Exhibit 10.17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
the 1st day of December, 2001, by and between MetaSolv Software, Inc., a
Delaware corporation (the "Employer"), and Xxxxxxx X. Xxxxxx, Vice President -
Engineering (the "Executive").
RECITALS
A. The Employer desires that the Executive continue to provide
services for the benefit of the Employer and its affiliates and the Executive
desires to continue such employment with the Employer.
B. The Employer and the Executive acknowledge that the Executive is
and will continue to be a member of the senior management team of the Employer
and, as such, will participate in implementing the Employer's business plan.
C. The Employer recognizes that the changing economic market can
distract its key management personnel from maintaining a long term vision for
the Employer.
D. The Employer has determined that it is essential and in the best
interest of the Employer and its stockholders to retain the services of the
Executive and to ensure his continued dedication and efforts in a changing
global economic environment.
E. In order to induce the Executive to remain in the employ of the
Employer, the Employer desires to enter into this Agreement with the Executive
to provide the Executive with certain benefits in the event his employment is
terminated.
F. In the course of employment with the Employer, the Executive has
had and will continue to have access to certain confidential information that
relates to or will relate to the business of the Employer and its affiliates.
The Employer desires that any such information not be disclosed to other
parties or otherwise used for unauthorized purposes.
NOW, THEREFORE, in consideration of the above premises and the following
mutual covenants and conditions, the parties agree as follows:
1. Employment. The Employer shall employ the Executive as its Vice
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President -Engineering, or in an equivalent executive officer level position,
and the Executive hereby accepts such employment on the following terms and
conditions.
2. Duties. The Executive shall work for the Employer in a full-time
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capacity. The Executive shall, during the term of this Agreement, have the
duties, responsibilities, powers, and authority customarily associated with the
positions of Vice President - Engineering, or such equivalent executive
position. The Executive shall report to, and follow the direction of, the
Chief Operating Officer and President of the Employer. The Executive shall
diligently, competently, and faithfully perform all duties, and shall devote
his entire business time, energy,
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attention, and skill to the performance of duties for the Employer or its
affiliates and will use his best efforts to promote the interests of the
Employer. It shall not be considered a violation of the foregoing for the
Executive to serve on corporate, industry, civic, religious or charitable
boards or committees, so long as such activities do not individually or in the
aggregate significantly interfere with the performance of the Executive's
responsibilities as an employee of the Employer in accordance with this
Agreement.
3. Executive Loyalty. The Executive shall devote all of his time,
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attention, knowledge, and skill solely and exclusively to the business and
interests of the Employer, and the Employer shall be entitled to all benefits
and profits arising from or incident to any and all work, services, and advice
of the Executive. The Executive expressly agrees that during the term of this
Agreement, he shall not engage, directly or indirectly, as a partner, officer,
director, member, manager, stockholder, advisor, agent, employee, or in any
other form or capacity, in any other business similar to that of the Employer.
The foregoing notwithstanding, and subject to Paragraph 9 below, nothing herein
contained shall be deemed to prevent the Executive from investing his money in
the capital stock or other securities of any corporation whose stock or
securities are publicly-owned or are regularly traded on any public exchange,
nor shall anything herein contained be deemed to prevent the Executive from
investing his money in real estate.
4. Term of Employment. Unless sooner terminated as hereinafter
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provided, this Agreement shall be entered into for a period of two (2) years,
commencing December 1, 2001 (the "Initial Term"). The term of employment shall
be renewed automatically for successive periods of one (1) year each (a
"Renewal Term") after the expiration of the Initial Term and any subsequent
Renewal Term, unless the Chief Operating Officer and President provides the
Executive, or the Executive provides the Chief Operating Officer and President
with written notice to the contrary at least twelve (12) months prior to the
end of the Initial Term or any Renewal Term; provided, however, that
notwithstanding any such notice by the Employer not to extend, if a Change in
Control (as defined in Paragraph 7D below) shall occur during the term hereof,
the term of this Agreement shall not expire prior to the expiration of
twenty-four (24) months after the occurrence of a Change in Control.
5. Compensation.
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A. The Employer shall pay the Executive an annual base salary of
$175,000.00 (the "Base Salary"), payable in substantially equal installments in
accordance with the Employer's payroll policy from time to time in effect. The
Executive's salary shall be subject to any payroll or other deductions as may
be required to be made pursuant to law, government order, or by agreement with,
or consent of, the Executive. Changes to the Base Salary, as adjusted, may be
made following an annual salary review, the first of which shall take place in
or around February 2002, and all subsequent reviews shall occur in or around
February of each year thereafter.
B. The Executive shall have the opportunity to participate in
the Employer's Performance Bonus Plan, pursuant to the terms and conditions of
such Performance Bonus Plan. The Board of Directors of the Employer (the
"Board") shall determine, in its sole discretion, the Executive's target
performance bonus under the Performance Bonus Plan. For calendar year
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2001, the Executive shall be eligible for a target bonus of 50% of Base Salary
for the period ending December 31, 2001, if the Executive and the Employer have
achieved certain defined and documented annual goals. If the Executive and the
Employer overachieve these goals, the bonus may be as high as 62.5% of Base
Salary for such period. For calendar year 2002, and for each calendar year
thereafter, the Executive shall be eligible for a semi-annual target bonus, to
be set by the Board as a percentage of the Executive's then current Base Salary
for each six (6) month period if the Executive and the Employer have achieved
certain defined and documented annual goals. If the Executive and the Employer
overachieve these goals, this reward may be set as a higher percentage of Base
Salary for each such six (6) month period. The Board may amend the terms and
conditions of the Performance Bonus Plan at any time in its sole discretion.
