EMPLOYMENT AGREEMENT
This Employment Agreement dated as of December 22, 1998 (the "Agreement")
by and between Marcam Solutions, Inc., a Delaware corporation (the "Company"),
and Xxxxxxxx X. Xxxxx (the "Executive"):
WITNESSETH:
WHEREAS, the Executive is the Chairman of the Board, Chief Executive
Officer and President of the Company and has made and is expected to continue to
make major contributions to the profitability, growth and financial strength of
the Company;
WHEREAS, the Company desires to continue to employ the Executive, and the
Executive desires to continue to be employed by the Company, to render services
to the Company on the terms and subject to the conditions set forth in this
Agreement; and
NOW, THEREFORE, in consideration of these premises and of the covenants and
agreements set forth in this Agreement, the parties hereto hereby agree as
follows:
1. Employment. The Company shall continue to employ the Executive, and the
Executive agrees to continue to serve the Company, as its Chairman of the Board,
Chief Executive Officer and President upon the terms and subject to the
conditions set forth in this Agreement.
2. Term. Unless earlier terminated in accordance with this Agreement, the
term of the Executive's employment under this Agreement (the "Term") shall
commence on the date hereof and shall expire on September 30, 1999; provided,
however, that upon expiration of such term, this Agreement shall be extended
from year to year without further action on the part of the parties hereto,
unless either party hereto gives written notice of termination to the other
party at least 30 days prior to the expiration of the then current term.
3. Duties and Responsibilities. (a) During the Term, the Executive shall
serve as the Chairman of the Board, Chief Executive Officer and President of the
Company. In the performance of his responsibilities as the Chairman of the
Board, Chief Executive Officer and President, the Executive shall be subject to
all of the Company's policies, rules and regulations applicable to its
executives of comparable status and shall report directly to, and shall be
subject to the direction and control of, the Board of Directors of the Company
(the "Board"), and shall perform such duties as shall be assigned to him by the
Board. In performing such duties, the Executive will be subject to and will
substantially abide by, and will use reasonable efforts to cause employees of
the Company to be subject to and substantially abide by, all policies and
procedures developed by the Company.
Employment Agreement--Page 2
(b) During the Term, the Executive shall devote all of his business
time, energies, skills and attention to the affairs and activities of the
Company and any corporation, partnership or other entity controlled by the
Company (each, a "Subsidiary"). The Executive shall provide these services to
the Company and its Subsidiaries described in this Agreement in a professional
and diligent manner and in a manner consistent with the highest standards of
performance in the health care field. During the Term, the Executive shall not
devote any of his business time, energies, skills or attention to the affairs or
activities of any other business or organization, without the prior approval of
the Board (which approval shall not be unreasonably withheld).
4. Compensation. (a) For all services rendered by the Executive under this
Agreement, the Company shall pay or cause to be paid to the Executive, and the
Executive shall accept, the Base Salary and Bonus, if any (as such terms are
hereinafter defined in this Section 4), all in accordance with and subject to
the terms of this Agreement. For the purposes of this Agreement, the term
"Compensation" shall mean the Base Salary and Bonus, if any. The Executive shall
have the right to elect to defer in accordance with applicable Internal Revenue
Service requirements for a reasonable time the Compensation payable to him, such
deferral to be evidenced by appropriate documentation at the time of such
deferral. In addition, to the Base Salary and Bonus, the Executive shall be
entitled to receive such other bonuses, options and other remuneration as the
Board may from time to time approve, in its sole discretion.
(b) During the Term, the Company shall pay the Executive a base salary
(the "Base Salary") at an annual rate of $398,000 from the date of this
Agreement through September 30, 1999. The Executive's Base Salary shall be
reviewed at least annually by the Compensation Committee of the Board (the
"Compensation Committee") and may be increased or decreased by the Compensation
Committee in its sole discretion. The Base Salary shall be payable in
installments in accordance with the Company's regular practices, as such
practices may be modified from time to time, but in no event less often than
monthly.
