EXHIBIT 10.9
EXECUTIVE AGREEMENT
This Executive Agreement (this "Agreement") is entered into as of June 9,
1994, by and between Xxxxxxx Xxxxxxxxx (the "Executive") and Global Imaging
Systems Inc., a Delaware corporation (the "Company"). Golder, Thoma, Xxxxxxx,
Xxxxxx Fund IV Limited Partnership, an Illinois limited partnership (the "Fund")
is also a party to this Agreement for purposes of Section 2.4 of this Agreement.
WITNESSETH:
WHEREAS, Executive wishes to purchase, and the Company wishes to sell to
Executive, 1,633.98 shares of the Company's Class B Common Stock, par value $.01
per share (the "Class B Common"), representing 2.5% of the shares of the
Company's Common Stock, par value $.01 per share (the "Common Stock"), and
WHEREAS, the Company and Executive desire to enter into an agreement to
provide for the terms and conditions of Executive's employment with the Company,
and the terms and conditions relating to Executive's purchase of shares of the
Company's Class B Common.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:
ARTICLE I. TERMS AND CONDITIONS OF SERVICES
1.1 Engagement. The Company hereby engages the Executive as the Company's
Vice President, Chief Financial Officer, Treasurer and Secretary, and Executive
agrees to serve the Company, during the Service Term (defined in Section 1.5) in
the capacities, and subject to the terms and conditions, set forth in this
Agreement.
1.2 Services.
(a) During the Service Term, Executive will serve as Vice
President, Chief Financial Officer, Treasurer and Secretary of the Company and
will be responsible for all financial and accounting matters of the Company as
well as such other duties and responsibilities as established from time to time
by the Company's Chief Executive Officer and the Company's Board of Directors
(the "Board"). Executive will devote his best efforts and substantially all of
his business time and attention (except for vacation periods and periods of
illness or other incapacity) to the business of the Company and its
subsidiaries. Notwithstanding the foregoing, and provided that such activities
do not interfere with the fulfillment of
Executive's obligations hereunder, Executive may (i) serve as a director of a
Corporation that does not compete with the Company and is not engaged in the
office product service business; (ii) serve as a director, trustee or officer or
otherwise participate in educational, welfare, social, religious and civic
organizations; (iii) serve as a director, officer or employee of any other
entity if and to the extent specifically consented to in writing by the Board;
and (iv) acquire investment interests in one or more entities which are not,
directly or indirectly, in competition with the Company or its subsidiaries and
which do not provide supplies to the Company, except that the Executive may own
up to 1 % of the outstanding voting securities of any publicly-held company.
(b) Unless the Company and Executive agree to the contrary,
Executive's place of employment shall be at the Company's principal executive
offices in Tampa, Florida; provided, however, that Executive will work out of
his home in Sacramento or at such other locations as may be necessary in order
to discharge his duties hereunder until consummation of the Company's Base
Acquisition (as defined in Section 1.5 below). In connection with the
establishment of the principal executive office, the Company will pay all of the
Executive's reasonable out-of-pocket moving expenses associated with his
relocation to Tampa (up to a maximum of $40,000). In the event that the Company
and Executive agree that Executive should relocate his place of employment more
than 100 miles from Tampa, Florida, the Company will reimburse Executive for all
reasonable relocation expenses incurred.
(c) The Company shall reimburse the Executive for all out-of-pocket
expenses of the Executive incurred for the benefit of the Company prior to the
date hereof.
