Exhibit 10.20
PERITUS SOFTWARE SERVICES, INC.
EMPLOYMENT AGREEMENT
Agreement made as of the 30/th/ day of December, 1996 (the "Effective
Date"), by and between Peritus Software Services, Inc., a Massachusetts
corporation (the "Company"), and Xxxxxxx Xxxxxxxx (the "Employee").
The Company desires to employ the Employee, and the Employee desires
to be employed by the Company. In consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
the parties agree as follows:
I. Titles and Reporting Responsibility
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The Employee's title will be President and Chief Operating Officer. The
Employee will report to the Chief Executive Officer.
The Chairman of the Company agrees to nominate the Employee as a candidate
for election to the Board of Directors.
II. Term of Employment
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The Company hereby agrees to employ the Employee and the Employee hereby
accepts employment with the Company for a period (the "Employment Period")
commencing on December 30, 1996 and
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ending upon the termination of the Employee's employment pursuant to the
provisions of Section VII below. This Agreement shall remain in full force and
effect unless and until terminated in accordance with Section VII of this
Agreement.
III. Responsibilities of the Employee
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The Employee agrees to undertake the duties and responsibilities
inherent in the position described in Section I above and such other duties and
responsibilities as the Company or its designee shall from time to time
reasonably assign. The Employee agrees to devote his entire business time,
attention and energies to the business and interests of the Company during the
term of this Agreement. The Employee agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes
therein which may be adopted from time to time by the Company.
IV. Support from the Company
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The Company will reimburse the Employee for all reasonable travel and
other business expenses incurred in furthering the business of the Company.
Expenditures of an extraordinary nature shall require prior written approval of
the Company.
V. Prohibitions
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During the term of this Agreement, the Employee shall not:
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(a) be employed by or otherwise represent any other company, product,
service or enterprise, without the prior written approval of the
Company; or
(b) make any representation, guarantee, or statement, orally or in
writing, which would contravene any Company policy or compromise the
Company's interests.
VI. Compensation
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(a) The Employee shall be paid a base salary (the "Base Salary") and,
when appropriate, bonuses ("Bonus Compensation") as described in this
Section VI. The Employee's bi-weekly Base Salary shall be $9,615.39,
which is the equivalent of $250,000 per year. Provided neither party
has exercised the right to terminate this Agreement under Section VII,
performance and compensation reviews will be conducted annually
beginning December 30, 1997.
(b) Bonus Compensation may be paid from time to time to the Employee
as approved by the Board of Directors of the Company, by a Committee
of the Board of Directors of the Company which has the authority to
determine the applicable bonus compensation or by a designee of the
Board of Directors who has been granted
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the authority to determine the applicable bonus compensation.
(c) Except as otherwise provided, the Employee shall be entitled to
participate in any and all benefit programs that the Company
establishes and makes generally available to its employees for which
he may be eligible under plan documents. In any case where
contributions or benefits related to participation in a plan vary on
the basis of compensation, "compensation" shall mean Employee's Base
Salary only and shall not include expense reimbursements, advances,
Bonus Compensation or any other compensation which may be paid by the
Company. The Employee shall be entitled to three weeks paid vacation
per year, to be taken at such times as may be approved by the Chief
Executive Officer.
(d) Any future revisions to Base Salary or Bonus Compensation may be
implemented by the Board of Directors of the Company, by a Committee
of the Board of Directors of the Company which has the authority to
determine the applicable bonus compensation or base salary or by a
designee of the Board of Directors who has been granted the authority
to determine the
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applicable bonus compensation or base salary.
(e) During the period beginning on the Employee's date of employment
and ending on the 30th day thereafter, the Employee shall be entitled
to purchase up to $500,000 worth of Class A Voting Common Stock, no
par value (the "Common Stock"), of the Company at a price per share
equal to the fair market value of a share of Common Stock on the date
of purchase. As a condition of purchase the Grantor shall deliver to
the Company an investment letter signed by the Employee in
substantially the form as set forth in Exhibit A.
(f) The Employee shall receive the stock option grants as set forth
in Exhibit B and C, subject to necessary approvals by the Company's
Board of Directors, by a Committee of the Board of Directors of the
Company which has the authority to approve said option grants, and/or
the shareholders of the Company.
VII. Termination
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The employment of the Employee by the Company pursuant to this Agreement
shall terminate:
(a) By either party, without cause, by giving 45 days
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prior written notice of termination to the other party, or within such
shorter period as is established by mutual agreement of the parties.
