EMPLOYMENT AGREEMENT
Exhibit 10.16
THIS EMPLOYMENT AGREEMENT (this “Agreement”), is made this 3rd day of March, 2005 (the
“Effective Date”) by and between Xxxxxx Xxxxxxx, an individual resident of the State of Texas, (the
“Executive”) with a residence at [***] and RealPage, Inc., a
Delaware corporation (the “Employer”), having its chief offices at 0000 Xxxxxxxxxxxxx Xxxxxxx,
Xxxxxxxxxx, Xxxxx 00000.
WHEREAS, Employer desires to retain the services of Executive on the terms and conditions
hereinafter set forth;
WHEREAS, Executive desires to furnish services to Employer on the terms and conditions
hereinafter set forth; and
WHEREAS, the parties desire to enter into this Agreement setting forth the terms and
conditions of the employment relationship between Executive and Employer;
NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth below,
the parties hereby agree as follows:
1. Employment. Employer hereby agrees to employ Executive, and Executive hereby accepts
such employment, on the terms and conditions hereinafter set forth.
2. Employment Screening. Executive shall successfully complete a pre-employment drug test,
pre-employment consumer report verification, and the Employer new hire paperwork.
3. Employment Period. The period during which Executive shall furnish services to Employer
hereunder (the “Employment Period”) shall commence on the Effective Date and shall end on the Date
of Termination (as defined in Section 8(b) below). Nothing in this Section shall limit the right
of Employer or Executive to terminate Executive’s employment hereunder on the terms and conditions
set forth in Section 7 hereof.
4. Position and Duties.
(a) Office; Reporting; Duties. During the Employment Period, Executive shall serve as
President — Velocity and shall report directly to Employer’s Chief Executive Officer (“Supervisor”).
Executive shall have those powers, duties and perquisites consistent with a senior management
position and such other powers and duties as may be prescribed by the Employer’s Supervisor,
provided that such other powers and duties are consistent with the scope, dignity and perquisites
of Executive’s position.
(b) Commitment of Full Time Efforts. Executive agrees to devote substantially her
full working time, attention and energies to the performance of her duties for Employer, provided,
however, that it shall not be a violation of this Agreement for Executive to (i) serve on civic or
charitable boards or committees, (ii) serve on corporate boards or committees, with the prior
consent of Employer, which consent shall not be unreasonably withheld, (iii) give speeches and
make media appearances to discuss matters of public interest (so long as such shall not involve Employer
in matters of political, religious or social controversy), and (iv) manage her personal
investments, so long as the foregoing activities do not interfere materially with the performance
of Executive’s responsibilities in accordance with this Agreement.
5. Place of Performance. Executive shall perform her duties for Employer from
Employer’s corporate offices at 00000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, or at any other address
in Dallas County or Collin County, Texas to which the corporate offices may be moved in the future.
6. Compensation and Related Matters.
(a) Base Salary. As compensation for the performance by Executive of her obligations
hereunder, during the Employment Period, Employer shall pay Executive a base salary at a rate not
less than One Hundred Fifty Thousand Dollars (US$150,000.00) per year (the base salary, at the rate
in effect from time to time, is hereinafter referred to as the “Base Salary”). Base Salary shall
be paid in approximately equal installments in accordance with Employer’s customary payroll
practices and legal requirements regarding withholding and deductions. During the Employment
Period, the Base Salary shall be reviewed no less frequently than annually (commencing in 2006) to
determine whether or not the same should be adjusted in light of the duties, responsibilities and
performance of Executive and other relevant factors.
(b) Annual Bonus. As compensation for services rendered during the Employment Period,
Executive shall be eligible to participate in Employer’s annual bonus plan on terms no less
favorable than other senior executives of Employer. Beginning in 2005, Executive shall be eligible
for an annual bonus of up to 80% of her Base Salary with a target bonus at plan of 40% of her Base
Salary, prorated for that portion of calendar year 2005 during which Executive is employed by
Employer. The performance criteria shall be as established by the Compensation Committee of
Employer’s Board of Directors. To be eligible for the Annual Bonus, Executive must be employed by
Employer on December 31 of the year with regard to which the Annual Bonus is applicable.