1.3 Salary and Bonus. During the Service Term, the Company will pay
Executive an annual base salary of $100,000, subject to periodic increases at
the discretion of the Company's Board of Directors (the "Base Salary"). In
addition, Executive will be eligible for an annual bonus of up to 40% of his
Base Salary based on Executive's attainment of defined budget and corporate
objectives as set by the Company's Board for the year in accordance with any
management incentive bonus plan or other incentive plan or bonus which the Board
establishes and maintains for its key employees; provided, however, that
Executive shall be entitled to a one-time bonus of $20,000 in the month
following the date which is one year after the consummation of the Base
Acquisition (the "Bonus Month"). In addition, Executive shall be entitled to an
additional one-time bonus of $20,000 in the event that the Company, together
with its wholly-owned subsidiaries, achieves a quarterly EBIT (as hereinafter
defined) of at least $1.25 million for any fiscal quarter prior to the
expiration of the fiscal quarter in which the Bonus Month occurs. For purposes
of this Agreement, "EBIT" shall mean the Company's earnings before interest and
taxes computed in accordance with Generally Accepted Accounting Principles,
consistently applied. Upon termination of his employment with the Company for
any reason other than good cause shown or his resignation with Good Reason (as
defined in the Executive Agreement with Xxxxxxx of even date herewith),
Executive will be entitled to receive a pro rata portion of the incentive
compensation for the year (pro rated based upon the number of days in such year
during which Executive is employed by the Company) in which the termination
occurred. Such pro rated incentive compensation shall be paid at such time as
the Company pays incentive compensation to its other management employees for
such year.
-2-
1.4 Other Benefits. Executive shall be entitled to receive fringe benefits
customary for the industry including three weeks vacation, health/accident
insurance, disability insurance and life insurance, reimbursement of reasonable
business expenses and other employee benefits as in effect from time to time for
the management employees of the Company.
1.5 Term of Employment. Executive's employment under this Agreement shall
commence on May 1, 1994 and shall continue at the pleasure of the Board in
accordance with the Company's bylaws or until the first to occur of Executive's
resignation, removal, death or disability (as determined in good faith by the
Board) (the "Service Term"); provided, however, that the Service Term shall end
on December 31, 1994 and Executive's employment with the Company shall terminate
on such date (and the Company shall owe Executive no severance pay), in the
event that the Company has not consummated a Base Acquisition (as hereinafter
defined) prior to December 31, 1994; provided, however, that if the Company is
engaged in good faith negotiations towards the consummation of a Base
Acquisition on such date, then the Service Term shall be extended unless such
negotiations terminate without consummation of the Base Acquisition. For
purposes of this Section 1.6, "Base Acquisition" shall mean the Company's first
acquisition of a business engaged in the copier/office equipment dealer
industry.
1.6 Covenant Not to Compete.
(a) Executive agrees that, while Executive is employed by the Company
under this Agreement and for a period of one year thereafter, he will not:
(i) except with the express written consent of the Board,
either directly or indirectly, for himself or on behalf or in conjunction with
any other person, partnership, corporation or other entity, own, maintain,
engage in, render any services for, manage, contact, have any financial interest
in, or permit his name to be used in connection with, any copier/office
equipment dealer business which then competes with the Company or its
subsidiaries or any business in which the Company has entertained discussions to
acquire such business prior to after the date that Executive's employment
hereunder is terminated; provided, however, that notwithstanding the foregoing,
Executive may during such period own up to 1 % of the outstanding voting
securities of any publicly-held company; or
(ii) make any remarks, statements, speeches or any other written
or oral communication to any person or the public which would in any way
disparage, criticize, embarrass, slander, libel or otherwise be derogatory to
the Company and its subsidiaries, or their employees, officers or directors or
to GTCR and its Affiliates.
(b) If, at the time of enforcement of any provision of Section 1.6(a)
above, a court holds that the restrictions stated therein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances will be
substituted for the stated period, scope or area.
-3-
(c) In the event of a breach by Executive of the provisions of
Section 1.6(a) above, the Company or its successors or assigns may, in addition
to other rights and remedies existing in their favor, apply to any court of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violations of the provisions thereof.
