EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into this
15th day of December, 1999 by and between MAPICS, Inc., a Georgia corporation
(hereinafter, the "Company"), and Xxxxxxx X. Xxxxx (hereinafter, "Executive"),
to be effective as of the date hereof (the "Effective Date").
BACKGROUND
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The Company and Pivotpoint, Inc. have entered into that certain Agreement
and Plan of Merger dated as of the date hereof (the "Merger Agreement"),
pursuant to which Pivotpoint will be acquired by the Company (the "Merger").
Following the Merger, Executive will be the Chief Operating Officer of the
Company. In order to facilitate an integrated business transition, the Company
deems it to be in its best interests to engage Executive as a part-time employee
prior to the Merger, and thereafter in a full-time capacity, all in accordance
with the terms of this Agreement. Executive is willing to serve as an employee
of the Company, in accordance with the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Employment. Executive is hereby employed on the Effective Date as an
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employee of the Company. Until such time as the effective time of the Merger
occurs (the "Merger Date"), Executive shall work on a part-time basis for the
Company not to exceed 15 hours per week. In such capacity, Executive shall
report to and perform services for the Company as assigned to him by the Chief
Executive Officer, with a view to facilitating an integrated business transition
by becoming oriented to the policies and practices of the Company and providing
information and assistance to Company personnel on Pivotpoint policies and
practices. On the Merger Date, Executive shall become a full-time employee of
the Company and shall be promoted to the office of Chief Operating Officer of
the Company. Executive shall be located at the Company's headquarters in
Alpharetta, Georgia. In his capacity as Chief Operating Officer of the Company,
Executive shall have the responsibilities outlined on Exhibit A to this
Agreement and such other responsibilities commensurate with such position as
shall be assigned to him by the Board of Directors of the Company. Executive
will report directly to the Chief Executive Officer.
2. Employment Period. Unless earlier terminated herein in accordance with
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Section 6 hereof, Executive's employment shall be for a three year term (the
"Employment Period"), beginning on the Effective Date. Beginning on the third
anniversary of the Effective Date and on each anniversary of the Effective Date,
the
Employment Period shall, without further action by Executive or the Company, be
extended by an additional one-year period; provided, however, that either party
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may, by notice to the other, cause the Employment Period to cease to extend
automatically. Upon such notice, the Employment Period shall terminate upon the
expiration of the then-current term, including any prior extensions.
3. Extent of Service. During the Employment Period, and except as
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provided below, Executive agrees to devote his business time, attention, skill
and efforts exclusively to the faithful performance of his duties hereunder;
provided, however, that it shall not be a violation of this Agreement for
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Executive to (i) devote an equal or greater amount of his business time,
attention, skill and efforts to the business of Pivotpoint prior to the Merger
Date, (ii) devote reasonable periods of time to charitable and community
activities and, with the approval of the Company, industry or professional
activities, and/or (ii) manage personal business interests and investments, so
long as such activities do not materially interfere with the performance of
Executive's responsibilities under this Agreement.
4. Compensation and Benefits.
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(a) Base Salary. During the Employment Period, the Company will pay
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to Executive a base salary in the amount of U.S. $225,000 per year ("Base
Salary"), less normal withholdings, payable in equal monthly or more frequent
installments as are customary under the Company's payroll practices from time to
time. The Compensation Committee of the Board of Directors of the Company shall
review Executive's Base Salary annually and in its sole discretion, may adjust
Executive's Base Salary from year to year. The annual review of Executive's
salary by the Committee will consider, among other things, Executive's own
performance and the Company's performance.
(b) Initial Grant of Stock Options. On the Effective Date, Executive
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shall be granted options to acquire 200,000 shares of the common stock of the
Company (the "Options"), which Options will have a per-share exercise price
equal to the fair market value of such stock on the Effective Date and a term of
ten years, unless terminated earlier in certain circumstances set forth in the
Plan or the Award Certificate. The Options will become fully vested and
exercisable as to 25% of the option shares on the first, second, third and forth
anniversaries of the Effective Date; provided, however that if, prior to the
first anniversary of the Effective Date, Executive meets certain integration
objectives to be established by the Compensation Committee, then the Options
will become vested and exercisable as to 50% of the option shares on the first
anniversary of the Effective Date and as to 25% on the second and third
anniversaries of the Effective Date. The Options, which will be granted under
and pursuant to the term of the Company's Amended and Restated 1998 Long-Term
Incentive Plan and an Award Certificate, are intended to be incentive stock
options to the extent permitted by law.
