EXHIBIT 10.25
EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") made and entered into as of November 15, 2000
by and between Xxxxxxx X. Xxxxxxxxx (the "Employee"), and Mercator Software Inc.
("Mercator"), a Delaware corporation having its principal place of business at
00 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx 00000.
WHEREAS, Mercator wishes to employ the Employee and the Employee wishes to be
employed under the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. Employment and Term.
1.1 Mercator hereby employs the Employee as Senior Vice President Finance
and Administration and Chief Financial Officer ("SVP-CFO") for a term of
employment as defined in paragraph 1.2 hereof. The Employee shall,
consistent with the bylaws of Mercator and as required by the Board of
Directors of Mercator (the "Board"), be responsible for and perform all
lawful services, acts or things necessary or advisable which are normally
associated with the positions of SVP-CFO, including managing finance,
facilities, investor relations and certain other administrative functions.
In this position the Employee is subject to the direction and supervision
of the Chief Executive Officer ("CEO") and shall report directly to the
CEO.
1.2 The Employee's employment hereunder shall commence on the date hereof
and shall continue in effect through the second anniversary of the date
hereof; except that on each day on which the Employee is employed
hereunder, the term of this Agreement shall automatically be extended for
an additional day. The term of this Agreement shall expire upon any
termination of the Employee's employment pursuant to paragraph 6 hereof.
1.3 The Employee shall have such powers and duties as may from time to
time be prescribed by the Board, provided that such duties are consistent
with the Employee's position as SVP-CFO. The Employee shall devote
substantially all of his working time and efforts to the business and
affairs of Mercator. Notwithstanding the foregoing, nothing shall preclude
the Employee from serving on the boards of directors of a reasonable
number of other corporations or the boards of a reasonable number of trade
associations which are not competitive with Mercator, or managing his
personal investments and affairs, provided that none of the foregoing
activities interfere with the proper performance of his duties and
responsibilities as Mercator's VP-CFO.
1.4 The Employee's principal place of employment during his employment
with Mercator shall be in Wilton, Connecticut.
2. Compensation.
2.1 Mercator agrees to pay the Employee a salary at the annualized rate of
Three Hundred Thousand Dollars ($300,000.00) ("Base Salary") payable in
accordance with Mercator's standard payroll practices. Such salary shall
be reviewed at least annually by the Board and shall be subject to
increase, but not decrease, during the term of this Agreement.
2.2 The Employee shall be eligible to receive a target bonus equal to
fifty percent (50%) of the Employee's Base Salary for each calendar year
during the Employee's term of employment. The Employee's actual bonus for
any year may be greater or less than the target bonus with a maximum bonus
payment of one hundred percent (100%) of salary. Such actual bonus shall
be determined based upon criteria established by the Compensation
Committee of the Board, with input from the Employee, at the beginning of
each year. Such bonus shall be payable no later than the first date that
any other senior-level employees are paid their bonus. In the event
Mercator adopts different bonus arrangements, Employee shall be eligible
to participate in these arrangements, if applicable to senior management
of Mercator and in accordance with the terms of any such arrangement and
will not participate in any other bonus arrangements.
3. Benefits and Expenses.
3.1 The Employee shall be entitled to participate in all benefit plans,
programs and arrangements of Mercator on the same basis, subject to the
same qualifications as other Mercator employees and pursuant to Mercator's
then prevailing policies, including, without limitation, any group
medical, hospitalization, 401K plan or other fringe benefit plans in
effect with respect to employees and executives of Mercator in general,
but not including any group profit sharing or other profit-based incentive
program.
3.2 The Employee shall be entitled to the same number of paid holidays per
year as set forth by Mercator for its employees in general plus twenty
(20) paid vacation days to be scheduled by the mutual agreement of the
parties.
3.3 Upon presentation of proper documentation and receipts, Mercator will
promptly reimburse the Employee for expenses he reasonably incurs in
connection with the performance of his duties (including business travel
and entertainment expenses).
3.4 Relocation: i)The Employee will receive up to $50,000 (net of taxes)
for reasonable and actual relocation expenses including a rental apartment
through May 30, 2001, ii) house hunting trip for spouse, iii) air fare for
permanent relocation of spouse, iv) a lump sum payment of $30,000 (net of
taxes) upon permanent relocation to the Wilton area, a lump sum payment of
$10,000 (net of taxes) twelve (12) months after permanent relocation to
the Wilton area and a final lump sum payment of $10,000 (net of taxes)
twenty-four (24) months after permanent relocation to the Wilton area.
