Exhibit 10.13
CORRECTED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
WHEREAS, GlobalSCAPE, Inc. ("GlobalSCAPE") and Xxxxxx Xxxxx-Xxxxxxxx
("Executive") entered into an Executive Employment Agreement dated effective
January 1, 1998 (the "Original Agreement"); and
WHEREAS the Original Agreement contained various errors;
NOW THEREFORE, the parties have executed this Corrected and Restated
Executive Employment Agreement (the "Agreement") effective as of the date of the
Original Agreement:
The parties hereto agree as follows:
1. Employment.
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The Company agrees to employ Executive and Executive accepts such employment
for the period beginning January 1, 1998 (the "Start Date") and ending upon
termination pursuant to paragraph 1(D) hereof (the "Employment Period").
(A) Services. During the Employment Period, Executive will be the
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President of the Company, and in connection therewith will render such
services of an executive and administrative character to the Company and
its affiliates as are customarily rendered by persons holding such position
with similarly situated companies, as the Board of Directors of the
company, (the "Board") may from time to time direct. Executive will devote
her best efforts and substantially all of her business time and attention
(except as otherwise specifically permitted herein and except for vacation
periods and reasonable periods of illness or other incapacity) to the
business of the Company and its affiliates and will faithfully and
diligently carry out such duties and have such responsibilities as are
customary among persons employed in substantially similar capacities for
similar companies. Executive will report to GlobalSCAPE's Board of
Directors and shall faithfully and diligently comply with all of its
reasonable and lawful directives. For purposes of this Agreement, the term
"affiliates" means any corporation, limited partnership, limited liability
company or other entity engaged in the same business as the Company or a
related business, which controls, is controlled by or is under common
control with the Company.
(B) Salary. During the Employment Period and thereafter as provided
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in paragraph (D) below, the Company will pay Executive a base salary at the
rate of not less than $80,000 per annum (or such higher amount as the Board
may establish from time to time), and will be payable in accordance with
the Company's regular payroll practices.
(C) Benefits. In addition to the compensation described above in this
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paragraph 1, Executive will be entitled during the Employment Period to the
following benefits:
(1) such bonus as the Board in its sole discretion may from time
to time authorize, but in no event shall bonuses paid during a year
exceed 50% of Executive's base salary for such year;
(2) such health insurance and other benefits as are available
from time to time to the Company's salaried employees generally;
(3) in accordance with the Company's vacation and absence paid
as in effect from time to time, sick leave, personal time provided
that Executive shall have no less than three weeks vacation each year,
with salary;
(4) reimbursement, upon submission of documentation in
accordance with the Company's regular expense policies, for reasonable
business expenses incurred on the Company's behalf by Executive;
(5) participation in any savings plan, 401(k) plan, profit
sharing plan or pension plan as is available from time to time to the
Company's salaried employees generally; and
(6) opportunity to participate in any and all employee benefit
plans from time to time in effect for executives or salaried employees
of the Company generally (subject to any contribution therefore
generally required by such employees and except to the extent such
plans are in a category of benefit otherwise provided to Executive).
(D) Termination. Unless earlier terminated by termination of
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Executive's employment pursuant to any of the provisions immediately below,
Executive's employment with the Company will continue until the third
anniversary of the Start Date, and Executive's employment shall be renewed
automatically for one-year periods thereafter unless either party hereto
gives written notice to the other party, at least 120 days prior to the
next anniversary date, that such employment shall not be renewed:
(1) Death. In the event of Executive's death during the term
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hereof, Executive's employment hereunder shall immediately and
automatically terminate. Notwithstanding such event, the Company shall
pay to Executive's designated beneficiary or, if no beneficiary has
been designated by Executive, to her estate, the base salary at the
rate in effect on the date of death for a period of 6 months. The
Company shall also pay to Executive's designated beneficiary or, if no
beneficiary has been designated by Executive, to her estate, any
incentive compensation that is earned but unpaid, based on the
operations of the Company for the whole year, prorated through the
date of death.
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(2) Disability.