(c) Grant of Option to Purchase Common Stock. The Compensation Committee of
Employer’s Board of Directors shall grant to Executive, an option (the “Option”) to purchase Two
Hundred Thousand (200,000) shares of common stock of Employer (“Common Stock”) with a grant date as
of the Committee’s action and an exercise price of not less than fair market value of Employer’s
Common Stock on the date of grant. The Option shall be subject to the RealPage, Inc., 1998 Stock
Incentive Plan (the “Plan”) and the Non-Qualified Stock Option Agreement issued pursuant to the
Plan, a copy of which Non-Qualified Stock Option Agreement is attached as Exhibit A hereto.
(d) Expenses and Vacations. Employer, according to its standard travel policy, shall
reimburse Executive for all reasonable, in-policy business expenses upon the presentation of
itemized statements of such expenses. Executive shall be entitled to three weeks paid vacation per
year, in accordance with Employer’s vacation policy and practice applicable to senior executives of
Employer.
(e) Fringe Benefits and Perquisites. During the Employment Period, Employer shall
make available to Executive all the fringe benefits and perquisites that are made available to
other senior Executives of Employer.
(f) Other Benefits. During the Employment Period, Executive shall be eligible to
participate in all other employee welfare benefit plans and other benefit programs (including group
life insurance, medical and dental insurance, and accident and disability insurance) made available
generally to employees or senior executives of Employer.
(g) Maternity Leave. Executive contemplates taking maternity leave during calendar year 2005,
but as of the date of such maternity leave, shall not be eligible for short term disability for
such leave. It is the parties intention that Executive shall be paid as if she were eligible for
short term disability at the time she takes such maternity leave. Therefore, in the event
Executive takes maternity leave in calendar year 2005 (“Maternity Leave”), Employer shall pay
Executive as follows:
| • | for the first 15 calendar days of such Maternity Leave: | 100% applicable Base Salary |
||||
| • | next four weeks of such Maternity Leave: | 60% applicable Base Salary |
7. Termination. Executive’s employment hereunder may be terminated under the following
circumstances, in each case subject to the provisions of this Agreement:
(a) Death. Executive’s employment hereunder shall terminate upon her death.
(b) Disability. If, as a result of Executive’s incapacity due to physical or mental
illness, Executive shall have been absent from her duties hereunder on a full-time basis (i) for a
period of six consecutive months or (ii) for shorter periods aggregating six months during any
twelve month period, and, in either case, within thirty (30) days after written Notice of
Termination (as described in Section 8(a) hereof) is given, Executive shall not have returned to
the performance of her duties hereunder on a full-time basis, Employer may terminate Executive’s
employment hereunder for “Disability.”
(c) Cause. Employer may terminate Executive’s employment hereunder for Cause. In the
event of a termination under this Section 7(c), the Date of Termination shall be the date set forth
in the Notice of Termination. For purposes of this Agreement, “Cause” means the occurrence of any
of the following events: (i) Executive’s conviction for any criminal acts; (ii) Executive’s making
a materially false statement to Employer’s auditors or legal counsel;
(iii) Executive’s falsification of any corporate document or form; (iv) any material breach by
Executive of Executive’s material obligations to Employer or of any published policy of Employer;
(v) any material breach by Executive of the provisions of this Agreement; (vi) Executive’s making a
material misrepresentation of fact or omission to disclose material facts in relation to
transactions occurring in the business and financial matters of Employer; (vii) Executive’s
continued performance of Executive’s duties in an incompetent, unprofessional, unsuccessful,
insubordinate or
negligent manner subsequent to written notice thereof by Employer which notice
specifies with reasonable clarity the failure to perform alleged to give rise to Cause (in no case,
however, shall Employer be required to give more than one notice as to a particular type of
failure).
