EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), made and entered into as of this 30th day
of October, 1995, by and between XXXX XXXXXXX, an individual currently a
resident of Xxxxxx County, Georgia (hereinafter referred to as "Employee"),
and TSW INTERNATIONAL, INC., a Georgia corporation (hereinafter referred to
as "Company");
WITNESSETH:
WHEREAS, Company desires to employ Employee, and Employee desires to be
employed by Company, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
SECTION 1. EMPLOYMENT.
Subject to the terms hereof, Company hereby employs Employee, and
Employee hereby accepts such employment. Employee shall serve as the Chief
Financial Officer of Company in accordance with the Bylaws of the Company.
In such capacity, Employee shall report to the Chief Executive Officer of the
Company and devote his full business time (except for such responsibilities
to serving on other boards of directors and other commitments as shall be
approved by the Company) and best efforts to the performance of his duties on
behalf of Company, as directed by the Chief Executive Officer and the Board
of Directors (the "Board") of the Company. Unless Company and Employee agree
otherwise, Employee's principal office shall be located in the Company's
corporate offices in the vicinity of metropolitan Atlanta, Georgia.
SECTION 2. TERM.
2.1 GENERAL. The employment of Employee hereunder shall commence as of
October 30, 1995 and shall continue until terminated upon the occurrence of
any of the following events:
(i) The death of Employee;
(ii) The mutual written agreement of the Company and Employee to
terminate this Agreement;
(iii) The resignation by Employee upon thirty (30) days prior written
notice to the Company; provided, however, that in the event any such
resignation by Employee occurs as a result of a Relocation (as hereinafter
defined) the Company shall continue to pay to Employee, in full
satisfaction of its obligations hereunder, his Base Salary (as defined in
Section 3.1) for a period of twelve (12) months from the date of such
resignation. As used in this subsection, "Relocation" shall mean the
relocation of the Employee's principal place of employment (or that of the
key members of the staff reporting to the Chief Financial Officer of the
Company) to a location other than the metropolitan Atlanta, Georgia area;
(iv) The termination of Employee's employment hereunder by the
Company for "good cause." For the purpose of this Agreement, "good cause"
shall mean (a) a material breach by Employee of his obligations hereunder;
or (b) conduct by Employee amounting to fraud, dishonesty or negligence;
and
(v) The termination of Employee's employment hereunder by the
Company without good cause; provided, however, that upon any such
termination under this subsection (v) the Company shall continue to pay to
Employee, in full satisfaction of its obligations hereunder, his Base
Salary (as defined in Section 3.1) for a period of twelve (12) months from
the date of such termination.
2.2 NO REPAYMENT OBLIGATION OF EMPLOYEE. In the event this Agreement
is terminated pursuant to Section 2.1 herein, Employee shall have no
obligation to repay any amounts or benefits previously paid to Employee
pursuant to this Agreement, and the Company shall have no obligation to pay
Employee any further amounts and further benefits after the date of
termination except for such amounts or benefits, if any, (i) which are
required to be paid or offered to Employee under any applicable federal or
state law, (ii) which accrued prior to the date of termination, or (iii)
which are payable pursuant to subsections (iii) or (v) of Section 2.1 above.
SECTION 3. COMPENSATION; EXPENSES.
3.1 SALARY. Employee shall be paid a base salary (the "Base Salary")
during the term of his employment hereunder at the rate of Two Hundred Twenty
Thousand Dollars ($220,000) per annum for the period commencing on the date
hereof and ending upon the termination of Employee's employment hereunder.
Unless otherwise increased by the Board of Director in its sole discretion,
the Base Salary will continue to be Two Hundred Twenty Thousand Dollars
($220,000) during the term of Employee's employment hereunder. The Base
Salary shall be paid to Employee in equal installments on normal Company pay
dates, but in no event less often than monthly in arrears, less all
applicable withholdings.
3.2 SIGNING BONUS. The Company shall pay to the Employee a "Signing
Bonus" of Forty Thousand Dollars ($40,000), less all applicable withholdings,
which shall be paid on or before January 31, 1996.
