Exhibit 10(e)(5)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of the 26th day of December 2006, by and
between COVER-ALL TECHNOLOGIES INC., a Delaware corporation (the "COMPANY"),
having its principal office at 00 Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, and
XXXX XXXXXX, currently residing at 00 Xxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx
00000 (the "EXECUTIVE").
W I T N E S S E T H :
WHEREAS, pursuant to an employment agreement, dated December 31, 2003,
the Executive has served as the Chairman of the Board, President and Chief
Executive Officer of the Company; and
WHEREAS, the Company and the Executive desire that the Executive
continue to be employed by the Company as Chairman of the Board, President and
Chief Executive Officer of the Company on and after January 1, 2007 under the
terms of this Agreement, as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties agree as follows:
1. EMPLOYMENT. The Company, effective as of January 1, 2007, hereby agrees
to continue to employ the Executive as Chairman of the Board, President and
Chief Executive Officer of the Company, and the Executive hereby accepts such
employment, all upon and subject to the terms and conditions hereinafter set
forth.
2. TERM.
(a) The term of employment under this Agreement shall commence as of
January 1, 2007 (the "EFFECTIVE DATE") and shall continue in full force and
effect until December 31, 2007 (the "EMPLOYMENT TERM"), subject to earlier
termination as provided in Section 2(b) hereof.
(b) Notwithstanding the foregoing, each of the Executive and the
Company may, at their respective option, terminate the Executive's employment
hereunder at any time, with or without reason or cause, upon written notice to
the other party.
3. DUTIES.
(a) The Executive will render his services to the Company as
Chairman of the Board, President and Chief Executive Officer and shall perform
such duties and services of such office or position. In addition, the Executive
will hold such other offices and directorships in the Company or any parent or
subsidiary of the Company to which, from time to time, he may be reasonably
appointed or elected.
(b) Except as otherwise provided herein and except for illness,
permitted vacation periods and permitted leaves of absence consistent with the
past practice of the
Company or as otherwise approved by the Board, the Executive agrees that during
the term of his employment hereunder, he shall devote all of his full working
time and attention, and give his best effort, skill and abilities, exclusively
to the business and interests of the Company.
4. COMPENSATION; BENEFITS.
(a) SALARY. In consideration of the services to be rendered by the
Executive hereunder, including, without limitation, any services rendered by him
as an officer or director of the Company or any parent, subsidiary or affiliate
of the Company, the Company agrees to pay to the Executive, and the Executive
agrees to accept as compensation, an annual salary (the "BASE SALARY") of
$300,000, payable in equal bi-weekly installments in accordance with the
Company's normal payroll policies. The Executive's Base Salary shall be subject
to all applicable withholding and other taxes.
(b) BONUS. In addition to the payment of the Base Salary, as
provided for hereunder, the Company shall pay the Executive a bonus based upon
the financial performance of the Company (the "PERFORMANCE BONUS") in an amount
equal to the product of the Performance Factor (as defined herein) and seventy
percent (70%) of the Executive's Base Salary as in effect at that time;
PROVIDED, HOWEVER, that if the amount of the Performance Bonus is in excess of
the amount of the Base Salary, then the Performance Bonus shall consist of (x) a
cash payment in an amount equal to the Base Salary (the "MAXIMUM CASH BONUS")
and (y) the grant of such number of shares of the Company's common stock, $.01
par value per share (the "COMMON STOCK") (pursuant to the Company's Amended and
Restated 2005 Stock Incentive Plan) determined by dividing (A) the difference
between the Performance Bonus and the Maximum Cash Bonus by (B) the price per
share of the Common Stock, based on the closing sales price of shares of the
Company's Common Stock on the last business day of such year.
For the purposes hereof:
"PERFORMANCE FACTOR" shall mean the sum of (a) the Growth Factor (as
defined herein) and (b) the Profit Factor (as defined herein).
"GROWTH FACTOR" shall mean the product of (a) the fraction, the
numerator of which shall be the actual revenues of the Company for such year,
and the denominator of which shall be the Targeted Revenues (as defined herein),
and (b) the Growth Weight (as defined herein).
"PROFIT FACTOR" shall mean the product of (a) the fraction, the
numerator of which shall be the actual net income (before taxes and employee
bonuses) of the Company for such year, and the denominator of which shall be the
Targeted Net Income (as defined herein), and (b) the Profits Weight (as defined
herein).
