EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of January 1, 1998, by
and between Policy Management Systems Corporation, a South Carolina
corporation ("Employer"), and XXXXXX X. XXXXXXXX ("Employee").
WHEREAS, Employer and Employee wish to alter their current employment
arrangement; and
WHEREAS, Employer and Employee are desirous of continuing Employee's
employment with Employer for the period of five years beginning January 1,
1998, and on the terms and conditions, set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and obligations herein contained, the parties hereby agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee accepts
----------
such employment, according to the terms and conditions set forth in this
Agreement.
2. TERM.
----
(a) The term of Employee's employment hereunder shall be for a period
commencing on January 1, 1998, and continuing through December 31, 2002.
Notwithstanding the foregoing, Employee's employment by Employer hereunder may
be earlier terminated, subject to Section 10 hereof. The period of time
between the commencement and termination of Employee's employment hereunder
shall be referred to herein as the "Employment Period."
(b) In the event of a "Change in Control" on or before June 30, 1998, as
defined in Section 10 of this Agreement, the five year term shall be extended
for an additional 12-month period.
3. POSITION AND SERVICES.
---------------------
(a) Employee shall hold the position of Special Consultant to the CEO of
Employer and will report to the CEO. Employee shall have the following duties
and responsibilities: (i) sales and marketing consulting; (ii) consulting on
improvements in customer satisfaction; (iii) consulting on pricing of products
and services; (iv) to keep his knowledge and education current in the fields
of insurance and insurance related technologies; and (v) such other duties and
responsibilities as are mutually agreed to by Employee and the CEO of
Employer. Such duties are expected to include special assignments of
significance to Employer and Employee shall have no sales quotas.
(b) Employee shall spend 1,000 hours per annum in the employment of
Employer and report quarterly to the General Counsel the hours expected within
15 days after the end of each calendar quarter. Notwithstanding the
foregoing, Employee shall have the right to enter into such consulting or
other working relationships as he may choose. Employee agrees to notify the
General Counsel of any such consulting or working arrangement within a
reasonable time prior to entering such an arrangement. Employee will not
offer consulting or other services to PMSC's customers or prospects which are
offered by Employer nor will Employee offer consulting or other services which
enhance the position of a competitor vis-a-vis Employer.
4. BASE SALARY.
-----------
(a) Employer shall pay to Employee an initial base salary at an annual
rate of $370,000, subject to applicable income and employment tax withholdings
and all other required and authorized payroll deductions and withholdings.
Employee's salary shall be payable in accordance with Employer's payroll
practices. Employee's annual base salary will not be adjusted during the
Employment Period.
(b) In the event of a "Change in Control" on or before June 30, 1998, as
defined in Section 10 of this Agreement, Employee's base salary, as in effect
immediately prior to such Change in Control, shall be increased to 150% of
such base salary.
5. INDEMNIFICATION. During the Term and thereafter, Employer shall
---------------
indemnify and hold harmless Employee to the fullest extent permitted by
applicable law and the Articles of the Incorporation and By-laws of Employer
from and against losses, claims, damages, costs, expenses, liabilities or
judgments or amounts paid in settlement with the approval of Employer of or in
consideration with any claim, action, suit proceeding or investigation based
in whole or in part on the fact that Employee is or was an officer or employee
of Employer. Any subsequent changes to the Employer's Articles of
Incorporation or By-Laws reducing the indemnity rights granted to Employer's
officers shall not affect the rights granted hereunder.
6. MUTUAL RELEASES. Upon the execution of this Agreement and as
----------------
consideration for their mutual obligations hereunder, Employee and Employer
--
each agree to execute and honor the terms of a waiver and release of all
preexisting claims against one another in the forms set forth in Exhibit A
(Employee) and Exhibit B (Employer) hereto, which are incorporated herein by
reference.
