Exhibit 10.3
Employment, Confidentiality, Non-competition, and Severance Agreement
(Agreement)
1. Recitations and Date. This Agreement is entered into by and between
Effective Management Systems, Inc. (EMS) and Xxxxxxx X. Xxxxxx, its Chief
Operating Officer (Executive) as of the 19th day of March, 1999. It is
entered into in recognition and acknowledgement of the significant,
crucial and continuing beneficial and valuable services being performed
by Executive at the request of EMS.
2. Employment. EMS hereby agrees to employ Executive and Executive agree to
continue his employment with EMS. The term of this Agreement shall run
from this date until the Separation Date as hereafter defined, unless the
parties mutually agree otherwise (Term).
3. Duties. During the Term, Executive shall continue to perform the duties
of the position he now has, as reasonably determined by the Board,
consistent with the level of authority and responsibility he now has
(Duties).
4. Compensation. Executive's base salary shall not, during the Term, be
reduced from its current level unless there is a corporate wide reduction
applicable to all executives of EMS, in which case his then current base
salary shall be proportionally reduced for the duration of such
reduction. Executive shall receive such bonuses and stock options as are
determined by the Compensation Committee of the Board.
5. Benefits. Executive shall continue to receive benefits equivalent to
those he presently receives, including health, dental, life, disability,
and auto, and such other benefits as are generally made available to
employees and executives of EMS.
6. Reaffirmation of Inventions and Non-disclosure Agreement. Executive
acknowledges the ongoing obligation he has to EMS to disclose and assign
inventions as well as maintain the confidentiality of proprietary and
sensitive business information pursuant to the agreement presently in
effect between the parties dated 7/2/87, a copy of which is attached
hereto for reference purposes.
7. No Prior Agreements. Except as set forth in paragraph 6, the parties
acknowledge that this is the sole agreement between them with respect to
these subject matters and, to the extent any such prior agreements exist,
whether verbal or written, they are hereby revoked.
8. Non-Solicitation of Employees. For one year from the Separation Date,
regardless of cause or initiating party, Executive shall not, directly or
indirectly, induce or
attempt to induce any employee of EMS, including its presently existing
Affiliates (at least 50% of the voting stock owned by EMS), to leave the
employ of EMS.
9. Noncompetition. During the Term of this Agreement, and for a period equal
to the length of any Severance period thereafter, Executive shall not
directly or indirectly, own any interest in (other than not more than 5%
passive stock ownership in a publicly traded company), participate in,
consult with, or render any services for any business which is planning,
considering, or does develop, market, or service ERP software anywhere in
the United States in the mid-market segment (businesses with up to $100
million in annual revenue).
10. Separation Date. Separation Date is the date either party elects to
terminate this Agreement. the consequences of such termination depend on
the party initiating the termination and the circumstances associated
with such termination.
a. If Executive quits for a non Event reason or is terminated for
Cause, there shall be no Severance (each term as hereafter
defined) and Executive shall receive only such benefits and
compensation as any terminating employee would be entitled to such
as accrued vacation pay and earned but not yet paid compensation.
b. If EMS terminates Executive without Cause at any time hereafter,
Executive shall be entitled to receive Severance for a period of
time depending on whether the termination i) preceded a Change in
Control, ii) followed an Asset Change in Control, or iii) followed
a Shareholder Change in Control. If circumstance i) applies, the
Severance period shall be 9 months, and if ii) or iii), the
Severance period shall be 12 months.
c. If EMS materially changes the Duties of Executive at any time
after the date of this Agreement (an Event), Executive may elect
to treat such action as a termination under b) above and the
appropriate Severance shall apply depending on whether
circumstance i), ii), or iii) is present except that, in the event
of an Asset Change in Control, the consequent change in authority
and responsibility solely resulting from such reduction in
business operations, shall not be deemed an Event without
requisite Board change.
11. Definitions.
a. Cause shall mean i) a final non-appealable felony conviction which
substantially impairs employee's ability to perform his duties or
ii) intentional bad faith conduct which causes demonstrable
serious financial injury to EMS evidenced by a binding final
judgement, order, or decree.
b. Change in Control shall mean the acquisition by any corporation or
group of associated persons acting in concert, excluding
Affiliates, if any, of EMS as of this date, of an aggregate of
more than i) 25% of the outstanding shares of voting stock of EMS
coupled with or followed by the election as directors of EMS of
persons who were not directors at the time of such acquisition and
such
persons shall become a majority of the Board (Shareholder Change
in Control) or ii) 50% of the assets of EMS (as reasonably
determined by EMS' auditors according to generally accepted
accounting principles) coupled with the same director change as in
i) (Asset Change in Control).
x. Xxxxxxxxx shall mean the making in advance of payments to
Executive (without any withholdings), equivalent to his gross
monthly base salary amount, for 9 months with a lump sum payment
of any remaining payments due for the duration of Severance at the
10th month. Severance shall also include continuation for the
entire Severance period of health, dental, group life, and
disability as then in effect but not less than in effect as of
this date. Severance shall also include, regardless of Severance
period duration, 6 months continuing use of his company car, car
phone, lap top, and company voice and email, and six (6) months
executive outplacement with R I Xxxxxxxx or equivalent. Severance
shall also effect an amendment to any outstanding option grants
immediately accelerating the vesting of all then unvested options
and extending the time to exercise all vested options to 12 months
from such date.
12. Legal Interpretation. If any provision of this Agreement is found to be
in conflict with provisions of any applicable law, the parties desire
that such conflict not invalidate the entire Agreement and that it be
construed to invalidate only the conflicting provisions and, where
possible, to reduce the duration or scope of a conflicting provision to
the maximum permitted by law. This Agreement shall be governed by the
laws of the State of Wisconsin without giving effect to any choice of law
or conflict of law rules or provisions.
13. Other Terms. Both parties agree that any public announcement of any
separation, except for Cause, shall require their mutual consent as to
the content, subject only to SEC or equivalent requirements. The parties
also agree not to, at any time, make any comments concerning the other to
media, prospective or actual employers, employees, customers, or
prospects which could be reasonably construed as being in any way
derogatory or negative of the other.
14. Costs of Enforcement. In an enforcement action relating to this
Agreement, the prevailing party, whether claimant or respondent,
following a final non-appealable decision, shall be immediately
reimbursed by the other party for all its reasonable out-of-pocket costs
incurred during such action including attorneys' fees.
15. Successors. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns, heirs, executors, and administrators of
the parties except that Executive may not assign or delegate his duties
hereunder.
16. Termination. This Agreement may be terminated only upon mutual written
agreement of the parties.
Signed at Milwaukee, WI upon the date set forth above.
Effective Management Systems, Inc. Executive
Effective Management Systems, Inc. Executive
By: _________________________ By: ___________________________
Title an individual
Witness: ___________________ Witness: ______________________