(c) Incentive, Savings and Retirement Plans. After the Merger Date
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and during the remainder of the Employment Period, Executive shall be entitled
to participate in
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all incentive, savings and retirement plans, practices, policies and programs
applicable generally to senior executive officers of the Company ("Peer
Executives"), and on the same basis as such Peer Executives. Without limiting
the foregoing, Executive will be entitled to the following special incentives
from and after the Merger Date:
(i) Retention Bonus. Executive will receive special retention
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bonuses (each a "Retention Bonus") of $500,000, payable within 30 days following
the Merger Date, $250,000 payable on the first anniversary of the Merger Date,
and $250,000 payable on the second anniversary of the Merger Date, provided that
Executive is still employed by the Company on such dates or such Retention
Bonuses become payable pursuant to Section 7(b)(i)(C) hereof.
(ii) Annual Bonus. Executive will have a target annual bonus of
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$225,000 (the "Annual Bonus"), to be earned based on the achievement of
individual and group performance objectives established from year to year by the
Chief Executive Officer. The Annual Bonus for fiscal year 2000 will be prorated
from the Effective Date to the end of the Company's fiscal year 2000.
(d) Welfare Benefit Plans. After the Merger Date and during the
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remainder of the Employment Period, Executive and Executive's family shall be
eligible for participation in, and shall receive all benefits under, the welfare
benefit plans, practices, policies and programs provided by the Company
(including, without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident insurance plans
and programs) ("Welfare Plans") to the extent applicable generally to Peer
Executives.
(e) Expenses. During the Employment Period, Executive shall be
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entitled to receive prompt reimbursement for all reasonable expenses incurred by
Executive in accordance with the policies, practices and procedures of the
Company to the extent applicable generally to Peer Executives. Without limiting
the foregoing, the Company shall pay Executive's reasonable moving costs and
expenses in connection with his family's relocation from Massachusetts to
Atlanta, Georgia.
5. Change of Control. For the purposes of this Agreement, a "Change of
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Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
25% or more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however,
that for purposes of this subsection (a), the following acquisitions shall
not constitute a Change of Control: (i) any acquisition by a Person who is
on the date of this Agreement the beneficial
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owner of 25% or more of the Outstanding Company Voting Securities, (ii) any
acquisition directly from the Company, (iii) any acquisition by the
Company, (iv) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled
by the Company, or (v) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection
(c) of this Section 5; or
(b) Individuals who, as of the date of this Agreement, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date of this Agreement whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no Person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 25% or more of the combined voting power of the then
outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination, and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or
of the action of the Board, providing for such Business Combination; or
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(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
6. Termination of Employment.
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(a) Death or Disability. Executive's employment shall terminate
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automatically upon Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of Executive has occurred
during the Employment Period (pursuant to the definition of Disability set forth
below), it may give to Executive written notice in accordance with Section 13(b)
of this Agreement of its intention to terminate Executive's employment. In such
event, Executive's employment with the Company shall terminate effective on the
30th day after receipt of such notice by Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, Executive shall
not have returned to full-time performance of Executive's duties. For purposes
of this Agreement, "Disability" shall mean the absence of Executive from
Executive's duties with the Company on a full-time basis for 180 consecutive
days as a result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by the Company or
its insurers and acceptable to Executive or Executive's legal representative.
(b) Cause. The Company may terminate Executive's employment during
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the Employment Period with or without Cause. For purposes of this Agreement,
"Cause" shall mean:
(i) the willful and continued failure of Executive to perform
substantially Executive's duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to
Executive by the Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or Chief Executive Officer
believes that Executive has not substantially performed Executive's duties, or
(ii) the willful engaging by Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on the part of
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Company. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or upon the instructions of the Chief Executive Officer or a senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. The cessation of employment of
Executive shall not be deemed to be for Cause unless and until there shall have
been
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delivered to Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after reasonable notice
is provided to Executive and Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board, Executive is guilty of the conduct described in subparagraph (i)
or (ii) above, and specifying the particulars thereof in detail.
(c) Good Reason. Executive's employment may be terminated by
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Executive for Good Reason or for no reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) the assignment to Executive of any duties materially
inconsistent with Executive's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 1 of this Agreement, or any other action by the Company which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4 of this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by Executive;
(iii) any purported termination by the Company of Executive's
employment otherwise than as expressly permitted by this Agreement; or
(iv) any failure by the Company to comply with and satisfy
Section 12(c) of this Agreement.