1.7 Confidential Information. Executive acknowledges that the information,
observations and data obtained by him during the course of his employment with
the Company concerning the business or affairs of the Company and its affiliates
are the property of the Company. Therefore, Executive agrees that he will not
disclose to any unauthorized person or use for his own benefit any of such
information, observations or data without the Board's prior written consent,
unless and to the extent that the aforementioned matters (i) are generic to the
Industry; (ii) are known or developed by Executive prior to the date of this
Agreement; (iii) become generally known to and available for use by the public
otherwise than as a result of the Executive's acts or omissions in violation of
this Agreement; or (iv) are required to be disclosed by judicial process or law.
Executive agrees to deliver to the Company at the termination of his employment,
or at any other time the Company may request, all memoranda, notes, plans,
records, reports and other documents (and copies thereof) relating to the
business of the Company and its affiliates which he may then possess or have
under his control.
1.8 Executive's Representations and Warranty. Executive represents and
warrants that he has full right and authority to enter into this Agreement and
fully to perform his obligations hereunder, that he is not subject to any
non-competition agreement, and that his past, present and anticipated future
activities have not and will not infringe on the proprietary rights of others.
Executive further represents and warrants that he is not obligated under any
contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency which would conflict with his obligation to use his best
efforts to promote the interests of the Company or which would conflict with the
Company's business as conducted or proposed to be conducted. Neither the
execution nor delivery of this Agreement, nor the carrying on of the Company's
business as an officer, director or employee by Executive, will conflict with or
result in a breach of the terms, conditions or provisions of or constitute a
default under any contract, covenant or instrument under which Executive is now
obligated.
ARTICLE II. TERMS AND CONDITIONS
RELATING TO EXECUTIVE SHARES
2.1 Definitions. For purposes of Articles II and III of this
Agreement, the following terms will have the meanings set forth below:
"Executive Shares" means all shares of the Company's Class B Common
purchased by Executive pursuant to Section 2.2 hereof; all Executive Shares will
continue to be Executive Shares in the hands of any holder other than Executive
(except for the Fund, the Fund's affiliates and purchasers pursuant to an
offering registered with the Securities and
-4-
Exchange Commission or purchasers acquiring Executive Shares in a market sale
made pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended (the "1933 Act")), and each such other holder of Executive Shares will
succeed to all rights and obligations attributable to Executive as a holder of
Executive Shares hereunder.
"Change in Control" shall mean a change in control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A, as in effect on the date of this Agreement, promulgated under
the Securities Exchange Act of 1934, as amended (without regard to whether the
Company is subject to such Regulation).
"Fair Market Value" of each share of Class B Common shall mean (a) the
Company's EBIT (as defined in Section 1.3) for the rolling twelve month period
ending on the last day of the most recent calendar quarter prior to the date of
determination multiplied by (b) the Recent Acquisition Multiples plus, (c)
Excess Cash less, (d) the sum of (i) all outstanding long-term indebtedness of
the Company and its subsidiaries on the date of determination, (ii) the
redemption value of all shares of the Company's preferred stock (if any) and all
accrued dividends thereon on the date of determination, and (iii) the sum of the
Unreturned Original Cost and the Unpaid Yield (as such terms are defined in the
Company's certificate of incorporation in effect on the date hereof) on the
Company's Class A Common Stock, multiplied by (e) .9 and divided by (f) the
aggregate number of shares of Class B Common then outstanding. For purposes of
this definition, "Recent Acquisition Multiples" shall mean (x) the sum of the
aggregate purchase prices paid by the Company for its three most recent
acquisitions in the copier/office equipment dealer industry (or such total
number of acquisitions if the Company has made less than three acquisitions)
prior to the date of determination, divided by (y) the sum of the pro forma EBIT
for each of such acquisitions calculated based on the Company's projections for
such acquisitions for the twelve calendar months following the month of the
consummation of each such acquisition. For purposes of this definition, "Excess
Cash" shall mean the amount by which cash or cash equivalents of the Company
exceed the Company's current liabilities on the date of determination, as
reasonably determined by the Board in good faith in accordance with generally
accepted accounting principles.