C. During the term of this Agreement, the Employer shall:
(1) include the Executive in any life insurance,
disability insurance, medical, dental or health insurance, savings,
pension and retirement plans, employee stock option and stock
purchase plans, and other benefit plans or programs (including, if
applicable, any excess benefit or supplemental executive retirement
plans) maintained by the Employer for the benefit of its executives;
(2) include the Executive in such perquisites as the
Employer may establish from time to time that are commensurate with
his position and at least comparable to those received by other
executives of the Employer; and
(3) provide the Executive with such amount of paid time
off per annum as is provided under the Employer's standard
employment policies.
6. Expenses. The Employer shall reimburse the Executive for all
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reasonable and approved business expenses, provided the Executive submits paid
receipts or other documentation acceptable to the Employer and as required by
the Internal Revenue Service to qualify as ordinary and necessary business
expenses under the Internal Revenue Code of 1986, as amended (the "Code").
7. Termination. The Executive's services shall terminate upon the
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first to occur of the following events:
A. At the end of the term of this Agreement, including any
Renewal Terms, as set forth in Paragraph 4 of this Agreement.
B. Upon the Executive's date of death or the date the Executive
is given written notice that he has been determined to be disabled by the
Employer. For purposes of this Agreement, the Executive shall be deemed to be
disabled if the Executive meets the requirements for long term disability under
the Employer's long-term disability plan or program in effect on the date of
the notice; alternatively, if the Employer does not have such a long-term
disability plan or program in effect, then the Executive shall be deemed to be
disabled if the Executive, as a result of illness or incapacity, shall be
unable to perform substantially his required duties for a period of four (4)
consecutive months or for any aggregate period of six (6) months in any twelve
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(12) month period. A termination of the Executive's employment by the Employer
for disability shall be communicated to the Executive by written notice and
shall be effective on the tenth (10th) business day after receipt of such
notice by the Executive, unless the Executive returns to full-time performance
of his duties before such tenth (10th) business day.
C. On the date the Employer provides the Executive with written
notice that he is being terminated for "Cause." For purposes of this
Agreement, and as determined by the Employer in its sole discretion, the
Executive shall be deemed terminated for Cause if the Employer terminates the
Executive after the Executive:
(1) shall have been convicted of any felony including,
but not limited to, a felony involving fraud, theft,
misappropriation, dishonesty, or embezzlement;
(2) shall have committed intentional acts of misconduct
that materially impair the goodwill or business of the Employer or
cause material damage to its property, goodwill, or business; or
(3) shall have refused to, or willfully failed to,
perform his material duties hereunder; provided, however, that no
termination under this subparagraph (3) shall be effective unless
the Executive does not cure such refusal or failure to the
Employer's reasonable satisfaction as soon as practicable after the
Employer gives the Executive written notice identifying such
refusal or failure (and, in any event, within thirty (30) days
after receipt of such written notice).
No act or failure to act on the part of the Executive shall be considered
"willful" unless it is done, or omitted to be done, by the Executive in bad
faith or without reasonable belief that his action or omission was in the best
interests of the Employer. A termination of the Executive's employment for
Cause shall be effected in accordance with the following procedures. The Board
shall give the Executive written notice ("Notice of Termination for Cause") of
its intention to terminate the Executive's employment for Cause, setting forth
in reasonable detail the specific conduct of the Executive that it considers to
constitute Cause and the specific provision(s) of this Agreement on which it
relies, and stating the date, time and place of the Board Meeting for Cause.
The "Board Meeting for Cause" means a meeting of the Board at which the
Executive's termination for Cause will be considered, that takes place not less
than ten (10) and not more than twenty (20) business days after the Executive
receives the Notice of Termination for Cause. The Executive shall be given an
opportunity, together with counsel, to be heard at the Board Meeting for Cause.
The Executive's termination for Cause shall be effective when and if a
resolution is duly adopted at the Board Meeting for Cause by a two-thirds
majority vote of the entire membership of the Board, excluding the Executive
from the count of such membership, stating that in the good faith opinion of
the Board, the Executive is guilty of the conduct described in the Notice of
Termination for Cause, and that such conduct constitutes Cause under this
Agreement.
D. On the date the Employer terminates the Executive's
employment for any reason, other than a reason otherwise set forth in this
Paragraph 7, provided that the Employer
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shall give the Executive thirty (30) days written notice prior to such date of
its intention to terminate such employment.
