EXHIBIT 10.49
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into effective
April 1, 2003 by and between Stellent, Inc., a Minnesota corporation (the
"Company"), and Xxxxxx X. Xxxxx, a resident of Minnesota ("Executive").
RECITALS
A. The Company is a global provider of web-based content management
solutions for businesses.
B. Executive is an experienced business manager.
C. Executive is currently employed by the Company as its President and
Chief Executive Officer.
D. The Company and Executive wish to continue the employment relationship
and to provide for certain additional benefits for Executive, subject to the
terms and conditions set forth in this Agreement.
E. Executive is a key member of the management of the Company and it is
desirable and in the best interests of the Company and its shareholders to
continue to obtain the benefits of Executive's services and attention to the
affairs of the Company.
F. It is desirable and in the best interests of the Company and its
shareholders to provide inducement for Executive (A) to remain in the service of
the Company in the event of any proposed or anticipated change in control of the
Company and (B) to remain in the service of the Company in order to facilitate
an orderly transition in the event of a change in control of the Company,
without regard to the effect such change in control may have on Executive's
employment with the Company.
G. It is desirable and in the best interests of the Company and its
shareholders that Executive be in a position to make judgments and advise the
Company with respect to proposed changes in control of the Company.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements of the Company and Executive set forth below, the Company
and Executive, intending to be legally bound, agree as follows:
1. Employment. Subject to all terms and conditions hereof, the Company
shall employ Executive, and Executive shall serve the Company and perform
services for the Company, until such time as Executive's employment is
terminated in accordance with Section 12 hereof.
2. Position and Duties.
(a) Position with the Company. During the term of Executive's
employment with the Company, Executive shall serve as its President and Chief
Executive Officer and shall perform such duties and responsibilities as the
Board of Directors of the Company (the "Board") shall assign to him from time to
time.
(b) Performance of Duties and Responsibilities. Executive shall serve
the Company faithfully and to the best of his ability and shall devote his full
time, attention and efforts to the business of the Company during his
employment. Executive shall report to the Board. During his employment
hereunder, Executive shall not accept other employment or engage in other
material business activity, except as approved in writing by the Board.
Executive hereby represents and confirms that he is under no contractual or
legal commitments that would prevent him from fulfilling his duties and
responsibilities as set forth in this Agreement.
3. Compensation and Benefits.
(a) Base Salary. While Executive is employed by the Company hereunder,
the Company shall pay to Executive an annual base salary of $240,000, less
deductions and withholdings, which base salary shall be paid in accordance with
the Company's normal payroll policies and procedures. During each year after the
first year of Executive's employment hereunder, the Board (or the compensation
committee of the Board) shall review and may adjust Executive's base salary in
its sole discretion. Executive's base salary shall not at anytime be decreased,
except that Executive's base salary may be reduced as part of a general
reduction in the base salaries for all executives of the Company.
(b) Bonus. Executive shall be eligible for annual and/or quarterly
bonuses of up to an aggregate amount of $260,000 for fiscal year 2004, based
upon and subject to achievement of specified objectives and criteria to be
established by the Board (or the compensation committee of the Board) from time
to time. Any bonus will be paid by the Company within 45 days after the period
for which the bonus is applicable, and Executive must be employed by the Company
on the date of payment in order to be eligible to receive any bonus. After
fiscal year 2004, the Board (or the compensation committee of the Board) shall
review and may revise the bonus program in its sole discretion.
(c) Stock Options. From time to time and subject to the approval of the
Board, the Company, in its sole discretion, may grant Executive an option to
purchase shares of common stock of the Company, in accordance with the terms and
conditions of the Company's stock option plan as may be amended from time to
time.
(d) Employee Benefits. While Executive is employed by the Company
hereunder, Executive shall be entitled to participate in all employee benefit
plans and programs of the Company to the extent that Executive meets the
eligibility requirements for each individual plan or program. The Company
provides no assurance as to the adoption or
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continuance of any particular employee benefit plan or program, and Executive's
participation in any such plan or program shall be subject to the provisions,
rules and regulations applicable thereto.
(e) Expenses. While Executive is employed by the Company hereunder, the
Company shall reimburse Executive for all reasonable and necessary out-of-pocket
business, travel and entertainment expenses incurred by Executive in the
performance of the duties and responsibilities hereunder, subject to the
Company's normal policies and procedures for expense verification and
documentation.
(f) Vacation. While Executive is employed by the Company hereunder,
Executive shall be entitled to paid vacation consistent with the Company's
vacation policy, which may be amended from time to time in the Company's
discretion. Vacation days shall be taken at such times so as not to disrupt the
operations of the Company.
4. Affiliated Entities. As used in this Agreement, "Affiliates" shall
include the Company and each corporation, partnership, or other entity, which
controls the Company, is controlled by the Company, or is under common control
with the Company (in each case "control" meaning the direct or indirect
ownership of 50% or more of all outstanding equity interests).
5. Confidential Information. Except as permitted by the Company, Executive
shall not at any time divulge, furnish or make accessible to anyone or use in
any way other than in the ordinary course of the business of the Company or its
Affiliates, any confidential, proprietary or secret knowledge or information of
the Company or its Affiliates that Executive has acquired or shall acquire about
the Company or its Affiliates, whether developed by himself or by others,
concerning (i) any trade secrets, (ii) any confidential, proprietary or secret
designs, programs, processes, formulae, plans, devices or material (whether or
not patented or patentable) directly or indirectly useful in any aspect of the
business of the Company or of its Affiliates, (iii) any customer or supplier
lists, (iv) any confidential, proprietary or secret development or research
work, (v) any strategic or other business, marketing or sales plans, (vi) any
financial or personnel data or plans, or (viii) any other confidential or
proprietary information or secret aspects of the business of the Company or of
its Affiliates. Executive acknowledges that the above-described knowledge and
information constitutes a unique and valuable asset of the Company and
represents a substantial investment of time and expense by the Company, and that
any disclosure or other use of such knowledge or information other than for the
sole benefit of the Company or its Affiliates would be wrongful and would cause
irreparable harm to the Company. Executive shall refrain from intentionally
committing any acts that would materially reduce the value of such knowledge or
information to the Company or its Affiliates. The foregoing obligations of
confidentiality shall not apply to any knowledge or information that (i) is now
or subsequently becomes generally publicly known, other than as a direct or
indirect result of the breach of this Agreement, (ii) is independently made
available to Executive in good faith by a third party who has not violated a
confidential relationship with the Company or its Affiliates, or (iii) is
required to be disclosed by law or legal process. Executive understands and
agrees that his obligations
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under this Agreement to maintain the confidentiality of the Company's
confidential information are in addition to any obligations of Executive under
applicable statutory or common law.
6. Ventures. If, during Executive's employment with the Company, Executive
is engaged in or provides input into the planning or implementing of any
project, program or venture involving the Company, all rights in such project,
program or venture shall belong to the Company. Except as approved in writing by
the Board of Directors of the Company, Executive shall not be entitled to any
interest in any such project, program or venture or to any commission, finder's
fee or other compensation in connection therewith. Executive shall have no
interest, direct or indirect, in any customer or supplier that conducts business
with the Company.
7. Conflicts of Interest. During Executive's employment with the Company
hereunder, Executive shall not, directly or indirectly, transact business with
the Company personally, or as agent, owner, partner, or shareholder of any other
entity unless any such transaction has been knowingly approved by all
disinterested members of the Company's Board of Directors.
8. Noncompetition and Nonsolicitation Covenants.
(a) Agreement Not to Compete. During Executive's employment with the
Company or any Affiliates and for a period of twelve (12) consecutive months
from and after the termination of Executive's employment, whether such
termination is with or without cause, or whether such termination is at the
instance of Executive or the Company, Executive shall not, directly or
indirectly (including without limitation as a proprietor, principal, agent,
partner, officer, director, stockholder, employee, member of any association,
consultant or otherwise), engage in any business, in the United States or in any
other location in which the Company is then doing business or actively planning
to do business:
(i) that designs, develops, markets, distributes, or sells web
content management services or products, or
(ii) that designs, develops, markets, distributes, or sells
services or products similar to any service or product then being
developed, marketed, or distributed by the Company.
Ownership by Executive, as a passive investment, of less than 3% of the
outstanding shares of capital stock of any corporation listed on a national
securities exchange or publicly traded in the over-the-counter market shall not
constitute a breach of this Section 8(a).
(b) Agreement Not to Hire. During Executive's employment with the
Company or any Affiliates and for a period of twelve (12) consecutive months
from and after the termination of Executive's employment, whether such
termination is with or without cause, or whether such termination is at the
instance of Executive or the Company, Executive shall not, directly or
indirectly (including without limitation as a proprietor, principal, agent,
partner,
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officer, director, stockholder, employee, member of any association, consultant
or otherwise), hire, engage or solicit any person who is then an employee or
contractor of the Company or who was an employee of the Company at any time
during the six (6) month period immediately preceding Executive's termination of
employment, in any manner or capacity.
(c) Agreement Not to Solicit. During Executive's employment with the
Company or any Affiliates and for a period of twelve (12) consecutive months
from and after the termination of executive's employment, whether such
termination is with or without cause, or whether such termination is at the
instance of Executive or the Company, Executive shall not, directly or
indirectly (including without limitation as a proprietor, principal, agent,
partner, officer, director, stockholder, employee, member of any association,
consultant or otherwise), solicit, request, advise or induce any current or
potential customer, supplier or other business contact of the Company to cancel,
curtail or otherwise adversely change its relationship with the Company, in any
manner or capacity.
(d) Acknowledgment. Executive hereby acknowledges that the provisions
of this Section 8 are reasonable and necessary to protect the legitimate
interests of the Company and that any violation of this Section 8 by Executive
shall cause substantial and irreparable harm to the Company to such an extent
that monetary damages alone would be an inadequate remedy therefor.
(e) Blue Pencil Doctrine. If the duration of, the scope of or any
business activity covered by any provision of this Section 8 is in excess of
what is determined to be valid and enforceable under applicable law, such
provision shall be construed to cover only that duration, scope or activity that
is determined to be valid and enforceable. Executive hereby acknowledges that
this Section 8 shall be given the construction which renders its provisions
valid and enforceable to the maximum extent, not exceeding its express terms,
possible under applicable law.
9. Patents, Copyrights and Related Matters.
(a) Disclosure and Assignment. Executive shall immediately disclose to
the Company any and all improvements and inventions that Executive may conceive
and/or reduce to practice individually or jointly or commonly with others while
he is employed with the Company or any of its Affiliates with respect to (i) any
methods, processes or apparatus concerned with the development, use or
production of any type of products, goods or services sold or used by the
Company or its Affiliates, and (ii) any type of products, goods or services sold
or used by the Company or its Affiliates. Any such improvements and inventions
shall be the sole and exclusive property of the Company and Executive shall
immediately assign, transfer and set over to the Company his entire right, title
and interest in and to any and all of such improvement and inventions as are
specified in this Section 9(a), and in and to any and all applications for
letters patent that may be filed on such inventions, and in and to any and all
letters patent that may issue, or be issued, upon such applications. In
connection therewith and for no additional compensation therefor, but at no
expense to Executive, Executive shall sign any and all instruments deemed
necessary by the Company for:
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(i) the filing and prosecution of any applications for letters
patent of the United States or of any foreign country that the
Company may desire to file upon such inventions as are specified
in this Section 9(a);
(ii) the filing and prosecution of any divisional, continuation,
continuation-in-part or reissue applications that the Company may
desire to file upon such applications for letters patent; and
(iii) the reviving, re-examining or renewing of any of such
applications for letters patent.
This Section 9(a) shall not apply to any invention for which no equipment,
supplies, facilities, confidential, proprietary or secret knowledge or
information, or other trade secret information of the Company was used and that
was developed entirely on Executive's own time, and (i) that does not relate (A)
directly to the business of the Company, or (B) to the Company's actual or
demonstrably anticipated research or development, or (ii) that does not result
from any work performed by Executive for the Company.
(b) Copyrightable Material. All right, title and interest in all
copyrightable material that Executive shall conceive or originate individually
or jointly or commonly with others, and that arise in connection with
Executive's services hereunder or knowledge of confidential and proprietary
information of the Company, shall be the property of the Company and are hereby
assigned by Executive to the Company or its Affiliates, along with ownership of
any and all copyrights in the copyrightable material. Where applicable, works of
authorship created by Executive relating to the Company or its Affiliates and
arising out of Executive's knowledge of confidential and proprietary information
of the Company shall be considered "works made for hire," as defined in the U.S.
Copyright Act, as amended.
10. Return of Records and Property. Upon termination of Executive's
employment or at any time upon the Company's request, Executive shall promptly
deliver to the Company any and all Company and Affiliate records and any and all
Company and Affiliate property in his possession or under his control, including
without limitation manuals, books, blank forms, documents, letters, memoranda,
notes, notebooks, reports, printouts, computer disks, computer tapes, source
codes, data, tables or calculations and all copies thereof, documents that in
whole or in part contain any trade secrets or confidential, proprietary or other
secret information of the Company or its Affiliates and all copies thereof, and
keys, access cards, access codes, passwords, credit cards, personal computers,
telephones and other electronic equipment belonging to the Company or its
Affiliates.
11. Remedies. Executive acknowledges that it would be difficult to fully
compensate the Company for monetary damages resulting from any breach by him of
the provisions hereof. Accordingly, in the event of any actual or threatened
breach of any such provisions, the Company shall, in addition to any other
remedies it may have, be entitled to
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injunctive and other equitable relief to enforce such provisions, and such
relief may be granted without the necessity of proving actual monetary damages.
12. Termination of Employment.
(a) The Executive's employment with the Company shall terminate
immediately upon:
(i) Executive's receipt of written notice from the Company of the
termination of his employment;
(ii) The Company's receipt of Executive's written resignation
from the Company;
(iii) Executive's Disability (as defined below); or
(iv) Executive's death.
(b) The date upon which Executive's termination of employment with the
Company occurs shall be the "Termination Date."
13. Payments upon Termination of Employment.
(a) If Executive's employment with the Company is terminated by the
Company for any reason other than for Cause (as defined below), or if
Executive's employment with the Company is terminated by Executive for Good
Reason (as defined below) within twelve (12) months following a Change in
Control (as defined in the Stellent, Inc. 2000 Stock Incentive Plan, as may be
amended from time to time), or if Executive's employment with the Company
terminates due to death or Disability, subject to Section 13(f), Section 13(g),
and Section 13(h), the Company shall:
(i) pay to Executive in a lump sum an amount equal to Executive's
current base salary, less applicable withholdings, for a period
of twelve (12) months following the Termination Date; and
(ii) if Executive elects to continue his group health or dental
insurance coverage with the Company following the termination of
his employment with the Company, reimburse him for the portion of
the premiums that the Company would have paid had Executive
remained employed with the Company, at the same level of coverage
that was in effect as of the Termination Date, for a period of
twelve (12) consecutive months after the Termination Date.
(b) If Executive's employment with the Company is terminated by reason
of:
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(i) Executive's abandonment of his employment or Executive's
resignation for any reason other than for Good Reason (as defined
below); or
(ii) termination of Executive's employment by the Company for
Cause (as defined below),
the Company shall pay to Executive or his beneficiary or his estate, as the case
may be, his base salary through the Termination Date.
(c) "Cause" hereunder shall mean:
(i) an act or acts of dishonesty undertaken by Executive and
intended to result in personal gain or enrichment of Executive or
others at the expense of the Company;
(ii) unlawful conduct or gross misconduct that is willful and
deliberate on Executive's part and that, in either event, is
injurious to the Company;
(iii) the conviction of Executive of a felony;
(iv) failure of Executive to perform his duties and
responsibilities hereunder or to satisfy his obligations as an
officer or employee of the Company; or
(v) breach of any terms and conditions of this Agreement by
Executive.
(d) Termination by Executive for "Good Reason" hereunder shall mean
termination by Executive of his employment with the Company because one or more
of the following shall have occurred upon or after a Change in Control (as
defined in the Stellent, Inc. 2000 Stock Incentive Plan, as may be amended from
time to time) without Executive's written consent:
(i) the relocation of Executive's principal place of work more
than 30 miles outside the greater Twin Cities metropolitan area;
(ii) a material reduction in Executive's duties or
responsibilities; or
(iii) a material reduction of Executive's base salary, other than
pursuant to a general reduction in the base salaries of all
executives of the Company.
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(e) "Disability" hereunder shall mean the inability of Executive to
perform on a full-time basis the duties and responsibilities of his employment
with the Company by reason of his illness or other physical or mental impairment
or condition, if such inability continues for an uninterrupted period of 90 days
or more during any 180-day period. A period of inability shall be
"uninterrupted" unless and until Executive returns to full-time work for a
continuous period of at least 30 days.
(f) Any amount payable to Executive as reimbursement for the cost of
the continuation of his group health or dental insurance coverage under Section
13(a) shall be subject to deductions and withholdings and shall be paid to
Executive by the Company in approximately equal monthly installments commencing
on the first normal payroll date of the Company following the expiration of all
applicable rescission periods provided by law and continuing monthly thereafter.
The Company shall be entitled to cease making reimbursement payments to
Executive for the cost of the continuation of his group health or dental
insurance coverage with the Company after the Termination Date if Executive
becomes eligible for comparable group health or dental insurance coverage from
any other employer. For purposes of mitigation and reduction of the Company's
financial obligations to Executive under Section 13(a), Executive shall promptly
and fully disclose to the Company in writing the fact that he has become
eligible for comparable group health or dental insurance coverage from any other
employer. Executive shall be liable to repay any amounts to the Company that
should have been so mitigated or reduced but for Executive's failure or
unwillingness to make such disclosures.
(g) Notwithstanding the foregoing provisions of this Section 13, the
Company shall not be obligated to make any payments to Executive under Sections
13(a) hereof unless Executive shall have signed a release of claims in favor of
the Company and its Affiliates in a form to be prescribed by the Board, all
applicable consideration and rescission periods provided by law shall have
expired, and Executive is in strict compliance with the terms of this Agreement
as of the dates of such payments.
(h) Notwithstanding any provision to the contrary contained in this
Agreement, if the cash payments due and the other benefits to which Executive
shall become entitled under this Section 13, either alone or together with other
payments in the nature of compensation to Executive that are contingent on a
change in the ownership or effective control of the Company or in the ownership
of a substantial portion of the assets of the Company or otherwise, would
constitute a "parachute payment" as defined in Section 280G of the Internal
Revenue Code (the "Code") or any successor provision thereto, such lump sum
payment and/or such other benefits and payments shall be reduced (but not below
zero) to the largest aggregate amount as will result in no portion thereof being
subject to the excise tax imposed under Section 4999 of the Code (or any
successor provision thereto) or being non-deductible to the Company for federal
income tax purposes pursuant to Section 280G of the Code (or any successor
provision thereto). The outside accountants of the Company shall determine the
amount of any reduction to be made pursuant to this Section 13 and shall select
from among the foregoing benefits and payments those that shall be reduced.
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(i) In the event of termination of Executive's employment, the sole
obligation of the Company hereunder shall be its obligation to make the payments
called for by Sections 13(a) or 13(b) hereof, as the case may be, and the
Company shall have no other obligation to Executive or to his beneficiary or his
estate, except as otherwise provided by law, under the terms of any other
applicable agreement between Executive and the Company, or under the terms of
any employee benefit plans or programs then maintained by the Company in which
Executive participates.
14. Miscellaneous.
(a) Governing Law. All matters relating to the interpretation,
construction, application, validity and enforcement of this Agreement shall be
governed by the laws of the State of Minnesota without giving effect to any
choice or conflict of law provision or rule, whether of the State of Minnesota
or any other jurisdiction, that would cause the application of laws of any
jurisdiction other than the State of Minnesota.
(b) Jurisdiction and Venue. Executive and the Company consent to
jurisdiction of the courts of the State of Minnesota and/or the federal district
courts, District of Minnesota, for the purpose of resolving all issues of law,
equity, or fact arising out of or in connection with this Agreement. Any action
involving claims of a breach of this Agreement shall be brought in such courts.
Each party consents to personal jurisdiction over such party in the state and/or
federal courts of Minnesota and hereby waives any defense of lack of personal
jurisdiction. Venue, for the purpose of all such suits, shall be in Hennepin
County, State of Minnesota.
(c) Entire Agreement. This Agreement and any stock option agreements
entered into by the Company and Executive contain the entire agreement of the
parties relating to Executive's employment with the Company and supersedes all
prior agreements and understandings with respect to such subject matter, and the
parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement that are not set forth herein.
(d) No Violation of Other Agreements. Executive hereby represents and
agrees that neither (i) Executive's entering into this Agreement nor (ii)
Executive's carrying out the provisions of this Agreement, will violate any
other agreement (oral, written or other) to which Executive is a party or by
which Executive is bound.
(e) Amendments. No amendment or modification of this Agreement shall be
deemed effective unless made in writing and signed by the parties hereto.
(f) No Waiver. No term or condition of this Agreement shall be deemed
to have been waived, except by a statement in writing signed by the party
against whom enforcement of the waiver is sought. Any written waiver shall not
be deemed a continuing waiver unless specifically stated, shall operate only as
to the specific term or condition waived
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and shall not constitute a waiver of such term or condition for the future or as
to any act other than that specifically waived.
(g) Assignment. This Agreement shall not be assignable, in whole or in
part, by either party without the prior written consent of the other party,
except that the Company may, without the consent of Executive, assign its rights
and obligations under this Agreement (1) to an Affiliate or (2) to any
corporation or other person or business entity to which the Company may sell or
transfer all or substantially all of its assets. After any such assignment by
the Company, the Company shall be discharged from all further liability
hereunder and such assignee shall thereafter be deemed to be "the Company" for
purposes of all terms and conditions of this Agreement, including this Section
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(h) Counterparts. This Agreement may be executed in any number of
counterparts, and such counterparts executed and delivered, each as an original,
shall constitute but one and the same instrument.
(i) Severability. Subject to Section 8(e) hereof, to the extent that
any portion of any provision of this Agreement shall be invalid or
unenforceable, it shall be considered deleted herefrom and the remainder of such
provision and of this Agreement shall be unaffected and shall continue in full
force and effect.
(j) Captions and Headings. The captions and paragraph headings used in
this Agreement are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
IN WITNESS WHEREOF, Executive and the Company have executed this Agreement
as of the date set forth in the first paragraph.
Stellent, Inc.
By
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Its
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Xxxxxx X. Xxxxx
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