4. Stock Options. During each year of the Employee's term of employment, the
Employee shall be eligible for a grant of Mercator stock options. Such
grants shall be at a level, and on terms and conditions that are
commensurate with his position and responsibilities with Mercator and
appropriate in light of corresponding grants to other senior-level
employees of Mercator. Upon employment with Mercator, the Employee shall
be granted 100,000 stock options with a grant date of November 21, 2000.
Fifty thousand (50,000) of these options will vest on a quarterly basis in
one (1) year. The remainder will vest quarterly over the following three
(3) years.
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5. Employment Guidelines and Confidentiality.
5.1 The Employee shall at all times be bound by and adhere to the
Conditions of Employment attached hereto as Appendix B and incorporated
herein by reference, including as such Conditions of Employment may be
changed by Mercator from time to time, following communication of any such
changes to the Employee in writing.
5.2. At all times, both during the Employee's employment by Mercator and
after his termination, the Employee will keep in confidence and trust all
proprietary and confidential materials and information of Mercator and of
Mercator's clients, including valuable trade secrets ("Confidential
Information"). The Employee will not use or disclose any such Confidential
Information or anything relating to it without the written consent of
Mercator, except in the ordinary course of performing his duties as an
employee of Mercator, to his attorney on an as needed basis or, if the
Employee is requested or required (orally or in writing) to do so by court
order, subpoena, administrative order, proceeding, civil investigatory
demand, interrogatory or any similar legal process, provided that the
Employee gives ten (10) days notice (or such shorter time as required by
such process) of any such request or requirements to Mercator prior to
disclosing the Confidential Information in order to allow Mercator to
protect the Confidential Information.
6. Termination.
6.1 (a) Notice of Termination. Any purported termination of the Employee's
employment by Mercator or by the Employee shall be communicated by written
Notice of Termination to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" means a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment under the
provision so indicated; notwithstanding the foregoing, if Mercator
terminates the Employee's employment other than for Cause (as hereinafter
defined) or if the Employee terminates his employment without Good Reason
(as hereinafter defined), Mercator or the Employee, as the case may be,
shall not be required to state the reasons for such termination in the
Notice of Termination.
(b) Date of Termination. "Date of Termination" means the date
specified in the Notice of Termination but no less than 10 days after the
date of the Notice of Termination if given by Mercator and no less than 30
days after the date of the Notice of Termination if given by the Employee.
6.2 (a) The Employee's employment under this Agreement shall terminate
upon the death of the Employee, without further act of Mercator. In
addition, either party may terminate the Employee's employment under this
Agreement as a result of the Employee's Disability, upon at least 15 days
prior written notice to the other party. For purposes hereof, "Disability"
shall mean that the Employee, by reason of physical or mental disability
(excluding infrequent and temporary absences due to ordinary transitory
illness) shall be unable to perform the services required of him hereunder
for more than three (3) consecutive months or for an aggregate of six (6)
months during any twelve (12) month period. Disability shall be determined
by a licensed physician selected by Mercator and reasonably acceptable to
the Employee.
(b) Upon any termination of the Employee's employment hereunder as a
result of the Employee's death or Disability, the Employee shall be
entitled to receive (i) his Base Salary and the monetary equivalent of any
accrued but unused vacation days through the Date of Termination, (ii) a
bonus amount
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equal to his target bonus for the year of termination, pro rated through
the Date of Termination, payable within 45 days after the Date of
Termination, and (iii) any additional amounts due to him hereunder or
under any benefit plan, program or arrangement of Mercator. In addition,
notwithstanding any provision in any option agreement or plan to the
contrary, in the past or in the future, upon any such termination, all of
the Employee's Mercator stock options shall immediately vest and shall
remain exercisable by the Employee (or her estate or beneficiaries) for
the remainder of their originally stated terms. If, however, at the time
of the Employee's death, the Employee is receiving severance compensation
per the terms of this Agreement, unpaid severance will be paid to the
Employee's estate in a lump sum.