E. On the date the Executive terminates his employment for
"Good Reason." For purpose of this Agreement, Good Reason means:
(1) a change in the Executive's status, title, position
or responsibilities (including reporting responsibilities)
inconsistent in any respect with Paragraph 2 of this Agreement; the
assignment to the Executive of any duties or responsibilities
inconsistent with Paragraph 2 of this Agreement; or the removal of
the Executive from or failure to reappoint or reelect him to any of
such positions, except in connection with the termination of his
employment for disability, Cause, as a result of his death, or by
the Executive other than for Good Reason;
(2) the Employer's requiring the Executive to be based
at any place outside a 60-mile radius of the location of the
Employer's corporate headquarters as of the date of this Agreement,
except for reasonably required travel;
(3) following a Change in Control (as defined in this
Paragraph 7E), the failure by the Employer to (a) continue in
effect (without reduction in benefit levels and/or reward
opportunities) any material compensation or employee benefit plan
in which the Executive was participating at any time within ninety
(90) days preceding the date of a Change in Control or at any time
thereafter, unless such plan is replaced with a plan that provides
substantially equivalent compensation or benefits to the Executive
or (b) provide the Executive with compensation and benefits, in the
aggregate, at least equal (in terms of benefit levels and/or reward
opportunities) to those provided for under each other employee
benefit plan, program and practice in which the Executive was
participating at any time within ninety (90) days preceding the
date of a Change in Control or at any time thereafter;
(4) any material breach by the Employer of any provision
of this Agreement; or
(5) following a Change in Control (as defined in this
Paragraph 7E), the failure of the Employer to obtain an agreement,
satisfactory to the Executive, from any Successors and Assigns (as
defined herein) to assume and agree to perform this Agreement.
Any event or condition described in this Paragraph 7E that occurs prior to a
Change in Control, but which the Executive reasonably demonstrates (1) was at
the request of a third party, or (2) otherwise arose in connection with, or in
anticipation of, a Change in Control that actually occurs, shall constitute
Good Reason for purposes of this Agreement notwithstanding that it occurred
prior to the Change in Control.
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For purposes of this Agreement, a "Change in Control" means the first to occur
of (a) the completion of the acquisition by any entity, person, or group of
beneficial ownership, as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, of more than 50% of the outstanding capital
stock of the Employer entitled to vote for the election of directors ("Voting
Stock"); (b) the completion by any entity, person or group (other than the
Employer or an affiliate of the Employer) of a tender offer or an exchange
offer for more than 50% of the outstanding Voting Stock of the Employer; (c)
the effective time of (1) a merger or consolidation of the Employer with one or
more corporations as a result of which the holders of the outstanding Voting
Stock of the Employer immediately prior to such merger or consolidation hold
less than 50% of the Voting Stock of the surviving or resulting corporation, or
(2) a transfer of substantially all of the property or assets of the Employer
other than to an entity of which the Employer owns at least 80% of the Voting
Stock; and (d) the election to the Board, without the recommendation or
approval of the incumbent Board, of the lesser of (1) three directors, or (2)
directors constituting a majority of the number of directors of the Employer
then in office.
For purposes of this Agreement, "Successors and Assigns" shall mean a
corporation or other entity acquiring all or substantially all of the stock,
assets and/or business of the Employer whether by operation of law or
otherwise.
8. Compensation Upon Termination.
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A. If the Executive's services are terminated pursuant to
Paragraph 7B or 7C, the Executive shall be entitled to his salary through his
final date of active employment plus any accrued but unused current paid time
off for which the Executive is eligible. The Executive shall also be entitled
to any benefits mandated under the Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA) or required under the terms of any death, insurance, or
retirement plan, program, or agreement provided by the Employer and to which
the Executive is a party or in which the Executive is a participant, including,
but not limited to, any short-term or long-term disability plan or program, if
applicable.
B. Except as otherwise provided in Xxxxxxxxx 0X, 0X or this
Paragraph 8B, if the Executive's services are terminated pursuant to Paragraph
7A, 7D or 7E, the Executive shall be entitled to his salary through his final
date of active employment, plus any accrued but unused current paid time off
for which the Executive is eligible. The Executive also shall be entitled to a
single sum payment payable within thirty (30) days after the Executive's
termination date and equal to one (1) times his Base Salary, plus one (1) times
his annual target performance bonus as determined pursuant to the Employer's
Performance Bonus Plan, provided (a) he signs an agreement acceptable to the
Employer that (i) waives any rights the Executive may otherwise have against
the Employer, (ii) releases the Employer from actions, suits, claims,
proceedings and demands related to the period of employment and/or the
termination of employment, and (iii) contains certain other obligations which
shall be set forth at the time of the termination (including, but not limited
to, a reaffirmation of the Executive's obligations under Paragraph 9 of this
Agreement), and (b) the Employer shall be permitted to offset from the
severance pay hereunder any salary paid to the Executive during the thirty (30)
day or one (1) year written notice period, whichever is applicable, if the
Executive performs no substantial services during such thirty (30) day or one
(1) year written notice period. In addition, all options to purchase
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common stock of the Employer granted to the Executive pursuant to the
Employer's Long-Term Incentive Plan shall immediately become Vested Shares as
defined in any Stock Option Agreement(s) between the Employer and the
Executive, and the Executive shall have one (1) year following the date of
termination to exercise any unexercised options held by him as of such date.