"TARGETED REVENUES" shall have the value set forth on SCHEDULE A hereto.
"GROWTH WEIGHT" shall have the value set forth on SCHEDULE A hereto.
"TARGETED NET INCOME" shall have the value set forth on SCHEDULE A
hereto.
"PROFITS WEIGHT" shall have the value set forth on SCHEDULE A hereto.
For the purposes hereof, each of revenues, net income and Performance Bonus
shall be determined by and set forth in a certificate of the Company's Chief
Financial Officer, and shall be based upon the books and records of the Company
and calculated in accordance with generally accepted accounting principles
consistently applied. Such certificate shall be final and binding on the parties
hereto. The Executive's Performance Bonus, if any, shall be paid as soon as
practicable after the date of the filing by the Company with the Securities and
Exchange Commission of its audited financial statements in its Form 10-K Annual
Report but in no event later than December 31st of the calendar year following
the fiscal year for which such bonus is computed.
(c) EQUITY INTERESTS. Upon the Effective Date, the Company shall
grant the Executive five-year options to purchase 500,000 shares (the "OPTIONS")
of the Company's Common Stock, granted at a price per share equal to the fair
market value of such share as of the date of grant, which will vest as to all
500,000 shares three years from the Effective Date, PROVIDED, HOWEVER, that
Options as to 250,000 shares shall immediately vest and become exercisable on
the first date following the Effective Date in which the Company enters into a
Qualifying Agreement (as defined below), and Options as to 250,000 shares shall
immediately vest and become exercisable on the second date following the
Effective Date in which the Company enters into a Qualifying Agreement, all in
accordance with and subject to the terms and conditions set forth in the
Company's Amended and Restated 2005 Stock Incentive Plan and a stock option
agreement by and between the Company and the Executive to be entered into
concurrently herewith. For the purposes hereof, "QUALIFYING AGREEMENT" shall
mean any fully executed customer agreement pursuant to which the Company is
entitled to receive at least $1,000,000 in license revenue or maintenance (for
the first year of such agreement) revenue.
(d) BENEFITS. During the Employment Term, the Executive shall be
entitled to the following benefits:
(i) Twenty (20) days of annual paid vacation time, in
accordance with the Company's policies; and
(ii) participation, subject to qualification and
participation requirements, in medical, life or other insurance or
hospitalization plans and any pension, profit sharing or other employee benefit
plans, presently in effect or hereafter instituted by the Company and applicable
to its officers and executive employees.
(e) COMPANY CAR. During the Employment Term, the Executive shall be
entitled to the continued use of the Company automobile currently provided to
the Executive for business purposes. In addition, the Company shall reimburse
the Executive, upon the presentation of appropriate receipts, for all
maintenance and repair costs incurred by the Executive in connection with the
use of such automobile.
(f) REIMBURSEMENT OF EXPENSES. The Executive shall be reimbursed for
reasonable and necessary expenses incurred by the Executive in performing his
employment
hereunder, provided such expenses are adequately documented in accordance with
the Companies policies.
5. PAYMENTS UPON TERMINATION AND SEVERANCE. If the employment of the
Executive is terminated for any reason, including upon the expiration of this
Agreement, the Company shall have no further obligations to the Executive
hereunder after the date of termination other than the payment or provision, as
applicable, to the Executive of (w) accrued and unpaid Base Salary and accrued
and unused vacation days, through the date of such termination, (x) the pro rata
portion of the bonus payment set forth in Section 4(b) hereof, based upon the
number of days the Executive was employed during the Company's fiscal year for
which such bonus is computed, to the extent the numerical requirements are
actually met for the fiscal year in question, which shall be payable at the same
time such bonus would have been paid under Section 4(b) hereof, (y) any
unreimbursed business expenses of the Executive that are otherwise reimbursable
hereunder, and (z) as severance, for a period of six months following such
termination, (i) the Base Salary payable in accordance with the Company's
payroll policies, and (ii) the benefits set forth in Sections 4(d) and 4(e)
hereof. This provision shall not preclude the Executive from claiming or
obtaining such disability benefits to which he may be entitled pursuant to any
plan maintained by the Company for disability incurred during the period of his
employment by the Company.