"Initial Public Offering" shall mean the completion of the first offering
of the Company's Common Stock to the public pursuant to an effective
registration statement under the Securities Act with net proceeds to the Company
or the sellers of such Common Stock of not less than $5 million.
"Restricted Shares" means, on any date following the Company's Base
Acquisition but prior to the fifth anniversary of the Base Acquisition, a number
of Executive Shares equal to 100% of the number of Executive Shares outstanding
on such date reduced by 20% of such Executive Shares for each full year prior to
such date (calculated annually on each anniversary of the Base Acquisition). No
Executive Shares shall be Restricted Shares on or after the fifth anniversary of
the Base Acquisition or, if earlier, upon the occurrence of any event specified
in Section 2.8. In the event of the termination of Executive's employment
because of Executive's death or disability (as reasonably determined by the
Company's Board in accordance with Section 1.5 hereof), the number of Restricted
Shares outstanding on the
-5-
resultant Termination Date shall be the lesser of the number of Restricted
Shares as calculated above or 50% of the number of Executive Shares outstanding
on such date.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Vested Shares" means Executive Shares that are not Restricted Shares.
2.2 Purchase and Sale of Executive Shares. Executive hereby subscribes
and agrees to purchase, and the Company hereby agrees to sell to Executive, on
the date hereof, 1,633.98 shares of the Company's Class B Common at an issuance
price of $9.00 per share, for a total purchase price in cash of $14,706.
2.3 Investment Representations. Executive represents and warrants that the
Executive Shares to be acquired by him pursuant to this Agreement will be
acquired for his own account and not with a view to, or present intention of,
distribution thereof in violation of the Securities Act, and will not be
disposed of in contravention of the Securities Act. Executive acknowledges that
he is able to bear the economic risk of his investment in the Executive Shares
for an indefinite period of time, because the Executive Shares have not been
registered under the Securities Act and, therefore, cannot be sold unless
subsequently registered under the Securities Act or an exemption from such
registration is available.
2.4 Repurchase Option.
(a) If the services provided by the Executive to the Company shall
terminate at any time for any reason whatsoever (the date of such termination
referred to herein as the "Termination Date"), the Company shall have the option
("Option") to purchase from Executive all of his (i) Restricted Shares as of the
Termination Date, at the purchase price per share originally paid by Executive
for the Restricted Shares and (ii) Vested Shares at a purchase price per share
equal to the Fair Market Value. The Company shall give written notice of its
intention to purchase such Executive Shares to Executive (or his personal
representative) within 90 days after the Termination Date and shall deliver a
check or cash in payment for such Executive Shares within 120 days after the
Termination Date. Executive shall deliver to the Company a properly endorsed
unencumbered certificate representing the Executive Shares so repurchased.
(b) If for any reason the Company does not elect to purchase all the
Executive Shares pursuant to the Option, the Fund shall be entitled to exercise
the Option in the manner set forth in Section 2.4(a) for the Executive Shares
that the Company has not elected to purchase (the "Available Shares"). As soon
as practicable after the Company has determined that there will be Available
Shares, but in any event within 30 days after the Termination Date, the Company
will give written notice to the Fund setting forth the number of Available
Shares, and the Fund may elect to purchase Available Shares by delivering
written notice to the Company and Executive within 60 days after receipt of such
notice. As soon as practicable, and in any event within the 120 day period set
forth above in Section 2.4(a), the Company shall notify Executive as to the
number of Executive Shares being purchased by the Fund and the
-6-
Fund shall deliver a check or cash in payment for such Executive Shares within
120 days after the Termination Date.
(c) Executive shall not sell, transfer, pledge or otherwise dispose
of Executive Shares, or any interest in any Executive Shares, except that
Executive may transfer all or a part of his Executive Shares to members of his
immediate family by gift, or to a trust for the benefit of Executive and/or
members of his immediate family, or by will or the laws of descent and
distribution, and any such trust may transfer shares to the Executive and/or
members of the Executive's immediate family in accordance with its terms;
provided that any Executive Shares so transferred shall remain subject to all
the terms and conditions of this Agreement; and further provided that Executive
shall retain the power to vote any Executive Shares so transferred under an
irrevocable proxy or other arrangement reasonably satisfactory to the Company
(the "Retention Agreement").