2
3.3 BONUS PLANS. Company shall allow Employee to participate at a
level consistent with his status as Chief Financial Officer in any pension or
profit sharing plan now or as may hereafter be provided or offered to the
Company's senior executive officers in accordance with the terms and
requirements of the applicable plan. The Company agrees to work with
Employee in designing and implementing an incentive bonus plan for Employee
to commence with the fiscal year beginning April 1,1996.
3.4 EXPENSES. Employee shall be reimbursed for all ordinary and
reasonable business expenses incurred by Employee at the request and on
behalf of Company upon the presentation of appropriate supporting
documentation to the Company.
SECTION 4. ADDITIONAL EMPLOYMENT BENEFITS.
Company shall provide Employee with the following additional employment
benefits during the term of his employment hereunder:
4.1 MEDICAL INSURANCE. Company shall pay for and shall provide
Employee with such life, medical, dental, disability and other insurance
benefits as is made available from time to time to the senior executive
officers of the Company. All such insurance coverage shall commence as soon
as practicable after the date hereof.
4.2 VACATION. Employee shall be entitled to paid vacation time in
accordance with the Company's vacation policy for senior executives in effect
from time to time, provided, however, that such paid vacation time shall not
be less than four (4) weeks per annum.
4.3 OTHER BENEFITS. Company shall provide Employee with any other
benefits that Company generally provides to its senior executive officers.
SECTION 5. GRANT OF STOCK OPTIONS.
Concurrently herewith the Company has granted to Employee, and does
hereby affirm the grant of, an incentive stock option to purchase 141,600
shares of the common stock of the Company, par value $0.01 per share, at a
price per share of $11.48 in accordance with the terms and conditions set
forth on Exhibit "A" attached hereto. This option shall be evidenced by a
written stock option agreement in form customarily used by the Company for
its employee stock options.
SECTION 6. RESTRICTIONS.
6.1 OWNERSHIP. All Work Product when and as it is created or
conceived, including all intellectual property rights therein, shall be
disclosed to and owned exclusively by Company. For purposes of this
Agreement, "Work Product" refers to all inventions, discoveries and
improvements and all other information of value or importance concerning the
business and actions of Employee while acting on behalf of Company (but
limited to the
3
Company's management information systems business), including (without
limitation) information concerning software development, customer prospects
and accounts, personnel, marketing and business strategies. Notwithstanding
the preceding sentence, Work Product shall exclude all inventions,
discoveries and improvements and all other information of value or importance
concerning the business and actions of Employee while acting on behalf of
parties other than Company, if undertaken with the consent of the board of
directors of the Company. To the greatest extent possible, any Work Product
shall be deemed to be "work made for hire" (as defined in the Copyright Act,
17 U.S.C.A. Section 101 ET AL., as amended) and owned exclusively by the
Company. Employee hereby unconditionally and irrevocably transfers and
assigns to the Company all rights, title and interest Employee may currently
have (or in the future may have) by operation of law or otherwise in or to
any Work Product, including, without limitation, all patents, copyrights,
trademarks, service marks and other intellectual property rights. Employee
agrees to execute and deliver to the Company any transfers, assignments,
documents or other instruments which the Company may deem necessary or
appropriate to vest complete title and ownership of any Work Product, and all
associated rights, exclusively in the Company.
6.2 CONFIDENTIALITY. Employee shall maintain in strict confidence and
shall not use or disclose (except as required to perform Employee's duties
under this Agreement) any "Trade Secrets" or "Confidential Information" of
Company, its affiliates and customers. With respect to the Company's Trade
Secrets, this obligation shall apply during and after the term of this
Agreement for so long as the pertinent information remains a Trade Secret,
and shall apply whether or not the Trade Secret is in written or tangible
form. With respect to the Company's Confidential Information, this
obligation shall apply during the term of this Agreement and for three (3)
years after its termination. As provided by Georgia statutes, "Trade Secret"
shall mean any information (including, but not limited to, technical or
non-technical data, a formula, a pattern, a compilation, a process, financial
data, financial plans, product plans, or a list of actual or potential
customers) that: (i) derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use;
and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy. In the case of Company's business,
Company's Trade Secrets include (without limitation) information regarding
software programs, names and addresses of any customers, sales personnel,
account invoices, training and educational manuals, administrative manuals,
prospective customer leads, in whatever form, whether or not computer or
electronically accessible "on-line." As used in this Agreement, the
Company's "Confidential Information" shall refer to valuable, non-public
competitively sensitive data and information relating to the Company's
business or its clients business, other than Trade Secrets, that is not
generally known by or readily available to competitors of the Company; it
also includes any information or data specifically identified as a "Trade
Secret" in the immediately preceding sentence that is determined by a court
of competent jurisdiction not to be a "Trade Secret."
