EXHIBIT 10.12
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of March 9, 2004
(the "Effective Date"), by and between BMC Software, Inc., a Delaware
corporation (the "Employer"), and Xxxxxx X. Xxxxxxxxxx (the "Executive"). The
Employer and the Executive are each a "party" and are together "parties" to this
Agreement.
RECITALS
WHEREAS, the Employer desires to employ the Executive, and the Executive
wishes to accept such employment, upon the terms and conditions set forth in
this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the employment compensation to be paid
to the Executive and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1.
"AGREEMENT" refers to this Employment Agreement, including all Exhibits
attached hereto, as amended from time to time.
"BENEFITS" as defined in Section 3.1(b).
"BOARD OF DIRECTORS" refers to the board of directors of the Employer.
"CHANGE OF CONTROL" refers to (i) the acquisition of at least 50% of
Employer's outstanding voting stock; (ii) an unapproved change in the majority
of the Employer's board of directors; (iii) a merger, consolidation, or similar
corporate transaction in which the Company's shareholders immediately prior to
the transaction do not own more than 60% of the voting stock of the surviving
corporation in the transaction; and (iv) shareholder approval of the company's
liquidation, dissolution, or sale or substantially all of its assets.
"CONFIDENTIAL INFORMATION" means any and all:
a. trade secrets (as defined herein) concerning the business and
affairs of the Employer, product specifications, data,
know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions
and ideas, past, current, and planned research and
development, current and planned manufacturing or distribution
methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business
plans, computer software and programs (including object code
and source code), computer software and database technologies,
systems, structures, and architectures (and related formulae,
compositions, processes,
improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information), and any
other information, however documented, that is a trade secret;
b. information concerning the business and affairs of the
Employer (which includes historical financial statements,
financial projections and budgets, historical and projected
sales, capital spending budgets and plans, the names and
backgrounds of key personnel, personnel training and
techniques and materials), however documented; and
c. notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Employer containing or based,
in whole or in part, on any information included in the
foregoing.
"DISABILITY" as defined in Section 6.2.
"EFFECTIVE DATE" is the date stated in the first paragraph of the
Agreement.
"EMPLOYEE INVENTION" shall mean any idea, invention, technique,
modification, process, or improvement (whether patentable or not), any
industrial design (whether registerable or not), any mask work, however fixed or
encoded, that is suitable to be fixed, embedded or programmed in a semiconductor
product (whether recordable or not), and any work of authorship (whether or not
copyright protection may be obtained for it) created, conceived, or developed by
the Executive, either solely or in conjunction with others, during the
Employment Period, or a period that includes a portion of the Employment Period,
that relates in any way to, or is useful in any manner in, the business then
being conducted or proposed to be conducted by the Employer, and any such item
created by the Executive, either solely or in conjunction with others, following
termination of the Executive's employment with the Employer, that is based upon
or uses Confidential Information.
"EMPLOYMENT PERIOD" is the term of the Executive's employment under this
Agreement.
"FISCAL YEAR" shall mean the Employer's fiscal year, which shall end on
March 31 of each year, or as changed from time to time.
"FOR CAUSE" as defined in Section 6.3.
"GOOD REASON" as defined in Section 6.3.
"PERSON" is any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, or governmental body.
"PROPRIETARY ITEMS" as defined in Section 7.2(a)(iv).
"SALARY" as defined in Section 3.1(a).
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"TRADE SECRETS" shall mean the whole or any part of any scientific or
technical information, design, process, procedure, formula, or improvement that
has value and that the owner has taken measures to prevent from becoming
available to persons other than those selected by the owner to have access for
limited purposes.
2. EMPLOYMENT TERMS AND DUTIES
2.1 EMPLOYMENT
The Employer hereby employs the Executive, and the Executive hereby
accepts employment by the Employer, upon the terms and conditions set forth in
this Agreement.
2.2 EMPLOYMENT PERIOD
Subject to the provisions of Section 6, the term of the Executive's
employment under this Agreement will commence upon the Effective Date and shall
continue in effect through the third anniversary of the Effective Date (the
"Employment Period"); provided, however, that, subject to the provisions of
Section 6, commencing on the day after the Effective Date and on each day
thereafter, the Employment Period shall be automatically extended for one
additional day unless the Employer shall give written notice to Executive that
the Employment Period shall cease to be so extended, in which event the
Employment Period shall terminate on the third anniversary of the date such
notice is given. The Employment Period may be further extended by mutual
agreement of the parties.