6. OWNERSHIP OF INTELLECTUAL PROPERTY.
(a) The Executive recognizes and agrees that all copyrights,
trademarks or other intellectual property rights to created works arising in any
way from, or related to, the Executive's employment by the Company are the sole
and exclusive property of the Company, and Executive agrees to not assert any
rights to those works against the Company or any third-parties and agrees to
assist the Company in any way requested to procure or protect the Company's
rights to those works.
b) For purposes of this Section 6 and the following Section 7, the
term "Company" shall mean and include any and all subsidiaries, parents and
affiliated corporations or entities of the Company in existence from time to
time during the Employment Term.
7. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION AND NON-COMPETITION.
(a) The Executive represents that he has been informed that it is
the policy of the Company to maintain as secret and confidential all information
relating to (i) the computer software, products, processes and/or other
information proprietary to the Company and (ii) the customers and employees of
the Company ("CONFIDENTIAL INFORMATION"), and the Executive further acknowledges
that such Confidential Information is of great value to the Company and is the
property of the Company. The parties recognize that the services to be performed
by the Executive are special and unique, and that by reason of this employment
by the Company, he will acquire Confidential Information as aforesaid. The
parties confirm that to protect the Company's goodwill, it is reasonably
necessary that the Executive agree, and accordingly the Executive does hereby
agree, that he will not directly or indirectly (except where authorized by the
Board for the benefit of the Company):
A. at any time during his employment hereunder or
after he ceases to be employed by the Company, divulge to any persons, firms or
corporations other than the Company (hereinafter referred to collectively as
"THIRD Parties"), or use, or cause to authorize any Third Parties to use, any
such Confidential Information, except to the extent that any such Confidential
Information (i) is required to be disclosed by the Executive under any
applicable laws, regulations or directives of any government agency, tribunal or
authority having jurisdiction in the matter or under subpoena or other process
of law, (ii) becomes generally available to the public, other than as a result
of a breach by the Executive of this Section 7, or (iii) becomes available to
the Executive on a non-confidential basis from a source other than the Company,
or any of its affiliates or advisors; provided, that such source is not known by
the Executive to be bound by a confidentiality agreement with, or other
obligation of secrecy to, the Company or another party; or
B. at any time during his employment hereunder and
for a period of six (6) months after he ceases to be employed by the Company
(the "RESTRICTED PERIOD"), solicit or cause or authorize, directly or
indirectly, to be solicited for employment, for or on behalf of himself or Third
Parties, any persons who were at any time within six (6) months prior to the
cessation of his employment hereunder, employees of the Company; PROVIDED,
HOWEVER, that this paragraph B shall not apply to or include persons who respond
to any general public advertisement or job posting; or
C. at any time during his employment hereunder and
during the Restricted Period, employ or cause or authorize, directly or
indirectly, to be employed, for or on behalf of himself or Third Parties, any
such employees of the Company; PROVIDED, HOWEVER, that this paragraph C shall
not apply to or include persons who respond to any general public advertisement
or job posting; or
D. at any time during his employment hereunder,
accept employment with or participate, directly or indirectly, as owner,
stockholder, director, officer, manager, consultant or agent or otherwise use
his special, unique or extraordinary skills or knowledge with respect to the
business of the Company or of any affiliate of the Company in or with any
business, firm, corporation, partnership, association, venture or other entity
or person which is engaged in the business of designing, developing or providing
software services to the property and casualty insurance industry, except that
this paragraph D shall not be construed to prohibit the Executive from owning up
to 5% of the securities of a corporation which are publicly traded on a national
securities exchange or in the over-the-counter market or from being employed by
an insurance or other company which may design and market software provided the
designing and marketing of software is not a predominant and principal part of
the business of such other company or concern; or
E. at any time during his employment hereunder,
solicit or cause or authorize, directly or indirectly, to be solicited, for or
on behalf of himself or Third Parties, any business with respect to designing,
developing or providing software services to the property and casualty insurance
industry from Third Parties who were, at any time within six (6) months prior to
the cessation of his employment hereunder, customers of the Company for such
business; or
F. at any time during his employment hereunder,
accept or cause or authorize, directly or indirectly, to be accepted, for or on
behalf of himself or Third Parties, any such business from any customers of the
Company.