The Employer shall also pay for up to six (6) months of outplacement services
for the Executive (or, if earlier, until the Executive obtains full-time
employment), to be provided by an outplacement service provider selected by the
Employer. Additionally, the Executive shall be entitled to any benefits
mandated under COBRA or required under the terms of any death, insurance, or
retirement plan, program, or agreement provided by the Employer and to which
the Executive is a party or in which the Executive is a participant. If the
Executive elects COBRA continuation coverage for himself and/or his dependents,
the Employer shall pay for such coverage for so long as the Executive is
eligible for COBRA continuation coverage; provided however, that nothing herein
shall be construed to extend the period of time mandated by statute over which
such COBRA continuation may otherwise be provided to the Executive and/or his
dependents.
C. If the Executive's services are terminated pursuant to
Paragraph 7A, 7D or 7E at any time during the twenty-four (24) month period
following a Change in Control, the Executive shall be entitled to his salary
through his final date of active employment, plus any accrued but unused
current paid time off for which the Executive is eligible. In lieu of any
entitlements under Paragraph 8B, the Executive shall be entitled to a single
sum payment payable within thirty (30) days after the Executive's termination
date and equal to two (2) times his Base Salary, plus two (2) times his annual
target performance bonus as determined pursuant to the Employer's Performance
Bonus Plan, provided (a) he signs an agreement acceptable to the Employer that
(i) waives any rights the Executive may otherwise have against the Employer,
(ii) releases the Employer from actions, suits, claims, proceedings and demands
related to the period of employment and/or the termination of employment, and
(iii) contains certain other obligations which shall be set forth at the time
of the termination (including, but not limited to, a reaffirmation of the
Executive's obligations under Paragraph 9 of this Agreement), and (b) the
Employer shall be permitted to offset from the severance pay hereunder any
salary paid to the Executive during the thirty (30) day or one (1) year written
notice period, whichever is applicable, if the Executive performs no
substantial services during such thirty (30) day or one (1) year written notice
period. In addition, all options to purchase common stock of the Employer
granted to the Executive pursuant to the Employer's Long-Term Incentive Plan
shall immediately become Vested Shares as defined in any Stock Option
Agreement(s) between the Employer and the Executive, and the Executive shall
have one (1) year following the date of termination to exercise any unexercised
options held by him as of such date. The Employer shall also pay for up to six
(6) months of outplacement services for the Executive (or, if earlier, until
the Executive obtains full-time employment), to be provided by an outplacement
service provider selected by the Employer. Additionally, the Executive shall
be entitled to any benefits mandated under COBRA or required under the terms of
any death, insurance, or retirement plan, program, or agreement provided by the
Employer and to which the Executive is a party or in which the Executive is a
participant. If the Executive elects COBRA continuation coverage for himself
and/or his dependents, the Employer shall pay for such coverage for so long as
the Executive is eligible for COBRA continuation coverage; provided however,
that nothing herein shall be
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construed to extend the period of time mandated by statute over which such
COBRA continuation may otherwise be provided to the Executive and/or his
dependents.
D. If a "change in control" shall occur (as defined in Section
280G(b)(2)(a)(i) of the Code), and a determination is made by legislation,
regulation, ruling directed to the Executive or the Employer, or court
decision, that the aggregate amount of any payment made to the Executive
hereunder, or pursuant to any plan, program, or policy of the Employer in
connection with, on account of, or as a result of, such change in control
constitutes "excess parachute payments" under the Code that are subject to the
excise tax provisions of Section 4999 of the Code, or any successor sections
thereof, the Executive shall be entitled to receive from the Employer, in
addition to any other amounts payable hereunder, an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes, other than interest and penalties imposed by reason of the Executive's
failure to file timely a tax return or pay taxes shown due on his return),
including, without limitation, any income taxes (and any interest and penalties
imposed thereon) and any excise tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the excise tax
imposed; provided, however, if the aggregate amount of payments to the
Executive, without regard to the Gross-Up Payment, does not exceed one hundred
ten percent (110%) of the maximum amount that the Executive could receive
without regard to the payments being subject to the excise tax provisions of
Section 4999 of the Code (the "Tax Limit"), then (i) no Gross-Up Payment shall
be made hereunder, and (ii) the payments shall be reduced to the Tax Limit.
