EXHIBIT 10.13
CEO AGREEMENT
THIS CEO AGREEMENT ("Agreement") is made and entered into as of the 15th
day of November, 1999, by and between Sterling Software, Inc., a Delaware
corporation ("Sterling Software"), and Xxxxxxxx X. Xxxxxxxx, an individual
("Xxxxxxxx").
RECITALS:
WHEREAS, Sterling Software acquires, develops, markets and supports a broad
range of products and services; and
WHEREAS, Sterling Software desires to continue to retain Xxxxxxxx as its
President and Chief Executive Officer; and
WHEREAS, Xxxxxxxx is willing to continue to accept such responsibilities;
NOW, THEREFORE, in consideration of the premises and covenants contained
herein and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
AGREEMENTS:
1. Employment. Xxxxxxxx agrees to render such managerial services as are
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customarily required of the President and Chief Executive Officer, and
Sterling Software agrees to utilize such services on the terms and
conditions contained herein. Sterling Software acknowledges that
Xxxxxxxx serves as Chairman of the Board of Directors and as a
consultant to Sterling Commerce, Inc. ("Sterling Commerce"). Sterling
Software agrees that such service to Sterling Commerce is not
inconsistent with this Agreement, the level of Executive's
compensation at Sterling Software having been determined by Sterling
Software with knowledge of Xxxxxxxx' service to Sterling Commerce and
the demands on Xxxxxxxx' time and attention required by such service.
2. Compensation and Benefits. As consideration for Xxxxxxxx' agreement
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to enter into this Agreement and the services to be performed
hereunder, Xxxxxxxx shall be paid an annual salary, which shall be
$875,000 during Sterling Software's fiscal year ending September 30,
2000 ("Fiscal 2000"), which amount shall be subject such future
increases as shall be mutually agreeable. Xxxxxxxx shall also be
entitled to earn additional compensation in the nature of bonuses,
deferred compensation and other incentive compensation as mutually
agreed. For Fiscal 2000, Xxxxxxxx shall be entitled to an incentive
cash bonus of $425,000. During the term of this Agreement, Xxxxxxxx
shall be entitled to participate in all
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Employee Benefits (as hereinafter defined). In addition, Xxxxxxxx
shall be entitled to such additional personal benefits and perquisites
as may be mutually agreed. As used herein, "Employee Benefits" means
the perquisites, benefits and service credit for perquisites or
benefits as provided under any and all employee perquisite or benefit
policies, plans, programs or arrangements in which Xxxxxxxx is
entitled to participate as of the date of this Agreement, including
without limitation any stock option, stock purchase, stock
appreciation, savings, pension, 401(k), employee stock ownership
(ESOP), employee stock purchase (ESPP), supplemental executive
retirement, or other retirement income or welfare benefit, deferred
compensation, incentive compensation, group or other life, health,
medical/hospital or other insurance (whether funded by actual
insurance or self-insured by Sterling Software), disability, salary
continuation, expense reimbursement, executive automobile, corporate
aircraft usage, tax and financial planning, club memberships,
incentive travel, tax reimbursement and other employee benefit
policies, plans, programs or arrangements that may now exist or any
successor policies, plans, programs or arrangements that may be
adopted hereafter by Sterling Software.
3. Term. The base term of this Agreement shall commence on the date
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first set forth above and shall continue in effect until such time as
this Agreement is automatically converted into a consulting agreement
pursuant to subparagraph 5(i) hereof; thereafter, the consulting
agreement shall continue for a period of seven years.
4. Termination of Employment. The parties acknowledge that Xxxxxxxx is
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employed "at will" and may be terminated by Sterling Software at any
time with or without cause.
5. Consulting Agreement.
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(i) This Agreement shall be automatically converted into a
consulting agreement in the event that (a) Sterling Software
terminates Xxxxxxxx' employment with or without cause, or (b)
Xxxxxxxx terminates his employment as a result of a reduction in
Xxxxxxxx' salary, other compensation or his benefits or
perquisites, in each case below the level in effect for the
immediately preceding twelve month period; or as a result of
Xxxxxxxx' determination, in his sole judgment, that there has
been a significant reduction in the nature or scope of Xxxxxxxx'
authorities or duties.
(ii) The consulting agreement may be terminated by Xxxxxxxx in
writing at any time, but any compensation which has been paid as
of the date of termination shall be deemed to have been earned
and there shall be no repayment of any sums previously paid. In
addition, Xxxxxxxx shall have the right to terminate the
consulting agreement in accordance with
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paragraph 6 hereof. Sterling Software may terminate the
consulting agreement upon Xxxxxxxx' death.
(iii) During the term of the consulting agreement, Xxxxxxxx shall
serve in an advisory capacity to the Executive Committee of the
Board of Directors of Sterling Software, reporting directly to
the Executive Committee for the purpose of making operational,
strategic and financial recommendations affecting the general
welfare of Sterling Software. Xxxxxxxx shall make himself
available for a reasonable amount of such consulting and
advisory services during normal business hours and upon
reasonable notice, at such times and places as shall be
mutually agreed upon. In no event shall Xxxxxxxx expend in
excess of thirty (30) days per year performing such services
for Sterling Software.
(iv) Any and all confidential information of Sterling Software to
which Xxxxxxxx may become privy in the performance of his
consulting services shall be treated as confidential by him and
shall not be communicated to or discussed with any party who is
not an officer or director of Sterling Software, unless
Xxxxxxxx is specifically authorized to do so by the Executive
Committee of the Board of Directors of Sterling Software.
During the term of the consulting agreement, Xxxxxxxx shall not
use any information delivered to him by Sterling Software for
his personal gain.
