. Notwithstanding the foregoing, as used in this
Agreement, "Voting Securities" shall mean any securities of Employer which vote
generally in the election of directors. For the purpose of this Agreement,
"Constructive Termination" shall mean that after the date hereof (x) the
Employee is assigned duties other than or inconsistent with those of Chief
Executive Officer of Employer, (y) Employee is required to change his place of
residence from Indianapolis, Indiana, or (z) the Employee is required to report
other than to the Board of Directors of Employer.
(c) Termination Payments.
(i) If Employer terminates Employee's employment hereunder pursuant to
paragraph 5(a) hereof for any reason other than for "Cause", as defined
herein, or if Employee terminates his employment hereunder for "Good
Reason," as defined herein, then immediately upon the effectiveness of
the termination, Employer shall make a lump sum cash payment to
Employee in an amount equal to two times the sum of (A) Employee's
annual Base Salary as in effect immediately prior to the date of such
event, and (B) the aggregate amount of cash bonuses paid to Employee
with respect to the most recent fiscal year, provided, however, that
such bonuses shall not include any bonus awarded to Employee pursuant
to Section 3(c) above. Notwithstanding anything to the contrary
expressed or implied herein, in the event that a sale of the CRM
business is consummated prior to December 31, 1999, Employee shall, at
the purchaser's election, provide reasonable consulting services on a
full-time basis for up to six (6) months following the closing for
which Employee shall be paid at a rate no less than the annual Base
Salary as in effect immediately prior to the effectiveness of
Employee's termination hereunder. Employee agrees further that,
notwithstanding anything to the contrary expressed or implied in
Section 7 below, during such consulting period Employee shall not
violate the provisions of Section 7(c). Employee acknowledges and
agrees that any material breach by him of this covenant shall be a
material breach of this Agreement and that Employer, in addition to,
and without waiving any other remedy, shall have the right to
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require Employee to return all separation payments and bonus payments
made by Employer pursuant to Sections 5(c) or 3(c) of this Agreement.
(ii) From and after the termination of Employee's employment for Cause,
Employee's voluntary termination of employment other than for Good
Reason, or Employee's death, Employer shall not be liable to Employee,
his spouse or his personal representative for the payment of salary,
benefits, or payments of any kind, except for amounts payable under
this Agreement that are attributable to services performed by Employee
prior to the termination of his employment and except for amounts
payable pursuant to the terms of any Employer benefits, disability,
retirement or similar plan in which Employee may be a participant.
(iii) In the circumstances described in the last sentence of Section
3(c), Employee shall remain entitled to payment of the bonuses due
under such section after termination of Employee's employment by
Employer.
(d) Termination by Employer for Cause. Employer may terminate
Employee's employment hereunder for Cause. "Cause" means (i) the substantial
failure of Employee to carry out and perform his duties after written notice
from the Board of Directors of Employer; (ii) the repeated refusal by Employee
to follow the lawful directions of the Board of Directors; (iii) the commission
of an act by Employee constituting financial dishonesty against Employer; (iv)
the commission of an act by Employee involving a felony; (v) the commission of
an act by Employee involving moral turpitude that brings Employer or any of its
affiliates into public disrepute or disgrace or causes material harm to the
customer relations, operations or business prospects of Employer or its
subsidiaries; or (vi) violation by Employee of any provision of Section 7
hereof.
(e) Disability. If the Employee is unable to perform his duties
hereunder for a period of six consecutive months due to disability (as defined
by the primary disability insurance carrier then providing such insurance
coverage for the Employer's executive officers), Employee's employment hereunder
may be terminated at Employer's discretion by giving to the Employee written
notice specifying a termination date subsequent thereto and also subsequent to
the end of said six-month period; provided, however, that for a two-year period
following such termination, Employee shall continue as an employee of Employer
for all purposes (including without limitation Employer's benefit plans and
Employer's 1996 Stock Option Plan) and Employer shall pay to Employee any
portion of Employee's Base Salary (as in effect immediately prior to such
termination) not paid by the disability insurance carrier(s) then providing
coverage for Employer's executive officers.