The Company reserves the right to provide Base Salary payments in lieu
of the 45 days notice.
(b) By either party, if the other party breaches any of its
obligations under this Agreement and fails to remedy such breach
within 30 days after written notice of such breach is provided to such
other party; failure of the Employee to adequately perform the
responsibilities specified in Section III hereof shall be considered a
breach of this Agreement.
(c) By the Company, effective immediately and without notice, for
cause. For purposes of this Section VII(c), "cause" for termination
shall be deemed to exist upon (a) a good faith finding by the Company
of the failure of the Employee to perform his assigned duties for the
Company, dishonesty, gross negligence or misconduct, or (b) the
conviction of the Employee of, or the entry of a pleading of guilty or
nolo contendere by the Employee to, any crime involving moral
turpitude or any felony.
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(d) Upon the death or disability of the Employee. As used in this
Agreement, the term "disability" shall mean the inability of the
Employee, due to a physical or mental disability, to perform the
essential functions of his/her job with or without a reasonable
accommodation.
VIII. Rights Following Termination
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(a) Following termination of this Agreement, pursuant to Section
VII(b), VII(c), VII(d), or at the option of the Employee pursuant to
Section VII(a), the Company shall have no further responsibility to
Employee except to pay Base Salary up to and including the last day of
employment.
(b) Following termination of this Agreement, at the option of the
Company pursuant to Section VII(a), the Company shall continue to pay
to the Employee the Base Salary which would otherwise be payable to
the Employee for a period of 52 weeks from the date of termination of
employment (the "Severance Period"). The Employee shall be deemed to
be an employee during the Severance Period for eligibility for
benefits to the extent allowable by law. The Employee shall not be
eligible to receive the payments provided for under this Section
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VII(b) or the additional vesting provided for in Exhibit B and Exhibit
C unless and until the Employee signs a release in the form attached
hereto as Exhibit D.
(c) In the event of termination or expiration of this Agreement,
Employee shall, at the instruction of the Company, promptly return to
the Company or its designee all files, letters, memoranda, reports,
records, data, sketches, drawings, laboratory notebooks, program
listings, or other written, photographic, or other tangible material
supplied by the Company to the Employee or created or maintained for
the Company by the Employee.
(d) Except as set forth above, neither party shall be entitled to any
compensation or claim for goodwill or other loss, suffered by reason
or termination of this Agreement.
(e) The rights and obligations of the parties to this Agreement set
forth in Section VIII and Section IX shall survive any termination of
this Agreement. The termination or expiration of this Agreement shall
in no case relieve either party from its obligations to pay
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to the other any monies accrued hereunder prior to such termination or
expiration.
IX. Non-Compete.
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(a) During the Employment Period and for a period of one year after
the termination or expiration thereof, the Employee will not directly
or indirectly:
(i) as an individual, proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, or in any other
capacity whatsoever (other than as the holder of not more than one
percent (1%) of the total outstanding stock of a publicly held
company), engage in the business of developing, producing, marketing
or selling products of the kind or type developed or being developed,
produced, marketed or sold by the Company or any subsidiary of the
Company while the Employee was employed by the Company, provided that
the foregoing restriction shall not apply after the end of the
Employment Period to activities that are not related to the Company's
Year 2000 business activities; or
(ii) recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company to terminate their employment
with, or otherwise cease their relationship with, the Company; or
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(iii) solicit, divert or take away, or attempt to divert or to
take away, the business or patronage of any of the clients, customers
or accounts, or prospective clients, customers or accounts, of the
Company which were contacted, solicited or served by the Employee
while employed by the Company.
(b) If any restriction set forth in this Section IX is found by any
court of competent jurisdiction to be unenforceable because it extends
for too long a period of time or over too great a range of activities
or in too broad a geographic area, it shall be interpreted to extend
only over the maximum period of time, range of activities or
geographic area as to which it may be enforceable.
(c) The restrictions contained in this Section IX are necessary for
the protection of the business and goodwill of the Company and are
considered by the Employee to be reasonable for such purpose. The
Employee agrees that any breach of this Section IX will cause the
Company substantial and irrevocable damage and therefore, in the event
of any such breach, in addition to such other remedies which may be
available, the Company shall have the right to seek specific
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performance and injunctive relief.