For purposes of this Section 6(c), any good faith determination of "Good
Reason" made by Executive shall be conclusive. Anything in this Agreement to
the contrary notwithstanding, a termination by Executive for any reason during
the 30-day period immediately following the first anniversary of a Change in
Control of the Company shall be deemed to be a termination for Good Reason for
all purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause,
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or by Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 13(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than
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30 days after the giving of such notice). The failure by Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
Executive or the Company, respectively, hereunder or preclude Executive or the
Company, respectively, from asserting such fact or circumstance in enforcing
Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
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Executive's employment is terminated by the Company for Cause, or by Executive
for Good Reason, the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be, (ii) if Executive's employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies Executive of such
termination or any later date specified in such notice, (iii) if Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of Executive or the Disability Effective
Date, as the case may be.
7. Obligations of the Company upon Termination.
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(a) Termination Prior to the Merger Date. If Executive's employment
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shall be terminated for any reason whatsoever prior to the Merger Date, this
Agreement shall terminate without further obligations whatsoever to Executive,
other than the obligation to pay to Executive his Base Salary through the Date
of Termination; provided, however, that the Company's obligation to pay such
Base Salary shall be conditional upon Executive's execution of a Release in
substantially the form attached hereto as Exhibit B.
(b) Good Reason; Other Than for Cause, Death or Disability. If,
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after the Merger Date, the Company shall terminate Executive's employment other
than for Cause or Disability, or Executive shall terminate employment for Good
Reason, then in consideration of Executive's services rendered prior to such
termination and of Executive's covenants contained in Section 11 hereof:
(i) the Company shall pay to Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) Executive's Base Salary through the Date
of Termination to the extent not theretofore paid, (2) the product of (x)
Executive's annual bonus paid or payable, including any bonus or portion thereof
which has been earned but deferred, for the most recently completed fiscal year
during the Employment Period, if any, but specifically excluding any Retention
Bonus (such amount being referred to as the "Most Recent Annual Bonus") and (y)
a fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365, and
(3) any compensation previously deferred by Executive (together with any accrued
interest or earnings thereon and subject to any prior election by Executive to
receive such deferred amounts in installments) and any accrued vacation pay, in
each case
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to the extent not theretofore paid (the sum of the amounts described in clauses
(1), (2), and (3) shall be hereinafter referred to as the "Accrued
Obligations"); and
B. the amount equal to one-half (.5) times (or 2.5 times,
if the Date of Termination occurs after a Change in Control) the sum of (1)
Executive's Base Salary and (2) the Most Recent Annual Bonus; and
C. any unpaid Retention Bonus(es); and
(ii) for six months after the Date of Termination (or two and
one-half years, if the Date of Termination occurs after a Change in Control), or
such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to Executive
and/or Executive's family at least equal to those which would have been provided
to them in accordance with the Welfare Plans described in Section 4(d) of this
Agreement if Executive's employment had not been terminated or, if more
favorable to Executive, as in effect generally at any time thereafter with
respect to other Peer Executives, provided, however, that if Executive becomes
re-employed with another employer and is eligible to receive medical or other
welfare benefits under another employer provided plan, the medical and other
welfare benefits described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility. For purposes of
determining eligibility (but not the time of commencement of benefits) of
Executive for retiree benefits pursuant to such plans, practices, programs and
policies, Executive shall be considered to have remained employed until three
years after the Date of Termination and to have retired on the last day of such
period;
(iii) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to Executive any other amounts or benefits required
to be paid or provided or which Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").
(iv) notwithstanding any provision of this Agreement to the
contrary, Executive shall forfeit his right to receive, or, to the extent such
amounts have previously been paid to Executive, shall repay in full to the
Company within thirty (30) days of a final determination of Executive's
liability therefor as set forth below, the amount described in Section
7(b)(i)(B) of this Agreement if at any time during the period of two years after
the Date of Termination he violates the Restrictive Covenants set forth in
Section 11 hereof.