(c) During the Term, the Executive shall be eligible to earn an annual
performance bonus (the "Bonus") if the Company meets the performance objectives
established by the Compensation Committee for purposes of this Agreement for the
applicable period during the Term. The Bonus (including the amount thereof)
shall be reviewed at least annually by the Compensation Committee and shall be
payable as determined by the Compensation Committee in its sole discretion.
(d) The Executive shall be eligible to participate in qualified
retirement, deferred compensation, group medical, accident, disability and
health benefit plans of the Company as may be provided by the Company from time
to time to Company executives of comparable status, subject to, and to the
extent that, the Executive is eligible under such benefit plans in accordance
with their respective terms. The Company shall pay the expenses associated with
the Executive's participation in such benefit plans to the same extent the
Company pays the expenses associated with participation by other employees. In
addition, the Executive shall be entitled to reasonable periods of paid
vacation, personal and sick leave during the Term in accordance with the
Company's policies regarding such vacation and leaves.
Employment Agreement--Page 3
(e) The Executive is authorized to incur reasonable expenses in the
performance of his duties hereunder during the Term. The Company shall reimburse
the Executive for all such expenses in accordance with the Company's procedures
and policies as adopted and in effect from time to time and applicable to its
executives of comparable status.
5. Termination. (a) During the Term (regardless of whether or not the
Company experiences a Change in Control (as defined below)), the Company may
terminate the employment of the Executive for "Cause." For purposes of this
Agreement, "Cause" means: (i) the Executive's conviction of any crime (whether
or not involving the Company) which constitutes a felony in the jurisdiction
involved (other than unintentional motor vehicle felonies); (ii) any intentional
act of theft, fraud or embezzlement by the Executive in connection with his work
with the Company; (iii) the Executive's continuing, repeated and willful failure
or refusal to perform his duties and services under this Agreement (other than
due to his incapacity due to illness or injury), provided that such failure or
refusal continues uncorrected for a period of 30 days after the Executive shall
have received written notice from the Board stating with specificity the nature
of such failure or refusal; or (iv) the Executive's violation of Section 7.
(b) During the Term (regardless of whether or not the Company
experiences a Change in Control), the Company may terminate the Executive's
employment at any time without Cause. For purposes of this Agreement, if the
Company gives written notice of termination to the Executive at least 30 days
prior to the expiration of the then current Term, such action shall be
considered termination of the Executive's employment without Cause pursuant to
this Section 5(b).
(c) The Company may terminate the Executive's employment if, as a result
of the Executive's incapacity due to physical or mental illness, the Executive
is unable to perform the essential functions of his job for any period of at
least 90 days (whether or not consecutive) during any 12-month period, and no
reasonable accommodation can be made that will allow the executive to perform
his essential functions (a "Disability").
(d) The Executive may voluntarily terminate his employment at any time
by giving the Board at least six months' prior written notice; provided,
however, that, at any time after receiving such written notice, the Board may
terminate the Executive's employment on shorter notice or with no prior notice
(which termination shall not be deemed a termination without Cause under this
Agreement).
(e) Within one year following a Change in Control (as defined below) of
the Company, the Executive may voluntarily terminate his employment at any time
for Good Reason (as defined below).