X. Other Agreements
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Employee represents that his performance of all the terms of this Agreement
and as an employee of the Company does not and will not breach any employment
agreement with any previous employer or any agreement with any previous employer
or other party to keep in confidence proprietary information, knowledge or data
acquired by him in accordance or in trust prior to his employment with the
Company or to refrain from competing, directly or indirectly, with the business
of such previous employer or any other party. Employee represents that he will
be able to complete Form I-9 upon commencement of employment. Employee agrees to
execute the Company's standard confidentiality and nondisclosure agreement as
set forth in Exhibit E, and to the extent that the terms as set forth in Exhibit
E are contrary to the terms of this Agreement, this Agreement shall control and
take precedence.
XI. Notices
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All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered in person or, if mailed, when mailed by certified or registered mail,
postage prepaid, to the parties at the addresses set forth below their
signatures to this
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Agreement or at such other address as may be given in writing by either party to
the other party in accordance with this Section XI.
XII. Assignability
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Employee acknowledges that the Company is entering into this Agreement in
reliance upon the personal reputation, qualifications and abilities of the
Employee and accordingly, the Employee may not assign his rights or obligations
under this Agreement, either voluntarily or by operation of law.
XII. Miscellaneous
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(a) This Agreement shall not be binding upon the Company until it has
been executed by a duly authorized officer of the Company.
(b) This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts.
(c) This Agreement constitutes the entire understanding between the
parties relating to the subject matter of this Agreement and
supersedes all prior writings, negotiations or understandings with
respect thereto. No modification or addition to this
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Agreement shall have any effect unless it is set forth in writing and
signed by both parties.
(d) The waiver by the Company of any breach of any provision of this
Agreement shall not be construed as a continuing waiver of such breach
or as a waiver of other breaches of the same or of other provisions of
this Agreement.
(e) Should any provision of this Agreement be declared or be
determined by any court of competent jurisdiction to be illegal or
invalid, the validity of the remaining parts, terms, or provisions
shall not be affected thereby and said illegal and invalid part, term
or provision shall be deemed not to be a part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxxxxxx Xxxxxxx Xxxx
14 Rust Way President & C.E.O.
Xxxxxxxx, XX 00000 Peritus Software Services, Inc
000 Xxxxxxx Xx.
Xxxxxxxxx, XX 00000
Date: 12/30/96 Date: 12/30/96
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RELEASE
1. Release. In consideration of the payment to me of the severance benefit
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provided to me under a certain employment contract between Peritus Software
Services, Inc., a Massachusetts Corporation (the "Company"), I hereby fully,
forever, irrevocably and unconditionally release, remise and discharge the
Company, and any subsidiary or affiliated organization of the Company or their
current or former officers, directors, stockholders, corporate affiliates,
attorneys, agents and employees (the "Released Parties") from any and all
claims, charges, complaints, demands, actions, causes of action, suits, rights,
debts, sums of money, costs, accounts, reckonings, covenants, contracts,
agreements, promises, doings, omissions, damages, executions, obligations,
liabilities, and expenses (including attorneys' fees and costs), of every kind
and nature, known or unknown, which I ever had or now have against the Released
Parties, including, but not limited to, all claims arising out of my employment,
all claims arising out of your separation from employment, all claims arising
from any failure to reemploy you, all claims of race, sex, national origin,
handicap, religious, sexual preference, benefit and age discrimination, all
employment discrimination claims under Title VII of the Civil Rights Act of
1964, 42 U.S.C. (S)2000 et seq., the Age Discrimination in Employment Act, 29
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U.S.C. (S)621 et seq., the Americans with Disabilities Act of 1990, 29 U.S.C.
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(S)12101 et seq., the Employee Retirement Income Security Act of 1974, 29 U.S.C.
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(S)1001 et seq., and similar state or local statutes, wrongful discharge claims,
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common law tort, defamation, breach of contract and other common law claims, and
any claims under any other federal, state or local statutes or ordinances not
expressly referenced above.
2. Entire Agreement and Applicable Law. This Agreement contains and
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constitutes the entire understanding and agreement between the parties hereto
with respect to the purchase price for your Company Stock and settlement of
claims against the Company and cancels all previous oral and written
negotiations, agreements, commitments, and writings in connection therewith.
This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts to the extent not preempted by federal law.
3. Acknowledgments. I acknowledge that I have been given at least twenty-one
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(21) days to consider this Agreement and that the Company advised me to consult
with any attorney of my own choosing prior to signing this Agreement. I
acknowledge that I may revoke this Agreement for a period of seven (7) days
after signing it, and the Agreement shall not be effective or enforceable until
the expiration of this seven (7) day revocation period.
Date:_______________________ Employee's Signature:___________________
Employee's Name:________________________
(type or print)
