AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Employment Agreement")
originally made and entered into effective June 11, 1992 and amended and
restated effective April 27, 1995 by and between Information Advantage, Inc., a
Minnesota corporation ("Employer") and Xxxxxxx X. Xxxxxx ("Executive").
WITNESSETH:
WHEREAS, Employer and Executive entered into an employment contract, dated
June 11, 1992 (the "Agreement"), in conjunction with the acquisition by Employer
of substantially all of the assets of Information Advantage, Incorporated; and
WHEREAS, the Employer and Executive desire to amend and restate the
Agreement; and
WHEREAS, Employer desires to continue to employ Executive in the capacity
and on the terms and conditions hereinafter set forth, and Executive has agreed
to accept such terms and conditions.
NOW THEREFORE, in consideration of the premises and the mutual promises
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT RELATIONSHIP. Employer hereby employs Executive as the
Senior Vice President, Strategic Planning and Business Development, subject to
the direction of the Board of Directors of the Employer. Executive accepts such
employment and agrees to devote his loyalty, skills and his full-time efforts to
the conduct of the Employer's business operations.
2. TERM OF EMPLOYMENT. Subject to SECTION 4 hereof, the term of this
Employment Agreement and the performance of Executive's services shall continue
under the terms hereof through April 30, 1996. In addition and subject to
SECTION 4 hereof, the employment term shall automatically extend for an
additional one (1) year following the expiration of each employment year (May 1
through April 30 of each year) unless, on or before April 1 of each year, one
party has notified the other party in writing that this Agreement will not be
extended for an additional year. In the event of such a notification, the
employment term of Executive will expire on April 30 in the year such notice is
given, without further obligation for either party, except as described
elsewhere in this Agreement or in any stock option agreements then in effect
between the Company and Executive. The initial term and subsequent one-year
terms shall be called the "Term".
3. COMPENSATION AND BENEFITS. For all services rendered by Executive to
Employer, Executive shall be compensated by Employer in accordance with the
terms and conditions set forth herein:
3.1 BASE SALARY. The base salary of Executive shall be determined by
the Board of Directors from time to time during the Term ("Base Salary")
and shall be payable in accordance with the Employer's normal payroll
procedures and policies for executive employees.
3.2 BONUS. Executive shall be entitled to a bonus only upon written
action of the Board of Directors of Employer.
3.3 FRINGE BENEFITS. Executive shall be entitled to those employee
benefits as are available to all other employees of Employer, and such
other benefits as determined by written action of the Board of Directors.
3.4 EXPENSE REIMBURSEMENTS. Executive is authorized to incur
reasonable expenses, including travel expense, in connection with the
business of the Employer. Employer will reimburse Executive for all such
reasonable expenses.
3.5 VACATION. Executive shall be entitled to two weeks of vacation
during each year of this Agreement
3.6 STOCK OPTION PLAN. Employer is in the process of raising
additional equity through an offering of convertible preferred stock, which
offering Employer intends to conclude within the next three (3) months (the
"Offering"). In conjunction with the Offering, the parties agree that
Executive shall receive options to purchase shares of common stock in an
amount such that the total number of shares of common stock that Executive
is entitled to purchase pursuant to all options granted by Employer to
Executive since the beginning of his employment shall be equal to 2 1/2% of
the aggregate outstanding number of shares of common and preferred stock
determined on a post-Offering and fully diluted basis ("Option Shares");
provided that the dollar amount of the Offering taken into account for
purposes of computing the number of Option Shares shall not exceed
$7,100,000, including the conversion of $2,000,000 of convertible bridge
financing extended to the Company. The purchase price for each of the new
Option Shares to be granted to Executive in connection with the Offering
(the "New Option Shares") shall be forty-five cents ($.45). The vesting
period for the Option Share shall be split as follows: (i) an option
representing eighty percent (80%) of the New Option Shares shall vest over
a five-year period from the date of grant; and (ii) an option representing
twenty percent (20%) of the New Option Shares shall vest over a ten-year
period; provided, however, in the event Employer makes an initial public
offering of its common stock on or prior to May 1, 1997 (or such later time
within six (6) months thereafter as Employer's underwriter suggests a
postponement due to adverse stock market conditions in general) the vesting
provisions for such New Option Shares shall be accelerated and such New
Option Shares shall vest over a five-year period from the date of grant.