7. ARBITRATION. Except as to actions for injunctive relief as provided in
-----------
Section 15 hereof, any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted, as
provided below, before a single arbitrator or three arbitrators, in the State
of South Carolina, in accordance with the rules of the American Arbitration
Association then in effect. It is hereby expressly agreed that the arbitrator
or arbitrators in any proceeding conducted hereunder shall not have the
authority to award punitive damages to either party hereto. Except as may be
required to enter judgment on the award as provided below, the proceedings and
award of any such arbitration shall at all times be kept confidential by the
parties hereto, and the parties shall require the arbitrator or arbitrators to
maintain the same confidentiality. Judgment may be entered on the arbitration
award in any court having jurisdiction. All expenses of any arbitration
proceeding hereunder shall be borne by the party who, as determined by the
arbitrator or arbitrators, is not the prevailing party in the arbitration,
including, without limitation, the reasonable attorneys' fees and expenses of
the prevailing party. In any arbitration under this Agreement, a party
requesting arbitration shall notify the other party in writing of the
existence of the dispute setting forth all issues to be resolved. The parties
shall first attempt to agree upon a mutually agreeable arbitrator to decide
the dispute. If the parties are unable to mutually agree upon a single
arbitrator within 30 days of the notice of dispute, then within 45 days of the
notice of dispute each party shall notify the other of the name, address and
telephone number of their selected arbitrator. The two arbitrators so
selected shall then select a third independent arbitrator within 75 days from
the notice of dispute and the dispute will be determined by the three
arbitrators so selected. The vote of two of the three arbitrators shall be
required in support of any decision or award by the three arbitrator panel.
8. EMPLOYEE BENEFITS AND PERQUISITES.
---------------------------------
(a) During the period of employment, Employee shall be entitled to receive
the same standard employment benefits as other employees of Employer receive
from time to time. Employee shall be entitled to fully participate in all of
Employer's future employee benefit programs for employees generally, in
accordance with their then-existing terms. Nothing herein shall be
interpreted as limiting Employer's right to amend or terminate any employee
benefit plan or program at any time in any manner as applied to employees of
Employer generally. Employee shall receive, at their current asset book value
as of January 1, 1998, title to the office furniture and equipment in use by
Employee on the effective date of this Agreement and a $45,000 credit toward
an automobile of Employee's choice.
(b) In order to stay abreast of trends in the insurance and technology
industries, Employee may attend up to four trade shows, conferences or
seminars per year and at least one may be outside the continental United
States. Attendance shall be at Employer's expense and subject to Employer's
policy and procedures governing expense reimbursement.
(c)
Employee's life insurance benefit will be maintained at the current level and
will not be reduced during the term of this Agreement.
(d) Employee's vested benefits will not be changed unless they are
enhanced during the term of this Agreement. In the event of such enhancement,
Employee shall be entitled to the enhanced benefit.
9. WORKING FACILITIES. Employee shall be entitled to perform his duties
------------------
from facilities outside of Employer's facilities, including his residence.
When working at Employer's facilities, Employee shall be furnished an office,
clerical support, and other facilities and services at the level provided to
Vice Presidents of the Employer for the performance of his duties as needed.
Employee shall also be provided with access to the Employer's computer network
and e-mail services and an Employee telephone credit card for use in
performing services for the Employer.
10. TERMINATION. This Agreement does not grant Employee any right or
-----------
entitlement to be retained by Employer, and shall not affect or prejudice
Employer's right to discharge Employee for the specific reasons set forth
below.
(a) TERMINATION BY EMPLOYER FOR CAUSE. In the event of termination of
---------------------------------
Employee's employment hereunder by Employer "For Cause," Employee shall not be
entitled to any severance pay, except as otherwise provided in any applicable
benefits plans of Employer that cover Employee.
A termination of Employee's employment hereunder by Employer shall be deemed
to have occurred "For Cause" if, within a reasonable period after such
termination, a good faith finding shall be made by a majority of the Board
that such termination occurred as a result of any of the following: (A) any
act committed by Employee which shall represent a breach in any material
respect of any of the terms of this Agreement and which breach is not cured
within 30 days of receipt by Employee of written notice from Employer of such
breach; (B) improper conduct consisting of sexual harassment or act of moral
turpitude; (C) use of illegal drugs or unauthorized use of alcohol in the
workplace or being under the influence of illegal drugs or alcohol while at
work; or (D) any conviction of, or plea of nolo contendere to, a crime (other
than a traffic violation) that constitutes a felony under the laws of the
United States or any political subdivision thereof. Employer shall provide
written notice to Employee, within a reasonable time period, that the Board is
convening for purposes of determining whether Employee's termination of
employment was For Cause and Employee (or his representative) shall have the
right to appear before the Board in connection with such determination.
If Employer intends to terminate this Agreement under either (B) or (C) above,
Employer shall first provide written notice to Employee and if the Employee
disputes the factual basis for Employer's right to so terminate, then the
dispute shall be submitted to arbitration under Section 7 and any termination
shall be delayed until the arbitration decision or award is entered.