(c) Death. If Executive's employment is terminated by reason of
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Executive's death after the Merger Date, this Agreement shall terminate without
further obligations to Executive's legal representatives under this Agreement,
other than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to Executive's
estate or beneficiary, as applicable, in a
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lump sum in cash within 30 days of the Date of Termination. With respect to the
provision of Other Benefits, the term Other Benefits as utilized in this Section
7(c) shall include without limitation, and Executive's estate and/or
beneficiaries shall be entitled to receive, benefits under such plans, programs,
practices and policies relating to death benefits, if any, as are applicable to
Executive on the date of his death.
(d) Disability. If Executive's employment is terminated by reason of
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Executive's Disability after the Merger Date, this Agreement shall terminate
without further obligations to Executive, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to Executive in a lump sum in cash within 30 days of
the Date of Termination. With respect to the provision of Other Benefits, the
term Other Benefits as utilized in this Section 6(c) shall include, and
Executive shall be entitled after the Disability Effective Date to receive,
disability and other benefits under such plans, programs, practices and policies
relating to disability, if any, as are applicable to Executive and his family on
the Date of Termination.
(e) Cause; Other than for Good Reason. If Executive's employment
---------------------------------
shall be terminated for Cause after the Merger Date, this Agreement shall
terminate without further obligations to Executive other than the obligation to
pay to Executive (x) his Base Salary through the Date of Termination, (y) the
amount of any compensation previously deferred by Executive, and (z) Other
Benefits, in each case to the extent theretofore unpaid. If Executive
voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without further
obligations to Executive, other than for Accrued Obligations and the timely
payment or provision of Other Benefits. In such case, all Accrued Obligations
shall be paid to Executive in a lump sum in cash within 30 days of the Date of
Termination.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
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limit Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which Executive may qualify, nor, subject to Section 13(f), shall
anything herein limit or otherwise affect such rights as Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
9. Full Settlement. Except as explicitly provided herein, the Company's
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obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take any
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other action by way of mitigation of the amounts payable to Executive under any
of the provisions of this Agreement and, except as explicitly provided herein,
such amounts shall not be reduced whether or not Executive obtains other
employment. The Company agrees to pay as incurred, to the full extent permitted
by law, all legal fees and expenses which Executive may reasonably incur as a
result of any contest (regardless of the outcome thereof) by the Company,
Executive or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by Executive about the amount of any
payment pursuant to this Agreement), plus in each case interest on any delayed
payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of
the Internal Revenue Code of 1986, as amended (the "Code").
10. Limitation of Benefits.
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(a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any benefit, payment or distribution by
the Company to or for the benefit of Executive (whether payable or distributable
pursuant to the terms of this Agreement or otherwise) (a "Payment") would, if
paid, be subject to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then the Payment shall be reduced to the extent necessary of
avoid the imposition of the Excise Tax. Executive may select the Payments to be
limited or reduced.
(b) All determinations required to be made under this Section 10,
including whether an Excise Tax would otherwise be imposed and the assumptions
to be utilized in arriving at such determination, shall be made by Coopers &
Xxxxxxx L.L.P. or such other certified public accounting firm as may be
designated by Executive (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and Executive within 15 business
days of the receipt of notice from Executive that a Payment is due to be made,
or such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, Executive may appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any determination by the Accounting Firm shall be binding
upon the Company and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Payments hereunder will
have been unnecessarily limited by this Section 10 ("Underpayment"), consistent
with the calculations required to be made hereunder. The Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Executive.
11. Restrictions on Conduct of Executive. Executive and the Company
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understand and agree that the purpose of the provisions of this Section 11 is to
protect legitimate business interests of the Company, as more fully described
below, and is not
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intended to eliminate Executive's post-employment competition with the Company
per se, nor is it intended to impair or infringe upon Executive's right to work,
earn a living, or acquire and possess property from the fruits of his labor.
Executive hereby acknowledges that the post-employment restrictions set forth in
this Section 10 are reasonable and that they do not, and will not, unduly impair
his ability to earn a living after the termination of this Agreement. Therefore,
subject to the limitations of reasonableness imposed by law upon the
restrictions set forth herein by the time and geographical area described below,
Executive shall be subject to the restrictions set forth in this Section 11.
(a) Definitions. The following capitalized terms used in this
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Section 11 shall have the meanings assigned to them below, which definitions
shall apply to both the singular and the plural forms of such terms:
"Competitive Services" means providing enterprise resource
planning software applications for discrete and batch-process mid-size
manufacturing enterprises (i.e., enterprises having annual revenue of $20
million to $500 million).
