EXHIBIT 10.20
AWARD SOFTWARE INTERNATIONAL, INC.
EMPLOYMENT AGREEMENT
FOR
XXXXXX X. XXXXXX
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of May 30, 1997,
by and between XXXXXX X. XXXXXX ("Narath") and AWARD SOFTWARE INTERNATIONAL,
INC. a California corporation (the "Company").
RECITALS
A. Execution and delivery of this Agreement is made as a closing
condition to that certain Agreement and Plan of Merger and Reorganization
("Merger Agreement") dated as of May 29, 1997 by and among Award, Award
Acquisition Sub Corp., a Delaware corporation and a wholly owned subsidiary of
Award ("Merger Sub"), Unicore Software, Inc., a Massachusetts corporation
("Unicore"), and Narath, an individual and sole shareholder of Unicore, pursuant
to which Merger Sub will merge with Unicore (the "Merger"). Upon consummation
of the Merger, Unicore will cease to exist, and Merger Sub will be the surviving
corporation and renamed "Unicore Software, Inc." (the "Surviving Corporation").
B. Execution and delivery of this Agreement is an inducement to Award to
consummate the Merger.
C. The Company desires to employ Narath to provide personal services to
the Company, and wishes to provide Narath with certain compensation and
benefits, in return for his services; and
X. Xxxxxx wishes to be employed by the Company and provide personal
services to the Company in return for certain compensation and benefits.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:
1. EMPLOYMENT BY THE COMPANY.
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1.1 Subject to terms set forth herein, the Company agrees to employ
Narath in the position of President of Unicore and Vice President of the Company
and Narath hereby accepts such employment effective as of the date first written
above (the "Effective Date"). During the term of his employment with the
Company, Narath will devote his best efforts and substantially all of his
business time and attention (except for
1.
vacation periods as set forth herein and reasonable periods of illness or other
incapacities permitted by the Company's general employment policies) to the
business of the Company.
1.2 Narath shall serve in an executive officer and shall perform such
duties as are customarily associated with his then current title, consistent
with the Bylaws of the Company and as required by the Company's Board of
Directors (the "Board").
1.3 The employment relationship between the parties shall also be
governed by the general employment policies and practices of the Company,
including those relating to protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment policies or
practices, this Agreement shall control.
1.4 The term of this Agreement shall be two (2) years commencing with
the Effective Date hereof. Subject to Section 5.1, the term of employment shall
be automatically extended for consecutive additional periods of one (1) year
each unless either the Company or Narath provides written notice to the other of
an intention not to renew not less than thirty (30) days prior to the expiration
of the then current term.
2. COMPENSATION.
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2.1 SALARY. Narath shall receive for services to be rendered
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hereunder an annualized base salary of $180,000 less standard deductions and
withholdings, payable in installments in accordance with Company policy. The
Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee") shall perform an annual review and shall increase such
annual salary as the Compensation Committee deems appropriate in its sole
discretion; provided, however, that Narath's salary shall be increased annually
by a percentage amount equal to at least the percentage increase during the
immediately preceding twelve (12) months in the Consumer Price Index (All Items)
For All Urban Consumers For Boston, Massachusetts area, as published by the
Bureau of Labor Statistics, or if such Index is not available, the U.S.
Government Index which is the most similar thereto. At no time during the term
of this Agreement shall Narath's annual base salary fall below one hundred and
eighty thousand ($180,000.00) dollars. In addition, if Narath's annual base
salary is increased at any time during the term of this Agreement, Narath's
increased annual base salary shall become a floor below which Narath's annual
base salary shall not fall at any future time during the term of this Agreement.
2.2 COMMISSION. Narath shall be entitled to receive a sales
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commission payable monthly based on net revenues of the Surviving Corporation.
For the fiscal year ending December 31, 1997, Narath shall be entitled to
receive three percent (3.0%) of Unicore net revenues and one and one-half
percent (1.5%) of Award net revenues for the calendar year. For purposes of
this Section 2.2, "Unicore net revenues" shall mean the revenues of the
Surviving Corporation and its wholly owned subsidiary corporation, Microid
Research, Inc., net of returns and allowances determined in accordance with
generally accepted accounting principles ("GAAP") as applied by the Company.