6.3 DELIVERY. Upon the request of Company, and, in any event, upon the
termination of Employee's employment, (1) Employee shall take such steps as
Company may
4
reasonably request in order to transfer, disclose, and give Company the full
benefit of any Work Product remaining in Employee's possession; and (2)
Employee shall deliver to Company all memoranda, notes, records, drawings,
manuals, disks and other documents and media, regardless of form, that
certain Work Product or Trade Secrets. Employee shall not retain any such
materials (whether in original or duplicated form) following such delivery.
6.4 NON RECRUITMENT. Employee agrees that during his employment by the
Company and for a period of two (2) years following any termination of such
employment, he will not, either directly or indirectly, on his own behalf or
in the service or on behalf of others solicit or attempt to solicit on behalf
of or for the benefit of any entity which competes with the Company (i) any
person employed by the Company, whether or not such employee is a full-time
employee or a temporary employee of the Company and whether or not such
employee is pursuant to written agreement and whether or not such employment
is for a determined period or is at will, or (ii) any person or entity that
is an agent or independent contractor of the Company in the continental
United States; nor will Employee at any time during such period, either
directly or indirectly, induce or attempt to induce any such agent or
independent contractor to terminate, breach or otherwise fail fully to
perform any agency or agreement with the Company.
6.5 NAMES AND MARKS. Following the termination of Employee's
employment, Employee shall not, for the benefit of his own or any other
person or entity's business, use or display the names, marks, logos or
slogans of the Company or its affiliates, or any name, xxxx, logo or slogan
similar thereto, without the prior written consent of the Company.
6.6 LIMITATION ON SOLICITING CLIENTS. Employee agrees that during his
employment, Employee will not, either directly or indirectly, alone or in
conjunction with any other party, solicit, divert or appropriate or attempt
to solicit, divert or appropriate any "Client" for the purpose of providing
the Client with services or products competitive with those offered by the
Company during the Employment Term. For purposes of this Agreement,
"Clients" shall mean actual clients or actively sought prospective clients of
the Company during the term of Employee's employment by the Company.
Employee agrees that for eighteen (18) months after the last day of his
employment, Employee will not, either directly or indirectly, alone or in
conjunction with any other party, solicit, divert or appropriate or attempt
to solicit, divert or appropriate any Client of the Company for the purpose
of providing the Client with services or products competitive with those
offered by the Company during his employment; provided that the covenant in
this sentence shall limit Employee's conduct only with respect to those
Clients with whom Employee had substantial contact (through direct or
supervisory interaction with the Client or the Client's account) during a
period of time up to but no greater than two (2) years prior to the last day
of his employment.
6.7 NO COMPETE COVENANT. In the event that the Company terminates this
Agreement prior to the expiration of the term hereof pursuant to Section 2.2
hereof, for so long as the Company is making severance payments to the
Employee, Employee agrees that
5
he will not, either directly or indirectly, enter into any employment or
other relationship with any entity or enterprise which is engaged, wholly or
partly, in any business competitive with the Company whereby Employee is
required to or does perform services similar to those he provides to the
Company hereunder.