(v) During the term of the consulting agreement, Xxxxxxxx shall not
act as a financial consultant or advisor to any other person,
partnership, corporation or other business association in the
computer industry (software, hardware or services) without the
prior written consent of Sterling Software, such consent not to
be unreasonably withheld; provided, however, that Xxxxxxxx'
continued service to Sterling Commerce shall not be prohibited
by this subparagraph (v).
(vi) As consideration for his advisory and consulting services,
Xxxxxxxx shall be entitled to receive all of the compensation
and to participate in all Employee Benefits (or the cash
equivalent thereof) described in paragraph 2 hereof; provided,
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however, that in no event will Sterling Software be required to
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make any new grants of options to Xxxxxxxx under any Sterling
Software stock option plan after conversion of this Agreement
into a consulting agreement. In the event this Agreement is
automatically converted into a consulting agreement pursuant to
subparagraph (i) hereof, the level of Xxxxxxxx' compensation
shall be the greater of the compensation and benefits of the
type described in paragraph 2 hereof in effect on the date of
his termination or the compensation and benefits of the type
described in paragraph 2 hereof in effect twelve (12) months
prior to the date of termination. This compensation shall be
paid during the term of the consulting agreement without regard
to whether Sterling
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Software utilizes the services of Xxxxxxxx for the maximum
thirty (30) days per year specified in subparagraph (iii)
hereof, or does not avail itself of his services at any time
during the term hereof. In addition, Xxxxxxxx shall be
reimbursed for all other authorized expenses, such as food and
first class travel and lodging, which are incurred at the
direction of Sterling Software consistent with the terms
hereof. During the term of the consulting agreement, Sterling
Software shall make available to Xxxxxxxx all office facilities
of Sterling Software, including secretarial, telephone and
office space, or reimburse Xxxxxxxx for the cost of obtaining
comparable facilities from third parties.
6. Change-in-Control. Sterling Software and Xxxxxxxx are parties to a
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Change-in-Control Severance Agreement, dated the date hereof (as such
agreement may be amended from time to time, the "Change-in-Control
Agreement"). Notwithstanding anything contained in this Agreement to
the contrary, in the event William's employment with Sterling Software
is terminated under circumstances in which this Agreement would
automatically be converted into a consulting agreement and Xxxxxxxx
would otherwise be entitled to receive payments and benefits under
both this Agreement and the Change-in-Control Agreement, Xxxxxxxx
shall have the right to elect to have this Agreement converted into a
consulting agreement pursuant to the terms hereof or to receive
payments and benefits under the Change-in-Control Agreement, but not
both. Within five business days following the termination of
William's employment with Sterling Software under circumstances in
which this paragraph 6 would apply, Sterling Software shall provide
Xxxxxxxx, in writing, a reasonably detailed determination of the
payments and other benefits under each of such consulting agreement
and the Change-in-Control Agreement. Xxxxxxxx shall make the election
provided for in this paragraph 6 within thirty calendar days after
William's receipt of the written determination referred to in the
preceding sentence; provided, however, that if such election is not so
made within such 30-day period, Xxxxxxxx shall be irrevocably deemed
to have elected to receive payments and benefits under the Change-in-
Control Agreement. Prior to the date on which Xxxxxxxx makes or is
deemed to have made the election referred to above, he shall receive
all of the compensation and to participate in all of the Employee
Benefits provided for in paragraph 5(vi) of this Agreement as if it
had been converted to a consulting agreement.
In the event of a Change-in-Control following the conversion of this
Agreement into a consulting agreement, Xxxxxxxx shall have the option
of terminating the consulting agreement in writing at any time
following such Change-in-Control. Upon such termination of the
consulting agreement, Xxxxxxxx shall be entitled to receive in one
lump sum the aggregate of all unpaid compensation, and the cash
equivalent of all foregone Employee Benefits, in each case as provided
for in subparagraph 5(vi), through the unexpired portion of the seven
(7) year consulting agreement. Such lump sum shall be payable within
ninety (90) days following
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Xxxxxxxx' notice of termination of the consulting agreement. Upon such
termination by Xxxxxxxx, Xxxxxxxx shall have no further obligations
pursuant to subparagraphs 5(iii) or (v).
7. Termination of Prior Agreements. Upon the execution and delivery of
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this Agreement, the CEO Agreement between Xxxxxxxx and Sterling
Software, dated February 12, 1996, as amended to the date hereof,
shall terminate automatically and shall thereafter be of no further
force or effect. Except with respect to the Change-in-Control
Agreement, this Agreement supersedes all prior agreements,
arrangements and understandings with respect to the subject matter
hereof.
9. Miscellaneous.
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(i) Notices, demands, payments, reports and correspondence shall be
addressed to the parties hereto at the address for such party
set forth below or such other places as may from time to time
be designated in writing to the other party. Notices hereunder
shall be deemed to be given on the date such notices are
actually received.
If to Sterling Software, to: 000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: President
If to Xxxxxxxx, to: Xx. Xxxxxxxx X. Xxxxxxxx
c/o Sterling Software, Inc.
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
(ii) This Agreement shall be binding upon Sterling Software and
Xxxxxxxx and their respective successors, assigns, heirs and
personal representatives.
(iii) The substantive laws of the State of Delaware shall govern the
validity, construction, enforcement and interpretation of the
provisions of this Agreement.
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Executed by the parties hereto as of the date first set forth above.
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Xxxxxxxx X. Xxxxxxxx
STERLING SOFTWARE, INC.
By: ---------------------------------------
Xxx X. XxXxxxxxx, Xx.
Senior Vice President & General Counsel
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