1
Exhibit 10.10
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 6th day of July, 1998 by and between
SOFTWORKS, Inc., a Delaware corporation (hereinafter the "Company") and XXXXXX
XXXXXXXXXX, residing at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxx 00000
(hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, the Company and the Employee desire to enter into an
Employment Agreement relating to the Company's employment of the Employee; and
WHEREAS, this Agreement is intended to supersede and replace
all prior agreements, understandings and arrangements between the Company and
the Employee, including any and all royalty agreements, relating to such
employment.
NOW, THEREFORE, it is agreed as follows:
1. Retention of Services. The Company hereby retains the
services of Employee, and Employee agrees to furnish such services, upon the
terms and conditions hereinafter set forth.
2. Term. Subject to earlier termination on the terms and
conditions hereinafter provided, and further subject to certain provisions
hereof which survive the term hereof, the term of this Agreement shall be
comprised of a three (3) year period of employment commencing on the date on
which the Company completes an initial public offering (the "IPO") of its
capital stock and terminating three (3) years thereafter. The term of this
Agreement shall automatically be extended for additional one (1) year periods
unless and until the Company or the Employee shall deliver written notice to the
other party hereto no less than ninety (90) days prior to the end of any renewal
term of its desire to terminate this Agreement.
3. Duties and Extent of Services During Period of Employment.
During the term of employment, Employee shall be employed on a full-time basis
as the Chief Financial Officer and Treasurer of the Company. In such capacity,
Employee agrees that he shall serve the Company under the direction of the
President and Chief Executive Officer of the Company to the best of his ability,
shall perform all duties incident to his offices on behalf of the Company and
shall perform such other duties as may from time to time be assigned to him by
the President and Chief Executive Officer of the Company. Employee shall also
serve in similar capacities of such of the subsidiary corporations of the
Company as may be selected by the Board of Directors and shall be entitled to
such additional compensation therefor as may be determined by the Board of
Directors of the Company. Notwithstanding the foregoing, it is understood and
agreed that during the term hereof the duties of Employee during the period of
active employment shall not be inconsistent with (i) his position and title as
the Chief Financial Officer of the Company or (ii) with those duties ordinarily
performed by a Chief Financial Officer.
2
4. Remuneration. During the period of employment, Employee
shall be entitled to receive the following compensation for his services:
(a) The Company shall pay to Employee a salary at the
rate of $120,000 per annum, payable in equal bi-weekly installments, or in such
other manner as shall be agreeable to the Company and Employee.
(b) In the event that the Company meets or exceeds
the quarterly targets established by the Board of Directors of the Company the
Company shall pay to Employee, as incentive compensation, an amount to be
determined by the Board of Directors. The Company shall pay one-eighth of such
incentive compensation on a quarterly basis not later than thirty (30) days
after the end of each fiscal quarter and shall pay one-half of such incentive
compensation not later than ninety (90) days after the end of each fiscal year
of the Company. The Company agrees to furnish to Employee a copy of such
financial statements not later than thirty (30) days after the end of each
fiscal quarter and ninety (90) days after the end of each fiscal year of the
Company during the term hereof.
5. Employee Benefits; Expenses.
(a) During the period of employment, the Company will
provide at its expense, life insurance to Employee in the face amount of up to
$1,000,000 and disability insurance in an amount equal to two-thirds of
Employee's base salary as established under paragraph 4(a) and shall pay the
premium for a standard risk non-smoker. Employee shall pay any difference in the
event that the policy is other than a standard risk non-smoker.
(b) During the period of employment, Employee shall
be eligible to participate in the Company's stock option plans, stock purchase
plans or other employee incentive plans (including without limitation its 1998
Stock Option Plan) to the extent determined in the sole discretion of the Board
of Directors of the Company or a committee thereof.
(c) During the period of employment, Employee shall
be furnished with office space and facilities commensurate with his position and
adequate for the performance of his duties; he shall be provided with the
perquisites customarily associated with the position of the Chief Financial
Officer of the Company; and he shall be entitled to regular vacations during
each year of four (4) weeks in the aggregate.