(b) TERMINATION BY EMPLOYEE FOR GOOD REASON BEFORE OR AFTER A CHANGE IN
-------------------------------------------------------------------
CONTROL WHICH OCCURS PRIOR TO JUNE 30, 1998. In the event of termination of
-----------------------------------------
Employee's employment hereunder by Employee prior to the end of the five year
term "For Good Reason": (i) In the event of a "Change in Control", Employee
shall be entitled to severance payments in the form of continuation of
Employee's $370,000 base salary times 150%, as in effect immediately prior to
such termination, for the remainder of the five year term; and (ii) if such
termination is after a Change in Control which occurs prior to June 30, 1998,
for the remainder of the five year term Employee shall also receive an annual
payment equal to 150% of the highest annual bonus earned by Employee with
respect to his performance during the calendar years 1996 or 1997.
Such payment shall be made in equal monthly installments commencing the first
day of the first month following such termination.
The employment of Employee hereunder shall be deemed to have been terminated
"For Good Reason" upon termination of employment by Employee following a
"constructive termination event," subject to the provisions of this subsection
(b).
For purposes hereof, the following shall constitute constructive termination
events if such events occur prior to or after a "Change in Control" (as
hereinafter defined): a material breach by Employer of any of its obligations
to provide Employee with the compensation and benefits provided in Sections 4,
8 and 9 hereof.
For purposes hereof, the following shall constitute constructive termination
events if such events occur upon or after a "Change in Control": (1) any
reduction of Employee's salary; (2) a material reduction from pre-Change in
Control levels in Employee's employee benefits and perquisites, unless
Employer provides a substitute benefit that is at least as favorable on an
after-tax basis; and (3) a relocation of Employee's office by more than 35
miles that increases Employee's travel distance from home.
An event described above as a constructive termination event shall be treated
as a constructive termination event hereunder following the expiration of 30
days from the date Employee has notified Employer of the occurrence of such
event and his intention to treat such event as a constructive termination
event and
terminate his employment on the basis thereof, provided that Employer has not
cured the constructive termination event before the expiration of such 30 day
period. Any notice given by Employee under this paragraph shall be effective
only if given to Employer in writing within 45 days after the event in question.
A "Change in Control" shall be deemed to have taken place upon the occurrence
of one of the following events:
(1) any "person" (as such term is defined in Section 3 (a) (9) of the
Exchange Act and as used in Sections 13 (d) (3) and 14 (d) (2) of the Exchange
Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 33 a% or more of the combined voting power of the Company's then
outstanding securities eligible to vote for the election of the Board (the
"Company Voting Securities"); provided, however, that the event described in
this paragraph shall not be deemed to be a Change in Control by virtue of any
of the following situations: (i) an acquisition by the Company or any of its
subsidiaries; (ii) an acquisition by any employee benefit plan or employee
stock plan sponsored or maintained by the Company or any of its subsidiaries
or any trustee or fiduciary with respect to such plan; or (iii) an acquisition
by any underwriter temporarily holding Company Voting Securities pursuant to
an offering of such securities;
(2) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof; provided, however, that any person becoming a director subsequent to
the date hereof, whose election, or nomination for election, by the Company's
shareholders was approved by a vote of at least two-thirds of the directors
comprising the Incumbent Board who are then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without objection to such nomination)
shall be, for purposes of this paragraph (2), considered as though such person
were a member of the Incumbent Board, but excluding for this purpose any
individual elected or nominated as a director of the Company as a result of
any actual or threatened solicitation of proxies or consents by or on behalf
of any person other than the Board;
(3) the consummation of a merger, consolidation, share exchange or similar
form of corporate reorganization of the Company or any of its subsidiaries
that requires the approval of the Company's shareholders, whether for such
transaction or the issuance of securities in connection with the transaction
or otherwise (a "Business Combination"), unless (i) immediately following such
Business Combination: (A) more than 50% of the total voting power of the
corporation resulting from such Business Combination (the "Surviving
Corporation") or, if applicable, the ultimate parent corporation which
directly or indirectly has beneficial ownership of 100% of the voting
securities eligible to elect directors of the Surviving Corporation (the
"Parent Corporation"), is represented by Company Voting Securities that were
outstanding immediately prior to the Business Combination (or, if applicable,
shares into which such Company Voting Securities were converted pursuant to
such Business Combination), and such voting power among the holders thereof is
in substantially the same proportion as the voting power of such Company
Voting Securities among the holders thereof immediately prior to the Business
Combination, (B) no person (other than any employee benefit plan or employee
stock plan sponsored or maintained by the Surviving Corporation or Parent
Corporation or any trustee or fiduciary with respect to any such plan) is or
becomes the beneficial owner, directly or indirectly, of 33 a% or more of the
total voting power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation), and (C) at least a majority of the members of the
board of directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation), following the Business Combination,
were members of the Incumbent Board at the time of the Board's approval of the
execution of the initial agreement providing for such Business Combination or
(ii) the Business Combination is effected by means of the acquisition of
Company Voting Securities from the Company, and prior to such acquisition a
majority of the Incumbent Board approves a resolution providing expressly that
such Business Combination does not constitute a Change in Control under this
paragraph (3); or
(4) the shareholders of the Company approve a plan of complete liquidation
or dissolution of the Company or the sale or other disposition of all or
substantially all of the assets of the Company and its subsidiaries, other
than a sale or disposition of assets to a subsidiary of the Company.