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3.7 SPECIAL PROVISIONS RELATING TO VESTING OF OPTION SHARES. The
option agreements to be entered into with respect to the New Option Shares
shall provide, and the existing option agreements for the grant of other
non-vested Option Shares shall be amended to provide the following with
respect to vesting of the Option Shares: In the event Company terminates
Executive's employment without cause to be effective on or prior to
December 31, 1996, or in the event notice of nonrenewal of the term of
Executive's Employment Agreement is given by Company pursuant to SECTION 2
thereof, to be effective on April 30, 1996, then in either case, vesting
under all of Executive's option agreements shall continue on a monthly
basis through and including December, 1996.
4. TERMINATION. Executive's employment pursuant to this Agreement shall
continue for the period set forth in SECTION 2 hereof, subject to the following:
4.1 TERMINATION FOR CAUSE. Employer may terminate Executive's
employment with Employer for cause, effective upon notice in writing to the
Executive. "Cause", for purposes of this Agreement, is defined as an
indictment, charge or admission of a felony, fraud against Employer,
misappropriation of Employer's assets or embezzlement. Upon the giving of
such notice, Executive's employment shall immediately terminate.
4.2 TERMINATION WITHOUT CAUSE OR NON-RENEWAL. Employer may terminate
Executive's employment without cause at any time during the Term upon
thirty (30) days' written notice to Executive. If Executive's employment
is terminated without cause or if Company gives notification of non-renewal
under SECTION 2, Executive shall be paid an amount equal to his then Base
Salary per month at the end of each of the six (6) months immediately
following the date of termination. However, such severance payments shall
cease at such time as Executive obtains other employment.
4.3 RESIGNATION. Executive may resign from his position and
terminate his employment at any time upon 30 days written notice to
Employer.
4.4 DISABILITY. The determination of whether Executive has suffered
a total and permanent disability ("Disability") shall be the inability of
Executive to fully perform his duties hereunder for a period of 90 days or
more (with any working periods of less than 15 business days not to be
construed as interrupting such disability period) . Executive shall be
entitled to the continuation of Base Salary and fringe benefits as provided
in SECTIONS 3.1 AND 3.3 hereof through the end of such 90 day period. All
determinations as to whether Executive has suffered a Disability shall be
determined by the Board of Directors of Employer in its reasonable
discretion.
4.5 DEATH. In the event of Executive's death, Executive's Base
Salary as provided in SECTION 3.1 shall be continued only through the end
of the pay period in which Executive dies. Employer shall have no further
obligations to Executive, his heirs, personal representatives or
Executive's estate after the end of such period,
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except to the extent Employer is required to continue certain fringe
benefits as requested by law or the terms of the applicable fringe benefit
plans in effect on the date of Executive's death.
4.6 TERMINATION OF COMPENSATION AND BENEFITS. Except as required by
law or as provided in SECTION 4.2 hereof, Executive shall not be entitled
to the continuation of the Base Salary under SECTION 3.1, Bonus under
SECTION 3.2, fringe benefits under SECTION 3.3 hereof or expense
reimbursement (unless incurred in the ordinary course of business prior to
termination) under SECTION 3.4 hereof, after termination of his employment
hereunder.
4.7 MATERIALS. Upon termination under SECTION 4 hereof, Executive
shall return to Employer any materials and property owned by Employer, and
in the event of Executive's failure to do so, Employer may, in addition to
any other remedy provided by law, withhold any amounts due Executive until
full compliance with this provision. If Employer believes that Executive
has failed to return certain materials or property to Employer, Employer
shall give the Executive notice of such materials or property with
reasonable specificity. Upon receipt of such materials and property, or
evidence satisfactory to Employer that Executive does not have such
materials or property, Employer shall promptly forward the amounts owed
Executive to Executive.
5. COVENANT NOT TO COMPETE. During the Term and, for such period after
the expiration of the Term as the Employer pays Executive an amount equal to
one-half of the Executive's Base Salary at the end of the Term, but in no event
longer than two (2) years after the end of the Term, Executive shall not,
directly or indirectly, through an existing or to be existing corporation,
unincorporated business, affiliated party, successor employer or otherwise,
compete with Employer. Severance payments made to Executive pursuant to SECTION
4.2 shall be credited in full against the covenant not to compete payments
specified herein. This covenant not to compete shall not prevent Executive from
being employed by a division or subsidiary of an entity which is not competing
with Employer where that entity has another division or subsidiary which
competes with Employer provided that Executive is in no way involved with such
competing division or subsidiary. Before beginning employment, Executive shall
provide a copy of this Agreement to any employer of his during the two year
period immediately following the end of the Term. This covenant not to compete
shall apply to activities of Executive which directly or indirectly compete with
Employer in the United States, the United Kingdom and any other countries in
which Employer is engaged in business during the Term.
