EXHIBIT 10.1
OPEN SOLUTIONS INC.
EMPLOYMENT AGREEMENT
April 21, 2005
Xx. Xxxxx Xxxxxxxxx, Xx.
000 Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxxxx 00000
This Agreement is entered into between you and Open Solutions Inc., a
Delaware corporation (the "Company"), in consideration of the mutual promises
and covenants contained herein and for other good and valuable consideration,
including but not limited to the continued employment of you by the Company,
your access to the Company's confidential business and technological
information, your advancement at the Company, and any eligibility to receive
benefits from the Company.
Accordingly, the Company agrees with you as follows:
1. POSITION AND RESPONSIBILITIES.
1.1 You shall serve in an executive capacity as Chief Executive
Officer or in a position substantially equivalent thereto and shall perform such
duties at such place or places as the Company shall designate subject to Section
2.5(e).
1.2 You will, to the best of your ability, devote your full time and
best efforts to the performance of your job hereunder and to the business and
affairs of the Company. You agree to serve as a director, Chairman of the Board,
officer, or any combination of these, of the Company if elected by the
shareholders or the Company's Board of Directors (the "Board"), and to perform
such executive duties as may be assigned to you by the Board from time to time.
1.3 You will duly, punctually and faithfully perform your job duties
and observe any and all rules and regulations, which the Company may now or
shall hereafter establish governing its employees and the conduct of its
business.
2. TERM OF EMPLOYMENT.
2.1 The term of your employment shall be three (3) years commencing
on the date hereof, provided, however, that your employment shall automatically
terminate upon your death and may be terminated at any time as provided in
Section 2.2. Subject to Section 2.2 below, at the end of the initial three (3)
year term, your term of employment shall renew automatically for an additional
one (1) year term unless either you or the Company provides written notice to
the other party of cancellation of such term at least sixty (60) days prior to
the expiration of the initial three-year term.
2.2 Your employment may be terminated as follows:
(a) The Company shall have the right, by giving you written notice,
to terminate your employment:
(i) immediately for Cause (as hereinafter defined); or
(ii) at any time without Cause; or
(iii) upon a Change of Control (as hereinafter defined).
(b) You shall have the right, on written notice to the Company, to
terminate your employment for Good Reason (as hereinafter defined).
(c) You shall have the right, on written notice to the Company, to
terminate your employment without Good Reason.
2.3 If your employment is terminated (a) by the Company without
Cause pursuant to Section 2.2(a)(ii) above or (b) by you with Good Reason
pursuant to Section 2.2(b) above, the Company shall be obligated upon
termination to pay you the full amount of your target cash bonus, i.e. 75% of
your then Base Salary, for the year in which your termination occurs, and to
continue to pay you your Base Salary and to provide you with the other benefits
described in this Agreement for twelve (12) months following the termination of
your employment, in each case less applicable taxes and other required
withholdings and any amount you may owe to the Company. If your employment is
terminated by the Company upon a Change of Control pursuant to Section
2.2(a)(iii) above, you shall be paid and provided with (x) your benefits for two
(2) years after the date of termination as if you had remained actively
employed, (y) full vesting of any stock options previously granted to you, and
(z) on the date of termination, two times (i) your Base Salary then in effect
plus (ii) your target bonus for the year of termination.
2.4 For purposes of this Agreement, the term "Cause" shall mean: (a)
habitual intoxication; (b) drug addiction; (c) conviction of a felony (or a plea
of guilty or nolo contendre to a felony charge); (d) adjudication by a court as
a mental incompetent; (e) insubordination, malfeasance, or willful misconduct;
or (f) material failure or inability to perform your agreements, duties, or
obligations as an employee of the Company or under this Agreement (including,
without limitation, as a result of your voluntary or involuntary termination of
employment).
2.5 For purposes of this Agreement, the term "Good Reason" shall
mean, without your consent: (a) your removal from, or the failure to elect or
re-elect you to, the Board, except when such removal or failure to elect or
re-elect relates to your termination by the Company for Cause; (b) a significant
reduction in the nature or scope of the authorities, powers, functions or duties
attached to your position with the Company ("Reduction in Duties"); (c) the
failure of the Company to maintain its incentive compensation plan, or its
equivalent; (d) a Change in Control (as hereinafter defined) as a
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result of which (i) you are in any way constrained in carrying out the
authorities, powers, functions or duties attached to the position stated in
Section 1.1 hereof or (ii) there is a Reduction in Duties and, in either case,
if after reasonable negotiation with the new control group, the situation is not
remedied within thirty (30) days following the Change in Control or (e)
requiring you to be permanently based at a location in excess of fifty (50)
miles from Glastonbury, CT.