2.3 DUTIES
The Executive will have such duties as are assigned or delegated to the
Executive by the Board of Directors, and will initially serve as the Employer's
Senior Vice President - Chief Financial Officer. The Executive will devote his
entire business time, attention, skill, and energy exclusively to the business
of the Employer, will use his best efforts to promote the success of the
Employer's business, and will cooperate fully with the Board of Directors in the
advancement of the best interests of the Employer. The Executive's employment
will be subject to the policies maintained and established by the Employer, from
time to time. Nothing in this Section 2.3, however, will prevent the Executive
from engaging in additional activities in connection with passive personal
investments and community affairs that are not inconsistent with the Executive's
duties under this Agreement. Additionally, nothing in this Section 2.3 will
prevent the Executive from serving on the Board of Directors of other companies
or organizations, or engaging in other activities, so long as such participation
does not conflict with the interests or business of Employer or require such
involvement as to interfere with the performance of the Executive's duties
hereunder and has been expressly approved by the Chief Executive Officer of
Employer. If the Executive is elected as a director of the Employer or as a
director or officer of any of its affiliates, the Executive will fulfill his
duties as such director or officer without additional compensation. The
Executive acknowledges and agrees that he owes a fiduciary duty of loyalty,
fidelity and allegiance to act at all times in the best interests of the
Employer.
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3. COMPENSATION
3.1 COMPENSATION
a. Salary. During the Employment Period, the Executive will be
paid an annual base salary of $400,000 (the "Salary"), which
will be payable in twenty-four (24) equal installments
according to the Employer's customary payroll practices.
Executive may be subject to such increases in Salary as deemed
appropriate in the sole discretion of the Compensation
Committee of the Board of Directors of Employer.
b. Benefits. The Executive will, during the Employment Period, be
permitted to participate in such pension, profit sharing, life
insurance, hospitalization, major medical, and other employee
benefit plans of the Employer that may be in effect from time
to time, to the extent the Executive is eligible under the
terms of those plans (collectively, the "Benefits").
c. Stock Options. The Executive will be eligible to participate
in the Employer's FY05 Plan for its executives and be entitled
to receive, in May of 2004, an option to purchase 130,000
shares of common stock of the Employer. Such options will be
subject to the terms and conditions of the BMC Software, Inc.
1994 Employee Incentive Plan and an Executive Stock Option
Agreement.
d. Cash Bonus. Executive will be eligible for a cash bonus based
as described in Attachment A incorporated herein by reference
and which cash bonus shall be guaranteed for the Employer's
fiscal quarters ended June 30, 2004, September 30, 2004 and
December 31, 2004.
e. Restricted Stock. The Executive will, upon execution of this
Agreement, be entitled to receive 37,500 shares of restricted
stock of the Employer, vesting in equal amounts over a three
(3) year period.
f. Sign on Bonus. The Executive will be paid a cash sign on bonus
to offset the Executive's loss of his IBM Defined Benefit
Program of $1.4 million discounted at 5%. These monies will be
placed in the BMC Deferred Compensation Plan. Such bonus will
also include the payment of the Executive's loss of this
year's incentive compensation from IBM of $130,000.
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4. FACILITIES AND EXPENSES
4.1 FACILITIES.
The Employer will furnish the Executive office space, equipment,
supplies, and such other facilities and personnel as the Employer deems
necessary or appropriate for the performance of the Executive's duties
under this Agreement.
4.2 EXPENSES.
The Employer will pay on behalf of the Executive (or reimburse the
Executive for) reasonable expenses incurred by the Executive at the
request of, or on behalf of, the Employer in the performance of the
Executive's duties pursuant to this Agreement, and in accordance with the
Employer's employment policies, including reasonable expenses incurred by
the Executive in attending business meetings, in appropriate business
entertainment activities, and for promotional expenses. The Executive must
file expense reports with respect to such expenses in accordance with the
Employer's policies then in effect.
5. VACATIONS AND HOLIDAYS
The Executive will be entitled to paid vacation during the term of
the Agreement in accordance with the vacation policies of the Employer in
effect for its employees from time to time. The Executive will also be
entitled to the paid holidays and other paid leave set forth in the
Employer's policies.