6. CONFIDENTIAL INFORMATION.
6.1 DEFINITIONS. For purposes of this Agreement:
A. "Confidential Information" means information or material,
techniques, formulas, processes or procedures, which are proprietary
to Employer or designated as Confidential Information by Employer and
not
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generally known independently by non-Employer personnel, which
Executive developed or has or may obtain knowledge of or access to
through or as a result of his relationship with Employer (including,
but not limited to, information conceived, originated, discovered,
improved or developed in whole or in part by Executive). Confidential
Information includes, but is not limited to, the following types of
information and other information of a similar nature (whether or not
reduced to writing) : discoveries, ideas, inventions, concepts,
technologies, computer programs and software, whether application or
operating programs, and associated source and object codes, modules,
components, routines, formats, files and all documentation related
thereto, designs, secrets, drawings, specifications, techniques,
models, data, documentation, diagrams, flow charts, research
development, processes, procedures, know-how, marketing techniques and
materials, marketing and development plans, customer names and other
information related to customers, price lists, pricing policies and
financial information. Confidential Information also includes any
information described above which Executive obtains from another party
(including, for example, customers or vendors of Employer) and which
Employer treats as proprietary or designates as Confidential
Information, whether or not owned by Employer. In the event Executive
is uncertain whether any particular information constitutes
Confidential Information, he will seek clarification from Employer.
B. "Inventions" includes discoveries, improvements, techniques,
models, processes, procedures, designs, diagrams and ideas (whether
patentable or not).
C. "Works" of authorship includes writings, drawings, software,
and other works of authorship (whether or not they are copyrightable).
6.2 CONFIDENTIALITY COVENANT.
A. CONFIDENTIAL INFORMATION. Executive shall not, both during
and after the end of the Term, directly or indirectly divulge,
communicate, use to the detriment of Employer, or any of its
affiliates, successors or assigns, or for the benefit of any other
person or entity, or misuse any Confidential Information. Confidential
Information shall not be used by Executive for any purpose whatsoever
except as required to perform the work Employer requests under the
terms of this Agreement. Employer reserves the right to demand the
return of any such information at any time. Upon any termination of
this Agreement, Executive shall immediately return any such
information in his possession to Employer. This paragraph shall
survive the termination of this Agreement indefinitely.
B. INVENTIONS AND WORKS OF AUTHORSHIP. With respect to
inventions or works of authorship, Executive shall: (i) promptly
disclose to Employer in
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writing all inventions and works of authorship which are or were
conceived, made, discovered, written or created by Executive alone
or jointly with someone else while employed at Employer during the
Term and the two (2) year period immediately after the end of the
Term, and Executive hereby assigns all rights to these inventions
and works of authorship to Employer; and (ii) gives Employer all
assistance it reasonably requires to perfect, protect, and use its
rights to inventions and works of authorship. In particular,
Executive will sign all documents, do all things, and supply all
information that Employer considers necessary or desirable to
transfer or record the transfer of his entire right, title and
interest in inventions and works of authorship; and to enable
Employer to obtain patent, copyright, or other legal protection for
inventions and works of authorship. Any out-of-pocket expenses
will be paid by Employer. This paragraph shall survive the
termination of this Agreement indefinitely.
6.3 EXCLUSIONS. NOTICE: Minnesota law exempts from this Employment
Agreement "AN INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR TRADE
SECRET INFORMATION OF THE EXECUTIVE WAS USED AND WHICH WAS DEVELOPED
ENTIRELY ON THE EXECUTIVE'S TIME, AND (1) WHICH DOES NOT RELATE (A)
DIRECTLY TO THE BUSINESS OF THE EMPLOYER OR (B) TO THE EMPLOYER'S ACTUAL OR
DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (2) WHICH DOES NOT
RESULT FROM ANY WORK PERFORMED BY THE EXECUTIVE FOR THE EMPLOYER."
Executive does not currently claim to own or control rights in any
inventions or works of authorship and will not assert any such rights
against the Employer.
7. SOLICITATION OF SUPPLIERS AND CUSTOMERS. During the Term, and for two
years after the termination of this Agreement, Executive shall not directly,
through an existing or to be existing corporation, unincorporated business,
affiliated party, successor employer, or otherwise, reveal the name or related
information of, solicit or interfere with, or endeavor to entice from the
Employer, or an affiliate of Employer, any of its suppliers or customers during
the Term.