(d) It is contemplated that during the period of
employment, Employee may be required to incur out-of-pocket expenses in
connection with the performance of his services hereunder, including expenses
incurred for travel and business entertainment. Accordingly, the Company shall
reimburse Employee for all reasonable out-of-pocket expenses incurred by
Employee in the performance of his duties hereunder upon submission of
reasonable documentation therefore
3
in accordance with the Company's policies.
(e) All benefits to Employee specifically provided
for herein shall be in addition to, and shall not diminish any rights which
Employee may have or may acquire under any hospitalization, life insurance,
pension, profit sharing or other present or future employee benefit plan or
plans of the Company.
6. Disability. If Employee, during the period of employment,
becomes unable for three consecutive months or more, or any 180 days in any
twelve-month period, due to ill health or other physical or mental incapacity,
to perform his services hereunder, the Company may thereafter, upon at least 45
days' written notice to Employee, place him on disability status. After such
action by the Company, Employee shall only be entitled to the disability
benefits under his insurance policy during the disability period.
7. Confidential Information.
(a) In the course of Employee's employment by the
Company, Employee will have access to and possession of valuable and important
confidential or proprietary data or information of the Company and its
operations. Employee will not during Employee's employment by the Company or at
any time thereafter divulge or communicate to any person nor shall Employee
direct any Company employee, representative or agent to divulge or communicate
to any person or entity (other than to a person or entity bound by
confidentiality obligations similar to those contained herein and other than as
necessary in performing Employee's duties hereunder) or use to the detriment of
the Company or for the benefit of any other person or entity, any of such
confidential or proprietary data or information or make or remove any copies
thereof, whether or not marked or otherwise identified as "confidential" or
"secret." Employee shall take all reasonable precautions in handling the
confidential or proprietary data or information within the Company to a strict
need-to-know basis and shall comply with any and all security systems and
measures adopted from time to time by the Company to protect the confidentiality
of confidential or proprietary data or information.
(b) The term "confidential or proprietary data or
information" as used in this Agreement shall mean information not generally
available to the public, including, without limitation, all database
information, personnel information, financial information, customer lists,
supplier lists, trade secrets, patented or proprietary information, forms,
information regarding operations, systems, services, know how, computer and any
other processed or collated data, computer programs, pricing, marketing and
advertising data.
(c) Employee will at all times promptly disclose to
the Company in such form and manner as the Company may reasonably require, any
inventions, improvements or procedural or methodological innovations, programs,
methods, forms, systems, services, designs, marketing ideas, products or
processes (whether or not capable of being trademarked, copyrighted
4
or patented) conceived or developed or created by Employee during or in
connection with Employee's employment hereunder and which relate to the business
of the Company ("Intellectual Property"). Employee agrees that all such
Intellectual Property shall be "work-for-hire" and shall be the sole property of
the Company. To the extent any such Intellectual Property does not constitute a
"work-for-hire" under U.S. law, Employee hereby assigns to Company all right,
title and interest in such Intellectual Property. Employee further agrees that
Employee will execute such instruments and perform such acts as may reasonably
be requested by the Company to effectuate such assignment and otherwise to
transfer to and perfect in the Company all rights in such Intellectual Property.
(d) All written materials, records and documents made
by Employee or coming into Employee's possession during Employee's employment by
the Company concerning any products, processes or equipment manufactured, used,
developed, investigated, purchased, sold or considered by the Company or
otherwise concerning the business or affairs of the Company shall be the sole
property of the Company, and upon termination of Employee's employment by the
Company, or upon request of the Company during Employee's employment by the
Company, Employee shall promptly deliver the same to the Company. In addition,
upon termination of Employee's employment by the Company, Employee will deliver
to the Company all other Company property in Employee's possession or under
Employee's control, including, but not limited to, financial statements,
marketing and sales data, customer and supplier lists, database information and
other documents, and any Company credit cards.
(e) The provisions of this Section 7 shall survive
the termination of this Employment Agreement.