"Confidential Information" means any confidential or
proprietary information possessed by the Company or its affiliated entities or
relating to its or their business, including without limitation, any
confidential customer lists, details of client or consultant contracts, current
and anticipated customer requirements, pricing policies, price lists, market
studies, business plans, operational methods, marketing plans or strategies,
product development techniques or plans, unannounced computer software programs,
computer software program source code, data and documentation, data base
technologies, computer program structures and architectures, inventions and
ideas, past, current and planned research and development, compilations,
devices, methods, techniques, processes, financial information and data,
business acquisition plans, new personnel acquisition plans and any other
information that would constitute a "trade secret(s)" under the common law or
statutory law of the State of Georgia.
"Determination Date" means the date of termination of
Executive's employment with the Company for any reason whatsoever or any earlier
date (during the Employment Period) of an alleged breach of the Restrictive
Covenants by Executive.
"Person" means any individual or any corporation,
partnership, joint venture, association or other entity or enterprise.
"Principal or Representative" means a principal, owner,
partner, shareholder, joint venturer, investor, member, trustee, director,
officer, manager, employee, agent, representative or consultant.
"Protected Customers" means customers of the Company that
purchased Competitive Services from the Company within one (1) year prior to the
Determination Date.
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"Protected Employees" means employees of the Company who were
employed by the Company at any time within six (6) months prior to the
Determination Date.
"Restricted Period" means the period extending two (2) years from
the termination of Executive's employment with the Company for any reason
whatsoever.
"Restricted Territory" means the following territory, in which
Executive engages in the provision of Competitive Services on behalf of the
Company on the Merger Date: metropolitan Atlanta, Georgia.
"Restrictive Covenants" means the restrictive covenants contained
in Section 11 hereof.
(b) Restrictive Covenants.
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(i) Restriction on Disclosure and Use of Confidential
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Information. Executive understands and agrees that the Confidential Information
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constitutes a valuable asset of the Company and its affiliated entities, and may
not be converted to Executive's own use. Accordingly, Executive hereby agrees
that Executive shall not, directly or indirectly, at any time during the
Restricted Period reveal, divulge, or disclose to any Person not expressly
authorized by the Company any Confidential Information, and Executive shall not,
directly or indirectly, at any time during the Restricted Period use or make use
of any Confidential Information in connection with any business activity other
than that of the Company. The parties acknowledge and agree that this Agreement
is not intended to, and does not, alter either the Company's rights or
Executive's obligations under any state or federal statutory or common law
regarding trade secrets and unfair trade practices.
(ii) Nonsolicitation of Protected Employees. Executive
--------------------------------------
understands and agrees that the relationship between the Company and each of its
Protected Employees constitutes a valuable asset of the Company and may not be
converted to Executive's own use. Accordingly, Executive hereby agrees that
during the Restricted Period Executive shall not directly or indirectly on
Executive's own behalf or as a Principal or Representative of any Person or
otherwise solicit or induce any Protected Employee to terminate his or her
employment relationship with the Company or to enter into employment with any
other Person.
(iii) Nonsolicitation of Protected Customers. Executive
--------------------------------------
understands and agrees that the relationship between the Company and each of its
Protected Customers constitutes a valuable asset of the Company and may not be
converted to Executive's own use. Accordingly, Executive hereby agrees that,
during the Restricted Period, Executive shall not, without the prior written
consent of the Company, directly or indirectly, on Executive's own behalf or as
a Principal or Representative of any Person or otherwise, solicit a Protected
Customer for the purpose of providing or selling
-12-
Competitive Services; provided, however, that the prohibition of this covenant
shall apply only to Protected Customers with whom Executive had Material Contact
on the Company's behalf during the twelve (12) months immediately preceding the
Date of Termination. For purposes of this Agreement, Executive had "Material
Contact" with a Protected Customer if (a) he had business dealings with the
Protected Customer on the Company's behalf; (b) he was responsible for
supervising or coordinating the dealings between the Company and the Protected
Customer; or (c) he obtained Confidential Information about the customer as a
result of his association with the Company.