(d) Good Reason. Executive may terminate her employment hereunder for “Good Reason”
in the event of any material failure on the part of Employer to comply with any of its material
obligations under this Agreement, which failure has not been cured within ten (10) days after
written notice thereof has been given by Executive to Employer specifying the acts or omissions of
Employer alleged to give rise to Good Reason.
(e) Other Terminations. Employer may terminate Executive’s employment hereunder other
than for Cause or Disability, and Executive may terminate her employment other than for Good Reason
in each case subject to the provisions of this Agreement.
8. Termination Procedure.
(a) Notice of Termination. Any termination of Executive’s employment by Employer or
by Executive (other than termination pursuant to Section 7(a) hereof) shall be communicated by
written Notice of Termination to the other party hereto in accordance with Section 15.
(b) Date of Termination. “Date of Termination” shall mean (i) if Executive’s
employment is terminated by her death, the date of her death, (ii) if Executive’s employment is
terminated pursuant to Section 7(b), thirty (30) days after Notice of Termination is given
(provided that Executive shall not have returned to the performance of her duties on a full-time
basis during such thirty (30) day period), (iii) if Executive’s employment is terminated pursuant
to Section 7(c), the date specified in the Notice of Termination, and (iv) if Executive terminates
her employment for Good Reason, ten (10) days after Notice of Termination if Employer’s breach
shall be uncured.
9. Compensation Upon Termination.
(a) Death; Disability; Termination By Employer without Cause or By Executive for Good
Reason. If Executive’s employment is terminated by reason of her death or Disability or by
Employer without Cause or by Executive for Good Reason and Executive has been employed by Employer
for at lease six (6) months, Employer shall pay to Executive (or her legal representatives or
estate or as may be directed by the legal representatives of her estate, as the case may be)
(i) twelve (12) equal monthly installments of an amount per installment equal to one-twenty-fourth
of Executive’s Base Salary (determined as of the Date of Termination) and (ii) a lump sum cash
payment, within five days following such Date of Termination, of an amount equal to any earned but
unpaid Base Salary or bonus due to Executive in respect of periods through the Date of
Termination plus accrued vacation in accordance with Employer’s vacation policy — subject to
all required deductions and withholdings (the “Accrued Amounts”). The amount set forth in
Section 9(a)(i) shall be payable if and only if the Executive shall have executed on or before the
30th day following the Date of Termination a full Release and Covenant not to xxx the Employer and
its employees, officers, directors and stockholders.
(b) Cause or By Executive Other than for Good Reason. If Executive’s employment is
terminated by Employer for Cause or by Executive other than for Good Reason, then Employer shall
pay Executive, within five (5) days following such Date of Termination, in a lump sum cash payment,
the Accrued Amounts.
10. No Mitigation. Executive shall not be required to mitigate amounts payable pursuant to
Section 9 of this Agreement by seeking other employment or otherwise, nor shall such payments be
reduced on account of any remuneration earned by Executive attributable to employment by another
employer, by retirement benefits, by offset against any amount claimed to be owed by Executive to
Employer or otherwise.
11. Confidentiality; Non-Competition.
(a) Non-Disclosure and Non-Use of Confidential Information. Executive shall not
disclose any Employer Confidential Information to any third party (other than accountants, lawyers
and other third parties engaged by and working at the behest of Employer) without the specific
written consent of Employer and shall use Employer Confidential Information solely for the benefit
of Employer. Executive shall hold all and any Employer Confidential Information in confidence.
(b) Definition of Employer Confidential Information. For purposes of this Agreement,
“Employer Confidential Information” includes, in whatever form or format, all information —
disclosed to or known to Executive as a direct or indirect consequence of or through Executive’s
employment with Employer — about Employer, its parents or subsidiaries, its technology, finances,
business methods, plans, operations, services, products and processes (whether existing or
contemplated), or any of its executives, clients, agents or suppliers, including all information
relating to software programs, source codes or object codes; computer systems; computer systems
analyses, testing results; flow charts and designs; product specifications and documentation; user
documentation; sales plans; sales records; sales literature; customer lists and files; research and
development projects or plans; marketing and merchandising plans and strategies; pricing
strategies; price lists; sales or licensing terms and conditions; consulting sources; supply and
service sources; procedure or policy manuals; legal matters; financial statements; financing
methods; financial projections; and the terms and conditions of business arrangements with its
parent, clients, suppliers, banks, or other financial institutions.