(f) No Mitigation. Employee shall have no obligation to seek other
employment in the event of termination of his employment and no compensation or
other benefits received by Employee from any other employment shall reduce or
limit Employer's obligation to make payment under paragraph 5(c).
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6. Confidential Information. Employee shall not, at any time during or
following his employment by Employer regardless of the reason for such
termination of employment, furnish, divulge, communicate, use to the detriment
of Employer or for the benefit of any business, firm, person, partnership, trust
or corporation, or otherwise, any of Employer's confidential information, data,
trade secrets, sales methods, names of customers, advertising methods, financial
affairs or methods of procurement, or take with him any document or paper
relating to the foregoing, it being acknowledged that Employee received or
obtained all of the above in confidence and as a fiduciary of Employer.
7. Non-Competition. Employee agrees that during the term hereof and for
a period of two years following termination of Employee's employment hereunder
(but the provisions of subsection (c) below shall not apply to Employee after
termination of his employment if the termination was by Employer without Cause
or by Employee for Good Reason):
(a) Employee will not directly or indirectly, individually or as a
partner, employee, stockholder, consultant, agent, officer, director, advisor or
in any other capacity, solicit any of the customers of Employer or its
subsidiaries (collectively, the "Company") for the purpose of selling any
service or product similar to those provided by the Company, or in any manner
attempt to induce any of the Company's customers or suppliers to withdraw,
reduce or divert any of their business from the Company or otherwise interfere
or attempt to interfere with any business relationship between the Company and
its customers or suppliers; provided, however, that Employer recognizes that
Employee possesses general management and management consulting skills and
agrees that the exercise of such skills are not proscribed by this paragraph
7(a). For the purposes of this paragraph 7(a), customers shall mean any client,
account or customer of the Company that has transacted any business with or been
contacted by the Company during the last twenty-four (24) months of the term of
Employee's employment.
(b) Employee will not in any manner induce or attempt to induce any of
the Company's employees to leave the employment of the Company to become
associated with any business operation selling any service or product similar to
those provided by the Company.
(c) Employee will not directly or indirectly, either as principal,
agent, manager, employee, owner (if the percentage of ownership exceeds one
percent (1%) of the net worth of the business), partner (general or limited),
director, officer, consultant or in any other capacity, participate in any
business operation engaged in a business selling any service or product similar
to those provided by the Company.
8. Limitations on Scope. Because of the current and contemplated future
operations of Employer in the geographic areas hereinafter set forth, it is
further understood and agreed by the parties hereto that the restriction set
forth in paragraph 7(c) shall apply to a business operation engaged in the
following geographic areas:
(i) The State of North Carolina;
(ii) The State of New York;
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(iii) The State of California;
(iv) The State of Illinois;
(v) The State of Florida;
(vi) The State of Massachusetts;
(vii) The State of Texas;
(viii) Any State contiguous with the State of North Carolina;
(ix) Any State contiguous with the State of New York;
(x) Any State east of the Mississippi River;
(xi) Any State of the United States of America.
The parties intend the above geographical areas to be completely
severable and independent, and any invalidity or unenforceability of this
Agreement with respect to any one area shall not render this Agreement
unenforceable as applied to any one or more of the other areas.
9. Severability. If any provision contained in this Agreement shall for
any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The parties
agree that in the event a court should determine that this Agreement or any of
the covenants contained herein is unreasonable, void or invalid, for any reason
whatsoever, then in such event, the parties hereto agree that the duration,
geographical or other limitation imposed herein should be as the court, or jury,
if applicable, should determine to be fair and reasonable, it being the intent
of each of the parties hereto to be subject to an agreement that protects the
legitimate competitive interests of Employer and does not unreasonably curtail
the rights of the Employee.