6. TERMINATION
6.1 EVENTS OF TERMINATION
The Employment Period, the Executive's Salary and any and all other rights
of the Executive under this Agreement or otherwise as an employee of the
Employer will terminate (except as otherwise provided in this Section 6):
a. upon the death of the Executive;
b. upon the Disability (as defined in Section 6.2) of the
Executive immediately upon notice from either party to the
other;
c. upon termination by the Employer for cause (as defined in
Section 6.3);
d. upon the voluntary retirement from or voluntary resignation of
employment by the Executive for any reason other than those
set forth in Section 6.1(f) below;
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e. upon termination by the Employer for any reason other than
those set forth in Section 6.1(a) through 6.1(d) above; or
f. upon voluntary resignation of employment by the Executive
within 60 days of the occurrence of an event that constitutes
Good Reason, as defined in Section 6.3 below.
Upon termination of the Employment Period, as provided above or otherwise,
Executive's rights respecting Benefits, Stock Options, and Cash Bonus will be
determined under the applicable plan or program providing the same.
6.2 DEFINITION OF DISABILITY
For purposes hereof, the term "Disability" shall mean an incapacity by
accident, illness or other circumstance which renders the Executive mentally or
physically incapable of performing the duties and services required of the
Executive hereunder on a full-time basis for a period of at least 180
consecutive days.
6.3 DEFINITION OF "FOR CAUSE" AND "GOOD REASON"
a. For purposes of Section 6.1, the phrase "for cause" means: (i)
the Executive's continued and material failure to perform his
obligations under this Agreement; (ii) the Executive's
material failure to adhere to any Employer policy or code of
conduct; (iii) the appropriation (or attempted appropriation)
of a material business opportunity of the Employer, including
attempting to secure or securing any personal profit in
connection with any transaction entered into on behalf of the
Employer; (iv) the Executive's engaging in conduct that is
materially injurious to the Employer, (v) the misappropriation
(or attempted misappropriation) of any of the Employer's funds
or property; (vi) the conviction of, the indictment for (or
its procedural equivalent), or the entering of a guilty plea
or plea of no contest with respect to, a felony, the
equivalent thereof, or any other crime with respect to which
imprisonment is a punishment or; (vii) the conviction of the
Executive by a court of competent jurisdiction of a crime
involving moral turpitude. The determination of whether the
Executive's employment is terminated for cause shall be made
solely by the Employer, which shall act in good faith in
making such determination.
b. "Good Reason" means:
i. The occurrence, prior to a Change of Control or after
the date which is 12 months after a Change of Control
occurs, of any one or more of the following events
without the Executive's express written consent: (i) a
significant change in the Executive's titles or offices
from those previously applicable to the Executive (but
not an alteration in Executive's reporting
responsibilities); (ii) a
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reduction in the Executive's Salary from that provided
to him immediately on the Effective Date of this
Agreement (or the effective date of any extension of
this Agreement pursuant to Paragraph 7(a)) or as the
same may be increased from time to time; or (iii) a
diminution in employee benefits (including but not
limited to medical, dental, life insurance and long-term
disability plans) and perquisites applicable to the
Executive from those substantially similar to the
employee benefits and perquisites provided by the
Employer (including subsidiaries) to executives with
comparable duties; or
ii. The occurrence, within 12 months after the date upon
which a Change of Control occurs, of any one or more of
the following events without Executive's express written
consent: (i) a change in Executive's reporting
responsibilities, titles or offices as in effect
immediately prior to the Change of Control or any
removal of Executive from, or any failure to re-elect
Executive to, any of such positions which has the effect
of diminishing Executive's responsibility or authority;
(ii) a reduction by the Employer or a subsidiary thereof
in Executive's Salary as in effect immediately prior to
the Change of Control or as the same may be increased
from time to time or a change in the eligibility
requirements or performance criteria under any bonus,
incentive or compensation plan, program or arrangement
under which Executive is covered immediately prior to
the Change of Control which adversely affects Executive;
(iii) the Employer or a subsidiary thereof requiring
Executive to be permanently based anywhere other than
within 50 miles of Executive's job location at the time
of the Change of Control; (iv) without replacement by a
plan providing benefits to Executive equal to or greater
than those discontinued, the failure by the Employer or
a subsidiary thereof to continue in effect, within its
maximum stated term, any pension, bonus, incentive,
stock ownership, purchase, option, life insurance,
health, accident, disability, or any other employee
benefit plan, program or arrangement in which Executive
is participating at the time of the Change of Control,
or the taking of any action by the Employer or a
subsidiary thereof that would adversely affect
Executive's participation or materially reduce
Executive's benefits under any of such plans; (v) the
taking of any action by the Employer or a subsidiary
thereof that would materially adversely affect the
physical conditions existing at the time of the Change
of Control in or under which Executive performs his
employment duties; (vi) if Executive's primary
employment duties are with a subsidiary of the Employer,
the sale, merger, contribution, transfer or any other
transaction in conjunction with which the Employer's
ownership interest in the subsidiary decreases below a
majority
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interest; or (vii) any material variance from the terms
of this Agreement by the Employer or a subsidiary
thereof.