If on or before June 30, 1998, the Company has received any offers or
inquiries or if the Company has commenced negotiations with a third party on a
transaction which results in a Change of Control transaction occurring, then
such Change in Control transaction shall be deemed to have occurred prior to
June 30, 1998, for the purposes of Section 4(b) and
Section 10, provided, however, that any increases in compensation or change
in the meaning of "For Good Reason" shall not become effective until the
closing date of such transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any person acquires beneficial ownership of more than
33a% of the Company Voting Securities as a result of the acquisition of
Company Voting Securities by the Company which, by reducing the number of
Company Voting Securities outstanding, increases the percentage of shares
beneficially owned by such person; provided, that if a Change in Control would
occur as a result of such an acquisition by the Company (if not for the
operation of this sentence), and after the Company's acquisition such person
becomes the beneficial owner of additional Company Voting Securities that
increases the percentage of outstanding Company Voting Securities beneficially
owned by such person, a Change in Control shall then occur.
For purposes of this Section 10 only, the term "subsidiary" means a
corporation of which the Company owns directly or indirectly 50% or more of
the voting power.
(c) TERMINATION AT END OF FIVE YEARS. Upon the expiration of this
--------------------------------
Agreement on December 31, 2002 unless extended by a Change of Control event,
Employee shall not be entitled to any severance pay.
(d) OTHER TERMINATIONS. In the event of termination of Employee's
------------------
employment by Employee absent a breach of this Agreement, Employee shall not
be entitled to any severance pay, except as otherwise provided in any
applicable benefit plans of Employer that cover Employee.
(e) CONDITIONS TO SEVERANCE BENEFIT.
-------------------------------
(i) As conditions of Employee's continued entitlement to the severance
payments provided by this Section 10, Employee is required to honor in
accordance with their terms the provisions of Section 11, 12, 13 and 14
hereof. In the event that Employee fails to abide by the foregoing, all
payments to which Employee may otherwise have been entitled under this Section
10 shall immediately terminate and be forfeited, and any portion of the base
salary continuation payments that may have been paid to Employee shall
forthwith be returned to Employer. The parties hereto agree that Employee is
under no affirmative obligation to seek to mitigate or offset the severance
payments provided by this Section 10.
(ii) For purposes only of this Section, Employee shall be treated as
having failed to honor the provisions of Sections 11, 12, 13 and 14 hereof
only upon the vote of a majority of the Board following notice of the alleged
failure by Employer to Employee, an opportunity for Employee to cure the
alleged failure within a period of 30 days from the date of such notice and an
opportunity for Employee to be heard on the issue by the Board.
(f) POTENTIAL EXCISE TAXES. Should any payments made or benefits provided
----------------------
to Employee under this Agreement be subject to an excise tax pursuant to
Section 4999 of the Internal Revenue Code or any successor or similar
provision thereto, or comparable state or local tax laws, Employer shall pay
to Employee such additional compensation as is necessary (after taking into
account all federal, state, and local income taxes payable by Employee as a
result of the receipt of such compensation) to place Employee in the same
after-tax position he would have been in, had no such excise tax (or any
interest or penalties thereon) been paid or incurred. Employer shall pay such
additional compensation upon the earlier of: (i) the time at which Employer
withholds such excise tax from any payments to Employee; or (ii) 30 days after
Employee notifies Employer that Employee has filed a tax return which takes
the position that such excise tax is due and payable in reliance on a written
opinion of Employee's tax advisor that it is more likely than not that such
excise tax is due and payable. If Employee makes any additional payment with
respect to any such excise tax as a result of an adjustment to Employee's tax
liability by any federal, state, or local authority, Employer shall pay such
additional compensation within 30 days after Employee notifies Employer of
such payment.