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(a) The Company may terminate Executive's employment hereunder,
upon notice to Executive, in the event that Executive becomes disabled
during her employment hereunder through any illness, injury, accident
or condition of either a physical or psychological nature and, as a
result, is unable to perform substantially all of her duties and
responsibilities hereunder for 90 days during any period of 365
consecutive calendar days. In the event of such termination, until the
earliest of (i) the conclusion of the then-current term of this
Agreement and (ii) the conclusion of a period of 6 months following
the date of termination, the Company shall continue to pay Executive
the base salary at the rate in effect on the date of termination and
shall continue to contribute to the cost of Executive's participation
in the Company's group medical and dental insurance plan, if any,
provided that Executive is entitled to continue such participation
under applicable law and plan terms. The Company will also pay
Executive, in the case of such termination, any incentive compensation
that is earned but unpaid, based on the operations of the Company for
the whole year, prorated through the date of such termination;
(b) While receiving disability income payments under the
Company's disability income plan, if any, Executive shall be entitled
to receive the excess, if any, of base salary under paragraph 1 (B)
hereof over such disability income payments, and shall be entitled to
receive such bonus and other benefits as are described in paragraph
l(C), until the termination of her employment and except to the extent
a longer period is specified in paragraph 1 (D)(2)(a).
(3) Termination by the Company without Cause. The Company may at any
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time terminate Executive's employment without Cause (as defined below) by
giving Executive written notice of the effective date of termination. In
the event of such termination, the Company shall have the continuing
obligation to make payments of base salary in accordance with paragraph (B)
above at the rate in effect on the effective date of such termination until
the third anniversary of the Start Date or until 12 months after the
effective date of such termination, whichever period is longer.
Additionally, during such period following termination as the Company shall
have the continuing obligation to make payments of base salary, the Company
shall continue to contribute to the cost of Executive's participation in
the Company's group medical and insurance plans, if any, provided that
Executive is entitled to continue such participation under applicable law
and plan. The Company will also pay Executive, in the event of such
termination, any incentive compensation that is earned but
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unpaid, based on operations of the Company for the whole year, prorated
through the date of her termination.
(4) Termination by the Company for Cause. The Company shall have the
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right to terminate the Executive's employment at any time for any of the
following reasons (each of which is referred to herein as "Cause") by
giving Executive written notice of the effective date of termination (which
effective date may be the date of such notice):
(a) the willful breach of any provision of paragraphs 1 (A), 2,
3, 4 or 5 (including, but not limited to, a refusal to follow
reasonable and lawful directives of the Board; provided, however, that
to the extent that such breach is curable, the Board will give
Executive written notice of such breach and Executive will have 30
days from the receipt of such notice to cure such breach;
(b) any act of fraud, embezzlement or other material dishonesty
with respect to any aspect of the Company's business;
(c) continued use of illegal drugs;
(d) substantial failure of performance, repeated or continued
after written notice of such failure and explanation of such failure
of performance, which is reasonably determined by the Board of
Directors to be materially injurious to the business or interests of
the Company; or
(e) conviction of a felony or of a crime involving moral
turpitude.
If the Company terminates Executive's employment for any of the
reasons set forth above in this paragraph l(D)4, the Company shall have no other
obligations hereunder (including the obligation to continue to make payments of
base salary as provided in paragraph 1 (D)3 from and after the effective date of
termination and shall have all other rights and remedies available under this or
any other agreement and at law or in equity.
(5) By the Executive for Good Reason. Executive may terminate her
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employment hereunder for Good Reason, upon written notice to the Company
setting forth the nature of such Good Reason in reasonable detail. "Good
Reason" shall mean:
(a) the material failure of the Company to provide Executive the
base salary and incentive compensation and benefits in accordance with
the terms of paragraph 1 and paragraph 6 hereof;
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(b) the material diminution in the nature or scope of
Executive's responsibilities, duties or authority; or
(c) the occurrence of a Change in Control (as defined herein).
In the event of termination in accordance with this paragraph 1
(D)(5), the Company shall continue to pay Executive the base salary at the rate
in effect on the effective date of such termination until the third anniversary
of the Start Date or, in the event this Agreement has been automatically
extended thereafter in accordance with paragraph 1(D) hereof, until next
anniversary of the Start Date. Additionally, during such period following
termination as the Company shall have the continuing obligation to make payments
of base salary, the Company shall continue to contribute to the cost of
Executive's participation in the Company's group medical and insurance plans, if
any, provided that Executive is entitled to continue such participation under
applicable law and plan. The Company will also pay Executive, in the event of
such termination, any incentive compensation that is earned but unpaid, based on
operations of the Company for the whole year, prorated through the date of her
termination.
A "Change in Control" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), becomes the "beneficial owner" (as such term
is defined in Rule 13d-3 under the Act), directly or indirectly, of outstanding
securities of the Company representing 75% or more of the combined voting power
of the outstanding securities of the Company, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by the
Board of Directors or nomination for election by the shareholders of the Company
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the shareholders of the
Company approve (A) a merger or consolidation of the Company with any other
entity (other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 26% of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation), (B) a plan of complete
liquidation of the Company or (C) an agreement or agreements for the sale or
disposition, in a single transaction or series of related transactions, by the
Company of all or substantially all of the property and assets of the Company.
