AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated and effective as of April 30, 2010, by and between SolarWinds WorldWide, LLC, a Delaware limited liability company (the “Company”), and Xxxxx Xxx Xxxx (the “Employee”).
Whereas, Employee signed an Employment Agreement with SolarWinds, Inc., a Delaware corporation and the sole equity holder of the Company (the “Parent”) on September 25, 2006 (“Prior Agreement”);
Whereas, the Prior Agreement was previously assigned by the Parent to the Company;
Whereas, the Employee is currently Senior Vice President and Chief Product Strategist of the Company and the Parent;
Whereas, the Employee wishes to no longer be an Executive Officer of the Company or the Parent;
Whereas, Company desires to continue Employee’s tenure at the Company as a Product Specialist, but not as an officer of the Company or the Parent in any respect; and
Whereas, Employee agrees that such a change in position is voluntary and at his request, and is not a breach of the Prior Agreement, nor does it give rise to Employee’s ability to terminate his employment for Good Reason (as defined in the Prior Agreement), nor entitle Employee to severance or other termination benefits under the Prior Agreement.
IN CONSIDERATION of the premises and the mutual covenants set forth below, the parties hereby agree that this Agreement hereby supersedes any other employment agreements or understandings (with the exception of any confidentiality agreement or stock agreement between the Company and Employee), written or oral, between the Company and Employee, including, but not limited to the Prior Agreement, and further agree as follows:
1. Position and Duties.
(a) Effective May 1, 2010 (the “Effective Date”), the Employee will be employed by the Company as its Product Strategist and shall continue such employment until April 30, 2011, unless terminated sooner pursuant to Section 4 of this Agreement, and shall make himself available to the Company as directed by the CEO. The Employee shall report to Xxxxx Xxxxxxxx, Chief Executive Officer, or such other executive as designated by the CEO or any other member of the management team to which the Employee reports (hereinafter referred to as the “Managing Executive”).
(b) The Employee agrees to perform the duties of Employee’s position and such other duties as may reasonably be assigned to the Employee from time to time.
- 1 -
2. Compensation and Benefits. During Employee’s employment, as compensation for all services performed by the Employee for the Company and its subsidiaries, the Company will provide the Employee the following pay and benefits:
(a) Salary. The Company will pay Employee a salary at the rate of One Hundred Twenty-Five Thousand Dollars ($125,000) per year (“Base Salary”), payable in accordance with the regular payroll practices of the Company.
(b) Participation in Employee Benefit Plans. The Employee will be entitled to participate in all employee benefit plans in effect for employees of the Company. The Employee’s participation will be subject to the terms of the applicable plan documents and generally applicable Company policies.
(c) Business Expenses. The Company will pay or reimburse the Employee for all reasonable business expenses incurred or paid by the Employee in the performance of Employee’s duties and responsibilities for the Company. Reimbursements shall be subject to such reasonable substantiation and documentation as the Company may specify from time to time.
3. Confidential Information and Restricted Activities.
(a) Confidential Information. During the course of the Employee’s employment with the Company, the Company agrees to provide the Employee with Confidential Information, as defined below, and the Employee may develop Confidential Information on behalf of the Company. The Employee agrees that Employee will not use or disclose to any Person (except as required by applicable law or for the proper performance of the Employee’s regular duties and responsibilities for the Company) any Confidential Information obtained by the Employee incident to the Employee’s employment or any other association with the Company or any of its subsidiaries. The Employee understands that this restriction shall continue to apply after the Employee’s employment terminates, regardless of the reason for such termination.
(b) Protection of Documents. All material documents, records, software and files, in any media of whatever kind and description, relating to the business of the Company and its subsidiaries, and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by the Employee shall be the sole and exclusive property of the Company. The Employee agrees to safeguard all Documents and to surrender to the Company, at the time the Employee’s employment terminates, or at such earlier time or times as the Company may specify, all Documents then in the Employee’s possession or control.
(c) Non-Competition. The Company agrees to provide Employee with Confidential Information which, if disclosed, would assist in competition against the Company and that the Employee will also generate goodwill for the Company in the course of the Employee’s employment. Therefore, the Employee agrees that the following restrictions on the Employee’s activities during and after the Employee’s employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company:
(i) The Employee agrees that while the Employee is employed by the Company and during the twelve (12) months immediately following Employee’s resignation of employment or during the six (6) months immediately following an involuntary termination of the
- 2 -
Employee’s employment without Cause, the Employee will not, directly or through any other Person, (A) hire any employee of the Company or any of its subsidiaries or seek to persuade any employee of the Company or any of its subsidiaries to discontinue employment, (B) solicit or encourage any customer of the Company or any of its subsidiaries or independent contractor providing services to the Company or any of its subsidiaries to terminate or diminish its relationship with them, (C) seek to persuade any customer or active prospective customer of the Company or any of its subsidiaries to conduct with anyone else any business or activity that such customer or prospective customer conducts or could reasonably be expected to conduct with the Company or any of its subsidiaries at that time, or (D) serve as a consultant, director, employee, officer or sole proprietor of any business in competition with the Company’s network management and storage business as conducted by the Company during the course of the Employee’s employment with the Company. For the avoidance of doubt, the foregoing shall in no manner constrict the Employee’s ability to make passive investments in any entity, regardless of the industry or geographic focus of such entity. The foregoing covenant shall cover my activities in every part of the Territory. “Territory” shall mean (i) all counties in the State of Texas, (ii) all other states of the United States of America.