All determinations required to be made under this Paragraph 8, including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by a certified public accounting firm designated by the Employer
and reasonably acceptable to the Executive which is one of the five largest
accounting firms in the United States (the "Accounting Firm"), which shall
provide detailed supporting calculations both to the Employer and the Executive
within fifteen (15) business days of the receipt of notice from the Executive
that there has been an excess parachute payment, or such earlier time as is
requested by the Employer. All fees and expenses of the Accounting Firm shall
be borne solely by the Employer. Any Gross-Up Payment, as determined pursuant
to this Paragraph 8 shall be paid by the Employer to the Executive within five
(5) days of the receipt of the Accounting Firm's determination. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Employer should have
been made ("Underpayment") consistent with the calculations required to be made
hereunder. In the event that the Employer exhausts its remedies hereunder and
the Executive thereafter is required to make a payment of any excise tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Employer to or
for the benefit of the Executive. The Executive shall notify the Employer in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Employer of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten (10) business days
after the Executive is informed in writing of such claim and shall apprise the
Employer of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of
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the thirty (30) day period following the date on which he gives such notice to
the Employer (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Employer notifies the
Executive in writing prior to the expiration of such period that it desires
to contest such claim, the Executive shall:
(1) give the Employer any information reasonably
requested by the Employer relating to such claim;
(2) take such action in connection with contesting such
claim as the Employer shall reasonably request in writing from time
to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably
selected by the Employer;
(3) cooperate with the Employer in good faith in order
effectively to contest such claim; and
(4) permit the Employer to participate in any
proceedings relating to such claim;
provided, however, that the Employer shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any excise tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provision
of this Paragraph 8D, the Employer shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Employer shall
determine. Notwithstanding anything herein to the contrary, if, after the
receipt by the Executive of an amount advanced by the Employer pursuant to this
Paragraph 8D, the Executive becomes entitled to receive any refund with respect
to such claim, the Executive shall (subject to the Employer's substantial
compliance with the requirements of this Paragraph 8D) promptly pay to the
Employer the amount of such refund plus interest at an annual rate equal to the
Applicable Federal Rate provided for in Section 1274(d) of the Code from the
date the Gross-Up Payment was paid to the Executive until the date of the
repayment to the Employer.
9. Protective Covenants. The Executive acknowledges and agrees that
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solely by virtue of his employment by, and relationship with, the Employer, he
has acquired and will acquire "Confidential Information," as hereinafter
defined, as well as special knowledge of the Employer's relationships with its
customers, and that, but for his association with the Employer, the Executive
would not or will not have had access to said Confidential Information or
knowledge of said relationships. The Executive further acknowledges and agrees
(i) that the Employer has long term, near-permanent relationships with its
customers, and that those
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relationships were developed at great expense and difficulty to the Employer
over several years of close and continuing involvement; (ii) that the
Employer's relationships and goodwill with its customers are and will continue
to be valuable, special and unique assets of the Employer; and (iii) that the
Employer has the following protectable interests that are critical to its
competitive advantage in the industry and would be of demonstrable value in the
hands of a competitor: pricing models, formulas, software applications and
designs and other technologies and devices utilized in the management of
communications. In return for the consideration described in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and as a condition precedent to the Employer entering
into this Agreement, and as an inducement to the Employer to do so, the
Executive hereby represents, warrants, and covenants as follows:
A. The Executive has executed and delivered this Agreement as
his free and voluntary act, after having determined that the provisions
contained herein are of a material benefit to him, and that the duties and
obligations imposed on him hereunder are fair and reasonable and will not
prevent him from earning a comparable livelihood following the termination of
his employment with the Employer.
B. The Executive has read and fully understands the terms and
conditions set forth herein, has had time to reflect on and consider the
benefits and consequences of entering into this Agreement, and has had the
opportunity to review the terms hereof with an attorney or other
representative, if he so chooses.
C. The execution and delivery of this Agreement by the
Executive does not conflict with, or result in a breach of or constitute a
default under, any agreement or contract, whether oral or written, to which the
Executive is a party or by which the Executive may be bound. In addition, the
Executive has informed the Employer of, and provided the Employer with copies
of, any non-competition, confidentiality, work-for-hire or similar agreements
to which the Executive is subject or may be bound.
D. The Executive agrees that, during the time of his employment
with the Employer and (i) in the event the Executive's services are terminated
pursuant to Paragraphs 7A, 7D or 7E of this Agreement, for such period as the
Executive is receiving termination pay under Paragraph 8 of this Agreement, or
(ii) in the event the Executive's services are terminated pursuant to
Paragraphs 7B or 7C of this Agreement, for a period of one (1) year after such
termination, the Executive will not, except on behalf of the Employer, anywhere
in the United States of America or in any other place or venue where the
Employer or any affiliate, subsidiary, or division thereof now conducts or
operates, or may conduct or operate, its business prior to the date of the
Executive's termination of employment:
(1) directly or indirectly, contact, solicit or direct
any person, firm, corporation, association or other entity to
contact or solicit, any of the Employer's customers or prospective
customers (as hereinafter defined) for the purpose of providing any
products and/or services that are the same as or similar to the
products and services provided by the Employer to its customers
during the term hereof;
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(2) solicit or accept if offered to him, with or without
solicitation, on his own behalf or on behalf of any other person,
the services of any person who is a then current employee of the
Employer (or was an employee of the Employer during the year
preceding such solicitation), nor solicit any of the Employer's
then current employees (or an individual who was employed by or
engaged by the Employer during the year preceding such
solicitation) to terminate employment or an engagement with the
Employer, nor agree to hire any then current employee (or an
individual who was an employee of the Employer during the year
preceding such hire) of the Employer into employment with himself
or any company, individual or other entity; or
(3) directly or indirectly, whether as an investor
(excluding investments representing less than one percent (1%) of
the common stock of a public company), lender, owner, stockholder,
officer, director, consultant, employee, agent, salesperson or in
any other capacity, whether part-time or full-time, become
associated with any business involved in the design, manufacture,
marketing, or servicing of products then constituting ten percent
(10%) or more of the annual revenues of the Employer; or
(4) act as a consultant, advisor, officer, manager,
agent, director, partner, independent contractor, owner, or
employee for or on behalf of any of the Employer's customers or
prospective customers (as hereinafter defined), with respect to or
in any way with regard to any aspect of the Employer's business
and/or any other business activities in which the Employer engages
during the term hereof.