8. Non-Competition.
(a) During the term of this Agreement and for one
year thereafter (subject to clause (b) of this Section 8, the "Restricted
Period"), the Employee shall not, without the written consent of the Company,
directly or indirectly,
(i) become associated with, render services to,
invest in, represent, advise or otherwise participate in as an officer,
employee, director, stockholder, partner, promoter, agent of, consultant for or
otherwise, any systems management software business which is conducted in any of
the jurisdictions in which the Company's business is conducted; provided,
however, that nothing contained herein will prevent Employee from owning less
than five percent (5%) of any class of equity or debt securities listed on a
national securities exchange or traded in any established over-the-counter
securities market, so long as such involvement with the issuer of any such
securities is solely that of a passive investor;
(ii) for his own account or for the account of any
other person or entity (A) interfere with the Company's relationship with any of
its suppliers, customers, representatives or
5
agents or (B) transact any business with any customer or supplier of the Company
which transacts or has transacted business with the Company at any time during
the term of this Agreement; or
(iii) employ or otherwise engage, or solicit, entice
or induce on behalf of himself or any other person or entity, the services,
retention or employment of any person who has been an employee, sales
representative, consultant to or agent of the Company within one year of the
date of such offer or solicitation.
(b) In the event that the Employee terminates his
employment hereunder after a breach hereof by the Company, or if the Company
terminates the Employee's employment hereunder other than for cause (as defined
in Section 9(a) hereof), the covenant contained in Section 8(a) hereof shall
extend for a period of one year beyond the termination of the Employee's
employment only if the Company shall pay to the Employee on a monthly basis with
respect to such period an amount equal to the annual compensation otherwise
provided for hereunder with respect to the immediately preceding year during the
term hereof. This Section 8(b) shall be of no effect, and the Employee shall be
subject to the restrictive covenant contained in Section 8(a) hereof without the
Company being obligated to make the payments referred to in the preceding
sentence, if the Company terminates its employment of the Employee for cause (as
defined in Section 9(a) hereof) or if the Employee terminates his employment
hereunder in the absence of a breach hereof by the Company.
(c) The parties hereto intend that the covenants
contained in this Section 8 shall be deemed a series of separate covenants for
each country, state, county and city. If, in any judicial proceeding, a court
shall refuse to enforce all the separate covenants deemed included in this
Section 8 because, taken together, they cover too extensive a geographic area,
the parties intend that those of such covenants (taken in order of the cities,
counties, states and countries therein which are lease populous) which if
eliminated would permit the remaining separate covenants to be enforced in such
proceeding shall, for the purpose of such proceeding, be deemed eliminated from
the provisions of this Section 8.
(d) With respect to the covenants contained in
Sections 7 and 8 of this Agreement, Employee agrees that any remedy at law for
any breach or threatened or attempted breach of such covenants may be inadequate
and that the Company shall be entitled to specific performance or any other mode
of injunctive and/or other equitable relief to enforce its rights hereunder or
any other relief a court might award without the necessity of showing any actual
damage or irreparable harm or the posting of any bond or furnishing of other
security.
9. Termination.
(a) The Company recognizes that, for the period
during which Employee has been employed and/or associated with the Company, the
Company has been intimately familiar with the ability, competence and judgment
of Employee, which are acknowledged to be of the
6
highest caliber. Accordingly, the Company and Employee agree that Employee's
services hereunder may be terminated for "cause" by the Company only (i) for an
act of fraud or embezzlement adversely affecting the financial interest of the
Company, (ii) in the event that the Company places Employee on disability status
pursuant to Section 6 hereof more than once during the term hereof, (iii) in the
event of a conviction of the Employee for any felony, (iv) in the event of
material breach by the Employee of the terms of this Agreement, following the
receipt by the Employee of thirty (30) days notice of such breach and the
Employee's failure to cure such breach within such grace period, (v) in the
event of any willful breach by the Employee of this Agreement, or (vi) in the
event that the Employee materially breaches any of his representations,
warranties, covenants or agreements contained in the underwriting agreement to
be executed by the Company, SoundView Financial Group, Inc. and Xxxxxxx Xxxxx &
Associates, Inc. This Agreement shall also terminate on the death of Employee.