(iv) Noncompetition with the Company. Executive understands and
-------------------------------
agrees that, during the Restricted Period and within the Restricted Territory,
he shall not, directly or indirectly, on his own or on behalf of any Person, be
affiliated with as a Principal or Representative any Person engaged, in whole or
in part, in the provision of Competitive Services in a capacity where
Executive's duties or responsibilities for such Person will include strategic
planning, policymaking or management; provided, however, that the provisions of
Section 11 shall not be deemed to prohibit (i) Executive's provision of services
to Pivotpoint prior to the Merger Date, or (ii) the ownership by Executive of
any securities of the Company or its affiliated entities or not more than five
percent (5%) of any class of securities of any corporation having a class of
securities registered pursuant to the Exchange Act.
(c) Exceptions from Disclosure Restrictions. Anything herein to the
---------------------------------------
contrary notwithstanding, Executive shall not be restricted from disclosing or
using Confidential Information that: (a) is or becomes generally available to
the public other than as a result of an unauthorized disclosure by Executive or
his agent; (b) becomes available to Executive in a manner that is not in
contravention of applicable law from a source (other than the Company or its
affiliated entities or one of its or their officers, employees, agents or
representatives) that is not bound by a confidential relationship with the
Company or its affiliated entities or by a confidentiality or other similar
agreement; (c) was known to Executive on a non-confidential basis and not in
contravention of applicable law or a confidentiality or other similar agreement
before its disclosure to Executive by the Company or its affiliated entities or
one of its or their officers, employees, agents or representatives; or (d) is
required to be disclosed by law, court order or other legal process; provided,
however, that in the event disclosure is required by law, Executive shall
provide the Company with prompt notice of such requirement so that the Company
may seek an appropriate protective order prior to any such required disclosure
by Executive.
(d) Enforcement of Restrictive Covenants.
------------------------------------
(i) Rights and Remedies Upon Breach. In the event Executive
-------------------------------
breaches, or threatens to commit a breach of, any of the provisions of the
Restrictive Covenants, the Company shall have the following rights and remedies,
which shall be independent of any others and severally enforceable, and shall be
in addition to, and not in lieu of, any other rights and remedies available to
the Company at law or in equity:
-13-
(A) the right and remedy to enjoin, preliminarily and
permanently, Executive from violating or threatening to violate the Restrictive
Covenants and to have the Restrictive Covenants specifically enforced by any
court of competent jurisdiction, it being agreed that any breach or threatened
breach of the Restrictive Covenants would cause irreparable injury to the
Company and that money damages would not provide an adequate remedy to the
Company; and
(B) the right and remedy to require Executive to account
for and pay over to the Company all compensation, profits, monies, accruals,
increments or other benefits derived or received by Executive as the result of
any transactions constituting a breach of the Restrictive Covenants.
(ii) Severability of Covenants. Executive acknowledges and
-------------------------
agrees that the Restrictive Covenants are reasonable and valid in time and scope
and in all other respects. If any court determines that any of the Restrictive
Covenants, or any part thereof, are invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions.
(iii) Attorneys' Fees. In any action relating to the enforcement
---------------
of the Restrictive Covenants, the prevailing party in such action shall be
entitled to be paid any and all costs and expenses incurred by him or it in
enforcing or establishing his or its rights thereunder, including, without
limitation, reasonable attorneys' fees, whether suit be brought or not, and
whether or not incurred in trial, bankruptcy or appellate proceedings.
12. Successors.
----------
(a) This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
-14-
13. Miscellaneous.
-------------
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Georgia, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than-by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Executive:
Xx. Xxxxxxx X. Xxxxx
______________________
______________________
If to the Company:
MAPICS, Inc.
0000 Xxxxxxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right Executive or the Company may have hereunder, including, without
limitation, the right of Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
-15-
(f) Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between Executive and
the Company, the employment of Executive by the Company is "at will" and,
subject to Section 1 hereof, prior to the Merger Date, Executive's employment
may be terminated by either Executive or the Company at any time prior to the
Merger Date, in which case Executive shall have no further rights under this
Agreement. From and after the Effective Date, this Agreement shall supersede any
other agreement between the parties with respect to the subject matter hereof,
including without limitation any then-current employment agreement between the
Company and Executive.
IN WITNESS WHEREOF, Executive has hereunto set Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf by its
undersigned officer thereunto, duly authorized, all as of the day and year first
above written.
/s/ Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx
MAPICS, INC.