6.4 SEVERANCE
Should the Executive's employment with the Employer be terminated during
the Employment Period pursuant to Section 6.1(e) or Section 6.1(f) above, the
Executive shall be entitled to:
a. a payment equal to two years of his then current Salary; and
b. a payment equal to two times his then current cash bonus
target amount.
Such payments under this section will be made no later than 30 days
following the termination from employment. Severance payments do not constitute
continued employment beyond the termination date.
6.5 CHANGE OF CONTROL
If, within 12 months of a Change of Control, the Executive's position is
eliminated or the Executive is terminated pursuant to Section 6.1(e) or 6.1(f)
above, regardless of whether such termination event occurs during or after the
Employment Period, the Executive shall be entitled to the following in lieu of
the amounts set forth in Section 6.4:
a. a payment equal to two years of his then current Salary;
b. a payment equal to two times his then current cash bonus
target amount;
c. potential vesting of Executive's Stock Option award pursuant
to Section 3.1 (c) above, subject to the terms and conditions
of the Executive Stock Option Agreement;
d. potential vesting of Executive's restricted stock award
pursuant to Section 3.1 (e) above, subject to the terms and
conditions of the Restricted Stock Agreement; and
e. continued medical and life insurance benefits at no cost to
the Executive, for the Executive and his dependents (including
his spouse) who were covered as of such termination event
under the medical and life insurance benefit plan as in effect
for employees of the Employer during the coverage period, or
the substantial equivalence, for 18 months or until such time
that he is re-employed and is provided medical and life
insurance benefits (which coverage shall be promptly reported
to the Employer by the Executive) whichever is sooner.
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Severance payments do not constitute continued employment beyond the
termination date.
Notwithstanding anything to the contrary in this Agreement, if the
Executive is a "disqualified individual" (as defined in Section 280G(c) of the
Internal Revenue Code of 1986, as amended (the "Code")), and the severance
benefits provided for in this Section 6.5, together with any other payments and
benefits which the Executive has the right to receive from the Employer and its
affiliates, would constitute a "parachute payment" (as defined in Section
280G(b)(2) of the Code), then the severance benefits provided hereunder
(beginning with any benefit to be paid in cash hereunder) shall be either (1)
reduced (but not below zero) so that the present value of such total amounts and
benefits received by the Executive will be one dollar ($1.00) less than three
times the Executive's "base amount" (as defined in Section 280G of the Code) and
so that no portion of such amounts and benefits received by the Executive shall
be subject to the excise tax imposed by Section 4999 of the Code or (2) paid in
full, whichever produces the better net after-tax position to the Executive
(taking into account any applicable excise tax under Section 4999 of the Code
and any other applicable taxes). The determination as to whether any such
reduction in the amount of the severance benefit is necessary shall be made
initially by the Employer in good faith. If a reduced severance benefit is paid
hereunder in accordance with clause (1) of the first sentence of this paragraph
and through error or otherwise that payment, when aggregated with other payments
and benefits from the Employer (or its affiliates) used in determining if a
"parachute payment" exists, exceeds one dollar ($1.00) less than three times the
Executive's base amount, then the Executive shall immediately repay such excess
to the Employer upon notification that an overpayment has been made.
6.6 NO MITIGATION
Any remuneration received by the Executive from a third party following
the Employment Period shall not apply to reduce the Employer's obligations to
make payments hereunder.
6.7 LIQUIDATED DAMAGES
Due to the difficulties in estimating damages for an early termination of
the Employment Period, the Employer and the Executive agree that the payments,
if any, to be received by the Executive hereunder shall be received as
liquidated damages.
7. NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS
7.1 ACKNOWLEDGMENTS BY THE EXECUTIVE
The Executive acknowledges that (a) prior to and during the Employment
Period and as a part of his employment, the Executive has been and will be
afforded access to Confidential Information; (b) public disclosure of such
Confidential Information could have an adverse effect on the Employer and its
business; (c) because the Executive possesses substantial technical
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expertise and skill with respect to the Employer's business, the Employer
desires to obtain exclusive ownership of each Employee Invention, and the
Employer will be at a substantial competitive disadvantage if it fails to
acquire exclusive ownership of each Employee Invention; and (d) the provisions
of this Section 7 are reasonable and necessary to prevent the improper use or
disclosure of Confidential Information and to provide the Employer with
exclusive ownership of all Employee Inventions.
