EXHIBIT 10.22
INDUS INTERNATIONAL
XXXXXXX X. XXXXXX EMPLOYMENT AGREEMENT
This Agreement is entered into as of October 1, 2001 (the "Effective
Date"), by and between Indus International, Inc. (the "Company"), and Xxxxxxx X.
Xxxxxx (the "Executive").
1. Duties and Scope of Employment.
(a) Positions and Duties. As of the Effective Date,
Executive will serve as Executive Vice President and Chief Operating Officer of
the Company reporting to the Chief Executive Officer. Executive will render such
business and professional services in the performance of his duties, consistent
with Executive's position within the Company, as shall reasonably be assigned to
him by the Company's Board of Directors (the "Board").
(b) Obligations. During the Employment Term, Executive
will perform his duties faithfully and to the best of his ability and will
devote his business efforts and time to the Company at the Company's San
Francisco, California offices. Executive understands and agrees that frequent
travel may be necessary in carrying out his duties hereunder including, without
limitation, frequent travel to the Company's global offices as well as client
sites. During the Employment Term, Executive agrees not to actively engage in
any other employment, occupation or consulting activity with or without any
direct or indirect remuneration without the prior approval of the Board;
provided, however, that Executive may serve in any capacity with any civic,
educational or charitable organization, or as a member of corporate Boards of
Directors or committees thereof, without the approval of the Board, so long as
such activities do not materially interfere with his duties and obligations
under this Agreement.
2. Employment Term. Executive's employment with the Company
pursuant to this Agreement (the "Employment Term") shall commence on the
Effective Date and shall continue, unless otherwise terminated earlier as
provided in Section 6 hereof, until December 31, 2003 (the "Original Term");
provided that the Employment Term shall be extended by the Company, in its sole
discretion, for an additional twelve (12) month period (the "Additional Term")
if, at least ninety (90) days prior to the end of the Original Term, the Company
has notified the Executive in writing that the Employment Term shall be
extended. If the Company does not notify Executive in writing that the
Employment Term shall be extended at the end of the Original Term, then at such
time, Executive shall become an "at-will" employee of the Company and the
employment relationship may be terminated at any time, upon written notice to
the other party, with or without good cause or for any or no cause, at the
option either of the Company or Executive.
3. Compensation.
(a) Base Salary. During the Employment Term, the Company
will pay Executive as compensation for his services a base salary at the
annualized rate of three hundred and fifty thousand dollars $350,000 (the "Base
Salary"). The Base Salary will be paid periodically in
accordance with the Company's normal payroll practices and be subject to
applicable tax withholding.
(b) Annual Bonus. In addition to the Base Salary,
Executive may receive a performance bonus during each year of employment with
the Company under this Agreement equal to an amount, to be determined by the
Board or the Company's Compensation Committee, of up to one hundred percent
(100%) of Base Salary; provided, however, that, subject to Section 9, the
payment of any such bonus shall be subject to Executive's continued employment
with the Company through the end of the applicable Company fiscal year. Such
performance bonus, if any, shall be determined by the Compensation Committee of
the Board based upon its evaluation of performance relative to the business plan
and other pertinent considerations.
(c) Stock Option. The Company has previously granted
Executive a stock option, which is, to the extent possible under the $100,000
rule of Section 422(d) of the Internal Revenue Code of 1986, as amended (the
"Code") intended to be an "incentive stock option" (as defined in Section 422 of
the Code), to purchase 150,000 shares of the Company's Common Stock at an
exercise price of $7.625 (the "Option"). Subject to the accelerated vesting
provisions set forth herein, the Option will vest as to 25% of the shares
subject to the Option on the date of grant, and as to 25% of the shares subject
to the Option each year thereafter, so that the Option will be fully vested and
exercisable three (3) years from the date of grant, subject to Executive's
continued service to the Company on the relevant vesting dates. The Option is
subject to the terms, definitions and provisions of the Company's Stock Plan
(the "Option Plan") and the stock option agreement by and between Executive and
the Company (the "Option Agreement"), both of which documents are incorporated
herein by reference.
4. Employee Benefits; Indemnification. During the Employment
Term, Executive will be entitled to participate in the employee benefit plans
currently or hereafter maintained by the Company of general applicability to
other senior executives of the Company, including, without limitation, the
Company's group medical, dental, vision, disability, life insurance, and
flexible-spending account plans. The Company reserves the right to cancel or
change the benefit plans and programs it offers to its employees (including
Executive) at any time. Upon the Effective Date, Executive shall be offered an
indemnification agreement comparable in form and substance to indemnification
agreements previously entered into by and between the Company and its executive
officers.