For
2.
purposes of this Section 2.2, "Award net revenues" shall mean the revenues of
the Company from the sale of the Company's products through the Company's German
branch office net of returns and allowances determined in accordance with GAAP
as applied by the Company; provided, however, notwithstanding anything contained
herein to the contrary, Award net revenues shall not include for purposes of
calculating the sales commission in respect thereof Unicore net revenues. After
the fiscal year ending December 31, 1997, the Compensation Committee shall
determine in its discretion the amount of sales commission Narath shall be
entitled to earn taking into consideration Narath's responsibilities and
performance goals; provided, however, at no time during the term of this
Agreement shall Narath's Target Compensation to which he shall be entitled to
receive be less than his Target Compensation for the fiscal year ending December
31, 1997. For purposes of this Agreement, Target Compensation shall be annual
compensation composed of (a) annual base salary described in Section 2.1 and (b)
the sales commission compensation described in this Section 2.2; provided,
however, notwithstanding anything contained herein to the contrary, Target
Compensation shall not mean a guaranteed payment owed to Narath, but the right
to earn and receive (if earned) sales commission compensation. The Target
Compensation for fiscal year ending December 31, 1997 shall be $285,000.
2.3 PARTICIPATION IN BENEFIT PLANS. Narath shall be entitled to
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participate in, and receive benefits under, all the Company's employee benefit
plans and arrangements as set forth on Exhibit A hereto and as modified and in
effect from time to time (including, but not limited to, participation in any
pension, profit sharing, stock bonus or employee stock ownership plan adopted by
the Company, and all life, health, dental, disability and other insurance). For
purposes of determining vacation accrual under such benefits, Narath shall be
credited with his years of employment with Unicore.
2.4 STOCK OPTIONS. Narath shall be eligible to receive stock options
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under the Company's 1997 Equity Incentive Plan (the "Options") to purchase
55,000 shares of the Company's common stock. The Options shall be "nonstatutory
stock options" within the meaning of the Internal Revenue Code of 1986, as
amended. The Options shall have an exercise price equal to the fair market
value at the time of grant as determined by the Compensation Committee. The
Options shall vest 25% on the first anniversary of the date of grant and 1/48th
per month thereafter during Narath's employment with the Company.
2.5 EXPENSES. The Company shall assume Narath's obligations under
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that certain Vehicle Lease Agreement, dated November 7, 1996, between Narath and
Peabody Motor Sports evidencing the lease of a 1997 BMW 740IL, which lease shall
terminate on November 7, 1998. Thereafter, Narath shall be entitled to receive
a monthly reimbursement for all automobile lease payments, customary insurance,
gas, taxes, maintenance and other automobile related expenses consistent with
past practice by Narath. Narath shall be entitled to receive reimbursement for
all reasonable travel and entertainment expenses in connection with his
employment hereunder and shall be entitled to travel by business or first class
means for domestic flights and business class means for international flights
and to lodging and accommodations of his choice.
3.
2.6 RELOCATION. The Company shall not require Narath to have his
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principal business office at a location more than 25 miles from the location
where Narath is employed immediately prior to the Effective Date. In the event
that the Company requests that Narath relocate from Massachusetts, such
relocation shall be made upon mutually agreeable terms negotiated in good faith
by Narath and the Company at such time.
2.7 DIRECTOR. During the term of this Agreement, so long as
Surviving Corporation is a wholly owned subsidiary of the Company, Narath shall
serve as a Director of the Surviving Corporation and the Company agrees to
nominate and vote for Narath for such Director position.
2.8 LIFE INSURANCE. During the term of this Agreement, the Company
shall maintain and pay the premiums on the existing Unicore Software, Inc. one
million ($1,000,000) dollar term life insurance policy on Narath, or such other
life insurance policy with substantially similar coverage, and, upon execution
of this Agreement, will name the beneficiary designated by Narath in a
Beneficiary Designation to be filed with the insurance company.
3. PROPRIETARY INFORMATION OBLIGATIONS.
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3.1 AGREEMENT. Narath agrees to execute and abide by the Proprietary
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Information and Inventions Agreement attached hereto as Exhibit A.
3.2 REMEDIES. Narath's duties under the Proprietary Information and
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Inventions Agreement shall survive termination of his employment with the
Company. Narath acknowledges that a remedy at law for any breach or threatened
breach by him of the provisions of the Proprietary Information and Inventions
Agreement would be inadequate, and he therefore agrees that the Company shall be
entitled to injunctive relief in case of any such breach or threatened breach.
4. OUTSIDE ACTIVITIES.
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4.1 Except with the prior written consent of the Company's Board of
Directors, Narath will not during the term of this Agreement undertake or engage
in any other employment, occupation or business enterprise, other than ones in
which Narath is a passive investor. Narath may engage in civic and not-for-
profit activities so long as such activities do not materially interfere with
the performance of his duties hereunder.