7.2 AGREEMENTS OF THE EXECUTIVE
In consideration of the compensation and benefits to be paid or provided
to the Executive by the Employer under this Agreement, the Executive covenants
the following:
a. Confidentiality.
i. The Executive will hold in confidence the Confidential
Information and will not disclose it to any person
except with the specific prior written consent of the
Employer or except as otherwise expressly permitted by
the terms of this Agreement.
ii. Any trade secrets of the Employer will be entitled to
all of the protections and benefits under any applicable
law. If any information that the Employer deems to be a
trade secret is found by a court of competent
jurisdiction not to be a trade secret for purposes of
this Agreement, such information will, nevertheless, be
considered Confidential Information for purposes of this
Agreement. The Executive hereby waives any requirement
that the Employer submit proof of the economic value of
any trade secret or post a bond or other security.
iii. None of the foregoing obligations and restrictions
applies to any part of the Confidential Information that
the Executive demonstrates was or became generally
available to the public other than as a result of a
disclosure by the Executive.
iv. The Executive will not remove from the Employer's
premises (except to the extent such removal is for
purposes of the performance of the Executive's duties at
home or while traveling, or except as otherwise
specifically authorized by the Employer) any document,
record, notebook, plan, model, component, device, or
computer software or code, whether embodied in a disk or
in any other form (collectively, the "Proprietary
Items"). The Executive recognizes that, as between the
Employer and the Executive, all of the Proprietary
Items, whether or not developed by the Executive, are
the exclusive property of the Employer. Upon termination
of this Agreement by either party, or upon the request
of the Employer during the Employment Period, the
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Executive will return to the Employer all of the
Proprietary Items in the Executive's possession or
subject to the Executive's control, and the Executive
shall not retain any copies, abstracts, sketches, or
other physical embodiment of any of the Proprietary
Items.
b. Employee Inventions. Each Employee Invention will belong
exclusively to the Employer. The Executive acknowledges that
all of the Executive's writing, works of authorship, and other
Employee Inventions are works made for hire and the property
of the Employer, including any copyrights, patents, or other
intellectual property rights pertaining thereto. If it is
determined that any such works are not works made for hire,
the Executive hereby assigns to the Employer all of the
Executive's right, title, and interest, including all rights
of copyright, patent, and other intellectual property rights,
to or in such Employee Inventions. The Executive covenants
that he will promptly:
i. disclose to the Employer in writing any Employee
Invention;
ii. assign to the Employer or to a party designated by the
Employer, at the Employer's request and without
additional compensation, all of the Executive's right to
the Employee Invention for the United States and all
foreign jurisdictions;
iii. execute and deliver to the Employer such applications,
assignments, and other documents as the Employer may
request in order to apply for and obtain patents or
other registrations with respect to any Employee
Invention in the United States and any foreign
jurisdictions;
iv. sign all other papers necessary to carry out the above
obligations; and
v. give testimony and render any other assistance in
support of the Employer's rights to any Employee
Invention.
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c. Notice of Intent to Resign. Executive agrees to provide
Employer with 90 days advance notice of his intention to
resign ("Notice Period"). During the Notice Period, Executive
shall continue in the diligent fulfillment of all duties of
his position and this Agreement. Should Executive fail to
provide Employer with the full Notice Period, Executive shall
forfeit that portion of his earned pro-rata yearly cash bonus
as follows:
(90 - (number of full days of advance notice) / 90) X(times)
pro-rata earned yearly cash bonus = amount forfeited by
Executive.
Pro-rata earned yearly cash bonus is: (unconditional portion
of yearly cash bonus, if any, targeted for Executive in the
current Fiscal Year) / (number of full months worked in the
current Fiscal Year / 12).
d. NonDisparagement. Executive shall not disparage the Employer
or any of its shareholders, directors, officers, employees, or
agents.
e. Creative Works. Executive shall not create, assist with or
consult on any creative works which discuss, describe or
reference Employer or any executive of Employer. Creative
works includes but is not limited to novels, nonfiction
writings, any authored work, plays, screenplays, musicals or
the like.
7.3 DISPUTES OR CONTROVERSIES
The Executive recognizes that should a dispute or controversy arising from
or relating to this Agreement be submitted for adjudication to any court,
arbitration panel, or other third party, the preservation of the secrecy of
Confidential Information may be jeopardized. All pleadings, documents,
testimony, and records relating to any such adjudication will be maintained in
secrecy and will be available for inspection by the Employer, the Executive, and
their respective attorneys and experts, who will agree, in advance and in
writing, to receive and maintain all such information in secrecy, except as may
be limited by them in writing.
