EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective as of September 4, 1996, by and between XXXXX X. XXXXXXXX (hereinafter
"EMPLOYEE"), and MISSION CRITICAL SOFTWARE, INC., a Delaware corporation having
its principal office at 00000 Xxxxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
(hereinafter "EMPLOYER").
W I T N E S S E T H:
This Agreement is made and entered into under the following circumstances:
(1) Whereas, Employer intends to carry out the business plan developed and
implemented by Employer for the development, marketing and sale of the software
products and systems sold by Mission critical Software I, Inc. to Employer which
products and systems are known as the "Enterprise Administrator" for the
administration of security systems for access to networked personal computer
systems and any other products, systems or services that Employer may hereafter
develop, market or sell (the "BUSINESS ACTIVITIES"); and
(2) Whereas Employer desires, on the terms and conditions stated herein, to
employ Employee; and
(3) Whereas Employee desires, on the terms and conditions stated herein, to
be employed by Employer.
NOW, THEREFORE, in consideration of the foregoing recitals, and of the
promises, covenants, terms and conditions contained herein, the parties hereto
agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee hereby
accepts employment with Employer commencing September 4, 1996 (hereinafter the
"EFFECTIVE DATE") and continuing until terminated as provided in Section 7
hereof (hereinafter the "TERM OF EMPLOYMENT").
2. DUTIES. Employee shall serve as Vice President of Employer. Employee
shall serve in such position and perform the duties and functions as are normal
and customary to such position as well as any other duties delegated to Employee
by the Board of Directors during the Term of Employment. Employee agrees that
Employee's employment with Employer shall be the exclusive, full-time employment
of Employee.
3. BASE COMPENSATION AND INCENTIVE COMPENSATION. During the Term of
Employment, Employee shall be entitled to annual base compensation as set forth
on SCHEDULE A, payable in equal semi-monthly installments in accordance with the
normal payroll procedures of Employer. Employee shall be entitled to incentive
compensation as set form on SCHEDULE A.
1
4. STATUS OF EMPLOYEE. The parties expressly acknowledge that Employee, in
the performance of services hereunder, is an employee of Employer. Accordingly,
Employer shall deduct from all compensation paid to Employee pursuant to this
Agreement any sums required by law or any other requirement of any governmental
body.
5. VACATION/PERSONAL TIME. Employee shall be entitled to paid leave for
vacation, and illness, as provided on the attached SCHEDULE A. Employee shall
not be entitled to any additional paid absences for any reason. Unused holidays
and days of vacation may not be carried over from one fiscal year to another,
and additional income will not be given for vacation time or holidays not taken
during any year. Employer and Employee shall mutually agree on the scheduling of
Employee's vacation, holiday and leave time.
6. FRINGE BENEFITS. Employer shall provide to Employee, at Employer's
expense, the fringe benefits set forth on the attached SCHEDULE B.
7. TERMINATION. Notwithstanding any other provisions of this Agreement,
the Term of Employment shall terminate upon:
a. the death of Employee; or,
b. Employee's "disability" (For purposes of this Agreement, the term
"disability" shall mean the inability of Employee, arising out of any medically
determinable physical or mental impairment, to perform the services required of
him hereunder for a period of sixty (60) consecutive days during which sixty
(60) day period Employee's compensation hereunder shall continue);
c. six (6) months' prior written notice from Employer to Employee,
without cause, provided that, in lieu of such notice, Employer shall pay to
Employee six (6) months; salary as severance compensation, payable either in a
lump sum or over such six month period in accordance with Employer's usual
compensation practices (the "Severance Amount"); or
d. thirty (30) days prior written notice from Employee to Employer.
e. at Employer's option, immediately upon the existence of "cause."
