EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of August 1, 2002,
by and between Xxx Xxxxxx (the "Executive") and Precise Software Solutions, Inc.
(the "Company").
WHEREAS, the Executive and the Company deem it in their respective best
interests to enter into an agreement providing for the employment of the
Executive subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the agreements herein
contained, the parties hereto hereby agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions set forth in this
Agreement, the Company offers and the Executive hereby accepts employment
in the role of President to manage sales, marketing and administrative
operations, effective as of August 1, 2002 (the "Effective Date"). The
parties agree that such employment shall be on an at-will basis, which
means that either the Executive or the Company may, subject to the
provisions of this Agreement, terminate the employment relationship (and
this Agreement) at any time, for any or no reason, with or without cause,
upon written notice to the other party. The term of this Agreement, as from
time to time may be modified and in effect, is hereafter referred to as
"the term of this Agreement" or the "term hereof."
2. CAPACITIES AND PERFORMANCE. The Executive shall report to the Company's
CEO. The Executive shall comply with and perform, faithfully, diligently
and to the best of his ability, such directions and duties in relation to
the business and affairs of the Company as may from time to time be vested
in or requested of him by the Company. The Executive shall devote his time,
attention and energies to the business of the Company, and shall not work
as an executive, independent consultant or agent for another entity, during
the time which he is meant to devote to the business of the Company,
without the Company's permission.
3. COMPENSATION AND BENEFITS. As compensation for the satisfactory performance
by the Executive of his duties and obligations hereunder to the Company and
subject to the provisions of Section 5, the Executive shall receive:
3.1 BASE SALARY. The Executive's initial base salary shall be paid at a
rate of $17,625 per month (the "Base Salary"). The Base Salary shall
be payable in accordance with the customary payroll practices of the
Company, but at least paid monthly,
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as may be established or modified from time to time and shall be
subject to all applicable federal, state and/or local payroll and
withholding taxes.
3.2 BONUS.
(a) During the first year of employment the Company shall pay the
Executive a bonus of $37,000 per quarter for each fiscal quarter
end. All bonus payments will be subject to the Company's normal
meritorious bonus practice described below based on revenue and
operating income attainment goals consistent with those of the
CEO and as described by the 2002 MBO Plan approved by the board
(b) SIGNING BONUS. None
3.3 STOCK OPTIONS.
(a) Subject to the approval by Precise Software Solutions Ltd.'s
Board of Directors (the "Board") and subject to the terms,
conditions and restrictions of the Precise Software Solutions
Ltd.'s ("Precise Ltd.") Amended and Restated 1998 Share Option
and Incentive Plan (the "Plan") and a stock option agreement
between the Company and the Executive, the Executive shall be
eligible to be granted options, as established by and at the sole
discretion of the Board, to purchase shares of Precise Ltd.'s
common stock at the fair market value for each year of
employment.
(b) Acceleration of Vesting of Option for Business Combinations -
Upon a Transfer of Control (as defined in the Plan), 50% of the
Executive's total unvested shares shall, immediately prior to the
consummation of such Transfer of Control, become vested in
accordance with the terms of the option agreement and immediately
exercisable by the Executive. In addition to the above, upon (1)
a closing of a Transfer of Control and (2) the occurrence of a
Termination Event (as defined below), the remaining 50% of the
unvested shares subject to an option agreement shall immediately
be exercisable by the Executive.
A Termination Event is defined as the involuntary termination of
employment of the Executive within one (1) year after the closing
of a Transfer of Control other than under Disgraceful
Circumstances In addition, a Termination Event shall also include
the following if such event has occurred within one (1) year
after the closing of a Transfer of Control: (1) reduction in
salary or reduction in the level of benefits of the Executive as
in effect on the date immediately
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prior to the closing of the Transfer of Control: (2) a diminution
in the nature of scope of the Executive's authority, duties or
responsibilities in effect immediately prior to the closing of
the Transfer of Control; or (3) change in location of the
principle office to which the Executive must report of greater
that 50 miles.
3.4 VACATION. Subject to and in accordance with the Company's policy, the
Executive shall be eligible for 10 days of paid vacation per calendar
year.
3.5 BENEFITS. Subject to any contribution therefor generally required of
executives of the Company, the Executive will be eligible to
participate in the Company's benefits plans to the same extent as, and
subject to the same terms, conditions and limitations applicable to
other executives of the Company in similar positions. Such
participation shall be subject to (i) the terms of the applicable plan
documents, (ii) generally applicable Company policies, and (iii) the
discretion of the Company and/or the Board or any administrative or
other committee provided for in or contemplated by such plan. The
Company's current plans and policies, as applicable, shall govern all
other benefits. The Company, may alter, modify, add to, or delete its
employee benefits plans and/or policies at any time as the Company
and/or the Board, in their sole judgment, determine to be appropriate.
3.6 RELOCATION. None
3.7 BUSINESS EXPENSES. The Company shall pay or reimburse the Executive
for all reasonable business expenses incurred or paid by the Executive
in the performance of his duties and responsibilities hereunder,
subject to (i) any reasonable expense policy set by the Company as may
be modified from time to time, and (ii) such reasonable substantiation
and documentation requirements as may be specified by the Company from
time to time.