2.6 For purposes of this Agreement, a "Change in Control" shall mean
when: (a) the Company sells all or substantially all of its assets; or (b) any
person (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the
Securities Exchange Act of 1934, each a "person"), other than (x) the current
shareholders of the Company, (y) one or more venture capital investors or (z) in
connection with an underwritten registered public offering of the securities of
the Company, any person or persons, becomes a beneficial owner, directly or
indirectly, of securities of the Company representing sufficient votes to elect
a majority of the Board.
3. COMPENSATION.
3.1 The Company shall pay to you a salary for your services to the
Company at the initial annual rate of $400,000, as may be increased periodically
by the Board, in its sole discretion, payable in installments in accordance with
the Company's prevailing practice, as modified from time to time (the "Base
Salary").
3.2 In addition to the regular annual compensation to be paid to you
in accordance with Section 3.1 above, you will be eligible to receive an annual
cash bonus of a target of seventy-five percent (75%) of your then Base Salary,
and a maximum of one hundred fifty percent (150%) of your then Base Salary,
based on the Company's achievement of certain performance goals during each
fiscal year. The Board, with your consultation and active participation, shall
set by no later than December 31 of each year the standards for the Company's
expected performance in the following year and a mechanism to calculate the
amount of your bonus based on performance of such standards. The performance
goals which you will be required to attain to entitle you to payment of the
bonus may include, without limitation, the Company's market value, stock price,
profitability, sales, product research and development, customer installations,
management practices and such other areas as may be considered appropriate to
further corporate strategies.
3.3 The Company will purchase and pay for a life insurance policy
having a death benefit of at least $5,000,000. The owner(s) and beneficiaries of
this policy will be as selected by you.
3.4 The Company will provide you with the exclusive use of a
late-model car (Audi 8 Series or BMW 7 Series or comparable model as selected by
you), or a cash car allowance sufficient to fund (on an after-tax basis) the
lease of such a car.
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3.5 The Company will pay the cost of professional preparation of
your personal tax returns and related advice by Pricewaterhouse Coopers or
another mutually acceptable accounting firm.
4. OTHER ACTIVITIES DURING EMPLOYMENT.
4.1 Except with the prior written consent of the Company's Board,
you will not during the term of this Agreement undertake or engage in any other
employment, occupation or business enterprise other than one in which you are an
inactive investor as described in Section 4.3. This provision shall not be
deemed to preclude membership in professional societies, lecturing or the
acceptance of honorary positions, that are in any case incidental to your
employment by the Company and which are not adverse or in conflict with the
interests of the Company, its business or prospects, financial or otherwise.
4.2 Except as permitted by Section 4.3, you will not acquire, assume
or participate in, directly or indirectly, any position, investment, or interest
adverse or in conflict with the interests of the Company, its business or
prospects, financial or otherwise, or take any action towards any of the
foregoing.
4.3 During the term of your employment by the Company, except on
behalf of the Company or its subsidiaries, you will not, directly or indirectly,
whether as an officer, director, employee, stockholder, partner, proprietor,
associate, representative, or otherwise, become or be interested in any other
person, corporation, firm, partnership or other entity whatsoever which directly
competes with the Company, in any part of the world, in any line of business
engaged in (or which the Company has made plans to be engaged in) by the
Company; provided, however, that anything above to the contrary notwithstanding,
you may own, as an inactive investor, securities of any competitor corporation
or other business entity, so long as your holdings in any one such corporation
shall not in the aggregate constitute more than one percent (1%) of the voting
power of such corporation or other entity.
5. CONFIDENTIALITY. You acknowledge that in the course of performing your
duties hereunder it will be necessary to disclose to you or you will be exposed
to, proprietary and other confidential information of the Company, including,
without limitation, the Company's product information, data, processes, methods,
inventions, discoveries, improvements, financial data, business product and
marketing plans, and customer information (collectively, "Confidential
Information"). You agree not to use or disclose the Confidential Information to
any third party (or cause such use or disclosure), except as necessary to
perform the duties assigned to you by the Company hereunder and in furtherance
of the best interests of the Company, or as may otherwise be authorized in
writing by the Company, Confidential Information shall not include information
which (i) is or hereafter becomes publicly known through no fault of yours or
(ii) is lawfully disclosed to you by a third party having a right to disclose
such information.
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6. PROPRIETARY INFORMATION AND INVENTIONS. You have previously executed,
and hereby acknowledge that you are bound by the provisions of, a Proprietary
Information and Inventions Agreement with the Company.
7. POST-EMPLOYMENT ACTIVITIES.
7.1 You acknowledge and agree that as a result of, among other
things, (i) your access to significant and valuable Confidential Information (as
defined in Section 5 above) of the Company and (ii) the lucrative world-wide
market for the Company's expertise, services, products and technology, the
restrictions contained in this Section 7 are reasonable in all respects and
necessary to protect the Company's investments in your training and in the
Company's good will and other business interests.
