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EXHIBIT 10.16
EMPLOYMENT AGREEMENT
This Employment Agreement ("Employment Agreement") dated this 1st day of August,
2000 but effective as of May 1, 2000 (the "Effective Date") is made by and
between X.X. XXXXXXX & COMPANY, a Delaware corporation ("X.X. Xxxxxxx") and
XXXXXXX X. XXXXX ("Xxxxx").
RECITALS
A. J.D. Xxxxxxx is engaged in the business of developing, marketing and
supporting enterprise software and supply chain computing solutions.
X. Xxxxx is currently employed by X.X. Xxxxxxx in the position of Executive
Vice President and Chief Financial Officer and X.X. Xxxxxxx wishes to
retain Xxxxx in the employment of X.X. Xxxxxxx for a period of at least two
(2) years from the Effective Date of this Employment Agreement.
It is agreed between X.X. Xxxxxxx and Xxxxx as follows:
1. EMPLOYMENT. X.X. Xxxxxxx hereby agrees to employ Xxxxx to perform the
duties and responsibilities set forth in the job description attached as
Attachment A to this Employment Agreement together with such other duties
and responsibilities as shall be assigned to him from time to time by X.X.
Xxxxxxx senior management which shall be consistent with Xxxxx'x job
description. Xxxxx accepts such employment with X.X. Xxxxxxx upon the terms
and conditions of this Employment Agreement and agrees to perform the
duties and responsibilities described in this Section in accordance with
all policies, procedures, rules and regulations adopted by X.X. Xxxxxxx
Board of Directors or senior management. During the term of his employment,
Xxxxx agrees to devote his full time and attention, skills and efforts to
the performance of his duties and responsibilities on behalf of X.X.
Xxxxxxx and to maintain and promote the business of X.X. Xxxxxxx.
2. TERM. Subject to the terms of Section 7, Termination, Xxxxx shall be
employed by X.X. Xxxxxxx for a period of not less than two (2) years
commencing on the Effective Date (the "Initial Employment Term").
3. COMPENSATION.
3.1 ANNUAL BASE SALARY AND BONUS. Xxxxx'x compensation from August 1, 2000
until April 1, 2001 shall be set at an annual base salary of $326,000
with an annual bonus incentive of up to seventy-five percent (75%) of
such base salary based upon the achievement of those certain
objectives as determined and approved by the Compensation Committee of
the Board of Directors of X.X. Xxxxxxx. Compensation for subsequent
periods shall be established by a written addendum to this Employment
Agreement as approved by the Compensation Committee of X.X. Xxxxxxx
Board of Directors but in no event will be less than the annual base
salary of $326,000 and annual bonus
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incentive of up to seventy-five percent (75%) of the new base salary based
upon the achievement of those certain objectives as determined and approved
by the Compensation Committee of the Board of Directors of X.X. Xxxxxxx.
3.2 STAY BONUS. Upon Xxxxx remaining in the employment of X.X. Xxxxxxx for
the full two (2) year period of the Initial Employment Term and
otherwise complying with the terms hereof or Xxxxx dying during the
Initial Employment Term, Xxxxx will receive a stay bonus in an amount
equal to one hundred percent (100%) of his on target earnings (annual
base salary plus bonus as determined in accordance with Section 3.1,
Annual Base Salary and Bonus, hereof) for the second year of the
Initial Employment Term. Such stay bonus will be in addition to the
annual compensation received for the second year of this Employment
Agreement.
3.3 2001 FIRST HALF BONUS. In addition to the stay bonus described in
Section 3.2 above, upon Xxxxx remaining in the employment of X.X.
Xxxxxxx for the full two (2) year period of the Initial Employment
Term and otherwise complying with the terms hereof, Xxxxx will receive
an amount equal to one hundred percent (100%) of his first half fiscal
year 2001 bonus determined in accordance with the X.X. Xxxxxxx
Executive Bonus Plan for fiscal year 2001.