6.8 RELIEF. In the event of any breach or threatened breach by
Employee of any covenant contained in this Section 6, the resulting injuries
to Company would be difficult or impossible to estimate accurately, even
though irreparable injury or damages may result. Accordingly, an award of
legal damages, if without other relief, may be inadequate to protect the
Company. Employee therefore agrees that, in the event of any such breach,
Company shall be entitled to apply to a court of competent jurisdiction to
obtain an injunction to restrain the breach or anticipated breach of any such
covenant, and to obtain any other available legal, equitable, statutory, or
contractual relief. In the event the Company seeks damages from Employee for
any breach of any covenant contained in this Section 6, Employee's liability
shall be limited to the then fair market value of any shares of the Company's
capital stock owned by the Employee ("shares" shall include any shares of the
Company's capital stock to which Employee holds options to purchase and any
shares purchased pursuant to such options, but shall exclude any other shares
purchased by Employee).
6.9 REASONABLENESS OF COVENANTS. Employee recognizes and acknowledges
that the covenants in this Section 6 are reasonable as to time, geographical
coverage and restricted conduct and are necessary to protect Company's
business and Trade Secrets. Employee further acknowledges that (a) Employee
has entered into this Agreement freely as a result of balanced arm's length
bargaining and with the full benefit of qualified counsel of his choosing and
(b) Company would not have engaged Employee without Employee's having agreed
to these covenants.
SECTION 7. MISCELLANEOUS.
7.1 BINDING EFFECT. This Agreement shall inure to the benefit of and
shall be binding upon Employee and Company and its successors and assigns.
Employee may not assign his rights or delegate his obligations hereunder
without the prior written consent of the Company.
7.2 GOVERNING LAWS. Agreement shall be deemed to be made in, and in
all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia.
7.3 HEADINGS. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
6
7.4 NOTICES. Unless otherwise agreed to in writing by the parties
hereto, all communications provided for hereunder shall be in writing and
shall be deemed to be given when delivered in person or three (3) business
days after being sent by registered or certified mail, postage prepaid, and:
(a) If to Employee, addressed to:
Xxxx Xxxxxxx
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
(b) If to Company, addressed to:
TSW International, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
7.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
7.6 ENTIRE AGREEMENT. This Agreement is intended by the parties hereto
to be the final expression of their agreement with respect to the subject
matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements or agreements to the
contrary heretofore made.
7.7 MODIFICATIONS, WAIVERS. This Agreement may be modified only by a
written instrument signed by each of the parties hereto. No waiver shall be
effective unless made in writing and signed by the party against whom
enforcement is sought.
7.8 SEVERABILITY. Should any aspect or provisions of this Agreement
proven valid or unenforceable for any reason, the remainder of the Agreement
shall nonetheless be fully enforced to the fullest extent permitted by law,
regardless of whether the invalid of unenforceable aspect or provision is
facially severable from the remainder of the Agreement.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
TSW INTERNATIONAL, INC.
[CORPORATE SEAL]
By: /s/ Xxxxxxxxxxx X. Xxxx
-------------------------------------
Title: CEO
----------------------------------
EMPLOYEE:
/s/ Xxxx Xxxxxxx
----------------------------------------
Xxxx Xxxxxxx
8
EXHIBIT "A"
TO EMPLOYMENT AGREEMENT BETWEEN
XXXX XXXXXXX
AND
TSW INTERNATIONAL, INC.
The following provisions relate to the grant by the Company to Employee of
a stock option to purchase 141,600 shares of the common stock of the Company.
1. Option Price: $11.48 per share
2. Term of Option: ten (10) years
3. Vesting Provision: Not exercisable immediately; exercisable with respect
to 25% of shares upon each of the first four
anniversary dates of the option, so that the option
will be exercisable in full four years from its date.
4. Termination of No further vesting after termination of employment,
Employment: provided that if the termination of employment occurs
by reason of Employee's resignation due to a
Relocation, outstanding options will immediately vest
in full; vested portions of option may be exercised
within three months following termination of
employment and within one year following death;
Company may elect to permit Employee to hold non-
vested portions of option, in whole or in part and/or
at modified vesting terms.
5. Change of Control: Outstanding options will immediately vest in full upon
a "change in control" which shall be defined as any
event which results in Warburg, Xxxxxx Investors, L.P.
owning less than 50.1% of the outstanding common stock
of the Company.
6. Payment upon Cash in full.
Exercise:
