EXHIBIT 10.11.1
MCS
MISSION CRITICAL SOFTWARE
January 13, 1999
Xx. Xxxxx Xxxxx Saint-Germain
address
Re: Xxxxx XxXxxxx
Dear Xxxxx:
As we discussed in our meeting on January 7, 1999, Mission Critical Software,
Inc., M&A Associates and Xxxxx XxXxxxx have agreed to clarify the terms of the
Employment Agreement between MCS and Xxxxx entered into effective as of January
1, 1998 to reflect certain terms omitted at the time of execution of such
agreement, including, without limitation, the intention of the parties at that
time to terminate the Sales and Marketing Agreement dated January 1, 1997
between MCS and M&A Associates (the "M&A Agreement"), effective as of the date
Xxxxx took his position as Vice President of Sales for MCS, and the purchase by
Xxxxx of a warrant to purchase 100,000 shares of the Common Stock of MCS.
Therefore, the Employment Agreement is hereby amended as follows:
. The current compensation arrangement between Xxxxx and MSC consisting of
base salary payable at a rate of $16,667 per month, a 2% commission on
all license fee and a 1% commission on all initial maintenance revenue
collected by MCS since January 1, 1998 (other than revenue from the
"Named Accounts), and a commission of 15% of the revenue generated by
the "Named Accounts" since January 1, 1998 shall remain in place through
June 30, 1999 in accordance with MCS's and Xxxxx's previous course of
conduct; provided that such 15% "Named Accounts" commission payable to
Xxxxx shall be reduced to the extent MSC pays any commission to any
Account Manager or similar employee of MCS assigned to the "Named
Accounts" by MSC, but such reduction shall not exceed 6% of the related
commissioned revenue For example, if MSC assigns an Account Manager to
one of the "Named Accounts" and pays such Account Manager a 7%
commission on a "Named Account", Xxxxx's commission would only be
reduced from 15% to 9%. The list of "Named Accounts is attached hereto
as Exhibit A;
. Beginning July 1, 1999, Xxxxx's compensation package will consist of a
total compensation target base amount of $400,000, with 50% of such
compensation as base pay at a rate of $16,667 per month and 50% of such
target compensation contingent on meeting operating targets.
. With regard to the $100,000 of Xxxxx's salary that Xxxxx permitted MCS
to withhold from his pay at the beginning of 1998, such $100,000 amount
paid has been held in escrow, without interest, as consideration for the
exercise price of a Warrant to purchase 100,000 shares of MCS's common
stock. Such Warrant has an exercise price of $1.00 a share and is
exercisable for three years beginning January 1, 1998. In return for
other provisions of Xxxxx's employment contract, Xxxxx agrees that if he
Xx. Xxxxx Xxxxx-Saint Germain
January 13, 1999
Page 2 of 5
voluntarily terminates his employment without "Good Reason" prior to
July 1, 1999, he will be required to pay an additional $100,000 upon
exercising this warrant
. All provisions of the Employment Agreement shall remain in place;
provided, however, that the Employment Agreement shall be amended as
follows:
. (i) in the event that Xxxxx's employment with MCS is terminated by
MCS for any reason other than for "Cause" or Xxxxx voluntarily
terminates his employment for "Good Reason", Xxxxx shall receive a
severance payment of six months base salary. For purposes of the
Employment Agreement, "Good Reason" shall mean:
a. Without his express written consent, the assignment to Xxxxx
of any duties inconsistent with his positions, duties,
responsibilities and status with MCS, or a material change
in his reporting responsibilities, titles or offices, or any
removal of Xxxxx from or any failure to re-elect Xxxxx to
any such positions, except in connection with the
termination of his employment for Cause, disability,
retirement, death, or to the extent that such change(s) are
subsequent to July 1, 1999 and the result of or in
connection with an acquisition of another business by MCS;
b. A reduction by MCS in Xxxxx's total compensation package as
defined herein;
c. MCS's requiring Xxxxx to relocate to anywhere other than
Texas except for required travel on MCS's business to an
extent substantially consistent with his present or past
business travel obligations, or, in the event that Xxxxx
consents to any such relocation, the failure of MCS to pay
(or reimburse Xxxxx) for all reasonable moving expenses
incurred by him relating to a change of his principal
residence in connection with such relocation;
d. Any failure of MCS to obtain the assumption of, or the
agreement to perform, this Agreement by any successor-in-
interest to MCS;
. (ii) Xxxxx agrees to give MCS sixty (60) days prior written notice of
his resignation;
. (iii) The non-competition covenant shall be reduced to a six-month
period and shall only apply to a list of six companies that are
competitive with MCS (the "Competitors"), as determined by MCS based
on published or otherwise documented industry or company information
evidencing the competitive nature of such company; provided, however,
that such list may be amended by MCS every six (6) months on the 1st
of January and the 1st of July of each new year. The initial list
effective from January 1, 1999 to June 30, 1999 is attached hereto as
Exhibit B;
Xx. Xxxxx Xxxxx-Saint Germain
January 13, 1999
Page 3 of 5
Xxxxx's options shall continue to vest pursuant to the terms of the Option Plan
and Xxxxx's Option Agreement(s) without change; provided, however, that in the
event of a termination of Xxxxx's employment without Cause or a voluntary
resignation of his employment by Xxxxx for "Good Reason", such options shall
continue to vest during the applicable notice period and severance period.
This offer is subject to M&A Associate's and Xxxxx's written acknowledgement
below of the termination of the M&A Agreement as of January 1, 1998 and
agreement on the list of "Named Accounts" and "Competitors" attached hereto as
Exhibit A and Exhibit B, respectively. In connection with such termination of
the M&A Agreement and in consideration of MCS's execution and delivery of this
Letter Agreement, M&A Associates and Xxxxx XxXxxxx do hereby release, acquit,
and forever discharge MCS and its stockholders, employees, officers, agents and
directors, and their respective heirs, successors and assigns from any and all
manner of claims, debts, demands, damages, liabilities, and causes of action,
whether known or unknown, from the beginning of time through the date of this
release, which M&A Associates or Xxxxx XxXxxxx, their heirs, successors, and
assigns, may have had or may presently have or may have in the future, relating
to or arising out of the termination of the M&A Agreement and the employment of
Xxxxx XxXxxxx as Vice President of Sales of MCS including, but not limited to,
causes of action for libel, slander, breach of contract, negligence, impairment
of economic opportunity, wrongful termination, negligent supervision,
intentional infliction of emotional distress, and any other tort, and claims
under federal, state, or local constitutions, statutes, regulations, ordinances,
and common law, including, but not limited to, violations of the Texas Payroll
Act, exemplary damages, attorneys' fees, and pre- or post-judgment interest.
Nothing contained in this Agreement constitutes an admission of liability by
MCS, M&A Associates or Xxxxx XxXxxxx concerning any aspect of the employment of
Xxxxx XxXxxxx or the termination of the M&A Agreement. Furthermore, Xxxxx
XxXxxxx, M&A Associates and MCS do not waive any rights or claims that may arise
after the date this Agreement is executed, other than as set forth herein.
If you have any questions or comments regarding this matter, please give me a
call at your earliest convenience.
Sincerely,
/s/ Xxxxxxx X. Xxxx
--------------------
Xxxxxxx X. Xxxx
Chief Financial Officer
AGREED AND ACCEPTED BY:
/s/ Xxxxx XxXxxxx
------------------
Xxxxx XxXxxxx
M&A ASSOCIATES
By: /s/ Xxxxx XxXxxxx
------------------
Xxxxx XxXxxxx, Principal
Exhibit A
"Named Accounts"
Territory Company Territory Company
Bekim AIG Data Center U S F G
Chase Manhattan Bank Prudential Insurance Co.
CitiBank - Puerto Rico
CitiBank - Citicorp Xxxxxxxxx Honeywell
CitiCorp CDSI Finance Honeywell Ltd
Citicorp Credit Services Honeywell Space Systems
Deutsche Xxxxxx Xxxxxxxx Mayo Foundation
Xxxxxx Brothers Mayo Foundation Medical Ed.
Xxxxxxx Xxxxx
Metropolitan Life Sage Anheuser-Xxxxx
Xxxxxx Xxxxxxx
Union Bank of Switzerland St. Xxxxxx Digital EquipmentCorp/Compaq
Pfizer (EEM) Hoechst Celanese/Celanse
Xxxxxx Xxxxxx USA Tennessee Xxxxxxx
Republic National Bank
Xxxxxxxxx Defense Intelligence Agency
Xxxxxxx Detroit Edison Office Supply (DoD) A/Sentry
Pharmica/Upjohn FDIC
ALCOA National Reconnaissance/DEC
Xxxxx Air Force Base
Flagella Aetna, Inc. Social Security Administration
Analog Devices U.S. Department of Labor
Choice Courier Systems Inc U.S. Navy - Strategic Defense
CSC Consulting OASAM Office of Procurement
Dunhill Staffing Systems, Inc Ft. Xxxx - (EEM)
Fidelity Investments US House of Reps - (EEM)
Lotus Development Corp. Internal Revenue Service
Xxxx El Xxxxxx (EA & EEM) U.S. Treasury Department
SAIC USAF - Okinawa
UNUM Corporation 1st Air Marine Aircraft Japan
U.S. Tobacco Xxxxxx Xxxxxxxxx AFB
Swiss Bank
Xxxxxx CIBA Vision/Novartis
Xxxxxxx Bechtel Glaxo Wellcome
Xxxxxxx Xxxxxx & Co.
International Bank of Bermuda
Milan Blue Cross/Blue Shield of NE PA
Conoco
DuPont
Electronic Payment Services
Forensic Technologies
Xxxxxxx & Xxxxxxx
Merck
Exhibit B
"Competitors"
1. Aelita Software
2. Enteno Corporation
3. Bindview Development Corp.
4. Fastlane
5. NetIQ
6. Heroix Corp Ltd.