8. NON-COMPETITION AND NON-INTERFERENCE
8.1 ACKNOWLEDGMENTS BY THE EXECUTIVE
The Executive acknowledges that: (a) the services to be performed by him
under this Agreement are of a special, unique, unusual, extraordinary, and
intellectual character; (b) the Employer's business is international in scope
and its products are marketed throughout the United States and the world; (c)
the Employer competes with other businesses that are or could be located in any
part of the United States or the world; (d) the provisions of this Section 8 are
reasonable and necessary to protect the Employer's business; and (e) in
connection with the fulfillment of his duties hereunder and as an employee of
the Employer, the Employer will provide Executive with Confidential Information
necessitating the execution of the covenants contained in this Section 8.
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8.2 COVENANTS OF THE EXECUTIVE
In consideration of the acknowledgments by the Executive, and in
consideration of the compensation and benefits to be paid or provided to the
Executive by the Employer, the Executive covenants that during and for two (2)
years following the Employment Period he will not, directly or indirectly:
a. except in the course of his employment hereunder, engage or
invest in, own, manage, operate, finance, control, or
participate in the ownership, management, operation,
financing, or control of, be employed by, associated with, or
in any manner connected with, lend the Executive's name or any
similar name to, lend Executive's credit to or render services
or advice to, any business whose products or activities
compete in whole or in part with the products or activities of
the Employer anywhere in the world, provided, however, that
the Executive may purchase or otherwise acquire up to (but not
more than) five percent (5%) of any class of securities of any
enterprise (but without otherwise participating in the
activities of such enterprise) if such securities are listed
on any national or regional securities exchange or have been
registered under Section 12(g) of the Securities Exchange Act
of 1934, as amended;
b. whether for the Executive's own account or for the account of
any other person, solicit business of the same or similar type
being carried on by the Employer, from any person known by the
Executive to be a customer or a potential customer of the
Employer, whether or not the Executive had personal contact
with such person during and by reason of the Executive's
employment with the Employer;
c. whether for the Executive's own account or the account of any
other person, (i) solicit, employ, or otherwise engage as an
employee, independent contractor, or otherwise, any person who
is an employee (or was an employee within two (2) years of the
date in question) of the Employer at any time during the
Employment Period or in any manner induce or attempt to induce
any employee of the Employer to terminate his employment with
the Employer; or (ii) interfere with the Employer's
relationship with any person, including any person who at any
time during the Employment Period was an employee, contractor,
supplier, or customer of the Employer; or
If any covenant in this Section 8.2 is held to be unreasonable, arbitrary,
or against public policy, such covenant will be considered to be divisible with
respect to scope, time, and geographic area, and such lesser scope, time, or
geographic area, or all of them, as a court of competent jurisdiction may
determine to be reasonable, not arbitrary, and not against public policy, will
be effective, binding, and enforceable against the Executive.
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The period of time applicable to any covenant in this Section 8.2 will be
extended by the duration of any violation by the Executive of such covenant.
9. GENERAL PROVISIONS
9.1 INJUNCTIVE RELIEF AND ADDITIONAL REMEDY
The Executive acknowledges that the injury that would be suffered by the
Employer as a result of a breach of the provisions of this Agreement (including
any provision of Sections 7 and 8) would be irreparable and that an award of
monetary damages to the Employer for such a breach would be an inadequate
remedy. Consequently, the Employer will have the right, in addition to any other
rights it may have, to obtain injunctive relief to restrain any breach or
threatened breach or otherwise to specifically enforce any provision of this
Agreement, and the Employer will not be obligated to post bond or other security
in seeking such relief.
9.2 COVENANTS OF SECTIONS 7 AND 8 ARE ESSENTIAL AND INDEPENDENT
COVENANTS
The covenants by the Executive in Sections 7 and 8 are essential elements
of this Agreement, and without the Executive's agreement to comply with such
covenants, the Employer would not have entered into this Agreement or employed
the Executive. The Employer and the Executive have independently consulted with
their respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenants, with specific regard to the
nature of the business conducted by the Employer.
If the Executive's employment hereunder expires or is terminated, this
Agreement will continue in full force and effect as is necessary or appropriate
to enforce the covenants and agreements of the Executive in Sections 7 and 8.