E. The Executive acknowledges and agrees that the scope
described above is necessary and reasonable in order to protect the Employer in
the conduct of its business and that, if the Executive becomes employed by
another employer, he shall be required to disclose the existence of this
Paragraph 9 to such employer and the Executive hereby consents to and the
Employer is hereby given permission to disclose the existence of this Paragraph
9 to such employer.
F. For purposes of this Paragraph 9, "customer" shall be
defined as any person, firm, corporation, association, or entity that purchased
any type of product and/or service from the Employer or is or was doing
business with the Employer or the Executive within the twelve (12) month period
immediately preceding termination of the Executive's employment. For purposes
of this Paragraph 9, "prospective customer" shall be defined as any person,
firm, corporation, association, or entity (i) contacted or solicited by the
Executive (whether directly or indirectly) or (ii) to the Executive's
knowledge, contacted or solicited by any other employee or representative of
the Employer, or (iii) who contacted the Executive (whether directly or
indirectly) or (iv) to the Executive's knowledge, who contacted the Employer
within the twelve (12) month period immediately preceding termination of the
Executive's employment for the purpose of having such persons, firms,
corporations, associations, or entities become a customer of the Employer.
Page 11 MetaSolv Confidential Information
G. The Executive agrees that both during his employment and
thereafter the Executive will not, for any reason whatsoever, use for himself
or disclose to any person not employed by the Employer any "Confidential
Information" of the Employer acquired by the Executive during his relationship
with the Employer, both prior to and during the term of this Agreement. The
Executive further agrees to use Confidential Information solely for the purpose
of performing duties with the Employer and further agrees not to use
Confidential Information for his own private use or commercial purposes or in
any way detrimental to the Employer. The Executive agrees that Confidential
Information includes but is not limited to: (1) any financial, engineering,
business, planning, operations, services, potential services, products,
potential products, technical information and/or know-how, organization charts,
formulas, business plans, production, purchasing, marketing, pricing, sales,
profit, personnel, customer, broker, supplier, or other lists or information of
the Employer; (2) any papers, data, records, processes, methods, techniques,
systems, models, samples, devices, equipment, compilations, invoices, customer
lists, or documents of the Employer; (3) any confidential information or trade
secrets of any third party provided to the Employer in confidence or subject to
other use or disclosure restrictions or limitations; and (4) any other
information, written, oral, or electronic, whether existing now or at some time
in the future, whether pertaining to current or future developments, and
whether previously accessed during the Executive's tenure with the Employer or
to be accessed during his future employment with the Employer, which pertains
to the Employer's affairs or interests or with whom or how the Employer does
business. The Employer acknowledges and agrees that Confidential Information
does not include (x) information properly in the public domain, or (y)
information in the Executive's possession prior to the date of his original
employment with the Employer, except to the extent that such information is or
has become a trade secret of the Employer or is or otherwise has become the
property of the Employer.
H. In the event that the Executive intends to communicate
information to any individual(s), entity or entities (other than the Employer),
to permit access by any individual(s), entity or entities (other than the
Employer), or to use information for the Executive's own account or for the
account of any individual(s), entity or entities (other than the Employer) and
such information would be Confidential Information hereunder but for the
exceptions set out at (x) and (y) of Paragraph G of this Agreement, the
Executive shall notify the Employer of such intent in writing, including a
description of such information, no less than fifteen (15) days prior to such
communication, access or use.
I. During and after the term of employment hereunder, the
Executive will not remove from the Employer's premises any documents, records,
files, notebooks, correspondence, reports, video or audio recordings, computer
printouts, computer programs, computer software, price lists, microfilm,
drawings or other similar documents containing Confidential Information,
including copies thereof, whether prepared by him or others, except as his duty
shall require, and in such cases, will promptly return such items to the
Employer. Upon termination of his employment with the Employer, all such items
including summaries or copies thereof, then in the Executive's possession,
shall be returned to the Employer immediately.
J. The Executive recognizes and agrees that all ideas,
inventions, patents, copyrights, copyright designs, trade secrets, trademarks,
processes, discoveries, enhancements, software, source code, catalogues,
prints, business applications, plans, writings, and other
Page 12 MetaSolv Confidential Information
developments or improvements and all other intellectual property and
proprietary rights and any derivative work based thereon (the "Inventions")
made, conceived, or completed by the Executive, alone or with others, during
the term of his employment, whether or not during working hours, that are
within the scope of the Employer's business operations or that relate to any of
the Employer's work or projects (including any and all inventions based wholly
or in part upon ideas conceived during the Executive's employment with the
Employer), are the sole and exclusive property of the Employer. The Executive
further agrees that (1) he will promptly disclose all Inventions to the
Employer and hereby assigns to the Employer all present and future rights he
has or may have in those Inventions, including without limitation those
relating to patent, copyright, trademark or trade secrets; and (2) all of the
Inventions eligible under the copyright laws are "work made for hire." At the
request of the Employer, the Executive will do all things deemed by the
Employer to be reasonably necessary to perfect title to the Inventions in the
Employer and to assist in obtaining for the Employer such patents, copyrights
or other protection as may be provided under law and desired by the Employer,
including but not limited to executing and signing any and all relevant
applications, assignments or other instruments. Notwithstanding the foregoing,
the Employer hereby notifies the Executive that the provisions of this
Paragraph 9 shall not apply to any Inventions for which no equipment, supplies,
facility or trade secret information of the Employer was used and which were
developed entirely on the Executive's own time, unless (1) the Invention
relates (i) to the business of the Employer, or (ii) to actual or demonstrably
anticipated research or development of the Employer, or (2) the Invention
results from any work performed by the Executive for the Employer.