10. Employee's Representation. Employee represents that his experience
and capabilities are such that the provisions of paragraph 7 will not prevent
him from earning a livelihood.
11. Employer's Right to Obtain an Injunction. Employee acknowledges
that Employer will have no adequate means of protecting its rights under
paragraphs 7 and 8 of this Agreement other than securing an injunction.
Accordingly, Employee agrees that Employer is entitled to enforce this Agreement
by obtaining a preliminary and permanent injunction and any other appropriate
equitable relief in a court of competent jurisdiction. Employee acknowledges
that the recovery of damages by Employer will not be an adequate means to
redress a breach of
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this Agreement. Nothing contained in this paragraph, however, shall prohibit
Employer from pursuing any remedies in addition to injunctive relief, including
recovery of damages.
12. General Provisions.
(a) Entire Agreement. This Agreement contains the entire understanding
between the parties hereto relating to the employment of Employee by Employer
and supersedes any and all prior employment or compensation agreements between
Employer and Employee.
(b) Nonassignability. Neither this Agreement nor any right or interest
hereunder shall be assignable by Employee, his beneficiaries or legal
representatives, without the prior written consent of Employer; provided,
however, that nothing shall preclude (i) Employee from designating a beneficiary
to receive any benefit payable hereunder upon his death, or (ii) the executors,
administrators or other legal representatives of Employee or his estate from
assigning any rights hereunder to the person or persons entitled thereunto.
(c) Binding Agreement. This Employment Agreement shall be binding upon,
and inure to the benefit of, Employee and Employer and their respective
permitted successors and assigns, and in the case of Employer shall also be
binding upon any person or entity that shall acquire all or substantially all of
the assets of Employer.
(d) Amendment or Modification of Employment Agreement. This Employment
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto.
(e) Insurance. Employer, at its discretion, may apply for and procure
in its own name and for its own benefit, life insurance on Employee in any
amount or amounts considered advisable; and Employee shall have no right, title
or interest therein, and further, Employee agrees to submit to any medical or
other examination and to execute and deliver any applications or other
instruments in writing as may be reasonably necessary to obtain such insurance.
(f) Notices. All notices under this Employment Agreement shall be in
writing and shall be deemed effective when delivered in person (in the case of
Employer, to its General Counsel) or when mailed, if mailed by certified mail,
return receipt requested. Notices mailed shall be addressed, in the case of
Employee, to him at his residential address currently on file with Employer, and
in the case of Employer, to its corporate headquarters, attention of the General
Counsel, or to such other address as Employer or Employee may designate in
writing at any time or from time to time to the other party. In lieu of notice
by deposit in the U.S. mail, a party may give notice by telegram or telex.
(g) Waiver. No delay or omission by either party hereto in exercising
any right, power or privilege hereunder shall impair such right, power or
privilege, nor shall any single or partial exercise of any right, power or
privilege preclude any further exercise thereof or the exercise of any other
right, power or privilege. The provisions of this paragraph 13(g) cannot be
waived except in writing signed by both parties.
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(h) Governing Law. This agreement shall be governed and construed in
accordance with the laws of the State of North Carolina, exclusive of its choice
of law provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
BROADWAY & SEYMOUR, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Vice President
/s/ Xxxx X. Xxxxxxxx (SEAL)
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EXHIBIT A
Employee shall serve as Chairman, Chief Executive Officer and President
of Employer and shall be the principal executive officer of Employer and shall
also have day-to-day responsibility for all operational activities of the
Company. Employee shall not be required to permanently relocate to Charlotte,
North Carolina; provided that he shall retain offices at which he may be
regularly contacted and shall generally be available to perform a work-week
equivalent at Employer's principal executive offices each work week.
Upon expiration of Employee's current term as a director of Employer,
the Board of Directors or a nominating committee thereof shall, subject to
fiduciary duties, nominate Employee for re-election as a director.
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