9.3 REPRESENTATIONS AND WARRANTIES BY THE EXECUTIVE
The Executive represents and warrants to the Employer that the execution
and delivery by the Executive of this Agreement do not, and the performance by
the Executive of the Executive's obligations hereunder will not, with or without
the giving of notice or the passage of time, or both: (a) violate any judgment,
writ, injunction, or order of any court, arbitrator, or governmental agency
applicable to the Executive; or (b) conflict with, result in the breach of any
provisions of or the termination of, or constitute a default under, any
agreement to which the Executive is a party or by which the Executive is or may
be bound. The Executive further specifically represents and warrants that he is
not subject to, nor will he violate, any agreement not to compete upon the
execution and delivery by him of this Agreement.
The Executive represents and warrants that he will not utilize or divulge
any proprietary materials or information from his previous employers and
acknowledges that Employer has prohibited Executive from bringing any such
materials on to Employer's premises and has advised Executive that Executive's
failure to adhere to these prohibitions will subject Executive to immediate
termination.
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9.4 OBLIGATIONS CONTINGENT ON PERFORMANCE
The obligations of the Employer hereunder, including its obligation to pay
the compensation provided for herein, are contingent upon the Executive's
performance of the Executive's obligations hereunder.
9.5 WAIVER
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by either party in
exercising any right, power, or privilege under this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement can be discharged by one party, in whole or
in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement.
9.6 BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED
This Agreement shall inure to the benefit of, and shall be binding upon,
the parties hereto and their respective successors, assigns, heirs, and legal
representatives, including any entity with which the Employer may merge or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Executive under this Agreement,
being personal, may not be delegated or assigned.
9.7 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested and signed for by the party required
to receive notice, or (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), in each
case to the appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a party may designate by notice to
the other parties):
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If to Employer:
BMC Software, Inc.
0000 XxxxXxxx Xxxx
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attn: President
If to the Executive:
Xxxxxx X. Xxxxxxxxxx
00 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Telephone No:
E-mail Address:
9.8 ENTIRE AGREEMENT; AMENDMENTS
Except as provided in (a) plans and programs of the Employer referred to
in Sections 3.1(b) through (d), and (b) any signed written agreement
contemporaneously or hereafter executed by the Employer and the Executive, this
Agreement contains the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral or written, between the parties hereto with respect to the subject matter
hereof. Notwithstanding the foregoing, this Agreement shall not be construed to
supersede any stock option agreements or restricted stock agreements entered
into between Executive and Employer at any time prior to the execution of this
Agreement. This Agreement may not be amended orally, but only by an agreement in
writing signed by the parties hereto.
9.9 GOVERNING LAW
THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
9.10 ARBITRATION
In the event that there shall be any dispute arising out of or in any way
relating to this Agreement, the contemplated transactions, any document referred
to or incorporated herein by reference or centrally related to the subject
matter hereof, or the subject matter of any of the same, the parties covenant
and agree as follows:
a. The parties shall first use their reasonable best efforts to
resolve such dispute among themselves, with or without
mediation.
b. If the parties are unable to resolve such dispute among
themselves, such dispute shall be submitted to binding
arbitration in Houston, Texas, under the auspices of, and
pursuant to the rules of, the American Arbitration
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Association's Commercial Arbitration Rules as then in effect,
or such other procedures as the parties may agree to at the
time, before a tribunal of three (3) arbitrators, one of which
shall be selected by the Executive, one of which shall be
selected by the Employer, and the third of which shall be
selected by the two (2) arbitrators so selected. Any award
issued as a result of such arbitration shall be final and
binding between the parties, and shall be enforceable by any
court having jurisdiction over the party against whom
enforcement is sought. A ruling by the arbitrators shall be
non-appealable. The parties agree to abide by and perform any
award rendered by the arbitrators. If either the Executive or
Employer seeks enforcement of the terms of this Agreement or
seeks enforcement of any award rendered by the arbitrators,
then the prevailing party (designated by the arbitrators) to
such proceeding(s) shall be entitled to recover its costs and
expenses (including applicable travel expenses) from the
non-prevailing party, in addition to any other relief to which
it may be entitled. If a dispute arises and one party fails or
refuses to designate an arbitrator within thirty (30) days
after receipt of a written notice that an arbitration
proceeding is to be held, then the dispute shall be resolved
solely by the arbitrator designated by the other party and
such arbitration award shall be as binding as if three (3)
arbitrators had participated in the arbitration proceeding.