11. CONFIDENTIALITY. Employee agrees that he will not at any time during
---------------
the term hereof or thereafter for any reason, in any fashion, form, or manner,
either directly or indirectly, divulge, disclose, or communicate to any
person, firm, corporation, or other business entity, in any manner whatsoever,
any confidential information or trade secrets concerning the business of
Employer (including the business of any unit thereof), which materially
effects Employer including, without limiting the generality of the foregoing,
the confidential information described in Exhibit C, which is attached hereto
and incorporated herein by reference. Employee hereby acknowledges and agrees
that the prohibition against disclosure of confidential information recited
herein is in addition to, and not in lieu of, any rights or remedies which
Employer may have available pursuant to the laws of any jurisdiction or at
common law to prevent the disclosure of confidential information or trade
secrets, and the enforcement by Employer of its rights and remedies pursuant
to this Agreement shall not be construed as a waiver of any other rights or
available remedies which it may possess in law or equity absent this
Agreement. The foregoing shall not prohibit the disclosure of information to
the extent such disclosure is required by law or judicial or governmental
process, provided however, that the party intending to disclose information
under this provision shall notify the other party of the intent to disclose a
reasonable time prior to such disclosure.
12. PROPERTY OF EMPLOYER. Employee acknowledges that from time to time in
--------------------
the course of
providing services pursuant to this Agreement he shall have the opportunity to
inspect and use certain property, both tangible and intangible, of Employer,
and Employee hereby agrees that said property shall remain the exclusive
property of Employer, and Employee shall have no right or proprietary interest
in such property, whether tangible or intangible, including, without
limitation, Employer's customer and supplier lists, contract forms, books of
account, computer programs, and similar property.
13. NON-COMPETITION. Employee agrees that he shall not, during the
---------------
Employment Period and for a period of two (2) years after the termination or
end thereof, directly or indirectly compete with Employer by engaging in the
activities set forth in Exhibit D, which is attached hereto and incorporated
herein by reference (the "Prohibited Activities"), within the geographic area
which is set forth on Exhibit E, which is attached hereto and incorporated
herein by reference (the "Restricted Area"). For purposes of this Section 13,
Employee recognizes and agrees that Employer conducts and will conduct
business in the entire Restricted Area and that Employee will perform his
duties for Employer within the entire Restricted Area. Employee shall be
deemed to be engaged in and carrying on said Prohibited Activities if he
engages in said activities in any capacity whatsoever, including, but not
limited to, by or through a partnership of which he is a general or limited
partner or an employee engaged in said activities, or by or through a
corporation or association of which he owns five percent (5%) or more of the
stock or of which he is an officer, director, employee, member,
representative, joint venturer, independent contractor, consultant, or agent
who is engaged in said activities. Employee agrees that during the two (2)
year period described above, he will notify Employer of the name and address
of each Employer with whom he has accepted employment during said period and
provide a description of his position and duties. Such notification shall be
made in writing within 30 days after Employee accepts any such employment.
14. NON-SOLICITATION OF EMPLOYEES. Employee agrees that he shall not,
-----------------------------
during the Employment Period and for a period of two years after the
termination thereof, for any reason, directly or indirectly induce or attempt
to induce any employee of Employer to terminate his or her employment. During
the Employment Period and for a period of two years after the termination
thereof for any reason, Employee also will not, without prior written consent
of Employer, offer employment either on behalf of himself or on behalf of any
other individual or entity (i) to any employee of Employer, or (ii) to any
former employee of Employer during the first six months after the former
employee's termination of employment.
15. BREACH OF RESTRICTIVE COVENANTS. The parties agree that a breach or
-------------------------------
violation of Sections 11, 12, 13 and 14 hereof will result in immediate and
irreparable injury and harm to Employer, who shall have, in addition to any
and all remedies of law and other consequences under this Agreement, the right
to an injunction, specific performance or other equitable relief to prevent
the violation of the obligations hereunder.
16. STOCK OPTIONS.
-------------
(i) Employee's change of position or status pursuant to this Agreement
does not constitute a demotion as defined in paragraph 7.4 of Employer's Long
Term Incentive Plan. All vested stock options must be exercised by Employee
during the period of employment or within 90 days thereafter or will be
forfeited in accordance with the terms of Employer's stock option plans.