Notwithstanding the foregoing, events otherwise constituting a Change in Control
in accordance with the foregoing shall not constitute a Change in Control if
such events are solicited by the Company and are, if Executive is then a member
of the Board, approved, recommended or supported by Executive in her capacity as
a member of the Board of the Company in actions taken prior to, and with respect
to, such events.
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(6) Voluntary Termination by Executive. Except as provided in
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paragraph 1 (D)(5), in the event that Executive's employment with the
Company is terminated by Executive, such termination shall be a breach
of this Agreement and the Company shall have no further obligations
hereunder from and after the date of such termination.
2. Nondisclosure. Executive acknowledges that during the course of her
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performance of services for the Company she has acquired and will acquire
technical knowledge with respect to the Company's business operations,
including, by way of illustration, the Company's existing and contemplated
services, trade secrets, patents and selling techniques and information,
customer lists, supplier lists, and confidential information relating to the
Company's policy and/or business strategy (all of such information herein
referenced to as the "Confidential Information"); provided, however, that the
term "Confidential Information" shall not include (a) any information which is
or becomes publicly available otherwise than through breach of this Agreement,
or (b) any information which is or becomes known or available to Executive on a
non-confidential basis and not in contravention of applicable law from a source
which is entitled to disclose such information to Executive. Executive agrees
that she will not, while she is employed by the Company, divulge to any person,
directly or indirectly, except to the Company or its officers and agents or as
reasonably required in connection with her duties on behalf of the Company, or
use, except on behalf of the Company, any Confidential Information acquired by
Executive during the term of her employment. Executive agrees that she will not,
at any time after her employment with the Company has ended, divulge to any
person directly or indirectly any Confidential Information. Executive further
agrees that if her relationship with the Company is terminated (for whatever
reason) she shall not take with her but will leave with the Company all records,
papers and computer data and any copies thereof relating to the Confidential
Information (or if such papers, records, computer data or copies are not on the
premises of the Company, Executive agrees to return such papers, records and
computer data immediately upon her termination). Executive acknowledges that all
such papers, records, computer data or copies thereof are and remain the
property of the Company.
3. Inventions and Patents. Executive agrees that all inventions,
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innovations or improvements relating to the Company's business or method of
conducting business (including new contributions, improvements, ideas and
discoveries, whether patentable or not) conceived or made by her during her
employment with the Company belong to the Company. Executive will promptly
disclose such inventions, innovations or improvements to the Board and perform
all actions reasonably requested by the Board to establish and confirm such
ownership.
4. Other Businesses. During the Employment Period, Executive agrees that
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she will not, directly or indirectly except with the express written consent of
the Board, become engaged in, render material services for, or permit her name
to be used in connection with, or directly or indirectly counsel or consult
with, any business other than the business of the Company and its affiliates;
provided, however, that Executive may be a passive investor in any such business
(subject to the limitations set forth in paragraph 5 below).
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5. Noncompetition. Executive agrees that:
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(A) During the term she performs services for the Company and during
the Post-Employment Period (as defined below), Executive will not interfere
with the relationship between the Company or any affiliate and any
employee, agent or representative of the Company or any such affiliate.
(B) During the term she performs services for the Company and during
the Post-Employment Period, Executive will not directly or indirectly
divert or attempt to divert from the Company or any affiliate any business
which provides related services in which the Company has been actively
engaged during the term Executive performed services for the Company, nor
interfere with the relationships of the Company with customers, dealers,
distributors, franchisees or sources of supply.
(C) During the term she performs services for the Company and during
the Post-Employment Period, Executive will not directly or indirectly own,
manage, operate control, be employed by, participate in, or be connected in
any manner with the ownership, management, operation or control of, any
business or enterprise which provides software development or related
services in which the Company has been actively engaged during the then
Executive performed services for the Company.
(D) For purposes hereof, the "Post-Employment Period" shall mean: (i)
in the event Executive's employment with the Company is terminated for
Cause pursuant to paragraph l(D)(4), the 12- month period following
Executive's termination of employment with the Company, or (ii) in the
event Executive's employment with the Company is terminated for any other
reason, the period during which the Company continues to make payments of
base salary.