(d) The right to repurchase Executive Shares shall terminate if there
is a Change in Control of the Company or if the Company (i) sells to an
unaffiliated third party all or substantially all of its assets on a
consolidated basis in any single transaction or series of related transactions
(other than sales in the ordinary course of business) or (ii) merges or
consolidates with or into another corporation, except for a merger after giving
effect to which, the holders of the Company's voting capital stock immediately
prior to the merger, assuming conversion or exercise of all securities
convertible into or exercisable for voting capital stock (the "Voting Capital"),
will own a majority of the Company's Voting Capital subsequent to the merger.
The right to repurchase Vested Shares set forth in Sections 2.4(a) and (b) shall
terminate upon the closing of an Initial Public Offering.
2.5 Changes in Capital Structure. If any changes are made in the
Company's Common Stock by reason of any merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or any other combination or
exchange of Common Stock, any and all new or substituted securities to which
Executive is entitled because of his ownership of the Executive Shares shall be
deemed to be Executive Shares for the purposes of this Agreement, and
corresponding adjustments shall be made in the number and kind of securities
which Executive has the right to acquire hereunder. For the purpose of
establishing the purchase price under the Option, the original price per share
paid by Executive as described in Section 2.2 shall be appropriately adjusted to
reflect such changes. In addition, the right to purchase Executive Shares under
Section 2.4(a) above (i) shall be made in good faith by the Board and (ii) shall
not be made within six months of any event specified in Section 2.8, unless
Executive has been terminated for cause.
2.6 Stockholders Agreement. Executive agrees to execute and to be
bound by the terms of the Stockholders Agreement and to the addition of the
stock certificate legend required by the Stockholders Agreement on his shares of
Common Stock.
2.7 Transfers Not Recognized. Executive recognizes that his Executive
Shares are subject to certain restrictions on transfer, including the Option,
the Retention Agreement, and the Stockholders Agreement. Any sale, transfer or
other disposition by Executive of all or a portion of the Executive Shares, or
any interest therein, which is not made
-7-
in conformity with the above restrictions, as well as any others in this
Agreement or the Stockholders Agreement, shall be null and void, and the
secretary of the Company or other person having custody and control of the stock
transfer records of the Company shall not be required to recognize such sale,
transfer, or other disposition, nor to issue a new stock certificate or
certificates therefor unless or until the secretary or such other person shall
have received written evidence satisfactory to counsel for the Company that the
sale, transfer, or other disposition is made in conformity with and not in
violation of the terms of this Agreement.
2.8 Termination of Restrictions. The restrictions on the Executive
Shares, including the restrictions on the transfer thereof, set forth in this
Article II will terminate on the first to occur of (i) the date on which the
Company is merged or consolidated into a new surviving company and the holders
of the Company's Common Stock immediately prior to the merger or consolidation
own less than a majority of the Company's Common Stock subsequent to such merger
or consolidation, (ii) there is a sale of all, or substantially all, of the
Company's assets or capital stock in a single transaction or series of related
transactions, or (iii) upon a Change in Control of the Company. Except for the
provisions of Section 2.4(a)(i), the restrictions on Executive Shares shall
terminate upon the closing of an Initial Public Offering.
2.9 Securities Act Restrictions.
(a) The certificates representing the Executive Shares will bear
the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON ____________,HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT
REQUIRED. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN
REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH IN
AN EXECUTIVE AGREEMENT BETWEEN, AMONG OTHERS, GLOBAL IMAGING
SYSTEMS INC. AND XXXXXXX XXXXXXXXX, DATED AS OF JUNE _, 1994,
A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT SUCH
COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(b) No holder of Executive Shares may sell, transfer or dispose
of any Executive Shares (except pursuant to an effective registration statement
under the Securities Act) without first delivering to the Company an opinion of
counsel reasonably acceptable in form and substance to the Company that
registration under the Securities Act is not required in connection with such
transfer.