(d) In signing this Agreement, the Employee gives the Company assurance that the Employee has carefully read and considered all the terms and conditions of this Agreement, including the restraints imposed on the Employee under this Section 3. The Employee agrees without reservation that these restraints are necessary for the reasonable and proper protection of the Company and its subsidiaries and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area. The Employee further agrees that, were the Employee to breach any of the covenants contained in this Section 3, the damage to the Company and its subsidiaries would be irreparable. The Employee agrees that the Company, in addition to any other remedies available to it, shall be entitled to apply for injunctive relief in a court of appropriate jurisdiction. The Employee and the Company further agree that, in the event that any provision of this Section 3 is determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities, the court may modify and enforce the covenant to the extent it believes to be reasonable under the circumstances. It is also agreed that each of the Company’s subsidiaries shall have the right to enforce all of the Employee’s obligations to that subsidiary under this Agreement, including without limitation pursuant to this Section 3.
4. Termination of Employment. The Employee’s employment under this Agreement shall continue until April 30, 2011, unless terminated earlier pursuant to this Section.
(a) The Company may terminate the Employee’s employment for Cause following at least fifteen (15) days advance written notice to the Employee setting forth in reasonable detail the nature of the Cause. For purposes of this Agreement, “Cause” means any of the following: (i) the Employee’s continued substantial violations of Employee’s employment duties or willful disregard of commercially reasonable and lawful directives from the the Managing Executive, after Employee has received a written demand for performance from the Managing Executive that sets forth the factual basis for the Company’s belief that Employee has not substantially performed Employee’s duties or willfully disregarded directives from the Managing Executive; (ii) the Employee’s moral turpitude, dishonesty or gross misconduct in the performance of Employee’s duties or which has materially and demonstrably injured the finances or future business of the Company or any of its subsidiaries as a whole; (iii) the Employee’s
- 3 -
material breach of this Agreement; or (iv) the Employee’s conviction of, or confession or plea of no contest to, any felony or any other act of fraud, misappropriation, embezzlement, or the like involving the Company’s property; provided, however, that no such act or event described in clauses (i) and (iii) of this paragraph (a) shall constitute Cause hereunder if the Employee has fully cured such act or event during the applicable fifteen (15) day notice period.
(b) This Agreement shall automatically terminate in the event of Employee’s death during employment. No severance pay or other separation benefits will be paid in the event of such termination due to death except that Employee’s beneficiaries shall be entitled to receive any accrued Base Salary, any bonus compensation to the extent earned, any vested deferred compensation or Stock Options (other than pension plan or profit-sharing plan benefits which will be paid in accordance with the applicable plan), any benefits under any plans of the Company in which Employee is a participant to the full extent of Employee’s rights under such plans, any accrued vacation pay and any appropriate business expenses incurred by Employee in connection with his duties hereunder, all to the date of termination (collectively “Accrued Compensation”). In the event the Employee becomes disabled during employment and, as a result, is unable to continue to perform substantially all of Employee’s duties and responsibilities under this Agreement for a consecutive period of twelve (12) weeks, the Company will continue to pay the Base Salary to Employee benefits in accordance with Section 2(d) above during such period. If the Employee is unable to return to work after twelve (12) weeks of disability, the Company may terminate the Employee’s employment, upon notice to the Employee. No severance pay or other separation benefits will be paid in the event of such termination due to disability. If any question shall arise as to whether the Employee is disabled to the extent that the Employee’s duties and responsibilities for the Company, the Employee shall, at the Company’s request, and at the Company’s expense, submit to a medical examination by a physician selected by the Company to whom the Employee’s guardian, if any, has no reasonable objection to determine whether the Employee is so disabled and such determination shall for the purposes of this Agreement be conclusive of the issue. If such a question arises and the Employee fails to submit to the requested medical examination, the Company’s determination of the issue shall be binding on the Employee.