6. Stock Option. Effective as of the date hereof (the "Effective Date"),
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under the terms of the GLOBALSCAPE 1998 Stock Option Plan (the "Plan"),
GLOBALSCAPE, a Delaware corporation ("Global"), hereby grants to Executive the
option (the "Option") to purchase shares (the "Option Shares") of Common Stock,
$.001 par value per share, of GLOBALSCAPE. The number of Option Shares, the
purchase price per Option Share and the installments and dates in which the
Executive shall have the right to exercise the Option are attached to this
Agreement as Exhibit "B". The Plan is attached to this Agreement as Exhibit "A."
Beginning on the Effective Date, such installments shall be cumulative (i.e.
once the right to purchase the number of shares of an installment has accrued,
such shares may be purchased at any time thereafter, or in part from time to
time, until the business day immediately preceding the tenth anniversary of the
Effective Date (the "Expiration Date") or until such earlier date as set forth
in the following paragraph. Notwithstanding the preceding sentence, upon the
occurrence of a Change in Control, Executive's right to exercise the Option
shall become fully vested (i.e., all unissued Option Shares may be purchased at
any time thereafter, or in part from time to time, until the Expiration Date or
until such earlier date as set forth in the following paragraph).
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Upon termination of Executive's employment pursuant to Paragraph l(D)(4)
(Termination by the Company for Cause) or paragraph l(D)(6) (Voluntary
Termination by Executive), the Option shall remain exercisable for the four
month period following such termination, but only to the extent such option was
exercisable at termination. Upon termination of Executive's employment pursuant
to paragraph l(D)(1) (Death) or paragraph l(D)(2) (Disability), the Option, to
the extent then exercisable, shall remain exercisable for the one-year period
following such termination. Upon termination of Executive's employment pursuant
to paragraph (D)(3) (Termination by the Company without Cause) or paragraph
l(D)(5) (By the Executive for Good Reason), Executive's right to exercise the
Option shall become fully vested and the Option shall remain exercisable for the
four-month period following such termination.
7. General Provisions.
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(A) Notices. Any notice provided for in this Agreement must be in
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writing and must be either personally delivered, or mailed by first class
mail (postage prepaid and return receipt requested) or sent by reputable
overnight courier service, to the recipient at the address below indicated:
To the Company: Attn.: Xxxxxx X. Xxxxx
Chairman, GLOBALSCAPE Board of Directors
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
To Executive: Attn.: Xxxxxx Xxxxx-Xxxxxxxx
Executive's last known address
on records of Company
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or if mailed, five days after so mailed.
(B) Severability. Whenever possible, each provision of this Agreement
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will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision in such jurisdiction
or any other jurisdiction, or the legality or enforceability of such
provision in any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein except that any
court having jurisdiction shall have the power to reduce the duration, area
or scope of such invalid, illegal or unenforceable provision and, in its
reduced form it shall be enforceable.
(C) Complete Agreement. This Agreement embodies the complete
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agreement and understanding between the parties and supersedes and preempts
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any prior understandings, agreements or representations by or between the
parties, written or oral, which may have been related to the subject matter
hereof in any way.
(D) Successors and Assigns. This Agreement is a personal service
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contract and is not assignable by the Executive. Subject to the Executive's
rights under paragraph 1(D)(5)(c), this Agreement may be assigned from time
to time by the Company. This Agreement shall be binding on and inure to the
benefit of the parties hereto and such parties' respective successors,
personal representatives and permitted assigns.
(E) Choice of Law. All questions concerning the construction,
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validity and interpretation of this Agreement will be governed by the
internal law, and not the law of conflicts, of the State of Texas.
(F) Remedies. Each of the parties to this Agreement will be entitled
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to enforce her or its rights under this Agreement specifically, to recover
damages (including, without limitation, reasonable fees and expenses of
counsel) by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in her or its favor. The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for
any breach or threatened breach of the provisions of this Agreement and
that any party may in her or its sole discretion apply to any court of law
or equity of competent jurisdiction for specific performance and/or
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement. Such injunction or decree shall be available
without the posting of any bond or other security.
(G) Amendments and Waivers. Any provision of this Agreement may be
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amended or waived only with the prior written consent of Executive and a
majority of the Board.
(H) Absence of Conflicting Agreements. Executive hereby warrants and
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covenants that her employment by the Company does not result in a breach of
the terms, conditions or provisions of any agreement to which Executive is
subject.
(I) Survival. No termination of Executive's employment by either or
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both parties shall reduce or terminate Executive's covenants and agreements
in paragraphs 2,3 and 5.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered on the day and year first above written.
"Company" GLOBALSCAPE, Inc.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Chairman
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"Executive"
By: /s/ Xxxxxx Xxxxx-Xxxxxxxx
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Name: Xxxxxx Xxxxx-Xxxxxxxx, President
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