5. Vacation. Executive will be entitled to paid vacation of four
(4) weeks per year in accordance with the Company's vacation policy, with the
timing and duration of specific vacations mutually and reasonably agreed to by
the parties hereto.
6. Expenses. The Company will reimburse Executive for reasonable
travel, entertainment or other expenses incurred by Executive in the furtherance
of or in connection with the performance of Executive's duties hereunder,
including, but not limited to, first class airfare and transportation expenses
between work locations and Executive's domicile in the Los Angeles area. Such
expenses shall be reimbursed in accordance with the Company's expense
reimbursement policy as in effect from time to time.
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7. Housing Expense Reimbursement. The Company will reimburse
Executive for up to $30,000 each calendar year for housing expenses related to
maintaining an apartment in San Francisco, California. Such expenses shall be
reimbursed in accordance with the Company's expense reimbursement policy as in
effect from time.
8. [Reserved]
9. Severance.
(a) Termination without Cause; Termination for Good
Reason. If Executive's employment with the Company is terminated at any time
during the Employment Term (i) by the Company without "Cause" (as defined
herein) or (ii) by the Executive for "Good Reason" (as defined herein), and
Executive signs and does not revoke a standard release of claims with the
Company substantially in the form to be attached hereto as Exhibit A, then,
subject to Section 13, Executive shall be entitled to receive as severance (i)
an amount equal to Executive's then-current Base Salary (less applicable
withholding taxes), payable over a period of twelve (12) months from the date of
such termination in accordance with the Company's normal payroll policies, and
(ii) a bonus payment equal to the maximum bonus payment provided by this
Agreement (equal to one hundred percent (100%) Executive's then-current Base
Salary), payable in a lump sum within 30 days of such termination, and (iii) the
Company will pay for full COBRA benefits for Executive for the earlier of
eighteen (18) months or until Executive receives health, medical and/or dental
benefits, respectively, from a new employer, and (iv) the Option and any new
stock options granted during the term of this Agreement (collectively, the
"Options"), to the extent vested on the date of termination, may be exercised
until fifteen (15) months after the date of termination in order to minimize the
volatility of the Company's stock.
(b) Voluntary Termination; Termination for Cause. If
Executive's employment with the Company is terminated by Executive without Good
Reason or by the Company for Cause, then (i) all vesting of the Options will
terminate immediately and all payments of compensation by the Company to
Executive hereunder will terminate immediately (except as to amounts already
earned), and (ii) Executive will only be eligible for severance benefits in
accordance with the Company's established policies as then in effect, if
applicable. If Executive's employment with the Company is terminated by
Executive without Good Reason, the Options, to the extent vested on the date of
termination, may be exercised until six (6) months after the date of termination
in order to minimize the volatility of the Company's stock.
(c) Death or Disability. If Executive's employment with
the Company is terminated due to Executive's death or Disability (as defined
herein), and Executive or Executive's beneficiary (wife, Xxxxxxx Xxxx Xxxxxx) or
guardian signs and does not revoke a standard release of claims with the Company
substantially in the form to be attached hereto as Exhibit A, then, subject to
Section 13, Executive or Executive's beneficiary shall be entitled to receive as
severance (i) an amount equal to Executive's then-current Base Salary (less
applicable withholding taxes), payable over a period of twelve (12) months from
the date of such termination in accordance with the Company's normal payroll
policies, and (ii) a bonus payment equal to the maximum bonus payment provided
by this Agreement (equal to one hundred percent (100%) of Executive's
then-current Base Salary), payable in a lump sum within 30 days of such
termination, and (iii) with respect to a termination for Disability, the Company
will pay for full COBRA benefits for Executive for the
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earlier of twelve (12) months or until Executive receives health, medical and/or
dental benefits, respectively, from a new employer, and (iv) the Options, to the
extent vested on the date of termination, may be exercised until fifteen (15)
months after the date of termination in order to minimize the volatility of the
Company's stock.
10. Change of Control Benefits. In the event of a "Change of
Control" (as defined below) that occurs prior to the Executive's termination of
employment, then on a "Trigger Date," which is the earlier of (A) the date six
(6) months after the date of the Change of Control or (B) upon the termination
of Executive's employment without Cause or for Good Reason pursuant to Section
9(a), Executive's then-outstanding Options shall immediately vest and become
exercisable, and may be exercised until fifteen (15) months after the Trigger
Date in order to minimize the volatility of the Company's stock. In all other
respects the Options shall continue to be bound by and subject to the terms of
their respective agreements.