(c) Proprietary Information Obligations. Employer respects the right of every
employer to protect its confidential and proprietary information. Employer specifically wishes to
prevent Executive or any individual interested in employment with Employer from using on behalf of
Employer or disclosing to Employer at any time before, during or after Executive’s employment with
Employer any confidential or proprietary information belonging to any other employer.
Executive represents to Employer that (s)he will not use or otherwise exploit third party
confidential or proprietary information in the performance of his/her duties hereunder. Further,
between the date of this Employment Agreement and the date Executive begins employment with
Employer, Executive will continue to comply with any executory obligations to protect Executive’s
current employer’s confidential and proprietary information. Executive’s failure to observe those
continuing obligations could result in Employer’s refusal to hire or, if discovered after Executive
has already
begun employment with Employer, disciplinary action up to and including termination of
Executive’s employment.
(d) Non-Competition. In consideration of Employer’s promises and payments under this
Agreement, Executive agrees that, during the Employment Period and for a period of one (1) year
thereafter (the “Restricted Period”), Executive shall not (as principal, agent, executive,
consultant, volunteer or otherwise), engage (other than on behalf of Employer or its affiliates)
directly or indirectly, in a Competing Business (as defined below) anywhere in the territory of the
United States, or, without the prior consent of Employer, directly or indirectly, advise, own an
interest in, manage, operate, join, control, lend money or render financial, technical or other
assistance (other than customary professional courtesies afforded to members of the business
community) to or participate in or be connected with, as an officer, executive, partner,
stockholder, consultant, advisor or other similar capacity, any Competing Business; provided,
however, that ownership of securities having no more than one percent of the outstanding voting
power of any competitor which are listed on any national securities exchange or traded actively in
the national over-the-counter market shall not be deemed to be in violation of this sub-section so
long as Executive has no other connection or relationship with such competitor that would not be
permitted hereby. For purposes hereof, “Competing Business” means the business of developing,
designing, publishing, marketing, maintaining or distributing databases and software applications
which are competitive with products or services of Employer, are generally referred to as
“multi-family apartment community management applications” and are generally used at apartment
communities by personnel engaged in the operation, leasing, pricing, promotion and maintenance of
apartment units. Without limitation of the foregoing, multi-family apartment community management
applications and data bases shall include software used in screening potential residents,
performing accounting functions, providing a community web site, providing resident incentives,
performing market research, and communicating via the Internet with applicants, residents, service
providers, suppliers and advertising providers. This Section 11(d) shall immediately become null,
void and without further effect should Employer cease to conduct its business operations in the
ordinary course for any reason, including, without limitation, bankruptcy.
(e) Non-Interference with Licensees. Executive hereby agrees that, during the
Restricted Period (other than on behalf of Employer or its affiliates), Executive shall not in any
way directly or indirectly, for the purpose of conducting or engaging in a Competing Business, call
upon, solicit, respond to, advise or otherwise do, or attempt to do business with any then-existing
or Past customer or licensee of Employer or any affiliate of Employer or take away or attempt to
interfere with any then-existing or Past customer, licensee, trade, business or patronage of
Employer or any affiliate. For purposes of this Section 11(e), the term “Past” customer or “Past”
licensee shall refer to any former customer or licensee of Employer within six (6) months of their
having ceased to be a customer or licensee of Employer. Subject to the provisions of Section 4(b)
hereof, during the Restricted Period, Executive may offer any product or service to the multifamily industry so
long as such is not done for the purpose of conducting or engaging in a Competing Business.