(b) If the Company terminates Employee's employment
hereunder for any reason other than for "cause" as set forth in Section 9(a)
hereof, Employee's compensation shall be paid to him as provided hereunder for
the greater of the (i) remainder of the term of this Agreement or (ii) two
years. If the Company terminates Employee's employment hereunder for "cause" as
set forth in Section 9(a) hereof, Employee shall not be entitled to receive any
further compensation hereunder which has not already been earned pursuant to the
terms hereof. Employee and the Company acknowledge that the foregoing provisions
of this paragraph 9(b) are reasonable and are based upon the facts and
circumstances of the parties at the time of entering into this Agreement, and
with due regard to future expectations.
10. Consolidation or Merger. In the event of any consolidation
or merger of the Company into or with any other corporation during the term of
this Agreement, or the sale of all or substantially all of the assets of the
Company to another corporation, person or entity during the term of this
Agreement, such successor corporation shall assume this Agreement and become
obligated to perform all of the terms and provisions hereof applicable to the
Company, and Employee's obligations hereunder shall continue in favor of such
successor corporation.
11. Notices. Any notice to be given to the Company hereunder
shall be deemed sufficient if addressed to the Company in writing and delivered
or mailed by certified or registered mail to its offices at 0000 Xxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, or such other address as the
Company may hereafter designate, with a copy to Xxxxx X. Xxxxxxxxx, Esq., Blau,
Kramer, Wactlar & Xxxxxxxxx, P.C., 000 Xxxxxxx Xxxxxxxxxx, Xxxxxxx, Xxx Xxxx
00000. Any notice to be given to Employee hereunder shall be delivered or mailed
by certified or registered mail to him at: 0000 Xxxxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxx 00000 or such other address as he may hereafter designate.
12. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the Company, and
unless clearly inapplicable, all references herein to the Company shall be
deemed to include any such successor. In addition, this
7
Agreement shall be binding upon and inure to the benefit of the Employee and his
heirs, executors, legal representatives and assigns; provided, however, that the
obligations of Employee hereunder may not be delegated without the prior written
approval of the Board of Directors of the Company.
13. Amendments. This Agreement may not be altered, modified,
amended or terminated except by a written instrument signed by each of the
parties hereto.
14. Prior Agreements Superseded. This Agreement supersedes any
employment or consulting agreements, oral or written, entered into between
Employee and the Company prior to the date of this Agreement.
15. Change of Control.
(a) In the event there shall be a change in the
present control of the Company, as hereinafter defined, and the Employee's
working conditions as contemplated hereby shall have been adversely affected as
a result thereof, Employee shall have the option, exercisable within six (6)
months of his becoming aware of such event, to terminate this Agreement
forthwith. Upon such termination, Employee shall have the right to immediately
receive as a lump sum payment an amount equal to three times the total
compensation paid to Employee during the immediately preceding fiscal year of
the Company, less $1.00.
(b) For purposes of this Agreement, a change in the
present control of the Company shall mean:
(i) if any "person" (as such term is used in Section
13(d) and 14(d) of the Exchange Act) other than Computer Concepts Corp., the
Company or any "person" who on the date of this Agreement is a director or
officer of the Company, becomes the "beneficial owner" (as defined in Rule
13(d)-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing thirty percent (30%) of the voting power of the Company's
then outstanding securities; or
(ii) if during any period of two (2) consecutive
years during the term of this Agreement, individuals who at the beginning of
such period constitute the Board of Directors cease for any reason to constitute
at least a majority thereof, unless the election of each director who is not a
director at the beginning of such period has been approved in advance by
directors representing at least two-thirds (2/3) of the directors then in office
who were directors at the beginning of the period.
16. Applicable Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Delaware,
without regard to conflicts of laws.
17. Acknowledgment. Employee acknowledges that he has
carefully read this
8
Agreement and hereby represents and warrants to the Company that Employee's
entering into this Agreement, and the obligations and duties undertaken by
Employee hereunder, will not conflict with, constitute a breach of or otherwise
violate the terms of any other agreement to which Employee is a party and that
Employee is not required to obtain the consent of any person, firm, corporation
or other entity in order to enter into and perform his obligations under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SOFTWORKS, Inc.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: President &
Chief Executive Officer
/s/ Xxxxxx XxXxxxxxxx
-------------------------------------
Name: Xxxxxx XxXxxxxxxx
Title: Chief Financial Officer