4. TERMINATION OF EMPLOYMENT. The Executive's employment and this Agreement
shall terminate under the following circumstances:
4.1 DEATH OR DISABILITY. In the event of the Executive's death or
Disability (as defined herein) during the term hereof, the Executive's
employment and this Agreement shall immediately and automatically
terminate and the Company shall pay to the Executive (or in the case
of death, the Executive's designated beneficiary, or if no beneficiary
has been designated by Executive, his estate), any Base Salary, pro
rata bonus and pro rata vested options earned but unpaid through the
date of death or Disability. For the purposes of this Agreement,
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"Disability" shall mean any physical incapacity or mental incompetence
(i) as a result of which the Executive is unable to perform
substantially all his duties or responsibilities hereunder for an
aggregate of 120 days, whether or not consecutive, during any calendar
year, and (ii) which cannot be reasonably accommodated by the Company
without material undue hardship. Any determination of disability shall
be made by a qualified physician or physicians selected by the Company
and the Executive. The failure of the Executive to submit to a
reasonable examination by such physician shall constitute
determination of a permanent Disability.
4.2 BY THE COMPANY BECAUSE OF DISGRACEFUL CIRCUMSTANCES.
(a) The Company may terminate the Executive's employment and this
Agreement because of Disgraceful Circumstances at any time during
the term hereof. The Company shall thereafter have no further
obligation or liability to the Executive relating to the
Executive's employment or this Agreement, other than Base Salary
and pro rata bonus earned but unpaid and pro rata vested options
through the date of termination.
(b) The following events or conditions shall constitute "Disgraceful
Circumstances" for termination (which shall hereafter only be
referred to as "Dismissal for Cause"): (i) willful gross
negligence, willful misconduct or willful breach of fiduciary
duty to the Company or Precise Ltd., (ii) commission of an act of
embezzlement or fraud; (iii) deliberate disregard of the rules or
policies of the Company or Precise Ltd. which results in direct
material loss, damage or injury to the Company, Precise Ltd. or
any subsidiary of Precise Ltd., (iv) the unauthorized disclosure
of any trade secret or confidential information of the Company,
Precise Ltd. or any subsidiary of Precise Ltd. which materially
xxxxx the Company.
4.3 BY THE COMPANY. The Company may terminate the Executive's employment
and this Agreement at any time, for any or no reason, during the term
hereof. In the event of such termination, the Executive will be
entitled to a continuation, for seven (7) months from the date of the
Executive's termination of employment, of (i) his salary in an amount
equal to the Executive's Base Salary (in effect at the time of such
termination) and full bonus based on Company results, (ii) vesting of
options in accordance with any option agreement in effect at the time
of termination, and (iii) payment of premiums (in the same amount as
of the Executive's date of termination) on the Executive's behalf to
continue his health insurance, to the extent the Executive elects to
continue such coverage in accordance with and pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA").
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4.4 BY THE EXECUTIVE. The Executive also may terminate this Agreement
and/or his employment with the Company for any or no reason during the
term hereof upon 15 days' prior notice to the Company. Upon receipt of
such notice, the Company may elect to accelerate the Executive's
termination and pay to the Executive (i) an amount equivalent to the
Executive Base Salary (in effect at the time of such termination) and
(ii) pro rata bonus based on the Company's results for the quarter
prior to the date of termination. The Executive shall also be entitled
to exercise his stock options with respect to those options in which
he was fully vested as of the effective date of his termination. In
the event Executive's termination is accelerated under this provision,
vesting of options shall continue through the next vesting date within
the remainder of the 15-day notice period.
5. EFFECT OF TERMINATION. The provisions of this Section 5 shall apply in the
event of termination of this Agreement and/or the Executive's employment
pursuant to Section 4.
5.1 PAYMENT IN FULL. In the event of termination of this Agreement and/or
the Executive's employment for any reason other than for Disgraceful
Circumstances, in addition to and not in lieu of any other payments
provided for hereunder, the Executive will be entitled to a
continuation, for nine (9) months from the date of the Executive's
termination of employment, death or Disability (or, in the event of
termination pursuant to Section 4.3, upon expiration of the payments
provided for therein) of (i) his salary in an amount equal to the
Executive's Base Salary (in effect at the time of such termination)
and full bonus based on Company results, (ii) vesting of options in
accordance with any option agreement in effect at the time of
termination, and (iii) payment of premiums (in the same amount as of
the Executive's date of termination) on the Executive's behalf to
continue his health insurance, to the extent the Executive elects to
continue such coverage in accordance with and pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA").
Payment by the Company to the Executive of any Base Salary, bonus,
vested stock options, related benefit and other compensation amounts
shall constitute the entire obligation of the Company to the
Executive, except that nothing in this Section 5.1 is intended or
shall be construed to affect the rights and obligations of the
Company, on the one hand, and the Executive, on the other, with
respect to any loans, stock warrants, stock pledge arrangements,
option plans or other agreements to the extent said rights or
obligations survive the Executive's termination of employment under
the provisions of documents relating thereto.
