EXHIBIT 10.3
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EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of September 3,
2002, by and between Xxxx X. Xxxxxxx (the "Executive") and Precise Software
Solutions, Inc and any of its subsidiaries, divisions and affiliates (the
"Company").
WHEREAS, the Executive and the Company deem it in their respective best
interests to enter into an agreement providing for the employment of the
Executive as the Company's Chief Financial Officer, subject to the terms and
conditions hereinafter set forth; and
WHEREAS, the Executive agrees to execute the Company's Confidentiality and
Proprietary Information Agreement (the "Confidentiality Agreement") dated the
date hereof and attached hereto as Exhibit A;
NOW, THEREFORE, in consideration of the foregoing and the agreements herein
contained, the parties hereto hereby agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions set forth in this
Agreement, the Company offers and the Executive hereby accepts
employment, effective as of September 3, 2002 (the "Effective Date").
The parties agree that such employment shall be full time and on an
at-will basis, which means that either the Executive or the Company
may, subject to the provisions of this Agreement, terminate the
employment relationship (and this Agreement) at any time, for any or
no reason, with or without cause, upon written notice to the other
party. The term of this Agreement, as from time to time may be
modified and in effect, is hereafter referred to as "the term of this
Agreement" or "the term hereof"
2. CAPACITIES AND PERFORMANCE. During the term hereof, the Executive
shall serve the Company as its Chief Financial Officer. The Executive
shall report to the Company's Chief Executive Officer. The Executive
shall comply with and perform, faithfully, diligently and to the best
of his ability, such directions and duties in relation to the business
and affairs of the Company as may from time to time be vested in or
requested of him by the Company. The Executive shall devote
substantially all of his business time, attention and energies to the
business of the Company. The Executive shall not work as an executive,
independent consultant or agent for another entity, whether or not
during the business hours of Precise, without the permission of
Precise.
3. COMPENSATION AND BENEFITS. As compensation for the satisfactory
performance by the Executive of his duties and obligations hereunder
to the Company and subject to the provisions of Section 5, the
Executive shall receive:
3.1 BASE SALARY. The Executive `s Initial base salary shall be paid at a
rate of $17,500.00 per month (the "Base Salary"). The Base Salary
shall be payable in accordance with the customary payroll practices of
the Company, but at least paid monthly, as may be established or
modified from time to time and shall be subject to all applicable
federal, state and/or local payroll and withholding taxes.
3.2 BONUS. During the first year of employment the Company shall pay the
Executive a bonus up to $25,000 per quarter for each fiscal quarter
end. For all future years, the Executive shall be eligible to receive
a bonus of $100,000.00 per anum. Such bonus, if any shall be based
upon, among other things, the Executive's and the Company's attainment
of quarterly and/or yearly goals as established by and at the sole
discretion in accordance with the customary bonus practice of the
Company as may be established or modified from time-to-time.
3.3 STOCK OPTIONS.
(a) You will be granted an option to acquire 175,000 ordinary shares
of Precise Software Solutions, Ltd., at an exercise price equal
to the fair market value on the date of grant, vesting equally
over a four year period commencing on your first date of
employment September 3, 2002, all subject to the approval of the
Board of Directors of Precise Software Solutions, Ltd. (the
"Board") and subject to the terms of a stock option plan and
option agreement approved by such Board.
(b) The option agreement approved by the Board shall include a
provision that fifty percent (50%) of the unvested shares subject
to the option agreement shall, immediately prior to the
consummation of a Transfer of Control (as that term is defined in
the Company's stock option plan pursuant to which the option is
granted), become vested and immediately exercisable by the
Executive. In addition, upon (1) a closing of a Transfer of
Control and (2) the occurrence of a Termination Event (as defined
in Section 3.3(c)), the remaining fifty percent (50%) of the
unvested shares subject to the option agreement shall,
immediately upon the occurrence of a Termination Event of
Executive, become vested and immediately exercisable by
Executive.
(c) For purposes of this Section 3.3, a Termination Event is defined
as the involuntary termination of employment of the Executive
within one (1) year after the closing of a Transfer of Control
other than under Disgraceful Circumstances. In addition, a
Termination Event shall also include the following if such event
has occurred within one (1) year after the closing of a Transfer
of Control: (1) reduction in salary or material reduction in the
level of benefits of the Executive as in effect on the date
immediately prior to the closing of the Transfer of Control: (2)
a diminution in the nature or scope of the Executive's authority,
duties or responsibilities in effect immediately prior to the
closing of the Transfer of Control; or (3) change in location of
the principle office to which the Executive must report of
greater that 50 miles.
3.4 VACATION. Subject to and in accordance with the Company's policy, the
Executive shall be eligible for 10 days of paid vacation per calendar
year.
3.5 BENEFITS. Subject to any contribution therefor generally required of
executives of the Company, the Executive will be eligible to
participate in the Company's benefits plans to the same extent as, and
subject to the same terms, conditions and limitations applicable to,
other executives of the Company in similar positions. Such
participation shall be subject to (i) the terms of the applicable plan
documents, (ii) generally applicable Company policies, and (iii) the
discretion of the Company and/or the Board or any administrative or
other committee provided for in or contemplated by such plan. The
Company's current plans and policies shall govern all other benefits.