(c) Each holder of Executive Shares agrees not to effect any
public sale or distribution of any equity securities of the Company, or any
securities convertible into or
-8-
exchangeable or exercisable for such securities, during the seven days prior to
and the 90 days after the date on which any registration statement covering
securities of the Company (whether a primary or secondary offering) becomes
effective under the Securities Act.
2.10 Section 83(b) Filing. Within 30 days after the date of this
Agreement, Executive will make an effective election with the Internal Revenue
Service under Section 83(b) of the Internal Revenue Code and the regulations
promulgated thereunder in the form of Exhibit A attached hereto for the
Executive Shares.
ARTICLE III. GENERAL PROVISIONS
3.1 Notices. Any notice provided for in this Agreement must be in
writing and must be delivered to the recipient at the address below indicated:
To the Company:
X.X. Xxx 000000
Xxxxx, Xxxxxxx 00000-0000
Facsimile No. (000) 000-0000
Attention: Chairman
To Executive:
Xxxxxxx Xxxxxxxxx
X.X. Xxx 000000
Xxxxx, Xxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
To the Fund:
Golder, Thoma, Xxxxxxx, Xxxxxx
Fund IV Limited Partnership
Suite 6100
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile No.: (000) 000-0000
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 five business days
after mailing by first class mail, certified return receipt requested, one
business day after delivery to a receipted courier for next business day
delivery, or upon transmission by telex or facsimile.
-9-
3.2 Severability. Whenever possible, each provision of this Agreement
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 or 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.
3.3 Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
3.4 Counterparts; Facsimile Transmission. This Agreement may be
executed on separate counterparts, each of which is deemed to be an original and
all of which taken together constitute one and the same agreement. This
Agreement may be executed and delivered by facsimile transmission.
3.5 Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive, the Company and the
Fund, and their respective successors and assigns, except that Executive may not
assign any of his rights or obligations under Article I.
3.6 Choice of Law. The corporate law of the State of Delaware will
govern all questions concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity and
interpretation of this Agreement will be governed by the internal law, and not
the law of conflicts, of the State of Florida.
3.7 Remedies. Each of the parties to this Agreement (including the
Fund) will be entitled to enforce its rights under this Agreement specifically,
to recover damages by reason of any provision of this Agreement and to exercise
all other rights existing in its favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may in 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. The prevailing party in any action described in
this Section 3.7 shall be entitled to payment of its reasonable attorneys' fees
from the other party.
3.8 Amendments and Waivers. Any provision of this Agreement may be
amended or waived only with the prior written consent of the Company and
Executive; provided that no provision of Article II may be amended or waived
without the prior written consent of the Fund.
3.9 Expenses. The Company agrees to pay and hold the Executive
harmless against liability for the payment of the reasonable fees and expenses
of his counsel arising in
-10-
connection with the negotiation, execution and consummation of the transactions
contemplated by this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
EXECUTIVE:
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------------
Xxxxxxx Xxxxxxxxx
GLOBAL IMAGING SYSTEMS INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
Accepted as of June 9, 1994:
GOLDER, THOMA, XXXXXXX, XXXXXX
FUND IV LIMITED PARTNERSHIP
By: GOLDER, THOMA, XXXXXXX,
XXXXXX IV L.P.
General Partner
By: Golder, Thoma, Cressey,
Rauner, Inc.
General Partner
By: /s/ Xxxx X. Xxxxx
---------------------------
Xxxx X. Xxxxx
Authorized Officer
The Exhibits to this Executive Agreement are not included with this Registration
Statement on Form S-1. Global will provide these exhibits upon the request of
the Securities and Exchange Commission.