(f) Non-Interference with Employees. Executive hereby agrees, during the Restricted
Period, not to, directly or indirectly, hire or retain, attempt to hire or retain, any of
Employer’s then-existing or Past officers, executives, employees, representatives, consultants or
agents, not to induce any such to give up employment with or representation of Employer or any
affiliate and not to otherwise interfere with, or attempt to interfere with, the relationship of
any such with Employer or any affiliate. For purposes of this Section 11(f), the term “Past”
officer, executive, employee, representative, consultant or agent of Employer shall refer to any
former officer, executive, employee, representative, consultant or agent of Employer within six (6)
months of their having ceased to be an officer, executive, employee, representative, consultant or
agent of Employer or any affiliate.
(g) Non-Interference with Business Relationships. Executive hereby agrees, during the
Restricted Period, that Executive shall not, directly or indirectly, for the purpose of conducting
or engaging in a Competing Business, attempt to interfere with, impair, or adversely affect any
contractual relationships or business relationships between the Company and any of the technology
or distribution companies with whom the Company has strategic relationships.
(h) Non-Disparagement. Executive hereby agrees, that during the Restricted Period,
Executive shall not disparage either orally or in writing the Company, its products or services, or
its officers, directors, or employees.
(i) Injunctive Relief. Executive recognizes and agrees that the injury the Company
will suffer in the event of a breach of this Section 11 may cause the Company irreparable injury
that cannot adequately be compensated by monetary damages alone. Therefore, in the event of a
breach of this Section 11 by Executive, or any attempted or threatened breach, Executive agrees
that the Company, without limiting any legal or equitable remedies available to it, may be entitled
to equitable relief by preliminary and permanent injunction or otherwise, without the necessity of
posting any bond or undertaking, against Executive and/or the business enterprise with which
Executive may have become associated, from any court of competent jurisdiction.
12. Reasonableness of Restrictions. Executive expressly acknowledges and agrees that the
covenants and restrictive agreements contained in this Agreement are reasonable as to scope,
location, and duration and that observation thereof will not cause Executive undue hardship or
unreasonably interfere with Executive’s ability to earn a livelihood and practice Executive’s
present skills and trades. Executive has consulted with legal counsel of her selection regarding
the meaning of such covenants and restrictions, which have been explained to her satisfaction.
13. Successors; Binding Agreement.
(a) Employer’s Successors. Employer shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of its
businesses and/or assets to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that Employer would be required to perform it if no such
succession had taken place. Failure of Employer to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a material breach of a material provision of this
Agreement and shall entitle Executive to compensation in the same amount and on the same terms as
she would be entitled to hereunder if she terminated her employment for Good Reason, except that
for purposes of implementing the foregoing, the date on which any such succession becomes effective
shall be deemed the Date of Termination. As used in this Agreement, the “Employer” shall
mean Employer as hereinbefore defined and any successor to the business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Section 13 or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation of law.
(b) Executive’s Successors. This Agreement shall not be assignable by Executive.
This Agreement and all rights of Executive hereunder shall inure to the benefit of and be
enforceable by Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts
would still be payable to her hereunder if she had continued to live, all such amounts unless
otherwise provided herein, shall be paid in accordance with the terms of this Agreement to
Executive’s devisee, legatee, or other designee or, if there be no such designee, to Executive’s
estate.
14. Indemnification. To the fullest extent permitted by law, Employer shall indemnify
Executive (including the advancement of legal, accounting and other expert expenses) for any
judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees,
incurred by Executive in connection with the defense of any lawsuit or other claim to which she is
made a party by reason of performing her responsibilities as an officer or executive of Employer or
any of its subsidiaries; except that, Employer shall have no such duty of indemnification with
regard to claims or suits brought, for any reason, against Executive by any former employer of
Executive.
15. Notice. For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be deemed to have been
duly given when delivered to a national overnight delivery service or (unless otherwise specified)
mailed by United States certified or registered mail, return receipt requested, postage prepaid,
addressed to the addresses as set forth in the Preamble of this Agreement or to such other address
as any party may have furnished to the others in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt. No notices may be given via
e-mail or facsimile transmission.
16. Validity. The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
17. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.