The Company may alter, modify, add to, or delete its employee benefits
plans and/or a policy at any time as the Company and/or the Board, in
their sole judgment, determines to be appropriate.
3.6 BUSINESS EXPENSES. The Company shall pay or reimburse the Executive
for all reasonable business expenses incurred or paid by the Executive
in the performance of his duties and responsibilities hereunder,
subject to (i) any reasonable expense policy set by the Company as may
be modified from time to time, and (ii) such reasonable substantiation
and documentation requirements as may be specified by the Company from
time to time.
4. TERMINATION OF EMPLOYMENT. The Executive's employment and this
Agreement shall terminate under the following circumstances:
4.1 DEATH OR DISABILITY. In the event of the Executive's death or
Disability (as defined herein) during the term hereof, the Executive's
employment and this Agreement shall immediately and automatically
terminate and the Company shall pay to the Executive (or in the case
of death, the Executive's designated beneficiary, or if no beneficiary
has been designated by Executive, his estate) any Base and bonus
earned but unpaid through the date of death or Disability. For the
purposes of this Agreement, "Disability" shall mean any physical
incapacity or mental incompetence (i) as a result of which the
Executive is unable to perform substantially all of his duties, and
(ii) which cannot be reasonably accommodated by the Company without
undue hardship. Any determination of disability shall be made by a
qualified physician or physicians selected by the Company and the
Executive. The failure of the Executive to submit to a reasonable
examination by such physician shall constitute determination of a
permanent Disability.
4.2 BY THE COMPANY BECAUSE OF DISGRACEFUL CIRCUMSTANCES.
(a) The Company may terminate the Executive's employment and this
Agreement because of Disgraceful Circumstances at any time during
the term hereof. The Company shall thereafter have no further
obligation or liability to the Executive relating to the
Executive's employment or this Agreement, other than Base Salary
earned but unpaid and vested shares though the date of
termination.
(b) The following events or conditions shall constitute "Disgraceful
Circumstances" for termination (which shall hereafter only be
referred to as "Dismissal for Cause"): (i) gross negligence,
willful misconduct or breach of fiduciary duty to the Company,
Precise Software Solutions, Ltd. ("Precise Ltd.") or any of the
subsidiaries of Precise Ltd. (the "Subsidiary"); (ii) commission
of an act of embezzlement or fraud; (iii) deliberate disregard of
the rules or policies of the Company, Precise Ltd. or any
Subsidiary which results in direct material loss, damage or
injury to the Company, Precise Ltd. or any Subsidiary, (iv) the
unauthorized disclosure of any trade secret or confidential
information of the Company, Precise Ltd. or any Subsidiary which
materially xxxxx the Company.
4.3 BY THE COMPANY. The Company may terminate the Executive's employment
and this Agreement at any time, for any or no reason, during the term
hereof. In the event of such termination, the Executive will be
entitled to a continuation, for six (6) months from the date of the
Executive's termination of employment, of (i) his salary in an amount
equal to the Executive's Base Salary (in effect at the time of such
termination), (ii) pro rata monthly vesting of options, and (iii)
payment of premiums (in the same amount as of the Executive's date of
termination) on the Executive's behalf to continue his health
insurance, to the extent the Executive elects to continue such
coverage in accordance with and pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA" ).
4.4 BY THE EXECUTIVE. The Executive also may terminate this Agreement
and/or his employment with the Company for any or no reason during the
term hereof upon fifteen (15) days prior notice to the Company. Upon
receipt of such notice, the Company may accelerate the Executive's
termination and pay to the Executive an amount equivalent to his base
monthly salary (at that time) for the remainder of the 15-day notice
period. The Company shall thereafter have no further obligation or
liability to the Executive relating to the Executive's employment or
this Agreement, other than for any Base Salary earned but unpaid
through the date of termination.
5. EFFECT OF TERMINATION. The provisions of this Section 5 shall apply in
the event of termination of this Agreement and/or the Executive's
employment pursuant to Sections 4.
5.1 PAYMENT IN FULL. Payment by the Company to the Executive of any Base
Salary and other compensation amounts shall constitute the entire
obligation of the Company to the Executive, except that nothing in
this Section 5.1 is intended or shall be construed to affect the
rights and obligations of the Company, on the one hand, and the
Executive, on the other, with respect to any loans, stock warrants,
stock pledge arrangements, option plans or other agreements to the
extent said rights or obligations survive the Executive's termination
of employment under the provisions of documents relating thereto.
5.2 TERMINATION OF BENEFITS. Except for any right of continuation of
benefits coverage to the extent provided herein and/or provided by
COBRA or other applicable law, benefits shall terminate pursuant to
the terms of the applicable benefit plans as of the termination date
of the Executive's employment without regard to any continuation of
Base Salary or other payments to the Executive following such
termination date.