Either the Executive or the Employer may cause an arbitration
proceeding to commence by giving the other party notice in
writing of such arbitration. Executive and the Employer
covenant and agree to act as expeditiously as practicable in
order to resolve all disputes by arbitration. Notwithstanding
anything in this section to the contrary, neither Executive
nor the Employer shall be precluded from seeking court action
in the event the action sought is either injunctive action, a
restraining order or other equitable relief. The arbitration
proceeding shall be held in English.
c. Legal process in any action or proceeding referred to in the
preceding section may be served on any party anywhere in the
world.
d. Except as expressly provided herein and except for injunctions
and other equitable remedies that are required in order to
enforce this Agreement, no action may be brought in any court
of law and EACH OF THE PARTIES WAIVES ANY RIGHTS THAT IT MAY
HAVE TO BRING A CAUSE OF ACTION IN ANY COURT OR IN ANY
PROCEEDING INVOLVING A JURY TO THE MAXIMUM EXTENT PERMITTED BY
LAW. Each party acknowledges that it has been represented by
legal counsel of its own choosing and has been advised of the
intent, scope and effect of this Section 9.10 and has
voluntarily entered into this Agreement and this Section 9.10.
e. Excluded from this Section 9.10 are any claims for temporary
injunctive relief to enforce Sections 7 and 8 of this
Agreement.
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9.11 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
9.12 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
9.13 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
9.14 WAIVER OF JURY TRIAL
THE PARTIES HERETO HEREBY WAIVE A JURY TRIAL IN ANY LITIGATION WITH
RESPECT TO THIS AGREEMENT.
9.15 WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS
The Employer may withhold from any payments and benefits made pursuant to this
Agreement all federal, state, city, and other taxes as may be required pursuant
to any law or governmental regulation or ruling and all other normal deductions
made with respect to the Employer's employees generally.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date above first written above.
EMPLOYER:
BMC Software, Inc.
By: /s/ XXXXXX XXXXX
Name: Xxxxxx Xxxxx
Title: SVP of Administration
EXECUTIVE:
/s/ XXXXXX X. XXXXXXXXXX
Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx Attachment A
BMC SOFTWARE, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
CASH BONUS DESCRIPTION
The Executive will, during the Employment Period, be permitted to
participate in the BMC Annual Executive Incentive Plan that may be in effect
from time to time. During the employment period, the Executive will be eligible
to receive a target incentive, which is 100% of base salary. The actual amount
received is not guaranteed and is dependent on the performance of the Company
and the Executive in accordance with the Annual Incentive Plan established for
each fiscal year during the employment period.
Each fiscal year, the Executive will receive a detailed description
of the Annual Incentive Plan and the targeted measures
and objectives for that year.
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AMENDMENT NO. 1
TO
EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment No. 1 to the Executive Employment Agreement dated as of
March 9, 2004, between BMC Software, Inc. (the "Employer") and Xxxxxx Xxxxxxxxxx
(the "Executive") is entered into as of this 23rd day of April, 2004 (the
"Amendment Date")
For and in consideration of One Dollar ($1.00) and other good and valuable
consideration, the receipt of which is hereby acknowledged, the Employer and the
Executive hereby agree that the Agreement shall be amended as follows:
1. Section 3.1 (f) of the Agreement shall be deleted and the following shall
be substituted therefor:
"f. SIGN ON BONUS. The Executive will be paid a cash sign on bonus
of $130,000 to offset the Executive's loss of his incentive compensation
from IBM. In addition, the Executive will receive a deposit into the
Employer's 1994 Deferred Compensation Plan (the "Deferral Plan") of
$966,000 to offset the Executive's loss of his IBM Defined Benefit Program
valued by outside consultants at $1.4 million and discounted at 5%. The
$966,000 will be credited to Executive's Company Account (as defined in
the Plan) in the Plan, will vest according to the schedule set forth
below, and is subject to the provisions of the Plan.
VESTING DATE PERCENT VESTED
------------ --------------
Prior to March 10, 2008 0%
On or after March 10, 2008 25%
On or after March 10, 2009 50%
On or after March 10, 2010 75%
On or after March 10, 2011 100%
IN WITNESS WHEREOF, the Employer and the Executive have executed this
Amendment No. 1 as of the day and year first above written.
EMPLOYER
BMC SOFTWARE, INC.
By: /s/ XXXXXX XXXXX
Xxxxxx Xxxxx, SVP of Administration
EXECUTIVE
/s/ XXXXXX X. XXXXXXXXXX
Xxxxxx X. Xxxxxxxxxx
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