(b) The Executive agrees that he will not, at any time, remove from
the Company's premises any confidential Company drawings, notebooks, data and
other documents and materials relating to the business and procedures heretofore
or hereafter acquired, developed and/or used by the Company without prior
written consent of the Board, except as reasonably necessary to the discharge of
his duties hereunder.
(c) The Executive agrees that, upon the expiration of this
employment by the Company for any reason, he shall forthwith deliver up to the
Company any and all documents, books, manuals, lists, records, publications or
other materials which contains Confidential Information, whether in written,
electronic or other form, passwords, key, credit cards, equipment or other
articles that came into the Executive's possession or under his control in
connection with the Executive's employment by the Company and to maintain no
copies or duplicates without the prior written approval of the Board.
(d) The Executive agrees that any breach or threatened breach by him
of any provision of this Section 7 shall entitle the Company, in addition to any
other legal remedies available to it, to apply to any court of competent
jurisdiction to enjoin such breach or threatened breach. The parties understand
and intend that each restriction agreed to by the Executive hereinabove shall be
construed as separable and divisible from every other restriction, and that the
unenforceability, in whole or in part, of any other restriction, will not effect
the enforceability of the remaining restrictions and that one or more or all of
such restrictions may be enforced in whole or in part as the circumstances
warrant. No waiver of any one breach of the restrictions contained in this
Section 7 shall be deemed a waiver of any future breach.
(e) The Executive hereby acknowledges that he is fully cognizant of
the restrictions put upon him by this Section 7, and that the provisions of this
Section 7 shall survive the termination of this Agreement and his employment
with the Company.
8. MUTUAL NON-DISPARAGEMENT. The Executive and the Company agree not to
make any statement, written or verbal, to any party reasonably likely to be
harmful to the other party or to be injurious to the goodwill, reputation or
business standing of the other party at any time in the future; PROVIDED,
HOWEVER, that this non-disparagement clause shall not preclude any party or his
or its agents or representatives from any good faith response to any inquiries
under oath or in response to governmental inquiry.
9. MUTUAL RELEASE OF CLAIMS. The Executive and the Company agree to deliver
the Mutual Release in the form attached hereto as EXHIBIT A on or prior to the
date the Executive's employment is terminated pursuant to Section 5 hereof.
10. LIFE INSURANCE. The Executive agrees that the Company may apply for and
purchase one or more life insurance policies on the life of the Executive in
such amount or amounts as the Company deems appropriate. The Company shall be
the sole beneficiary of such insurance policy or policies and the Executive
hereby acknowledges that the Company has an
insurable interest in his life. The Executive agrees to cooperate with the
Company in obtaining any insurance on the life or on the disability of the
Executive which the Company may desire obtain for its own benefit and shall
undergo such physical and other examinations, and shall execute any consents or
applications, which the Company may reasonably request in connection with the
issuance of one or more of such insurance policies. The Company hereby agrees to
cancel such life insurance policy with respect to the Executive immediately upon
the termination of his employment hereunder.
11. NOTICES. All notices, requests, demands or other communications
hereunder shall be deemed to have been given if delivered in writing personally
or by certified mail to each party at the address set forth below, or at such
other address as each party may designate in writing to the other:
If to the Company:
Cover-All Technologies Inc.
00 Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chairman
With a copy to:
DLA Piper US LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
If to the Executive:
Xxxx Xxxxxx
00 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof, supersedes any prior
agreement between the parties, and may not be changed or terminated orally. No
change, termination or attempted waiver of any of the provisions hereof shall be
binding unless in writing and signed by the party against whom the same is
sought to be enforced. No provision hereof shall be construed against a party
because that provision or any other provision was drafted by or at the direction
of such party.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the respective heirs, legal representatives, successors
and assigns of the parties hereto.
14. SEVERABILITY. In the event that any one or more of the provisions of
this Agreement shall be declared to be illegal or unenforceable under any law,
rule or regulation of
any government having jurisdiction over the parties hereto, such illegality or
unenforceability shall not affect the validity and enforceability of the other
provisions of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. GOVERNING LAW. All matters concerning the validity and interpretation of
the performance under this Agreement shall be governed by the laws of the State
of New Jersey, whose courts or the federal courts located in the District of New
Jersey shall have exclusive jurisdiction over the parties to which they consent.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COVER-ALL TECHNOLOGIES INC.