In the event that, following a Change of Control, (i) Executive's
employment is terminated without Cause or for Good Reason pursuant to Section
9(a) or (ii) Executive terminates his employment with the Company with or
without Good Reason at any time after six (6) months following a Change in
Control, and Executive signs and does not revoke a standard release of claims
with the Company substantially in the form to be attached hereto as Exhibit A,
then, subject to Section 13, Executive will receive the severance benefits set
forth in Section 9(a); provided, however, that the severance payments described
in Section 9(a)(i) and (ii) shall be paid in a lump sum within 15 days following
Executive's termination.
11. Definitions.
(a) Cause. For purposes of this Agreement, "Cause" is
defined as (i) an act of dishonesty made by Executive in connection with
Executive's responsibilities as an employee, (ii) Executive's conviction of, or
plea of nolo contendere to, a felony, (iii) Executive's gross misconduct, or
(iv) Executive's continued substantial violations of his employment duties after
Executive has received a written demand for performance from the Company which
specifically sets forth the factual basis for the Company's belief that
Executive has not substantially performed his duties.
(b) Change of Control. For purposes of this Agreement,
"Change of Control" of the Company is defined as: (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) (and provided "person" for purposes of this definition shall not
include any funds managed by X.X. Xxxxxxx Xxxxxx & Co. or Warburg Pincus LLC or
their affiliates) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the Company's
then outstanding voting securities; or (ii) a change in the composition of the
Board occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. "Incumbent Directors" will
mean directors who either (A) are directors of the Company as of the date
hereof, or (B) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination (but will not include an individual whose
election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company); or (iii) the date
of the consummation of a merger or consolidation of the
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Company with any other corporation that has been approved by the stockholders of
the Company, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or such entity's parent) more
than fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or such entity's parent
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company; or (iv)
the date of the consummation of the sale or disposition by the Company of all or
substantially all the Company's assets.
(c) Disability. "Disability" shall mean that the
Executive has been unable to perform his Company duties as the result of his
incapacity due to physical or mental illness, and such inability, at least
twenty-six (26) weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and acceptable
to the Executive or the Executive's legal representative (such Agreement as to
acceptability not to be unreasonably withheld). Termination resulting from
Disability may only be effected after at least 30 days' written notice by the
Company of its intention to terminate the Executive's employment. In the event
that the Executive resumes the performance of substantially all of his duties
hereunder before the termination of his employment becomes effective, the notice
of intent to terminate shall automatically be deemed to have been revoked.
(d) Good Reason. "Good Reason" means without the
Executive's express written consent (i) a significant reduction of the
Executive's duties, position, responsibilities, line of reporting, or the
removal of such Executive from such position and responsibilities, unless the
Executive is provided with a comparable position (i.e., a position of equal or
greater organizational level, duties, authority, compensation and status); (ii)
a substantial reduction, without good business reasons, of the facilities and
perquisites (including office space and location) available to the Executive
immediately prior to such reduction; (iii) a reduction by the Company in the
base compensation or discretionary bonus opportunity of the Executive as in
effect immediately prior to such reduction; (iv) a material reduction by the
Company in the kind or level of benefits to which the Executive was entitled
immediately prior to such reduction with the result that such Executive's
overall benefits package is significantly reduced; or (v) the relocation of the
Executive to a facility or a location more than fifty (50) miles from such
Executive's then present location.
12. Confidential Information. Executive agrees to enter into the
Company's standard Confidential Information and Invention Assignment Agreement
(the "Confidential Information Agreement") upon commencing employment hereunder.
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13. Conditional Nature of Severance Payments.
(a) Noncompete. Executive acknowledges that the nature of
the Company's business is such that if Executive were to become employed by, or
substantially involved in, the business of a competitor of the Company during
the twelve (12) months following the termination of Executive's employment with
the Company, it would be very difficult for the Executive not to rely on or use
the Company's trade secrets and confidential information. Thus, to avoid the
inevitable disclosure of the Company's trade secrets and confidential
information, Executive agrees and acknowledges that Executive's right to receive
the severance payments set forth in Section 9 (to the extent Executive is
otherwise entitled to such payments) shall be conditioned upon the Executive not
directly or indirectly engaging in (whether as an employee, consultant, agent,
proprietor, principal, partner, stockholder, corporate officer, director or
otherwise), nor having any ownership interested in or participating in the
financing, operation, management or control of, any person, firm, corporation or
business that competes with Company or is a customer of the Company. Executive
may own minor investments less than 2% of outstanding stock of a publicly traded
company. Upon any breach of this section, all severance payments pursuant to
this Agreement shall immediately cease and any payments already made shall be
repaid by Executive to the Company.