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5.2 TERMINATION OF BENEFITS. Except for any right of continuation of
benefits coverage to the extent provided herein and/or provided by
COBRA or other applicable law, benefits shall terminate pursuant to
the terms of the applicable benefit plans as of the termination date
of the Executive's employment without regard to any continuation of
Base Salary or other payments to the Executive following such
termination date.
5.3 CESSATION OF COMPENSATION AND BENEFITS. If the Executive materially
breaches his obligations under this Agreement and/or the
Confidentiality Agreement, the Company may immediately cease payment
of all compensation, severance and benefits described in this
Agreement. The cessation of these payments shall be in addition to,
and not as an alternative to, any other remedies at law or in equity
available to the Company, including the right to seek specific
performance or an injunction.
6. SURVIVAL OF CERTAIN PROVISIONS. The obligations of the Executive under the
Confidentiality Agreement expressly survive any termination of the
Executive's employment or termination of this Agreement for up to twelve
months, regardless of the manner of such termination.
7. CONFLICTING AGREEMENTS. The Executive and the Company hereby warrant that
the execution of this Agreement and the performance of obligations
hereunder will not breach or be in conflict with any other agreement to
which or by which the Executive or the Company is a party or is bound and
that the Executive is not now subject to and will not enter into any
covenants against competition or similar covenants that would affect the
performance of his obligations hereunder. Moreover, where this Agreement
conflicts with other of the Company's agreements, the terms included in
this Agreement will be determinative.
8. WITHHOLDING TAXES. All payments made by the Company under this Agreement
shall be subject to and reduced by any federal, state and/or local taxes or
other amounts required to be withheld by the Company under any applicable
law.
9. MISCELLANEOUS.
9.1 ASSIGNMENT. The Executive shall not assign this Agreement or any
interest herein. The Company may assign this Agreement. No such
assignment shall be deemed a "termination" of the Executive's
employment within the meaning of Section 4. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of
the Company.
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9.2 SEVERABILITY. The Executive and the Company agree that each provision
and the subparts of each provision herein shall be treated as separate
and independent clauses and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses
of the Agreement. Moreover, if one or more of the provisions contained
in this Agreement shall for any reason be held to be excessively broad
as to scope, activity, subject or otherwise so as to be unenforceable
at law, such provision or provisions shall be construed by the
appropriate judicial body by limiting or reducing it or them, so as to
be enforceable to the maximum extent compatible with the applicable
law as it shall then appear. The Executive and the Company hereby
further agree that the language of all parts of this Agreement shall
in all cases be construed as a whole according to its fair meaning and
not strictly for or against either of the parties.
9.3 WAIVER AMENDMENT. Any waiver by the Company of a breach of any
provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach of such provision or any other
provision hereof. In addition, any amendment to or modification of
this Agreement or any waiver of any provision hereof must be in
writing and signed by the Company and the Executive.
9.4 NOTICES. All notices, requests and other communications provided for
by this Agreement shall be in writing and shall be effective when
delivered in person or four business days after being deposited in the
mail of the United States, postage prepaid, registered or certified,
and addressed (a) in the case of the Executive, to the address set
forth underneath his signature to this Agreement or (b) in the case of
the Company, to the attention of Xxxxxx Xxxx, c/o Precise Software
Solutions, Inc, 000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000; and/or to such
other address as either party may specify by notice to the other.
9.5 ENTIRE AGREEMENT. This Agreement and any stock option agreements
between the Company and the Executive constitute the entire agreement
between the Company and the Executive with respect to the terms and
conditions of the Executive's employment with the Company and
supersede and cancel all prior communications, agreements and
understandings, written or oral, between the Executive and the Company
with respect to the terms and conditions of the Executive's employment
with the Company.
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9.6 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be original and all of which together shall constitute one
and the same instrument.
9.7 GOVERNING LAW. This Agreement, the employment relationship
contemplated herein and any claim arising from such relationship,
whether or not arising under this Agreement, shall be governed by and
construed in accordance with the internal laws of the Commonwealth of
Massachusetts without giving effect to any choice or conflict of laws
provision or rule thereof, and this Agreement shall be deemed to be
performable in such Commonwealth.
9.8 CONSENT TO JURISDICTION. The Executive and the Company agree to in
good faith seek arbitration to settle any differences. The arbitration
will be in Boston, Massachusetts at the American Arbitration
Association ("AAA") before a single arbitrator. Such arbitrator shall
be selected in accordance with AAA's then current rules and
regulation. In the event no settlement is reached, the Executive, by
his execution hereof, hereby irrevocably submits to the exclusive
jurisdiction of the state or federal courts of the Commonwealth of
Massachusetts for the purpose of any claim or action arising out of or
based upon this Agreement, the Executive's employment with the Company
and/or termination thereof, or relating to the subject matter hereof,
and agrees not to commence any such claim or action other than in the
above-named courts.
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IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its duly
authorized representative, and by the Executive, as of the date first above
written.
PRECISE SOFTWARE SOLUTIONS, INC.
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: CEO
THE EXECUTIVE
/s/ Xxx Xxxxxx
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Xxx Xxxxxx
ADDRESS:
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