(ii) Notwithstanding the provisions of Section 18 of this Agreement, the
provisions in Section 3C Additional Compensation of any Stock
-----------------------
Option/Non-Compete Agreement between the Employer and Employee which pre-date
this Agreement are deleted in their entirety and are superseded in full by
this Agreement.
(iii) Notwithstanding the provisions of Section 18 of this Agreement, the
provisions in any stock option agreement between Employer and Employee shall
continue to govern the rights of Employee with respect to those stock options
in the event of a "Change in Control" as that term is defined in the relevant
stock option agreement and this Agreement shall have no force or effect with
respect to such stock options.
(iv) Notwithstanding the provisions of Section 18 of this Agreement, the
Employee Stock Option/Non-Compete Agreements between Employer and Employee
dated on or after May 12, 1994, are amended to delete the provision in
paragraph 1 of such agreements which allow such options to be revoked by the
Compensation Committee of the Board.
(v) If existing stock options are repriced by the Company, Employee shall
participate in the repricing.
17. NOTICES. Any notice required to be given pursuant to the provisions
-------
of this Agreement shall be in writing and delivered personally or sent by
registered or certified mail, return receipt requested, or by a nationally
recognized overnight courier service, postage or delivery prepaid, to the
party named at the address set forth below, or at such other address as each
party may hereafter designate in a written notice to the other party delivered
in accordance with the terms of this Section 17:
Employer: Policy Management Systems Corporation
Xxx XXX Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Employee: Xxxxxx X. Xxxxxxxx
000 Xxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Any such notices shall be deemed to have been delivered when served personally
or, in the case of Notices sent by registered or certified mail or courier,
upon signature acknowledging receipt thereof.
18. ENTIRE AGREEMENT.
----------------
(a) CHANGE, MODIFICATION, WAIVER. No change or modification of this
----------------------------
Agreement shall be valid unless it is in writing and signed by each of the
parties hereto. No waiver of any provision of this Agreement shall be valid
unless it is in writing and signed by the party against whom the waiver is
sought to be enforced. The failure of a party to insist upon strict
performance of any provision of this Agreement in any one or more instances
shall not be construed as a waiver or relinquishment of the right to insist
upon strict compliance with such provision in the future.
(b) INTEGRATION OF ALL AGREEMENTS. This Agreement constitutes the entire
-----------------------------
Agreement between the parties hereto with regard to the subject matter hereof,
and there are no agreements, understandings, specific restrictions,
warranties, or representations relating to said subject matter between the
parties other than those set forth herein or herein provided for. This
Agreement supersedes the June 30, 1997 Employment Agreement between Employer
and Employee and the June 30, 1997 Agreement is terminated by this Agreement.
(c) SEVERABILITY OF PROVISIONS. In the event that any one or more of the
--------------------------
provisions of this Agreement or any word, phrase, clause, sentence, or other
portion thereof (including without limitation the geographical and temporal
restrictions contained herein) shall be deemed to be illegal or unenforceable
for any reason, such provision or portion thereof shall be modified or deleted
in such a manner so as to make this Agreement as modified legal and
enforceable to the fullest extent permitted under applicable laws.
19. ASSIGNMENT. The rights, duties, and obligations under this Agreement
----------
may not be assigned by either party, except that if there is a Change in
Control as defined in Section 10, Employer may assign its rights and
obligations hereunder to the person, corporation, partnership, or other entity
which has gained such control. In addition, this Agreement shall be
assignable by Employer to any entity acquiring all or substantially all of the
assets of Employer. The provisions of this Agreement shall be binding on any
such assignee.
20. GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the state of South Carolina.
21. MISCELLANEOUS.
-------------
(a) FORM. As employed in this Agreement, the singular form shall include,
----
if appropriate, the plural.
(b) HEADINGS. The headings employed in this Agreement are solely for the
--------
convenience and reference of the parties and are not intended to be
descriptive of the entire contents of any paragraph and shall not limit or
otherwise affect any of terms, provisions, or construction thereof.
22. COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall take effect as an original and all of which
-
shall evidence one and the same Agreement.
IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
EMPLOYER:
POLICY MANAGEMENT SYSTEMS CORPORATION
BY: /S/ 12-15-97
---------------
XXXXXXX X. XXXXXXXX
EMPLOYEE:
/S/ 12-15-97
---------------
XXXXXX X. XXXXXXXX
EXHIBIT A
---------
EMPLOYEE RELEASE AND COVENANT
-----------------------------
This RELEASE AND COVENANT is executed by Xxxxxx X. Xxxxxxxx ("Employee")
and delivered to Policy Management Systems Corporation ("Employer").
In consideration of the Employment Agreement between Employment Agreement
between Employer and Employee dated ______________, 1997, (the "Employment
Agreement"), Employee hereby agrees as follows:
Section 1. Release and Covenant. Employee, of his own free will,
--------------------
voluntarily releases and forever discharges Employer and its subsidiaries and
affiliates, and their respective directors, officers, employee, agents,
stockholders, successors, and assigns (both individually and in their official
capacities) from, and covenants not to xxx or proceed against any of the
foregoing on the basis of, any and all past or present causes of action,
suits, agreements, or other claims which Employee, his dependents, relatives,
heirs, executors, administrators, successors, and assigns has or have against
Employer, including upon or by reason of any matter arising out of his
employment by Employer, and including, but not limited to, any alleged
violation of the Civil Rights Acts of 1964 and 1991, the Equal Pay at of 1963,
the Age Discrimination in Employment Act of 1967, the Rehabilitation Act of
1973, the Older Workers Benefit Protection Act of 1990, the Americans with
Disabilities Act of 1990, and any other federal or state law, regulation, or
ordinance, or public policy, contract, or tort law, having any bearing
whatsoever on the terms and conditions of employment with Employer. This
release shall not, however, constitute a waiver of any of Employee's rights
upon termination of employment under the Employment Agreement or under any
Stock Option Plan in which Employee received stock options, or under the terms
of any employee benefit plan of Employer in which Employee is participating.
Section 2. Due Care. Employee acknowledges that he has received a copy
--------
of this Release prior to its execution and has been advised hereby of his
opportunity to review and consider this Release for 21 days prior to its
execution. Employee further acknowledges that he has been advised hereby to
consult with an attorney prior to executing this Release. Employee enters
into this Release having freely and knowingly elected, after due
consideration, to execute this Release and to fulfill the promises set forth
herein. This Release shall be revocable by Employee during the 7-day period
following its execution, and shall not become effective or enforceable until
the expiration of such 7-day period. In the event of such a revocation,
Employee shall not be entitled to the consideration for this Release set forth
above.
Section 3. Reliance by Employee. Employee acknowledges that, in his decision
--------------------
to enter into this Release, he has not relied on any representations,
promises, or agreements of any kind, including oral statements by
representatives of Employer, except as set forth in this Release and the
Employment Agreement.
This RELEASE AND COVENANT is executed by Employee and delivered to
Employer on _____________, 1997.
EMPLOYEE:
By:
EXHIBIT B
---------
EMPLOYER RELEASE AND COVENANT
-----------------------------
This RELEASE AND COVENANT is executed by Policy Management Systems
Corporation ("Employer") and delivered to Xxxxxx X. Xxxxxxxx ("Employee").
In consideration of the Employment Agreement between Employer and
Employee dated _________, 1997, (the "Employment Agreement"), Employer hereby
agrees as follows:
Employer releases and forever discharges Employee, his dependents, heirs,
executors, administrators, successors, and assigns (the "releasees") from, and
covenants not to xxx or proceed against Employee and his releasees on the
basis of, any and all past or present causes of action, suits, arrangements,
or other claims which Employer has against Employee upon or by reason of any
matter, cause, or thing whatsoever, including, but not limited to, any matters
arising out of his employment by Employer. This release shall not, however,
constitute a waiver of any of Employer's rights under the Employment
Agreement.
This RELEASE AND COVENANT is executed by Employer and delivered to
Employee on _____________, 1997.
EMPLOYER:
By:
EXHIBIT C
CONFIDENTIAL INFORMATION
1. All software/systems (including all present, planned, and future
software), whether licensed or unlicensed, developed by or on behalf of, or
otherwise acquired by Policy Management Systems Corporation or any of its
subsidiaries.
"All software/system" shall mean:
- all code in whatever form
- all data pertaining to the architecture and design of such software systems
- all documentation in whatever form
- all flowcharts
- any reproduction or recreation in whole or in part of any of the above in
whatever form.