8. SOLICITATION OF EMPLOYEES. Executive during the Term and for two
years after the termination of the Term, Executive shall not directly or
indirectly, through an existing or to be existing corporation, unincorporated
business, affiliated party, successor employer or otherwise, solicit, hire for
employment, or work with, on a part-time, consulting, advising or any other
basis, any employee or independent contractor of Employer, or any of its
affiliates, successors and assigns, during the Term and the two year period
after the end of the Term.
9. INJUNCTIVE RELIEF. In the event that Executive breaches this
Agreement, he agrees that Employer could not be adequately compensated by money
damages. In addition, Employer, or its successors and assigns, shall be
entitled, in addition to any other right and
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remedy available to them, to an injunction restraining such breach or a
potential breach and no bond or other security shall be required in
connection therewith. Executive hereby consents to the issuance of such
injunction and agrees that Employer or any of its affiliates, successors and
assigns, will be irreparably harmed by Executive's breach of any provision in
this Agreement. If Executive breaches any provision of this Agreement and
Employer and/or any of its successors and assigns, brings an action against
Executive because of the breach, Executive shall be liable to such
entity(ies) for all damages, costs and expenses,, including reasonable
attorneys' fees, incurred by such entity(ies) which are related to such
breach or action. The damages, costs and expenses shall be paid promptly
upon demand from such entity(ies).
10. NOTICES. All notices given hereunder shall be in writing and shall be
personally served or sent by registered or certified mail, return receipt
requested, addressed as follows:
To Employer:
INFORMATION ADVANTAGE, INC.
Attn: Xxxxx X. Xxxx, President and CEO
Xxx Xxxxxxxxx Xxxxxx, Xxxxx 000
0000 Xxxxx Xxxxxxxxx
Xxxxx, XX 00000
To Executive:
Xxxxxxx X. Xxxxxx
00000 Xxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
11. MISCELLANEOUS.
11.1 COMPLETE AGREEMENT. This Employment Agreement is the entire
Employment Agreement between the parties concerning the subject matter
hereof and supersedes and replaces any existing arrangement between the
parties hereto relating to Executive's employment. Employer and Executive
hereby acknowledge that there are no other agreements regarding Executive's
employment, apart from this Employment Agreement.
11.2 NO WAIVER. No failure on the part of Employer or Executive to
exercise, and no delay in exercising any right hereunder will operate as a
waiver thereof, nor will any single or partial exercise of any right
hereunder by Employer or Executive preclude any other or further exercise
thereof or the exercise of any other right.
11.3 SEVERABILITY. It is further agreed and understood by the parties
hereto that if any part, term or provision of this Agreement should be held
unenforceable
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in the jurisdiction in which either party seeks enforcement of the
contract, it shall be construed as if not containing the invalid
provision or provisions, and the remaining portions or provisions shall
govern the rights and obligations of the parties.
11.4 GOVERNING LAW. This Employment Agreement shall be construed and
enforced in accordance with the internal laws of the State of Minnesota,
without regard to conflicts of law provisions.
11.5 ASSIGNMENT. This Employment Agreement is personal in nature and
cannot be assigned by Executive. This Employment Agreement can be assigned
by Employer. The terms, conditions and covenants herein shall be binding
upon the heirs and personal representatives of Executive, and the
successors, assigns of Employer and any subsidiary or "affiliate" of
Employer.
11.6 REMEDIES NOT EXCLUSIVE. No remedy conferred hereunder is
intended to be exclusive, and each shall be cumulative and shall be in
addition to every other remedy. The election of any one or more remedies
shall not constitute a waiver of any other remedy.
11.7 TERMINATION OF EMPLOYMENT. In the event of Executive's
termination of employment all obligations of Employer to Executive under
this Agreement shall terminate with the exception as to the continuation of
certain payments and fringe benefits as specified in SECTION 4. Executive's
obligations under SECTIONS 4, 5, 6, 7, 8 AND 9 shall survive the
termination of employment.
11.8 CAPTIONS. Captions and section headings used herein are for
convenience only and are not a part of this Employment Agreement, and shall
not be used in construing it.
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IN WITNESS WHEREOF, the parties have duly executed this Employment
Agreement as of the date and year first above written.
EMPLOYER: INFORMATION ADVANTAGE, INC.
By
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Xxxxx X. Xxxx
Its President and Chief
Executive Officer
EXECUTIVE:
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Xxxxxxx X. Xxxxxx
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