-11-
AMENDMENT NO. 1
TO
EXECUTIVE AGREEMENT
THIS AMENDMENT NO. 1 TO EXECUTIVE AGREEMENT is entered into as of August
14, 1996 by and among Global Imaging Systems Inc., a Delaware corporation (the
"Company"), Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P. ("GTCR") and Xxxxxxx
Xxxxxxxxx ("Xxxxxxxxx").
WITNESSETH
The Company, GTCR and Xxxxxxxxx are parties to an Executive Agreement dated
June 9, 1994 (the "Executive Agreement"). In order to induce GTCR to amend that
certain Equity Purchase Agreement dated June 9, 1994 among the Company, GTCR and
Xxxxxxxxx (the "Purchase Agreement"), the Company, GTCR and Xxxxxxxxx have
agreed to make certain changes to the Executive Agreement.
Certain capitalized terms used herein are defined in the Executive
Agreement.
The parties hereto agree as follows:
1. AMENDMENTS TO EXECUTIVE AGREEMENT.
1.1. Definitions. Section 2.1 of the Executive Agreement is hereby amended
to add the following new definition:
"Purchase Agreement" shall mean the Equity Purchase Agreement among the
Company, GTCR and Xxxxxxxxx dated June 9, 1994, as amended from time to
time."
1.2. New Paragraph. A new Section 2.4(e) is hereby added to the Executive
Agreement to read as follows:
"(e) Upon the earlier of (i) a Sale of the Company (as defined in the
Stockholders Agreement) or (ii) a Qualified Public Offering (as defined in
the Stockholders Agreement), the Company shall have the right to redeem a
number of Executive Shares determined based on the following formula:
-1-
Redeemed Amount = OB x (1 - (OA / IC))
WHERE:
OB = The number of Class B Common Shares purchased by the Executive
pursuant to this Agreement.
OA = The number of Class A Common Shares purchased by GTCR pursuant to the
Purchase Agreement on the date of determination.
IC = The aggregate number of shares of Class A Common which GTCR would have
acquired if it had purchased its full Individual Commitment under the
Purchase Agreement.
For example:
If Executive purchased 5,000 shares of Class B Common pursuant to the
Executive Agreement and GTCR has purchased 8,000 of its 10,000 shares of Class A
Common pursuant to the Purchase Agreement prior to a Qualified Public Offering,
then:
Redeemed Amount = 5,000 x (1 - (8,000 / 10,000))
Redeemed Amount = 5,000 x (l - .8)
Redeemed Amount = 5,000 x .2
Redeemed Amount = 1,000 shares of Class B Common
The number of Redeemed Shares may then be repurchased in cash by the
Company for an amount equal to the original purchase price for such shares.
In addition, the Company shall reimburse the Executive for any income taxes
associated with such redemption."
2. EFFECT OF THE AMENDMENT. All references in the Purchase Agreement or in
any other document to the "Xxxxxxxxx Executive Agreement" shall mean the
Executive Agreement as amended by this Amendment. Except as specifically amended
above, the Executive Agreement shall remain in full force and effect and is
hereby ratified and confirmed.
-2-
3. DESCRIPTIVE HEADINGS. The descriptive headings of this Amendment are
inserted for convenience only and do not constitute a part of this Amendment.
4. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Florida.
5. COUNTERPARTS. This Amendment may be executed and delivered in
counterparts, each of which shall constitute an original, and all of which
together shall constitute one Amendment.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-3-
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Executive Agreement as of the date first written above.
GLOBAL IMAGING SYSTEMS INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx, President
and Chief Executive Officer
GOLDER, THOMA, XXXXXXX, XXXXXX
FUND IV LIMITED PARTNERSHIP
By: GTCR IV, L.P.
General Partner
By: Golder, Thoma, Xxxxxxx, Xxxxxx Inc.
General Partner
By: /s/ Xxxx X. Xxxxx
------------------------------------
Xxxx X. Xxxxx
Authorized Officer
/s/ Xxxxxxx Schi1ling
----------------------------------------
Xxxxxxx Schi1ling
-4-