For purposes of this Agreement, the term "cause" shall be defined as:
(1) willful and continued failure of Employee to substantially
perform the duties required of him in this Agreement in a manner
satisfactory to Employer, in the sole discretion of a majority of the
members of the Board of Directors, exercised in good faith; provided,
however, that the Term of Employment shall not be terminated pursuant to
this subparagraph (1)unless Employer first gives Employee a written notice
("NOTICE OF DEFICIENCY"). The Notice of Deficiency shall specify the
deficiencies in Employee's performance of his duties. Employee shall have a
period of thirty (30) days, commencing on receipt of the Notice of
Deficiency, in which to cure the deficiencies contained in the Notice of
Deficiency. If Employee does not cure
2
the deficiencies to the reasonable satisfaction of Employer, in Employer's
sole reasonable discretion, within such thirty (30) day period, the
Employer shall have the right to immediately terminate the Term of
Employment and this Agreement. The provisions of this subparagraph (1) may
be invoked by Employer any number of times and cure of deficiencies
contained in any Notice of Deficiency shall not be construed as a waiver of
this subparagraph (1) nor prevent the Employer from issuing any subsequent
Notices of Deficiency;
(2) the willful engaging by Employee in misconduct which is
materially injurious to Employer or its affiliates, monetarily or
otherwise;
(3) any dishonesty by Employee in his dealings with the Employer,
the commission of fraud by Employee, or negligence in the performance of
the duties of Employee;
(4) the arrest or conviction (or plea of guilty or nolo contendere)
of Employee of any felony or other crime involving dishonesty or moral
turpitude;
(5) any violation of any covenant or restriction contained in
Section 11 or Section 12 hereof; or
(6) unlawful use of narcotics or other controlled substances, or
use of alcohol or other drugs in a manner the Employer reasonably
determines to be adverse to the best interests of the Employer.
For all purposes of this Agreement, termination for "cause" shall be deemed
to have occurred if Employee's resignation when, because of existing facts and
circumstances, subsequent termination for "cause" can reasonably be foreseen.
For all purposes of this Agreement, no act, or failure to act, on Employee's
part shall be considered "willful" unless done, or omitted to be done, by him
not in good faith and without reasonable belief that his action or omission was
in, or not opposed to, the best interest of Employer or its affiliates.
Upon termination of this Agreement, Employee or Employee's estate, as
appropriate, shall be entitled to receive (in addition to any fringe benefits
payable upon death in the case of Employee's death) the compensation provided
for in Section 3 hereof (prorated on a daily basis) up to and including the
effective date of termination.
8. EFFECTS OF TERMINATION. Upon termination of this Agreement, neither
party shall have any further obligations hereunder except for (i) obligations
accruing prior to the date of termination and (ii) obligations, promises or
covenants contained herein which are expressly made to extend beyond the term of
this Agreement, including, without limitation, confidentiality of information,
indemnities and Employee's covenants not to compete (which covenants and
agreements shall survive the termination or expiration of this Agreement). The
termination of this Agreement, for whatever reason, shall not extinguish those
obligations of Employee specified in the Restrictive Covenants (hereinafter
defined), nor shall the same extinguish the
3
right of either party to bring an action, either in law or in equity, for breach
of this Agreement by the other party.
9. TRANSITION FOLLOWING NOTICE OF TERMINATION. Following any notice of
termination of employment hereunder, whether given by Employer or Employee,
Employee will fully cooperate with Employer in all matters relating to the
winding up of Employee's pending work on behalf of Employer and the orderly
transfer of such work to the other professional employees of Employer. On or
after the giving of notice of termination hereunder and during any notice
period, Employer will be entitled to such full-time or part-time services of
Employee as Employer may reasonably require in accordance with the terms hereof,
and Employer will specifically have the right to terminate the active services
of Employee at the time such notice is given and to pay to Employee the
Severance Amount if such amount is due pursuant to Section 7(c) hereof.
10. TERRITORY. In recognition of the existing and potential worldwide
Business Activities of Employer, Employer and Employee agree that the terms of
this Agreement shall apply to any Prohibited Activities (as defined below)
engaged by Employee anywhere in the world including all states and territories
of the United States of America. Prohibited Activities shall include (without
limitation) any activities which would be in breach of the covenants contained
in Sections 11 and 12 below.
11. NON-COMPETITION. While Employee is employed by Employer and for a
period of one (1) year after termination or cessation such employment for any
reason Employee shall not, without employer's prior written consent, as a
principal, employee, consultant, partner, or stockholder of, or in any other
capacity with, any "business enterprise" (as that term is defined below) (other
than in any capacity as a holder of not more than 1% of the combined voting
power of the outstanding stock of a publicly held company) (a) engage in
competition with Employer, (b) conduct a business of the type or character
engaged in by Employer at the time of termination or cessation of Employee's
employment, or (c) develop, market, sell, and/or distribute products or services
competitive with those of Employer. As used herein, the term "business
enterprise" shall mean any corporation, partnership, association, sole
proprietorship or any other entity competing with Employer or directly involved
in the development, marketing, sales, and/or distribution of products or
services which, during the time of Employee's employment by Employer, were
developed, under active development, under consideration for development,
marketed, sold, and/or distributed by Employer.