K. The Executive acknowledges and agrees that all customer
lists, supplier lists, and customer and supplier information, including,
without limitation, addresses and telephone numbers, are and shall remain the
exclusive property of the Employer, regardless of whether such information was
developed, purchased, acquired, or otherwise obtained by the Employer or the
Executive. The Executive also agrees to furnish to the Employer on demand at
any time during the term of this Agreement, and upon the termination of this
Agreement, any other records, notes, computer printouts, computer programs,
computer software, price lists, microfilm, or any other documents related to
the Employer's business, including originals and copies thereof. The Executive
recognizes and agrees that he has no expectation of privacy with respect to the
Employer's telecommunications, networking or information processing systems
(including, without limitation, stored computer files, email messages and voice
messages) and that the Executive's activity and any files or messages on or
using any of those systems may be monitored at any time without notice.
L. The Executive acknowledges that he may become aware of
"material" nonpublic information relating to customers whose stock is publicly
traded. The Executive acknowledges that he is prohibited by law as well as by
Employer policy from trading in the shares of such customers while in
possession of such information or directly or indirectly disclosing such
information to any other persons so that they may trade in these shares. For
purposes of this Paragraph L, "material" information may include any
information, positive or negative, which might be of significance to an
investor in determining whether to purchase, sell or hold the stock of publicly
traded customers. Information may be significant for this purpose even if it
would not alone determine the investor's decision. Examples include a potential
Page 13 MetaSolv Confidential Information
business acquisition, internal financial information that departs in any way
from what the market would expect, the acquisition or loss of a major contract,
or an important financing transaction.
M. The Employer does not wish to incorporate any unlicensed or
unauthorized material into its products or services or those of its affiliates.
Therefore, the Executive agrees that he will not knowingly disclose to the
Employer, use in the Employer's business, or cause the Employer to use, any
information or material which is confidential or proprietary to any third party
including, but not limited to, any former employer, competitor or client,
unless the Employer has a right to receive and use such information. The
Executive will not incorporate into his work any material which is subject to
the copyrights of any third party unless the Employer has a written agreement
with such third party or otherwise has the right to receive and use such
information.
N. It is agreed that any breach or anticipated or threatened
breach of any of the Executive's covenants contained in this Paragraph 9 will
result in irreparable harm and continuing damages to the Employer and its
business and that the Employer's remedy at law for any such breach or
anticipated or threatened breach will be inadequate and, accordingly, in
addition to any and all other remedies that may be available to the Employer at
law or in equity in such event, any court of competent jurisdiction may issue a
decree of specific performance or issue a temporary and permanent injunction,
without the necessity of the Employer posting bond or furnishing other security
and without proving special damages or irreparable injury, enjoining and
restricting the breach, or threatened breach, of any such covenant, including,
but not limited to, any injunction restraining the Executive from disclosing,
in whole or part, any Confidential Information. The Executive acknowledges the
truthfulness of all factual statements in this Agreement and agrees that he is
estopped from and will not make any factual statement in any proceeding that is
contrary to this Agreement or any part thereof. The Executive further agrees
to pay all of the Employer's costs and expenses, including reasonable
attorneys' and accountants' fees, incurred in enforcing such covenants.
10. Notices. Any and all notices required in connection with this
-------
Agreement shall be deemed adequately given only if in writing and (a)
personally delivered, or sent by first class, registered or certified mail,
postage prepaid, return receipt requested, or by recognized overnight courier,
(b) sent by facsimile, provided a hard copy is mailed on that date to the party
for whom such notices are intended, or (c) sent by other means at least as fast
and reliable as first class mail. A written notice shall be deemed to have
been given to the recipient party on the earlier of (a) the date it shall be
delivered to the address required by this Agreement; (b) the date delivery
shall have been refused at the address required by this Agreement; (c) with
respect to notices sent by mail or overnight courier, the date as of which the
Postal Service or overnight courier, as the case may be, shall have indicated
such notice to be undeliverable at the address required by this Agreement; or
(d) with respect to a facsimile, the date on which the facsimile is sent and
receipt of which is confirmed. Any and all notices referred to in this
Agreement, or which either party desires to give to the other, shall be
addressed to his residence in the case of the Executive, or to its principal
office in the case of the Employer.