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
Title: CFO
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
Exhibit A
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MUTUAL RELEASE
WHEREAS, Xxxx Xxxxxx ("XXXXXX") was a party to an Employment Agreement
dated as of December 31, 2006 (the "Employment Agreement") by and between Roblin
and Cover-All Technologies Inc., a Delaware corporation (the "COMPANY" and,
together with Roblin, the "PARTIES");
WHEREAS, Roblin and the Company are parties to that certain Convertible
Loan Agreement and related convertible debentures, dated as of June 28, 2001, as
amended (collectively, the "CONVERTIBLE DEBENTURES"); and
WHEREAS, the Parties desire to resolve any potential disputes which
exist or may exist arising out of Roblin's employment with the Company and/or
termination thereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Roblin agree as
follows:
1. Except with respect to Claims (as defined below) arising in
connection with the rights and obligations arising out of the Convertible
Debentures, the Company does hereby irrevocably release and forever discharge
Roblin and his heirs, executors, personal representatives, agents, successors
and assigns, to the full extent permitted by law, of and from any and all
actions, causes of action, suits, controversies, liabilities, obligations,
proceedings, claims, damages, costs and demands of every kind and nature, both
in law and in equity, whether known or unknown (collectively, "CLAIMS"), which
the Company now has, has had or may in the future have, for and on account of
any matter or thing, from the beginning of time to and including the date of
this Mutual Release.
2. Except with respect to Claims arising in connection with the
rights and obligations arising out of the Convertible Debentures, Roblin does
hereby irrevocably release and forever discharge the Company and its successors
and assigns, to the full extent permitted by law, of and from any and all Claims
which Roblin now has, has had or may in the future have, for and on account of
any matter or thing, from the beginning of time to and including the date of
this Mutual Release.
3. Except with respect to Claims arising in connection with the
rights and obligations arising out of the Convertible Debentures, this release
is intended by the Parties to be all encompassing and to act as a full and total
release of any Claims, whether specifically numerated herein or not, that the
Parties may have or have had against each other, including, but not limited to,
any claims arising from any federal or state law or regulation dealing with
either employment, employment benefits or employment discrimination such as
those laws or regulations concerning discrimination on the basis of race, color,
creed, religion, age, sex, sexual harassment, sexual orientation, national
origin, ancestry, handicap or disability, veteran status or any military service
or application for military service, including without limitation, the Age
Discrimination in Employment Act, as amended by the Older Workers Benefit
Protection Act
("ADEA"), Title VII of the Civil Rights Act of 1964, as amended, the Americans
with Disabilities Act, the Family and Medical Leave Act and the Employee
Retirement Income Security Act; any contract, whether oral or written, express
or implied; any tort; any claim for equity or other benefits; or any other
statutory and/or common law claim.
4. Each Party hereby declares that it or he has carefully read,
reviewed and understood the terms of this Mutual Release and that it or he
voluntarily accepts the terms hereof with the purpose of making a full and final
compromise, adjustment and release of any and all Claims as provided herein.
5. Roblin represents and acknowledges as follows:
(a) That he has been and is hereby advised in writing to
consult with an attorney prior to signing this Release;
(b) That he does not waive rights or claims that may arise
after the date this Release is executed;
(c) That the Company has provided him with a period of
twenty one (21) days within which to consider this Release under the ADEA, and
that Roblin has signed on the date indicated below after concluding that this
Release is satisfactory to him; and
(d) That upon execution of this Release, the Company is
providing him with seven (7) additional days from such date of execution to
revoke his consent to the waiver of his rights under the ADEA, and if no such
revocation occurs, Roblin's waiver of rights under the ADEA shall become
effective seven days form the date Roblin executes this Release.
6. This Mutual Release shall be governed by the laws of the State
of New Jersey applicable to instruments executed and to be performed wholly
within that state.
7. This Mutual Release may be executed in one or more counterparts,
and in both original form or one or more photocopies, each of which shall be
deemed to be an original but all of which together shall be deemed to constitute
one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has executed this Mutual
Release this __ day of __________, 200_.
COVER-ALL TECHNOLOGIES INC.
By:
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Name:
Title:
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XXXX XXXXXX