5.3 CESSATION OF COMPENSATION AND BENEFITS. If the Executive breaches his
obligations under this Agreement and/or the Confidentiality Agreement,
the Company may immediately cease payment of all compensation,
severance and benefits described in this Agreement. The cessation of
these payments shall be in addition to, and not as an alternative to,
any other remedies at law or in equity available to the Company,
including the right to seek specific performance or an injunction.
6. SURVIVAL OF CERTAIN PROVISIONS. The obligations of the Executive under
the Confidentiality Agreement expressly survive any termination of the
Executive's employment for up to twelve (12) months, regardless of the
manner of such termination, or termination of this Agreement.
7. CONFLICTING AGREEMENTS. The Executive and the Company hereby warrants
that the execution of this Agreement and the performance of
obligations hereunder will not breach or be in conflict with any other
agreement to which or by which the Executive or the Company is a party
or is bound and that the Executive is not now subject to and will not
enter into any covenants against competition or similar covenants that
would affect the performance of his obligations hereunder. Moreover,
where this Agreement conflicts with other of the Company's agreements
(e.g., the Confidentiality and Proprietary Information Agreement), the
terms included in this agreement will be determinative.
8. WITHHOLDING TAXES. All payments made by the Company under this
Agreement shall be subject to and reduced by any federal, state and/or
local taxes or other amounts required to be withheld by the Company
under any applicable law.
9. MISCELLANEOUS.
9.1 ASSIGNMENT. The Executive shall not assign this Agreement or any
interest herein. The Company may assign this Agreement. No such
assignment shall be deemed a "termination" of the Executive's
employment within the meaning of Section 4. This Agreement shall inure
to the benefit of and be binding upon the successors of the Company.
9.2 SEVERABILITY. The Executive and the Company agrees that each provision
and the subparts of each provision herein shall be treated as separate
and independent clauses and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses
of the Agreement. Moreover, if one or more of the provisions contained
in this Agreement shall for any reason be held to be excessively broad
as to scope, activity, subject or otherwise so as to be unenforceable
at law, such provision or provisions shall be construed by the
appropriate judicial body by limiting or reducing it or them, so as to
be enforceable to the maximum extent compatible with the applicable
law as it shall then appear. The Executive and the Company hereby
further agree that the language of all parts of this Agreement shall
in all cases be construed as a whole according to its fair meaning and
not strictly for or against either of the parties.
9.3 WAIVER; AMENDMENT. Any waiver by the Company of a breach of any
provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach of such provision or any other
provision hereof. In addition, any amendment to or modification of
this Agreement or any waiver of any provision hereof must be in
writing and signed by the Company and the Executive.
9.4 NOTICES. All notices, requests and other communications provided for
by this Agreement shall be in writing and shall be effective when
delivered in person on four business days after being deposited in the
mail of the United States, postage prepaid, registered or certified,
and addressed (a) in the case of the Executive, to the address set
forth underneath his signature to this Agreement or (b) in the case of
the Company, to the attention of Xxxxxx Xxxx c/o Precise Software
Solutions, Inc, 000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000; and/or to such
other address as either party may specify by notice to the other.
9.5 ENTIRE AGREEMENT. This Agreement, the Confidentiality Agreement and
any stock option agreement between the Company and the Executive
constitute the entire agreement between the Company and the Executive
with respect to the terms and conditions of the Executive's employment
with the Company and supersede and cancel all prior communications,
agreements and understandings, written or oral, between the Executive
and the Company with respect to the terms and conditions of the
Executive's employment with the Company.
9.6 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be original all of which together shall constitute one and
the same instrument.
9.7 GOVERNING LAW. This Agreement, the employment relationship
contemplated herein and any claim arising from such relationship,
whether or not arising under this Agreement, shall be governed by and
construed in accordance with the internal laws of the Commonwealth of
Massachusetts without giving effect to any choice or conflict of laws
or the provision or rule thereof, and this Agreement shall be deemed
to be performable in such Commonwealth.
9.8 CONSENT TO JURISDICTION. The Executive and the Company agree to in
good faith seek arbitration to settle any differences. The arbitration
will be in Boston, Massachusetts at the American Arbitration
Association ("AAA") before a single arbitrator. Such arbitrator shall
be selected in accordance with AAA's then current rules and
regulation. The parties agree to split the cost of arbitration
equally. In the event no settlement is reached, the Executive, by his
execution hereof, hereby irrevocably submits to the exclusive
jurisdiction of the state or federal courts of the Commonwealth of
Massachusetts for the purpose of any claim or action arising out of or
based upon this Agreement, the Executive's employment with the Company
and/or termination thereof, or relating to the subject matter hereof,
and agrees not to commence any such claim or action other than in the
above-named courts.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its duly
authorized representative, and by the Executive, as of the date first about
written.
PRECISE SOFTWARE SOLUTIONS, INC.
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
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Title: CEO
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THE EXECUTIVE
/s/ Xxxx X. Xxxxxxx
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Xxxx Xxxxxxx
ADDRESS:
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Date signed