11. Waiver of Breach. A waiver by the Employer of a breach of any
----------------
provision of this Agreement by the Executive shall not operate or be construed
as a waiver or estoppel of any
Page 14 MetaSolv Confidential Information
subsequent breach by the Executive. No waiver shall be valid unless in writing
and signed by an authorized officer of the Employer.
12. Successors; Binding Agreement.
-----------------------------
A. This Agreement shall be binding upon and shall inure to the
benefit of the Employer and its Successors and Assigns, and the Employer shall
require any Successors and Assigns to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Employer
would be required to perform it if no such succession or assignment had taken
place.
B. Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive or his beneficiaries or
legal representatives, except by will or by the laws of descent and
distribution, and this Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
13. Entire Agreement. This Agreement and the Stock Option Agreements
----------------
referenced herein set forth the entire and final agreement and understanding of
the parties and contains all of the agreements made between the parties with
respect to the subject matter hereof. This Agreement supersedes any and all
other agreements, either oral or in writing, between the parties hereto, with
respect to the subject matter hereof. No change or modification of this
Agreement shall be valid unless in writing and signed by the Employer and the
Executive.
14. Severability. If any provision of this Agreement shall be found
------------
invalid or unenforceable for any reason, in whole or in part, then such
provision shall be deemed modified, restricted, or reformulated to the extent
and in the manner necessary to render the same valid and enforceable, or shall
be deemed excised from this Agreement, as the case may require, and this
Agreement shall be construed and enforced to the maximum extent permitted by
law, as if such provision had been originally incorporated herein as so
modified, restricted, or reformulated or as if such provision had not been
originally incorporated herein, as the case may be. The parties further agree
to seek a lawful substitute for any provision found to be unlawful; provided,
that, if the parties are unable to agree upon a lawful substitute, the parties
desire and request that a court or other authority called upon to decide the
enforceability of this Agreement modify those restrictions in this Agreement
that, once modified, will result in an agreement that is enforceable to the
maximum extent permitted by the law in existence at the time of the requested
enforcement.
15. Headings. The headings in this Agreement are inserted for
--------
convenience only and are not to be considered a construction of the provisions
hereof.
16. Execution of Agreement. This Agreement may be executed in several
----------------------
counterparts, each of which shall be considered an original, but which when
taken together, shall constitute one agreement.
17. Recitals. The recitals to this Agreement are incorporated herein
--------
as an integral part hereof and shall be considered as substantive and not
precatory language.
Page 15 MetaSolv Confidential Information
18. Arbitration. Any controversy, claim or dispute between the
-----------
parties relating to the Executive's employment or termination of employment,
whether or not the controversy, claim or dispute arises under this Agreement
(other than any controversy or claim arising under Paragraph 9), shall be
resolved by arbitration in accordance with the National Rules for the
Resolution of Employment Disputes ("Rules") of the American Arbitration
Association through a single arbitrator selected in accordance with the Rules.
The decision of the arbitrator shall be rendered within thirty (30) days of the
close of the arbitration hearing and shall include written findings of fact and
conclusions of law reflecting the appropriate substantive law. Judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof in the State of Texas. In reaching his or her decision,
the arbitrator shall have no authority (a) to authorize or require the parties
to engage in discovery (provided, however, that the arbitrator may schedule the
time by which the parties must exchange copies of the exhibits that, and the
names of the witnesses whom, the parties intend to present at the hearing), (b)
to interpret or enforce Paragraph 9 of the Agreement (for which Paragraph 19
shall provide the exclusive venue), (c) to change or modify any provision of
this Agreement, (d) to base any part of his or her decision on the common law
principle of constructive termination, or (e) to award punitive damages or any
other damages not measured by the prevailing party's actual damages and may not
make any ruling, finding or award that does not conform to this Agreement.
Each party shall bear all of his or its own legal fees, costs and expenses of
arbitration and one-half (1/2) of the costs of the arbitrator.
19. Governing Law. This Agreement shall be governed by, and construed
-------------
in accordance with, the laws of the State of Texas, without reference to its
conflict of law provisions. Furthermore, as to Paragraph 9, the Executive
agrees and consents to submit to personal jurisdiction in the State of Texas in
any state or federal court of competent subject matter jurisdiction situated in
Collin County, Texas. The Executive further agrees that the sole and exclusive
venue for any suit arising out of, or seeking to enforce, the terms of
Paragraph 9 of this Agreement shall be in a state or federal court of competent
subject matter jurisdiction situated in Collin County, Texas. In addition, the
Executive waives any right to challenge in another court any judgment entered
by such Collin County, Texas court or to assert that any action instituted by
the Employer in any such court is in the improper venue or should be
transferred to a more convenient forum.
Page 16 MetaSolv Confidential Information
IN WITNESS WHEREOF, the parties have set their signatures on the date
first written above.
EMPLOYER: EXECUTIVE:
METASOLV SOFTWARE, INC., a
Delaware corporation
/s/ Xxxxxxx X. Xxxxxx
---------------------
By: /s/ T. Xxxxxx Xxxxxx Xxxxxxx X. Xxxxxx
----------------------
T. Xxxxxx Xxxxxx, Xx.
Its: President and Chief Operating Officer
Page 17 MetaSolv Confidential Information