(b) Non-Solicitation. Until the date one (1) year after
the termination of Executive's employment with the Company for any reason,
Executive agrees and acknowledges that Executive's right to receive the
severance payments set forth in Section 9 (to the extent Executive is otherwise
entitled to such payments) shall be conditioned upon Executive not either
directly or indirectly soliciting, inducing, attempting to hire, recruiting,
encouraging, taking away, hiring any employee of the Company or causing an
employee to leave his or her employment either for Executive or for any other
entity or person and upon breach of this section, any payments already made
shall be repaid by Executive to the Company.
(c) Understanding of Covenants. The Executive represents
that he (i) is familiar with the foregoing covenants not to compete and not to
solicit, and (ii) is fully aware of his obligations hereunder, including,
without limitation, the reasonableness of the length of time, scope and
geographic coverage of these covenants.
14. Limitation on Payments. In the event that the severance and
other benefits provided for in this Agreement or otherwise payable to the
Executive (i) constitute "parachute payments" within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the "Code") and (ii) but for
this Section 14, would be subject to the excise tax imposed by Section 4999 of
the Code, then the Employee's severance benefits under Section 4(a)(i) shall be
either:
(a) delivered in full, or
(b) delivered as to such lesser extent which would result in
no portion of such severance benefits being subject to excise tax under Section
4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by Section
4999, results in the receipt by the Employee on an after-tax basis, of the
greatest amount of severance benefits, notwithstanding that all or some portion
of such severance benefits may be taxable under Section 4999 of the Code. Unless
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the Company and the Executive otherwise agree in writing, any determination
required under this Section 14 shall be made in writing by the Company's
independent public accountants immediately prior to a Change of Control (the
"Accountants"), whose determination shall be conclusive and binding upon the
Employee and the Company for all purposes. For purposes of making the
calculations required by this Section 14, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and the Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 14.
15. Assignment. This Agreement will be binding upon and inure to
the benefit of (a) the heirs, executors and legal representatives of Executive
upon Executive's death and (b) any successor of the Company. Any such successor
of the Company will be deemed substituted for the Company under the terms of
this Agreement for all purposes. For this purpose, "successor" means any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by will or the laws of descent
and distribution. Any other attempted assignment, transfer, conveyance or other
disposition of Executive's right to compensation or other benefits will be null
and void.
16. Notices. All notices, requests, demands and other
communications called for hereunder shall be in writing and shall be deemed
given (i) on the date of delivery if delivered personally, (ii) one (1) day
after being sent by a well established commercial overnight service, or (iii)
four (4) days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors at the
following addresses, or at such other addresses as the parties may later
designate in writing:
If to the Company:
Copies to each of the Chief Financial Officer and General
Counsel at the Company's principal executive office
If to Executive:
at the last residential address known by the Company.
17. Severability. In the event that any provision hereof becomes
or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement will continue in full force and effect without said
provision.
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18. Arbitration.
(a) Executive agrees that any dispute or controversy
arising out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, performance, breach, or termination
thereof, shall be settled by binding arbitration to be held in Cherokee County,
Georgia in accordance with the National Rules for the Resolution of Employment
Disputes then in effect of the American Arbitration Association (the "Rules").
The arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator will be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.
(b) The arbitrator(s) will apply Georgia law to the
merits of any dispute or claim, without reference to rules of conflicts of law.
The arbitration proceedings will be governed by federal arbitration law and by
the Rules, without reference to state arbitration law. The Executive hereby
consents to the personal jurisdiction of the state and federal courts located in
Georgia for any action or proceeding arising from or relating to this Agreement
or relating to any arbitration in which the parties are participants.
(c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION,
WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS
AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR
IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION,
AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A
JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS
OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO,
DISCRIMINATION CLAIMS.
All parties must initial here for Section 18 to be effective:
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19. Integration. This Agreement, together with the Option Plan,
Option Agreement and the Confidential Information Agreement represents the
entire agreement and understanding between the parties as to the subject matter
herein and supersedes all prior or contemporaneous agreements whether written or
oral. No waiver, alteration, or modification of any of the provisions of this
Agreement will be binding unless in writing and signed by duly authorized
representatives of the parties hereto.
20. Tax Withholding. All payments made pursuant to this Agreement
will be subject to withholding of applicable taxes.
21. Governing Law. This Agreement will be governed by the laws of
the State of Georgia (with the exception of its conflict of laws provisions).
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22. Acknowledgment. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement. Company agrees to reimburse Executive
for attorney fees related to review of this Agreement.
[signatures on following page]
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by their duly authorized officers, as of the day and
year first above written.
INDUS INTERNATIONAL
By: /s/ Xxxxxx X. Xxxxxxx Date: 2/4/02
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Title: Chairman
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EXECUTIVE
/s/ Xxxxxxx X. Xxxxxx Date: 2/1/02
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Xxxxxxx X. Xxxxxx
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