By: /s/ Xxxxxxx X. Xxxx
--------------------------
Xxxxxxx X. Xxxx, Chief Executive Officer
-16-
EXHIBIT A
Description of Responsibilities
-------------------------------
EXHIBIT B
Form of Release
---------------
THIS RELEASE ("Release") is granted effective as of the ____ day of _____,
_____, by Xxxxxxx X. Xxxxx ("Executive") in favor of MAPICS, Inc. (the
"Company"). This is the Release referred to that certain Employment Agreement
dated as of December ___, 1999 by and between the Company and Executive (the
"Employment Agreement"). Executive gives this Release in consideration of the
Company's promises and covenants as recited in the Employment Agreement, with
respect to which this Release is an integral part.
1. Release of the Company. Executive, for himself, his successors,
----------------------
assigns, attorneys, and all those entitled to assert his rights, now and forever
hereby releases and discharges the Company and its respective officers,
directors, stockholders, trustees, employees, agents, parent corporations,
subsidiaries, affiliates, estates, successors, assigns and attorneys ("the
Released Parties"), from any and all claims, actions, causes of action, sums of
money due, suits, debts, liens, covenants, contracts, obligations, costs,
expenses, damages, judgments, agreements, promises, demands, claims for
attorney's fees and costs, or liabilities whatsoever, in law or in equity, which
Executive ever had or now has against the Released Parties, including any claims
arising by reason of or in any way connected with any employment relationship,
including the Employment Agreement, which existed between the Company or any of
its parents, subsidiaries, affiliates, or predecessors, and Executive. It is
understood and agreed that this Release is intended to cover all actions, causes
of action, claims or demands for any damage, loss or injury, which may be traced
either directly or indirectly to the aforesaid employment relationship, or the
termination of that relationship, that Executive has, had or purports to have,
from the beginning of time to the date of this Release, whether known or
unknown, that now exists, no matter how remotely they may be related to the
aforesaid employment relationship including but not limited to claims for
employment discrimination under federal or state law, except as provided in
Paragraph 2; claims arising under Title VII of the Civil Rights Act, 42 U.S.C.
(S) 2000(e), et seq. or the Americans With Disabilities Act, 42 U.S.C. (S) 12101
-- ----
et seq.; claims for statutory or common law wrongful discharge, including any
-- ----
claims arising under the Fair Labor Standards Act, 29 U.S.C. (S) 201 et seq.;
-- ----
claims for attorney's fees, expenses and costs; claims for defamation; claims
for wages or vacation pay; claims for benefits, including any claims arising
under Executive Retirement Income Security Act, 29 U.S.C. (S) 1001, et seq.
-- ---
2. Release of Claims Under Age Discrimination in Employment Act. Without
------------------------------------------------------------
limiting the generality of the foregoing, Executive agrees that by executing
this Release, he has released and waived any and all claims he has or may have
as of the date of this Release for age discrimination under the Age
Discrimination in Employment Act, 29 U.S.C. (S) 621, et seq. It is understood
-- ---
that Executive is advised to consult with an attorney prior to executing this
Release; that he in fact has consulted a knowledgeable, competent attorney
regarding this Release; that he may, before executing this Release, consider
this Release for a period of twenty-one (21) calendar days; and that the
consideration he receives for this Release is in addition to amounts to which he
was already entitled. It is further understood that this Release is not
effective until seven (7) calendar days after the execution of this Release and
that Executive may revoke this Release within seven (7) calendar days from the
date of execution hereof.
Executive agrees that he has carefully read this Release and is signing it
voluntarily. Executive acknowledges that he has had twenty one (21) days from
receipt of this Release to review it prior to signing or that, if Executive is
signing this Release prior to the expiration of such 21-day period, Executive is
waiving his right to review the Release for such full 21-day period prior to
signing it. Executive has the right to revoke this release within seven (7)
days following the date of its execution by him. However, if Executive revokes
this Release within such seven (7) day period, no severance benefit will be
payable to him under the Employment Agreement and he shall return to the Company
any such payment received prior to that date.
EMPLOYEE HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT IT
CONSTITUTES A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE
CORPORATION UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. EMPLOYEE
ACKNOWLEDGES THAT HE HAS HAD A FULL OPPORTUNITY TO CONSULT WITH AN ATTORNEY OR
OTHER ADVISOR OF HIS CHOOSING CONCERNING HIS EXECUTION OF THIS RELEASE AND THAT
HE IS SIGNING THIS RELEASE VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE
CORPORATION FROM ALL SUCH CLAIMS.
_______________________________
Xxxxxxx X. Xxxxx
Date: _________________________
-2-