(f) For purposes of this Agreement, the following terms shall have the
meanings set forth below:
(i) "Change in Control" means the occurrence of any of the following
events during the Term:
Employment Agreement--Page 4
(A) The Company is merged, consolidated or reorganized into or
with another corporation or other legal person, and as a result of such merger,
consolidation or reorganization less than a majority of the combined voting
power of the then-outstanding securities of the combined corporation or person
immediately after such transaction are held in the aggregate by the holders of
the combined voting power of the then-outstanding securities entitled to vote
generally in the election of directors of the Company ("Voting Stock")
immediately prior to such transaction;
(B) The Company sells or otherwise transfers all or
substantially all of its assets to any other corporation or other legal person,
and less than a majority of the combined voting power of the then-outstanding
securities of such corporation or person immediately after such sale or transfer
is held in the aggregate by the holders of the Voting Stock of the Company
immediately prior to such sale or transfer;
(C) There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), disclosing that
any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2)
or the 0000 Xxx) has become the beneficial owner (as the term "beneficial owner"
is defined under Rule 13d-3 or any successor rule or regulation promulgated
under the 0000 Xxx) of securities representing 25% or more of the Voting Stock;
(D) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the 1934 Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or report
or item therein) that a change in control of the Company has or may have
occurred or will or may occur in the future pursuant to any then-existing
contract or transaction; or
(E) If during any period of two consecutive years, individuals
who at the beginning of any such period constitute the directors of the Company
cease for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Company's stockholders, of each
director of the Company first elected during such period was approved by a vote
of at least two-thirds of the directors then still in office who were directors
of the Company at the beginning of any such period;
provided, however, that notwithstanding the foregoing provisions (C) and (D) of
this Section 5(f)(i), a "Change in Control" shall not be deemed to have occurred
for purposes of this Plan solely because (i) the Company, (ii) an entity in
which the Company directly or indirectly beneficially owns 50% or more of the
voting securities, or (iii) any Company-sponsored employee stock ownership plan
or any other employee benefit plan of the Company, either files or becomes
obligated to file a report or a proxy statement under or in response to Schedule
13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form
or report or item therein) under the 1934 Act, disclosing beneficial ownership
by it of shares of Voting Stock, whether in excess of 25% or otherwise, or
because the Company reports that a change in control of the
Employment Agreement--Page 5
Company has or may have occurred or will or may occur in the future by reason of
such beneficial ownership.
(ii) "Good Reason" means the occurrence of one or more of the
following events following a Change in Control:
(A) Failure to elect, reelect or otherwise maintain the
Executive in the office or position in the Company which the Executive held
immediately prior to a Change in Control, or the removal of the Executive as a
director of the Company (or any successor thereto) if the Executive shall have
been a director of the Company immediately prior to the Change in Control;
(B) A significant adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or duties attached to the
position with the Company which the Executive held immediately prior to the
Change in Control, a reduction in the aggregate of the Executive's Compensation
received from the Company, or the termination of the Executive's rights to any
benefits to which he was entitled immediately prior to the Change in Control or
a reduction in scope or value thereof without the prior written consent of the
Executive, any of which is not remedied within 20 calendar days after receipt by
the Company of written notice from the Executive of such change, reduction or
termination, as the case may be;
(C) A determination by the Executive made in good faith that as
a result of a Change in Control and a change in circumstances thereafter
significantly affecting his position, including a change in the scope of the
business or other activities for which he was responsible immediately prior to
the Change in Control, he has been rendered substantially unable to carry out,
has been substantially hindered in the performance of, or has suffered a
substantial reduction in, any of the authorities, powers, functions,
responsibilities or duties attached to the position held by the Executive
immediately prior to the Change in Control, which situation is not remedied
within 20 calendar days after written notice to the Company from the Executive
of such determination;
(D) The liquidation, dissolution, merger, consolidation or
reorganization of the Company or transfer of all or a significant portion of its
business or assets, unless the successor or successors (by liquidation, merger,
consolidation, reorganization or otherwise) to which all or a significant
portion of its business or assets have been transferred (directly or by
operation of law) shall have assumed all duties and obligations of the Company
under this Agreement pursuant to Section 10(c); or
(E) The Company shall relocate its principal executive offices,
or require the Executive to have his principal location of work changed, to any
location which is in excess of 30 miles from the location thereof immediately
prior to the Change in Control or the Company shall require the Executive to
travel away from his office in the course of discharging his responsibilities or
duties thereunder significantly more (in terms of either consecutive days or
aggregate days in any calendar year) than was required of him prior to the
Change in Control without, in either case, his prior written consent.
Employment Agreement--Page 6
6. Effects of Termination. (a) If the Company terminates the Executive's
employment pursuant to Section 5(a) (for Cause), or the Executive voluntarily
terminates his employment with the Company pursuant to Section 5(d) for any
reason, at any time (regardless of whether or not the Company has experienced a
Change of Control prior to such termination), the Executive shall not be
entitled to any Compensation or benefits following the date of such termination,
other than Compensation and benefits required to be paid or provided by law and
payment of the Executive's normal post-termination benefits in accordance with
the Company's retirement, insurance and other benefit plans and arrangements.
(b) If the Company terminates the Executive's employment pursuant to
Section 5(b) (without Cause) at any time either (i) prior to a Change in Control
or (ii) after the first anniversary of a Change in Control, then (x) the
Executive shall receive an aggregate amount equal to 12 months of Base Salary at
the rate being paid to the Executive immediately prior to such termination; (y)
the Executive shall have 12 months following such termination to exercise any
options to purchase shares of the Company's common stock, par value $.01 per
share (the "Common Stock"), which are exercisable at the time of such
termination; and (z) the Company shall pay the Executive's normal
post-termination benefits in accordance with the Company's retirement, insurance
and other benefit plans and arrangements and as contemplated by this Agreement;
provided, however, that the date of such termination shall be treated as a
"qualifying event" under the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA") and if the Executive elects to continue coverage under the
Company's health benefit plans in accordance with COBRA, the Company shall pay
COBRA payments for a period of one (1) year from such termination date.
(c) If either (i) the Company terminates the Executive's employment
pursuant to Section 5(b) (without Cause) or (ii) the Executive terminates his
employment pursuant to Section 5(e) (for Good Reason), in the case of either (i)
or (ii) at any time during a period commencing with a Change in Control and
ending on the first anniversary of a Change in Control, then (x) the Executive
shall receive an amount equal to the sum of (I) 24 months of Base Salary at the
rate being paid to the Executive immediately prior to such termination plus (II)
the average of the annual bonuses paid to the Executive by the Company with
respect to the most recently completed three fiscal years (or such shorter
period as the Executive shall have been employed by the Company); (y)
notwithstanding any provisions of the Company's 1997 Stock Plan, or of any other
incentive stock option plans or non-qualified stock option plans which may
subsequently be adopted (collectively, the "Stock Plans") or any agreements
thereunder, all stock options granted to the Executive under the Stock Plans and
not then vested shall in such event and at such time become immediately vested
and exerciseable as of the date of termination and the Executive shall have 12
months following such termination to exercise any options to purchase shares of
the Common Stock which are exercisable at the time of such termination; and (z)
the Company shall pay the Executive's normal post-termination benefits in
accordance with the Company's retirement, insurance and other benefit plans and
arrangements and as contemplated by this Agreement; provided, however, that the
date of such termination shall be treated as a "qualifying event" under the
COBRA and if the Executive elects to continue coverage under the Company's
Employment Agreement--Page 7
health benefit plans in accordance with COBRA, the Company shall pay COBRA
payments for a period of one (1) year from such termination date.
(d) If the Executive dies, the Executive shall not be entitled to
receive any Compensation or benefits following the date of his death, other than
Compensation and benefits required to be paid or provided by law and payment of
the Executive's normal post-termination benefits in accordance with the
Company's retirement, insurance and other benefit plans and arrangements;
provided, however, that the Company shall pay to the Executive's estate an
amount equal to six months of Base Salary at the rate being paid to the
Executive immediately prior to his death; and further provided, notwithstanding
any provisions of the Company's Stock Plans or any agreements thereunder, with
respect to any stock options to purchase shares of the Common Stock granted to
Executive after the date of this Agreement, the Executive's estate shall have 12
months following such termination to exercise any stock options which are
exercisable at the date of the Executive's death in accordance with the
applicable Stock Plans and agreements thereunder.
(e) During any period that the Executive fails to perform his duties
under this Agreement as a result of incapacity due to a Disability (the
"Disability Period"), the Executive shall continue to receive his full Base
Salary at the rate then in effect for such period until the Company terminates
the Executive's employment pursuant to Section 5(c) because of his Disability;
provided, however, that the payments to be made to the Executive during the
Disability Period shall be reduced by the amounts, if any, payable to the
Executive with respect to such Disability Period under disability benefit plans
of the Company or under the Social Security disability insurance program, which
amounts were not previously applied to reduce any such payment. If the Company
terminates the Executive's employment pursuant to Section 5(c) because of his
Disability, the Executive shall not be entitled to receive any Compensation or
benefits following the date of such termination or death, other than
Compensation and benefits required to be paid or provided by law and payment of
the Executive's normal post-termination benefits in accordance with the
Company's retirement, insurance and other benefit plans and arrangements;
provided, however, that the Company shall pay to the Executive an amount equal
to six months of Base Salary at the rate being paid to the Executive immediately
prior to such termination; and further provided, notwithstanding any provisions
of the Company's Stock Plans or any agreements thereunder, with respect to any
stock options to purchase shares of the Common Stock granted to Executive after
the date of this Agreement, the Executive shall have 12 months following such
termination to exercise any stock options which are exercisable at the time of
such termination in accordance with the applicable Stock Plans and agreements
thereunder.
(f) Any severance payments to be made to the Executive shall be payable
in a lump sum within 30 days after such termination.
(g) Notwithstanding anything to the contrary in this Agreement, if the
Executive is a "Disqualified Individual" (as defined in Section 280G of the
Internal Revenue Code of 1986 as amended (the "Code")) and if any portion of the
payments to be made to the Executive pursuant to this Section 6 would be an
"Excess Parachute Payment" (as is defined in Section 280G of the
Employment Agreement--Page 8
Code), then the amount of such payments otherwise payable to the Executive
pursuant to this Agreement shall be reduced to the minimum extend necessary so
that no portion of such payments, as so reduced, constitutes an Excess Parachute
Payment.
7. Restrictive Covenants. (a) Executive acknowledges that he has entered
into an Employee Agreement on Ideas, Inventions, Confidential Information, and
Non-Competition dated as of October 28, 1998 with the Company (the "Employee
Agreement"). Notwithstanding anything to the contrary in this Agreement, the
Employee Agreement shall remain in full force and effect and shall not be deemed
modified in any way by this Agreement, except that the Company shall not be
obligated to pay amounts to the Executive pursuant to the Employee Agreement for
the agreements and covenants of the Executive set forth in Paragraph 10 of the
Employee Agreement to remain applicable to the Executive for the periods
specified in the Employee Agreement.
(b) In addition to the agreements and covenants of the Executive set
forth in the Employee Agreement, during the Term and until the first anniversary
of the date of termination of Executive's employment with the Company for any
reason (the "Termination Period"), the Executive shall not, directly or
indirectly, (i) induce or attempt to influence any employee of the Company or
its subsidiaries to leave its employ, (ii) aid or agree to aid any competitor,
customer or supplier of the Company or its subsidiaries in any attempt to hire
any person who shall have been employed by the Company or its subsidiaries
within the one-year period preceding such requested aid, or (iii) induce or
attempt to influence any person or business entity who was a customer of the
Company or its subsidiaries during any portion of the Term or the Termination
Period to transact business with a competitor of the Company in the Company's
business.
8. No Mitigation Obligation. The Company hereby acknowledges that it will
be difficult, and may be impossible, for the Executive to find reasonably
comparable employment in the event of his termination pursuant to Section 5(b)
(without Cause), Section 5(d) because of a Material Breach or Section 5(e) (for
Good Reason), and that the noncompetition covenant contained in Section 7 will
further limit the employment opportunities for the Executive. Accordingly, the
parties hereto expressly agree that the payment of the severance benefits by the
Company to the Executive in accordance with this Agreement will be liquidated
damages, and that the Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise, nor shall any profits, income, earnings or other benefits from any
source whatsoever create any mitigation, offset, reduction or any other
obligation on the part of the Executive hereunder or otherwise.
9. Legal Fees and Expenses. Except as provided in Section 9(b), each party
shall pay or cause to be paid and shall be solely responsible for any and all
attorneys' and related fees and expenses incurred by it in connection with any
dispute arising with respect to this Agreement; provided, however, that if the
Executive prevails in any such dispute, the Company shall reimburse the
Executive for any and all such fees and expenses incurred by the Executive in
connection with such dispute.
Employment Agreement--Page 9
10. Miscellaneous. (a) The Company may, from time to time apply for and
take out, in its own name and at its own expense, life, health, accident,
disability or other insurance upon the Executive in any sum or sums that it may
deem necessary to protect its interests, and the Executive agrees to aid and
cooperate in all reasonable respects with the Company in procuring any and all
such insurance, including without limitation, submitting to the usual and
customary medical examinations, and by filling out, executing and delivering
such applications and other instruments in writing as may be reasonably required
by an insurance company or companies to which an application or applications for
such insurance may be made by or for the Company.
(b) This Agreement is a personal contract, and the rights and interests
of the Executive hereunder may not be sold, transferred, assigned, pledged or
hypothecated, except as otherwise expressly permitted by the provisions of this
Agreement. Except as otherwise expressly provided herein, the Executive shall
not have any power of anticipation, alienation or assignment of payments
contemplated hereunder, and all rights and benefits of the Executive shall be
for the sole personal benefit of the Executive, and no other person shall
acquire any right, title or interest hereunder by reason of any sale,
assignment, transfer, claim or judgment or bankruptcy proceedings against the
Executive; provided, however, that in the event of the Executive's death, the
Executive's estate, legal representative or beneficiaries (as the case may be)
shall have the right to receive all of the benefits that accrued to the
Executive pursuant to, and in accordance with, the terms of this Agreement prior
to the date of the Executive's death.
(c) The Company shall have the right to assign this Agreement to any
successor of substantially all of its business or assets, and any such successor
shall be bound by all of the provisions hereof; provided, however, that such
assignment shall not preclude the exercise of the Executive's rights, if any,
pursuant to Section 5(d).
(d) Any notice required or permitted to be given pursuant to this
Agreement shall be in writing, and sent to the party for whom or which it is
intended, at the address of such party set forth below, by registered or
certified mail, return receipt requested, or at such other address as either
party shall designate by notice to the other in the manner provided herein for
giving notice.
If to the Company:
Marcam Solutions, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chairman of the Compensation Committee
of the Board of Directors
with copies to:
Marcam Solutions, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Employment Agreement--Page 10
If to the Executive:
Xxxxxxxx X. Xxxxx
Xxxxxxx Xxxx Spur
Woodstock, VT 05091
(e) This Agreement may not be changed, amended, terminated or superseded
orally, but only by an agreement in writing, nor may any of the provisions
hereof be waived orally, but only by an instrument in writing, in any such case
signed by the party against whom enforcement of any change, amendment,
termination, waiver, modification, extension or discharge is sought.
(f) Except as otherwise provided herein, this Agreement shall be
governed by and construed and enforced in accordance with the laws of the
Commonwealth of Massachusetts, without giving effect to the principles of
conflict of laws thereof.
(g) All descriptive headings of the several Sections of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(h) If any provision of this Agreement, or part thereof, is held to be
unenforceable, the remainder of this Agreement and provision, as the case may
be, shall nevertheless remain in full force and effect.
(i) Each of the parties hereto shall, at any time and from time to time
hereafter, upon the reasonable request of the other, take such further action
and execute, acknowledge and deliver all such instruments of further assurance
as necessary to carry out the provisions of this Agreement.
(j) This Agreement contains the entire agreement and understanding
between the Company and the Executive with respect to the subject matter hereof.
(k) Right of Offset. The Company shall have the right to offset any
amounts owing by the Company to the Executive pursuant to this Agreement against
any amounts owing by Executive to the Company, including those owing pursuant to
the Loan Agreement dated as of December __, 1998 by and between the Company and
the Executive (the "Loan Agreement") and the Promissory Note made by the
Executive thereunder (the "Note"). To the extent that the Executive owes money
to the Company pursuant to the Loan Agreement or the Note and such payment is
not then due, the Company may exercise its offset rights by paying any amounts
owing by the Company to the Executive at the time to a responsible escrow agent
to be held in escrow until the Executive's obligations under the Loan Agreement
and the Note are performed or satisfied in full.
Employment Agreement--Page 11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MARCAM SOLUTIONS, INC.
By: /s/ Xxx X. Xxxxxx
---------------------
Xxx X. Xxxxxx
Director
/s/ Xxxxxxxx X. Xxxxx
---------------------
Xxxxxxxx X. Xxxxx