4.2 Nothing contained herein shall prevent Narath's continued
engagement in the management and ownership of business entities in the health
club and fitness business so long as such activities do not materially interfere
with the performance of his duties hereunder.
4.
5. TERMINATION OF EMPLOYMENT.
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5.1 TERMINATION WITHOUT CAUSE.
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(A) The Company shall have the right to terminate Narath's
employment with the Company at any time without cause after the first
anniversary of the Effective Date.
(B) In the event Narath's employment is terminated without cause
after the first anniversary, but on or prior to the second anniversary of the
Effective Date, the Company shall pay Narath, and Narath shall be entitled to
receive, an amount equal to the sum of (a) six months of his then current annual
base salary and (b) the aggregate amount of sales commission earned during the
immediately preceding full calendar six-month period.
(C) After the second anniversary of the Effective Date, in the
event Narath's employment is terminated without cause, he will not be entitled
to severance pay, pay in lieu of notice or any other compensation (including any
amounts described in Section 2 hereof).
5.2 TERMINATION FOR CAUSE.
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(A) The Company shall have the right to terminate Narath's
employment with the Company at any time for cause.
(B) "Cause" for termination shall mean: (a) indictment or
conviction of any felony or of any crime involving moral turpitude or
dishonesty; (b) participation in any fraud against the Company; (c) breach of
Narath's duties to the Company, including breach of his Proprietary Information
and Inventions Agreement and persistent unsatisfactory performance of job duties
after written notice (which may be delivered by facsimile or e-mail) to Narath
specifying such breach or unsatisfactory performance and Narath fails to cure
such breach or unsatisfactory performance within thirty (30) days after such
written notice; (d) intentional damage to any property of the Company; or (e)
willful breach of the Company's policies.
(C) In the event Narath's employment is terminated at any time
with cause, he will not be entitled to severance pay, pay in lieu of notice or
any other compensation (including any amounts described in Section 2 hereof).
5.3 VOLUNTARY OR MUTUAL TERMINATION.
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(A) Narath may voluntarily terminate his employment with the
Company at any time upon tendering thirty (30) days prior written notice to the
Company, after which no further compensation will be paid to Narath.
5.
(B) In the event Narath voluntarily terminates his employment, he
will not be entitled to severance pay, pay in lieu of notice or any other such
compensation (including any amounts described in Section 2 hereof).
6. GENERAL PROVISIONS.
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6.1 NOTICES. Any notices provided hereunder must be in writing and
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shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telex) or the third day after mailing by first class mail,
to the Company at its primary office location and to Narath at his address as
listed on the Company payroll.
6.2 SEVERABILITY. Whenever possible, each provision of this
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Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.
6.3 WAIVER. If either party should waive any breach of any
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provisions 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.
6.4 COMPLETE AGREEMENT. This Agreement and its Exhibit, together
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with the Merger Agreement of even date herewith and its Exhibits, constitute the
entire agreement between Narath and the Company and it is the complete, final
and exclusive embodiment of their agreement with regard to this subject matter.
It is entered into without reliance on any promise or representation other than
those expressly contained herein, and it cannot be modified or amended except in
a writing signed by an officer of the Company.
6.5 COUNTERPARTS. This Agreement may be executed in separate
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counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.
6.6 HEADINGS. The headings of the sections hereof are inserted for
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convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
6.
6.7 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
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inure to the benefit of and be enforceable by Narath and the Company, and their
respective successors, assigns, heirs, executors and administrators, except that
Narath may not assign any of his duties hereunder and he may not assign any of
his rights hereunder without the written consent of the Company, which shall not
be withheld unreasonably.
6.8 ATTORNEY FEES. If either party hereto brings any action to
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enforce his or its rights hereunder, the prevailing party in any such action
shall be entitled to recover his or its reasonable attorneys' fees and costs
incurred in connection with such action.
6.9 CHOICE OF LAW. All questions concerning the construction,
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validity and interpretation of this Agreement will be governed by the law of the
Commonwealth of Massachusetts (without giving effect to principles of conflicts-
of-law).
7.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
AWARD SOFTWARE INTERNATIONAL, INC.
By:____________________________________
Xxxxx X. Xxxxx
Chief Financial Officer
____________________________________
Xxxxxx X. Xxxxxx
EMPLOYMENT AGREEMENT FOR
XXXXXX X. XXXXXX
EXHIBIT A