12. NON-DISCLOSURE: NON-SOLICITATION. Except in the performance of his
duties hereunder, at no time during the Term of Employment or at any time
thereafter shall Employee, individually or jointly with others, for the benefit
of Employee or any third party, publish, disclose, use of authorize anyone else
to publish, disclose or use, any secret or confidential material or information
relating to any aspect of the business or operations of Employer or any
information regarding the business methods, business policies, procedures,
techniques, or trade secrets, or other knowledge or processes of or developed by
Employer (and/or any other Employee or agent of Employer), any affiliate of the
Employer, or any entity in which the Employer has an interest, including,
without limitation, any secret or confidential information
4
relating to the business, customers, financial position, trade or industrial
practices, trade secrets, technology or know-how of the Employer or Employer's
affiliates. Moreover, while Employee is employed by Employer and for a period of
two years thereafter, Employee shall not directly or in any other capacity,
employ any person or hire or contract with, as a consultant or other independent
agent or independent contractor, any person or entity (other than Employee) who
was employed by or acted as an agent for, consultant to, or independent
contractor of the Employer, any affiliate of the Employer, or any entity in
which the Employer has an interest, at any time during the Term of Employment;
provided that the prohibitions contained in this sentence shall exclude persons
or entities not directly involved in the development, marketing, sales, and/or
distribution of products or services which, during the time of Employee's
employment by Employer, were developed, under active development, under
consideration for development, marketed, sold and/or distributed by Employer. In
addition, while Employee is employed by Employer and for a continuous period of
two (2) years thereafter, Employee shall not solicit, divert or take away, or
attempt to divert or take away, the business or patronage of any of the clients,
customers or accounts, or prospective clients, customers or accounts, of
Employer which were contacted, solicited or served by Employee while employed by
Employer in connection with products or services which, during the time of
Employee's employment by Employer, were developed, under active development,
under consideration for development, marketed, sold, and/or distributed by
Employer.
13. REASONABLENESS OF RESTRICTIONS; REFORMATION; ENFORCEMENT. The parties
hereto recognize and acknowledge that the geographical and time limitations
contained in Sections 11 and 12 hereof (hereinafter the "RESTRICTIVE COVENANTS")
are reasonable and properly required for the adequate protection of Employer's
interest. Employee acknowledges that Employer will provide to Employee
confidential information concerning the Employer's and Employer's affiliates'
business methods and operating practices in reliance on the covenants contained
in the Restrictive Covenants. It is agreed by the parties hereto that if any
portion of the restrictions contained in the Restrictive Covenants are held to
be unreasonable, arbitrary or against public policy, then the restrictions shall
be considered divisible, both as to the time and to the geographical area, with
each month of the specified period being deemed a separate period of time and
each radius mile of the restricted territory being deemed a separate
geographical area, so that the lesser period of time or geographical area shall
remain effective so long as the same is not unreasonable, arbitrary or against
public policy. The parties hereto agree that if any court of competent
jurisdiction determines the specified period or the specified geographical area
of the restricted territory to be unreasonable, arbitrary or against public
policy, a lesser time period or geographical area which is determined to be
reasonable, nonarbitrary and not against public policy may be enforced against
Employee. If Employee shall violate any of the covenants contained herein and
if any court action is instituted by the Employer to prevent or enjoin such
violation, then the period of time during which the Employee's business
activities shall be restricted, as provided in this Agreement, shall be
lengthened by a period of time equal to the period between the date of the
Employee's breach of the terms or covenants contained in this Agreement and the
date on which the decree of the court disposing of the issues upon the merits
shall become final and not subject to further appeal.