2. All business plans and strategies including:
- strategic plans
- product plans
- marketing plans
- financial plans
- operating plans
- resource plans
- all research and development plans including all data produced by such
efforts.
3. Internal policies, procedures, methods, and approaches which are unique
to Policy Management Systems Corporation and are non-public.
4. Any information relating to the employment, job responsibility,
performance, salary, and compensation of any present or future officer or
employee of Policy Management Systems Corporation.
EXHIBIT D
Acting in any capacity, either individually or with any corporation,
partnership, or other entity, directly or indirectly, in providing, or
proposing to provide, data processing software systems, related automation
support services and information services to the insurance industry,
including, but not limited to, application software, processing, consulting,
and related services, in the performance of any of the following types of
duties in any part of the insurance industry:
1. The performance of the sales and marketing functions.
2. The responsibility for sales revenue generation.
3. The responsibility for customer satisfaction.
4. The responsibility for research and development of insurance database
products.
5. The responsibility for the research and development of information
data processing systems and services.
6. The providing of input to pricing of products.
7. The planning and management of data processing services resources.
8. The coordination of the efforts of the various aspects of computer
systems services organizations with other functions.
9. The planning and management of information services resources.
10. The providing and management of an operations staff to support the
above listed activities.
EXHIBIT E
RESTRICTED AREA
Fifty mile radius of the city limits of the following cities:
Toronto, Canada Birmingham, Alabama
Columbus, Ohio Minneapolis, Minnesota
Cincinnati, Ohio San Diego, California
Chicago, Illinois Melbourne, Australia
Dallas/Fort Worth, Texas Indianapolis, Indiana
Los Angeles, California St. Xxxx, Minnesota
Boston, Massachusetts Denver, Colorado
Philadelphia, Pennsylvania Mobile, Alabama
Hartford, Connecticut Seattle, Washington
San Francisco, California Bloomington, Illinois
New York City, New York Des Moines, Iowa
Columbia, South Carolina San Xxxx, Puerto Rico
Sydney, Australia El Paso, Texas
Honolulu, Hawaii Detroit, Michigan
Jacksonville, Florida Phoenix, Arizona
Xxxxxxxxx, Xxxxxxxxx Xxx Xxxxxxx, Xxxxx
Xxxxxxxx, Xxxxxx Baltimore, Maryland
EXHIBIT E (CONTD.)
Kansas City, Missouri San Jose, California
Stanford, Connecticut Memphis, Tennessee
Oklahoma City, Oklahoma Washington, D.C.
Atlanta, Georgia New Orleans, Louisiana
Houston, Texas London, England
Miami, Florida Paris, France
Princeton, New Jersey St. Louis, Missouri
Cleveland, Ohio Nashville, Tennessee
ADDENDUM NO. 1
TO THE
EMPLOYMENT AGREEMENT
This Addendum is entered into on January 26, 1998 to be effective January 1,
1998, and is hereby made a part of and incorporated into the Employment
Agreement by and between POLICY MANAGEMENT SYSTEMS CORPORATION ("PMSC") and
XXXXXX X. XXXXXXXX ("Employee"), dated January 1, 1998 (the "Agreement"). In
the event that any provision of this Addendum and any provision of the
Agreement is inconsistent or conflicting, the inconsistent or conflicting
provision of this Addendum shall be and constitute an amendment of the
Agreement and shall control, but only to the extent that such provision is
inconsistent or conflicting with the Agreement.
PMSC and Employee hereby agree to amend the above referenced Agreement as
follows:
1. The first sentence of Section 4(a) is deleted in its entirety and is
replaced with the following:
"Employer shall pay to Employee an initial base salary at an annual rate of
$387,000 for the calendar years 1998, 1999 and 2000 and at an annual rate of
$370,000 thereafter, subject to applicable income and employment tax
withholdings and all other required and authorized payroll deductions and
withholdings."
2. The last sentence of Section 8(a) is deleted in its entirety.
PMSC and Employee certify by their undersigned authorized agents that they
have read this Addendum and the Agreement and agree to be bound by their terms
and conditions.
PMSC EMPLOYEE
POLICY MANAGEMENT SYSTEMS CORPORATION XXXXXX X. XXXXXXXX
By: /S/ 1/26/98 /S/ 1/26/98
------------- -------------
(Authorized Signature)
(in non-black ink, please)
Xxxxxxx X. Xxxxxxxx
-------------------
(Name)
Executive Vice President and General
Counsel
-------
(Title)
1/26/98
-------
(Execution Date)