18. Withholding. Notwithstanding any other provision of this Agreement, Employer may
withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that
are required to be withheld by applicable laws or regulations.
19. Executive’s Representations, Warranties and Covenants. Executive represents, warrants
and covenants to Employer that (i) the terms of this Agreement and her employment by the Employer
do not and will not breach any agreement between Executive and any other entity; (ii) that
Executive has not previously assumed any obligations inconsistent with those of this Agreement;
(iii) that Executive will not disclose to the Employer, or to any director,
officer, executive or agent thereof, any confidential or proprietary information or material belonging to any other
entity, including, without limitation, Executive’s previous employer; and (iv) that during
Executive’s employment by the Corporation, she will not use or attempt to use without prior
permission of the owner thereof, any confidential or proprietary information or material belonging
to any other entity in behalf of the Employer. Executive further agrees and covenants that, during
the term of this Agreement and her employment by Employer, she will not breach any agreement to
keep in confidence proprietary information, knowledge, or data acquired by Executive in confidence
or in trust prior to employment with Employer, and Executive will not disclose to Employer, or
induce or cause Employer to use, any confidential or proprietary information or material belonging
to any previous employer or others.
20. Governance of Employment Relationship. To the extent not governed by the specific
provisions hereof, the employment relationship between Executive and Employer shall be governed by
the Employer’s general rules, policies, procedures and plans relating to employment and executive
benefits.
21. Outside Fees. Executive agrees and covenants not to solicit or receive any income or
other compensation from any third party doing business with Employer, including, without
limitation, any supplier, client, customer, or executive of Employer, in connection with her
employment with Employer.
22. Miscellaneous. No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by Executive and an
authorized officer of Employer. No waiver by any party hereto at any time of any breach by the
other parties hereto of, or compliance with, any condition or provision of this Agreement to be
performed by any such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Any termination of Executive’s
employment or of this Agreement shall have no effect on any continuing obligations arising under
this Agreement, including without limitation, the right of Executive to receive payments pursuant
to Section 9 hereof and the obligations of Executive described in Section 11 hereof.
23. Applicable Law, Venue, Jurisdiction and Arbitration. This Agreement shall be deemed to
have been executed by the Parties in and shall be governed by, and construed and enforced in
accordance with, the laws of the State of Texas (excluding any conflicts-of-law rule or principle
of Texas law that might refer the governance, construction or interpretation of this Agreement to
the laws of another state). In the event of a dispute or in the event of any other legal action
arising out of or in connection with this Agreement the exclusive jurisdiction
and venue for such legal action or proceeding shall be the general civil trial courts of Xxxxxx
County, Texas, or the United States District Court having jurisdiction in Xxxxxx County, Texas.
Each Party irrevocably waives any objection on the grounds of venue, forum non-conveniens or any
similar grounds and irrevocably consents to service of process by mail or in any other manner
permitted by applicable law and consents to the jurisdiction of said courts. Employer shall have
the option, in the event of a dispute arising out of or relating to this Agreement, to submit said
dispute to arbitration in Xxxxxx County, Texas, pursuant to the rules of the American Arbitration
Association. The decision of the Arbitrator shall be final
and binding on the parties and judgment upon the award may be entered in any of the aforementioned courts having jurisdiction over this
Agreement.
24. Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto
in respect of the subject matter contained herein and supersedes all prior agreements, letters of
intent, promises, covenants, arrangements, communications, representations or warranties, whether
oral or written, by an officer, executive or representative of any party hereto; and any prior
agreement of the parties hereto in respect to the subject matter contained herein. Executive
acknowledges and agrees that no officer, executive or representative of Employer is authorized to
offer any term or condition of employment which is in addition to or different that those set forth
in this Agreement.
IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed this Agreement
on the Effective Date.
REALPAGE, INC.
| /s/ Xxxxxxx X. Xxxx | ||||
| By: Xxxxxxx X. Xxxx | ||||
| Its: Chief Executive Officer | ||||
| /s/ Xxxxxx Xxxxxxx | ||||
| Xxxxxx Xxxxxxx, an individual | ||||