7.2 Based on the foregoing and in consideration thereof and of the
payments to be made to you by the Company pursuant to this Agreement, for a
period of twelve (12) months after the termination of your employment with the
Company you will not directly or indirectly:
(a) engage in activities (similar or reasonably related to
those in which you shall have engaged during the twelve (12) months
immediately preceding the termination of your employment with the
Company) for, nor render services (similar or reasonably related to
those which you shall have rendered hereunder during such twelve
(12) months) to, any firm or business organization which directly
competes with the Company in any line of business engaged in by the
Company (or which the Company's Board formally resolved during your
employment to be engaged in), whether now existing or established
during your employment, nor shall you engage in such activities nor
render such services to any other person or entity engaged or about
to become engaged in such activities to, for, or on behalf of; any
such firm or business organization:
(i) in connection with the sale, marketing or promotion
to any customer of the Company upon whom you have called or in
whose account you participated or supervised on behalf of the
Company during the year prior to the termination of your
employment with the Company, or
(ii) with respect to any product, process, or service,
in existence or under development which substantially
resembles or competes with a product, process, or service of
the Company in existence or under development upon which you
worked or exercised supervisory responsibility at any time
during the year prior to the termination of your employment
with the Company;
(b) solicit employees of the Company to leave its employ;
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(c) offer or cause to be offered employment to any person who
is employed by the Company at any time during the six (6) months
prior to the termination of your employment with the Company;
(d) entice, induce or encourage any of the Company's other
employees to engage in any activity which, were it done by you,
would violate any provision of Sections 5 or 6 or this Section 7; or
(e) otherwise attempt to interfere with or disrupt the
business or activities of the Company.
7.3 Upon your written request to the Company specifying the
activities proposed to be conducted by you, the Company may in its discretion
give you written approval(s) to personally engage in any activity or render
services referred to in Section 7.2 upon receipt of written assurances
(satisfactory to the Company and its counsel) from you and from your prospective
employer(s) that the integrity of the provisions of Sections 5, 6 and 7 will not
in any way be jeopardized or violated by such activities, provided the burden of
so establishing the foregoing to the satisfaction of the Company and said
counsel shall be upon you and your prospective employer(s).
8. REMEDIES. Your duties under Sections 5, 6 and 7 shall survive
termination of your employment with the Company. You acknowledge that a remedy
at law for any breach or threatened breach by you of the provisions of the
Sections 5, 6 or 7 would be inadequate and you therefore agree that the Company
shall be entitled to injunctive relief in case of any such breach or threatened
breach.
9. MISCELLANEOUS.
9.1 ASSIGNMENT. This Agreement and the rights and obligations of the
parties hereto shall bind and inure to the benefit of any successor or
successors of the Company by reorganization, merger or consolidation and any
assignee of all or substantially all of its business and properties, but, except
as to any such successor or assignee of the Company, neither this Agreement nor
any rights or benefits hereunder may be assigned by the Company or you.
9.2 INTERPRETATION. In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. If, moreover, any one or more of the
provisions contained in this Agreement shall for any reason be held to be
excessively broad as to duration, geographical scope, activity or subject, it
shall be construed by limiting and reducing it, so as to be enforceable to the
extent compatible with the applicable law as it shall then appear.
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9.3 NOTICES. Any notice which the Company is required or may desire
to give to you shall be given to you by personal delivery or registered or
certified mail, return receipt requested, addressed to you at the address of
record with the Company, or at such other place as you may from time to time
designate in writing. Any notice which you are required or may desire to give to
the Company hereunder shall be given by personal delivery or by registered or
certified mail, return receipt requested, addressed to the Company at its
principal office, or at such other office as the Company may from time to time
designate in writing. The date of personal delivery or the dates of mailing any
such notice shall be deemed to be the date of delivery thereof.
9.4 WAIVERS. If either party shall waive any breach of any provision
of this Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
9.5 HEADINGS. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning hereof.
9.6 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Connecticut.
9.7 COMPLETE AGREEMENT: AMENDMENTS; PRIOR AGREEMENTS. The foregoing
is the entire agreement of the parties with respect to the subject matter hereof
and may not be amended, supplemented, cancelled or discharged except by written
instrument executed by both parties hereto. This Agreement supersedes any and
all prior agreements between the Company and you with respect to the matters
covered hereby, including without limitation the employment agreement dated May
6, 2002, by and between you and the Company.
9.8 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which when so executed and delivered shall constitute a complete and
original instrument but all of which together shall constitute one and the same
agreement, and it shall not be necessary when making proof of this Agreement or
any counterpart thereof to account for any other counterpart.
If you are in agreement with the foregoing, please so indicate by signing
and returning the enclosed copy of this Agreement.
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OPEN SOLUTIONS INC.
By: /s/ Xxxxxx X. XxXxx
-----------------------
Xxxxxx X. XxXxx
Title: Chairman, Compensation Committee
of the Board of Directors
Accepted and agreed:
/s/ Xxxxx Xxxxxxxxx, Xx.
----------------------------
Xxxxx Xxxxxxxxx, Xx.
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