4. STOCK OPTION GRANT. XXXXX will be granted 225,000 stock options to purchase
the common stock of X.X. Xxxxxxx pursuant to the terms of X.X. Xxxxxxx 1997
Equity Incentive Plan, or its successor option plan, if any, at the option
of price of $13.0625 per option (the "Stock Option Grant"). The Stock
Option Grant shall vest and become exercisable as to one hundred percent
(100%) of the shares subject to the option on (i) the last day of the
two-year period of this Employment Agreement, or (ii) should Xxxxx be
terminated by X.X. Xxxxxxx for any reason other than for Cause, Performance
or disability at any time during the Initial Employment Term.
Notwithstanding the foregoing sentence, however, should Xxxxx be terminated
for Performance or disability, the Stock Option Grant shall vest 25% of the
grant on May 1, 2001 and 1/16 per month thereafter; any unvested options
will terminate effective on the date of such termination. Should Xxxxx
resign from employment with X.X. Xxxxxxx or be terminated by X.X. Xxxxxxx
for Cause at any time during the Initial Employment Term, the Stock Option
Grant will be cancelled effective upon the date of resignation or
termination for Cause and Xxxxx will have no right to exercise any portion
of the Stock Option Grant. Xxxxx shall have a period of six (6) months
commencing upon termination of employment to exercise his vested stock
option under this Section.
5. EMPLOYEE BENEFITS. Xxxxx will be eligible to participate in all employee
benefits provided by X.X. Xxxxxxx to employees, based upon his position and
tenure, including the following:
5.1. HEALTH AND LIFE INSURANCE. X.X. Xxxxxxx agrees to provide to Xxxxx
(and his spouse and dependents) coverage under X.X. Xxxxxxx group
health and life insurance plan, the coverage, terms and benefits of
which shall be
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determined, from time to time, in the sole discretion of X.X. Xxxxxxx
Board of Directors.
5.2. PAID TIME OFF. Xxxxx shall be entitled to the maximum paid time off
provided for in X.X. Xxxxxxx paid time off policy in effect from time
to time.
5.3. QUALIFIED/NON-QUALIFIED PLAN(s). Xxxxx shall be entitled to
participate in any qualified or non-qualified plan(s) adopted by X.X.
Xxxxxxx Board of Directors and Xxxxx fulfills all eligibility
requirements under the terms and conditions of such plan. The X.X.
Xxxxxxx Board of Directors reserves the sole right and discretion to
adopt or terminate a plan and to establish all eligibility
requirements and other terms and conditions of such plan.
6. SEVERANCE PAY. If Xxxxx is terminated by X.X. Xxxxxxx for Performance or
disability, Xxxxx shall be entitled to receive severance pay in accordance
with the standard X.X. Xxxxxxx xxxxxxxxx pay policy for an employee of
Xxxxx'x position and time of service in the amount of one year's then
current base salary. If Xxxxx is terminated by X.X. Xxxxxxx for other than
Cause, Performance or disability, Xxxxx shall be entitled to receive, in
addition to all other compensation and benefits described herein to the
extent not already paid, severance pay in accordance with the standard X.X.
Xxxxxxx xxxxxxxxx pay policy for an employee of Xxxxx'x position and time
of service of one year's then current on target earning (annual base salary
plus bonus). This severance payment would be made in a one-time, lump sum
payment subject to appropriate tax withholding. Notwithstanding the
foregoing, however, no severance allowance shall be paid if termination is
for Cause or if Xxxxx voluntarily terminates employment within the Initial
Employment Term.
6.1. COBRA MEDICAL INSURANCE. If Xxxxx'x employment is terminated without
Cause, in addition to the severance payment in accordance with Section
6,Xxxxx and his dependents will be eligible for medical insurance (for
himself and his spouse and dependant(s)) under COBRA commencing on the
date of his termination for a period of one (1) year in accordance
with the standard X.X. Xxxxxxx policy at X.X. Xxxxxxx sole expense.
Xxxxx and his dependents will be eligible to continue coverage at his
cost beyond such date if he should so elect as provided by applicable
law.