(c) Either the Company or Employee may terminate Employee’s employment “at will,” for any reason, at any time, without cause or notice. At the time of such termination, in the event of termination of the Employee’s employment by the Company other than for Cause that is effective prior to April 30, 2011, the Employee shall be entitled to receive (i) a lump sum cash severance amount equivalent to (4) weeks of Employee’s then current annual salary (the “Severance Payments”), less applicable deductions; (ii) reimbursement of the health and dental care continuation premiums for Employee and Employee’s dependents incurred by Employee (after taking into account any available government subsidy for such payments) to effect continuation of health and dental insurance coverage for Employee and Employee’s dependents on the same basis as active employees, for a period of three (3) months from the date of such termination, to the extent that Employee is eligible for and elects continuation coverage under COBRA. Any obligation of the Company to provide the Employee severance payments under this Section 4(c) is conditioned, however, upon the Employee signing a release of claims in the form provided by the Company and reasonably acceptable to Employee within twenty-one (21) days of the date on which the Employee gives or receives, as applicable, notice of termination of employment, provided Employee has received the Employee Release on said date, and upon the Employee’s not revoking the Employee Release thereafter. Any termination occurring on or after April 30, 2011 shall not entitle Employee to any severance benefits pursuant to this Section or otherwise, regardless of the reason for such termination.
- 4 -
(d) In the event of termination of the Employee’s employment by the Company for Cause or the Employee’s voluntary resignation, (i) the Company will pay the Employee any Base Salary earned but not paid through the date of termination, and (ii) the Company shall have no obligation to the Employee for severance payments.
(e) Except for any right the Employee may have under the federal law known as “COBRA” to continue participation in the Company’s group health and dental plans, and subject to Section 4(c)(ii) above, benefits shall terminate in accordance with the terms of the applicable benefit plans based on the date of termination of the Employee’s employment, without regard to any continuation of base salary or other payment to the Employee following termination.
(f) Provisions of this Agreement shall survive any termination if so provided in this Agreement or if necessary to accomplish the purposes of other surviving provisions, including without limitation the Employee’s obligations under Section 3 of this Agreement, with the exception of Section 3(c)(i), which obligations do not survive termination. The obligation of the Company to make payments to the Employee under this Section 4 is expressly conditioned upon the Employee’s continued full performance of the obligations under Section 3 hereof that survive the termination of Employee’s employment. Upon termination by either the Employee or the Company, all rights, duties and obligations of the Employee and the Company to each other shall cease, except as otherwise expressly provided in this Agreement.
5. Definitions. For purposes of this Agreement, the following definitions apply:
“Affiliates” means all persons and entities directly or indirectly controlling, controlled by or under common control with the Company, where control may be by management authority, equity interest or otherwise.
“Confidential Information” means matters relating to the financial condition, results of operations, business, properties, assets, liabilities or future prospects of the Company and its subsidiaries. Confidential Information does not include information that enters the public domain, other than through the Employee’s breach of the Employee’s obligations under this Agreement.
“Person” means an individual, a corporation, a limited liability company, an association, a partnership, an estate, a trust or any other entity or organization, other than the Company or any of its Affiliates.
6. Conflicting Agreements. The Employee hereby represents and warrants that the Employee’s signing of this Agreement and the performance of the Employee’s obligations under it will not breach or be in conflict with any other agreement to which the Employee is a party or are bound and that the Employee is not now subject to any covenants against competition or similar covenants or any court order that could affect the performance of the Employee’s obligations under this Agreement.
- 5 -
7. Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.
8. Assignment. Neither the Employee nor the Company may make any assignment of this Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other. This Agreement shall inure to the benefit of and be binding upon the Employee and the Company, and each of our respective successors, executors, administrators, heirs and permitted assigns.
9. Severability. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
10. Miscellaneous. This Agreement sets forth the entire agreement between the Employee and the Company and replaces all prior and contemporaneous communications, agreements and understandings, written or oral, with respect to the terms and conditions of the Employee’s employment, including but not limited to the Prior Agreement, with the exception of that certain Employee Proprietary Information Agreement signed by Employee on September 25, 2006 (the “EPIA”). In the event of a conflict between the EPIA and this Agreement, the terms in this Agreement shall prevail. This Agreement may not be modified or amended, and no breach shall be deemed to be waived, unless agreed to in writing by the Employee and an expressly authorized representative of the Board. The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.
11. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Texas without regard to the conflict of laws principles thereof.
12. Notices. Any notices provided for in this Agreement shall be in writing and shall be effective when delivered in person or deposited in the United States mail, postage prepaid, and addressed to the Company at its principal place of business, attention of the General Counsel or in the case of the Employee, at the Employee’s last known address on the books of the Company (or to such other address as either party may specify by notice to the other actually received).
- 6 -
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| EMPLOYEE | SOLARWINDS WORLDWIDE, LLC | |||
| /s/ Xxxxx Xxx Xxxx |
/s/ Xxxxx Xxxxxxxx | |||
| Xxxxx Xxx Xxxx | Xxxxx Xxxxxxxx | |||
| President and Chief Executive Officer | ||||
- 7 -