5
14. NO REMEDY AT LAW. Employee agrees that the remedy at law for any
breach by him of the Restrictive Covenants will be inadequate and would be
difficult to ascertain and therefore, in the event of the breach or threatened
breach of any such covenants, the Employer, in addition to any and all other
remedies, shall have the right to enjoin Employee from any threatened or actual
activities in violation thereof; and Employee hereby consents and agrees that
temporary and permanent injunctive relief may be granted in any proceedings
which might be brought to enforce any such covenants without the necessity of
proof of actual damages and without necessity of posting a bond in cash or
otherwise. If Employer does apply for such an injunction, Employee shall not
raise as a defense thereto that the Employer has an adequate remedy at law.
15. ASSIGNABILITY. This Agreement and the rights and duties created
hereunder shall not be assignable or delegable by Employee. Employer may, at
Employer's option and without consent of Employee, assign its rights and duties
hereunder to any successor entity or transferee of Employer's assets.
16. NOTICES. All notices or other communications provided for herein to
be given or sent to a party by the other party shall be deemed validly given or
sent if in writing and mailed, postage prepaid, by registered or certified
United States mail or hand delivered or sent by facsimile, addressed to the
parties at their addresses hereinabove set forth. Any party may give notice to
the other party at any time, by the method specified above, of a change in the
address at which, or the person to whom, notice is to be addressed.
17. SEVERABILITY. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant or provision
hereof. If that any provision of this Agreement shall be determined to be
invalid or unenforceable, such provision shall be deemed limited by construction
in scope and effect to the minimum extent necessary to render the same valid and
enforceable, and, if such a limiting construction is impossible, such invalid or
unenforceable provision shall be deemed severed from this Agreement, but every
other provision of this Agreement shall remain in full force and effect.
18. WAIVER. The failure of a party to enforce any term, provision or
condition of this Agreement at any time or times shall not be deemed a waiver of
that term, provision or condition for the future, nor shall any specific waiver
of a term, provision or condition at one time be deemed a waiver of such term,
provision or condition for any future time or times.
19. PARTIES. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their heirs, personal representative, legal
representatives, and proper successors and assigns, as the case may be.
20. GOVERNING LAW. The validity, interpretation and performance of this
Agreement shall be governed by the laws of the State of Texas, without giving
effect to the principles of comity or conflicts of laws thereof. Each party
hereto agrees to submit to the personal jurisdiction and venue of the state and
federal courts having jurisdiction over Xxxxxx County, Texas, for a resolution
of all disputes arising in connection with the interpretation, construction,
6
and enforcement of this Agreement, and hereby waives the claim or defense
therein that such courts constitute an inconvenient forum.
21. CAPTIONS. The captions of this Agreement have been assigned thereto
for convenience only, and shall not be construed to limit, define or modify the
substantive terms hereof.
22. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement constitutes the entire
agreement between the parties hereto concerning the subject matter hereof, and
supersedes all prior agreements, memoranda, correspondence, conversations and
negotiations. This Agreement may be executed in several counterparts that
together shall constitute but one and the same Agreement.
23. COSTS OF ENFORCEMENT. If it is necessary for any party to retain the
services of an attorney or to initiate legal proceedings to enforce the terms of
this Agreement, the prevailing party shall be entitled to recover from the non-
prevailing party, in addition to all other remedies, all costs of such
enforcement, including reasonable attorneys' fees and costs and including trial
and appellate proceedings.
24. GENDER, ETC. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate.
7
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the
date first written above.
EMPLOYEE:
/s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
EMPLOYER:
MISSION CRITICAL SOFTWARE, INC.
a Delaware Corporation
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Name: XXXXX X. XXXXXXXX
------------------------
Title: President
------------------------
8
SCHEDULE A
COMPENSATION and LEAVE POLICIES
BASE COMPENSATION
Employee shall be paid a base salary of One Hundred Twenty Thousand Dollars
($120,000.00) per annum.
INCENTIVE COMPENSATION
There shall be no incentive compensation other than participation in such
incentive stock option plans as the Board of Directors or Compensation Committee
may establish from time to time on such terms the Board of Directors or
Compensation Committee may decide.
LEAVE
Employee shall be entitled to leave of three (3) weeks per annum, to be
taken in accordance with Employer's regular vacation policies.
9
SCHEDULE B
BENEFITS
Life Insurance - None
Health Insurance - Major Medical, Personal, Family and Dependent Coverage and
Dental Insurance Coverage on such terms as Employer may establish for all of its
employees.
Disability Insurance - None
Other Fringe benefits - None
10