6.2 MANAGEMENT CHANGE IN CONTROL PLAN. The X.X. Xxxxxxx & Company
Management Change in Control Plan Xxxxx accepted on September 8, 1999
(the "Plan") will remain in full force and effect for the term of this
Employment Agreement and will continue thereafter only so long as
Xxxxx remains an employee of X.X. Xxxxxxx. Therefore, the X.X. Xxxxxxx
Board of Directors agrees that it waives all rights under the Plan to
remove Xxxxx as a participant in the Plan, terminate the Plan with
respect to Xxxxx, amend or otherwise modify the Plan in any manner
that would be detrimental to Xxxxx or serve to reduce the Severance
Benefits payable to Xxxxx under the Plan.
6.3 INDEMNIFICATION AGREEMENT. The parties executed the X.X. Xxxxxxx &
Company Indemnification Agreement on August 19, 1997 (the
"Indemnification Agreement"). The parties recognize that the scope of
the indemnification offered to Xxxxx under the Indemnification
Agreement is
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insufficient. The parties, therefore, agree to work in good faith
together to modify the Indemnification Agreement to expand the
definition of a "Covered Event", provide for payment of all "Expenses"
on an as occurred basis by X.X. Xxxxxxx, allow Xxxxx to retain his own
counsel at the expense of X.X. Xxxxxxx, and in accordance with the
provisions of a letter dated July 31, 2000 from the Law Firm of
Xxxxxx, Xxxxxxxxx & Xxxxxx, L.L.C. to Xxxx Xxxxxx, Esq., a copy of
which is attached as Exhibit B to this Agreement. The parties agree to
complete the agreed to modifications on or before October 1, 2000. In
the event the parties cannot agree by such date as to the required
changes to the Indemnification Agreement, then the parties shall
submit the dispute to a mutually acceptable mediation in the City and
County of Denver, Colorado.
6.3 CONFIDENTIALITY AND NON-SOLICITATION. Xxxxx acknowledges that he has
signed the X.X. Xxxxxxx Employee Nondisclosure Agreement effective
June 1, 1994 and confirms that he will continue to abide by the
obligations contained therein. However, any violation of the
Nondisclosure Agreement by Xxxxx shall not affect Xxxxx'x rights or
X.X. Xxxxxxx obligations under this Agreement. X.X. Xxxxxxx agrees not
to withhold or otherwise set off any sums or benefits due to Xxxxx
under this Agreement in the event of a breach of the Nondisclosure
Agreement by Xxxxx.
7. TERMINATION. X.X. Xxxxxxx shall have the right to terminate this Employment
Agreement prior to its expiration only for "Cause" or "Performance" as set
forth below:
7.1. TERMINATION FOR CAUSE. For the purposes of this Employment Agreement,
"Cause" means the following:
(a) the willful and material breach of duty by Xxxxx in the course of
his employment;
(b) the habitual neglect by Xxxxx of his employment duties;
(c) the continued incapacity, whether physical or mental, of Xxxxx to
perform his duties, unless waived by X.X. Xxxxxxx; or
(d) Xxxxx'x gross misconduct resulting in material damage to X.X.
Xxxxxxx.
7.2. TERMINATION FOR PERFORMANCE. For the purposes of this Employment
Agreement, termination for "Performance" shall be as determined by the
X.X. Xxxxxxx Board of Directors in the good faith exercise of their
business judgment.
7.3 DISPUTE RESOLUTION. Should Xxxxx dispute whether X.X. Xxxxxxx has been
reasonable in interpreting "Cause," or "Performance" then in such
event Xxxxx may submit the matter to arbitration. The arbitration
proceeding shall be conducted under the applicable rules of the
American Arbitration Association and shall be located in Denver,
Colorado. If such organization ceases to exist, the arbitration shall
be conducted by its successor, or by a similar arbitration
organization, at the time a demand for arbitration is made. The
decision of the arbitrator shall be final and binding on both parties.
Each
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party shall be responsible for its or his own expenses for the
arbitrator's fee, attorney's fees, expert testimony, and for other
expenses of presenting its or his case. Other arbitration costs,
including fees for records or transcripts, shall be borne equally by
the parties.
7.4 COMPENSATION EARNED PRIOR TO TERMINATION. In the event that X.X.
Xxxxxxx terminates Xxxxx for Cause during the Initial Employment Term
or any renewal periods, Xxxxx shall be entitled to the compensation
earned prior to the date of termination as provided for in this
Employment Agreement computed pro rata up to and including that date
including any prorata bonuses accrued or payable for the fiscal year
in which Xxxxx is so terminated and all benefits set forth in Article
5 of this Agreement. Xxxxx shall be entitled to no further
compensation as of the date of termination.
7.5 RENEWAL. This Employment Agreement shall be deemed automatically
renewed for successive one (1) year periods without any further act of
the X.X. Xxxxxxx, unless, not later than thirty (30) days prior to the
end of any period, either party provides the other with written notice
of intent not to renew; notwithstanding the foregoing, however,
Section 4, Stock Option Grant of this Employment Agreement shall not
apply to any such renewal periods after the initial two (2) year
period.
. 7.6 NON-RENEWAL. Any non-renewal of this Employment Agreement shall be
treated as a termination of Xxxxx without Cause and be governed by the
provisions of this Employment Agreement applicable to terminations
without Cause, including, but not limited, to the payments and
benefits due to Xxxxx under Sections 3, 5 and 6 of this Employment
Agreement.
8. WAIVER AND RELEASE. Xxxxx acknowledges and agrees that he is aware of his
legal rights concerning his employment with X.X. Xxxxxxx. Xxxxx (for
himself and his heirs, legal representatives and assigns) hereby waives,
and generally releases X.X. Xxxxxxx and all affiliates, officers,
directors, employees and agents of X.X. Xxxxxxx from, and agrees not to xxx
X.X. Xxxxxxx for, any claims or causes of action, whether known or unknown,
which Xxxxx has or may have against X.X. Xxxxxxx. This includes, but is not
limited to, any claims or causes of action arising under any federal, state
or local laws dealing with employment discrimination (including, but not
limited to, Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act of 1967, as amended; the Older Workers
Benefit Protection Act; the American with Disabilities Act of 1990; the
National Labor Relations Act, as amended; the Family Medical Leave Act; and
any applicable state or local discrimination provisions) and any claims or
causes of action for wrongful discharge relating to Xxxxx'x employment and
termination of employment other than for termination for Cause or for
Performance which, if any dispute arises between the parties, will be
subject to the terms of Section 7.3, Dispute Resolution, above.
9. COOPERATION. The parties hereto agree that, at all times during Xxxxx'x
employment, and following termination of his employment, each party shall
avoid making any remarks about the other party, which for X.X. Xxxxxxx
shall include its affiliates, officers, directors, employees and agents
that would tend to disparage or injure the reputation of the other party.
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10. MISCELLANEOUS.
10.1. ASSIGNMENT. Neither X.X. Xxxxxxx nor Xxxxx may assign this Employment
Agreement or any of their respective obligations hereunder.
10.2. NOTICES. Any notice or other communication provided for or required
by this Employment Agreement shall be given within (i) three (3)
business days after mailing by registered or certified mail, postage
prepaid, return receipt requested, (ii) one (1) business day after
deposit with a recognized overnight courier (such as Federal Express)
or (iii) upon delivery if sent by facsimile transmission or in person
in each case to the following address:
TO X.X. XXXXXXX:
X.X. Xxxxxxx & Company
Xxx Xxxxxxxxxx Xxx
Xxxxxx, Xxxxxxxx 00000
Attn: Vice President, General Counsel
TO XXXXX:
Xxxxxxx X. Xxxxx
XXXX XXXXX XXXX XXXXX XXXXX
XXXXXXXXX, CO XXXXX
or at such other address or addresses as the X.X. Xxxxxxx or Xxxxx
may designate.
10.3. GOVERNING LAW. This Employment Agreement and each term thereof shall
be subject to and governed by the laws of the State of Colorado.
10.4. SEVERABILITY. If any portion of this Employment Agreement shall be,
for any reason, invalid or unenforceable, the remaining portion or
portions shall nevertheless be valid, enforceable and effective
unless to do so would clearly violate the present legal and valid
intention of the parties hereto.
10.5. ENTIRE AGREEMENT. This Employment Agreement constitutes the entire
agreement between the parties and contains all of the agreements
between the parties with respect to the subject matter hereof. This
Employment Agreement supersedes any and all other agreements, either
oral or written, between the parties hereto with respect to the
subject matter hereof.
10.6. AMENDMENT. No change or modification of this Employment Agreement
shall be valid unless the same shall be in writing and signed by
Xxxxx and a duly authorized officer of X.X. Xxxxxxx. No waiver of any
provision of this Employment Agreement shall be valid unless in
writing and signed by the party or party to be charged.
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10.7 BENEFIT. This Employment Agreement shall be binding upon and inure to
the benefit of X.X. Xxxxxxx and Xxxxx and their respective
successors, heirs, legal representatives and permitted assigns. This
Employment Agreement is hereby executed as of the date set forth
above.
X.X. XXXXXXX & COMPANY XXXXX
By: /s/ C. Xxxxxx XxXxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------------- -----------------------------------
(Authorized Signature) Xxxxxxx X. Xxxxx
C. Xxxxxx XxXxxxx
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Chairman and CEO
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SCHEDULE OF ATTACHMENTS
ATTACHMENT A - JOB DESCRIPTION
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DESCRIPTIONS: FINANCE, LEGAL and BUSINESS DEVELOPMENT
Group Executive, Finance & Admin. (0030) DIVISION: Executive
REPORTS TO (TITLE): CEO (005) DEPARTMENT: N/A
UPDATED: 12/31/00 This job is [ ] EXEMPT
[ ] NON-EXEMPT
BASIC PURPOSE: Directs and coordinates corporate support activities to plan,
develop and implement policies, programs and practices that support the
operating functions of the company. Evaluates progress of departments in meeting
their performance goals. Provides counsel to other executives and managers
through specialized service departments, including finance, human resources,
legal, business development, and administrative services. May also be
responsible for internal MIS/data processing function. Member of senior
management of company; may also be CFO.
Percent (%)
of Monthly
Working
ESSENTIAL DUTIES AND RESPONSIBILITIES: Time
------------
1. Directs the company's administrative support functions, including Finance, Accounting, Human Resources, 40%
Legal, Business Development, Office Services, Facilities/Maintenance, and Purchasing.
o Assists CEO and operating division heads in establishing the kinds of organizational structures
needed to accomplish the company's strategic objectives.
o Directs establishment of performance management and evaluation programs, and reward systems, to aid
operating divisions to attain their objectives.
o Assists operating divisions with the selection, training and development of personnel.
2. Analyzes operating results of business and its units versus approved plans and objectives; insures 30%
soundness of company's financial structure:
o Notifies CEO and operating executives of shortfalls in performance, and possible corrective steps.
o Reviews working capital/cash flow requirements on a regular basis.
o Negotiates/arranges outside financing, if necessary.
o Presents operating and capital expenditure budgets for review and approval by CEO and Board.
3. Directs maintenance of such records and reports as required by the CEO, Board, and shareholders regarding 10%
the corporation's plans and performance.
4. Directs all investigations and negotiations on mergers, joint ventures, acquisitions or sale of major assets. 10%
Assists CEO in protecting and enhancing company's investments in subsidiaries and affiliates.
5. Serves as member of senior management team in setting strategic direction of company. 10%
ADDITIONAL DUTIES AND RESPONSIBILITIES:
6. May direct activities of internal Information Systems/Data Processing department. (<20%)
o Reviews and approves procedures for computer programming and computer operations.
o Reviews and recommends to CEO for approval purchase of DP equipment and software for internal usage.
7. May be asked by CEO and/or Board to undertake various special projects and assignments. (