6.3 Mercator shall have the right to terminate the Employee's employment
under this Agreement for Cause upon prior Notice of Termination to the
Employee. Cause means: (i) the Employee is convicted of a felony (ii) the
Employee's willful neglect of his material obligations and duties
hereunder, which neglect the Employee shall fail to remedy within ten (10)
days after written demand from Mercator, or (iii) the Employee willfully
engages in conduct demonstrably and materially injurious to Mercator,
monetarily or otherwise, and fails to remedy such conduct within 10 days
after receipt of Notice thereof from Mercator. For the purpose of this
clause, no act, or failure to act, on the part of the Employee shall be
deemed "willful" unless done or omitted to be done, by the Employee not in
good faith and without reasonable belief that his action or omission was
in, or not opposed to, the best interests of Mercator. Upon any
termination of the Employee's employment hereunder by the Company for
Cause, the Employee shall be entitled to receive (i) his base Salary and
the monetary equivalent of any accrued but unused vacation days through
the Date of Termination, and (ii) any additional amounts due to him
hereunder or under any benefit plans, program or arrangement of Mercator.
Upon any such termination, any options granted hereunder shall immediately
expire.
6.4 Mercator shall have the right to terminate the Employee's employment
under this Agreement, without Cause, at the discretion of the Board of
Directors by Notice of Termination. If such termination occurs, Mercator
shall pay or provide the Employee (i) unpaid salary and the monetary
equivalent of any accrued but unused vacation days through the Date of
Termination, (ii) from the Date of Termination a severance compensation of
twelve (12) months of Base Salary at the rate then in effect payable in
accordance with Mercator's standard payroll practices, (iii) a bonus
amount equal to his target bonus for the year of termination, pro rated
through the Date of Termination, payable within 45 days alter the Date of
Termination; and any additional amounts due hereunder or under any benefit
plan, program or arrangement of Mercator. Notwithstanding any provision in
any option agreement or plan to the contrary, in the past or in the
future, upon any such termination all of the Employee's Mercator stock
options will immediately vest and shall remain exercisable for the
remainder of their originally stated terms.
6.5 The Employee shall have the right to terminate the Employee's
employment under this Agreement by Notice of Termination for Good Reason.
"Good Reason" means, without the Employee's written consent, the
occurrence of any of the following: (i) a significant diminution of, or
the assignment to the Employee of any duties inconsistent with, the
Employee's title, status, duties or responsibilities specified in
paragraphs 1.1 and 1.3 hereof; (ii) a reduction by Mercator in the
Employee's annual Base Salary as in effect on the date hereof or as the
same may be increased from time to time or the Employee's target bonus as
a percentage of Base Salary; (iii) the failure by Mercator to continue in
effect any compensation plan or other fringe benefit provided by Mercator
in which the Employee is then participating which by itself or in the
aggregate is material to the Employee's total compensation unless there
shall have been instituted a replacement or substitute plan or fringe
benefit providing comparable benefits: (iv) the relocation of the
Employee's office at Mercator more than fifty (50) miles from Wilton, CT;
or (v) the failure of Mercator to obtain the written assumption of this
Agreement by any successor to all or substantially all of its assets or
business within thirty (30) days after a merger, consolidation, sale or
similar change of control transaction.
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Upon any such termination, the Employee shall be entitled to the same
payments and benefits (including, without limitation, vesting of options)
specified in paragraph 6.4.
6.6 Within one year following a "Change of Control" of Mercator (as
defined below), the Employee may elect to terminate his employment upon
thirty (30) days' written notice to the Board. In the event that the
Employee shall elect to terminate his employment pursuant to this
paragraph, upon any such termination the Employee shall be entitled to the
same payments and benefits (including, without limitation, vesting of
options) as specified in paragraph 6.4. Upon a "Change of Control" of
Mercator (as defined below) notwithstanding any provision in any option
agreement or plan to the contrary, in the past or in the future, all of
the Employee's outstanding stock options will vest and become immediately
exercisable.
6.7 Upon Notice of Termination of this Agreement, irrespective of the
reason therefor, the Employee shall promptly turn over to Mercator all
proprietary and confidential materials of the kind referred to in Section
5 and all tangible forms of the Employee's work product (including work
files) without retaining any copies or duplicates thereof, except as to
which Mercator may in writing give permission.
6.8 In the event of any termination of the Employee's employment with
Mercator under the Agreement, the Employee shall be under no obligation to
seek other employment or otherwise mitigate the obligations of Mercator,
and, there shall be no offset against amounts due to the Employee under
this Agreement on account of any remuneration or other benefit earned or
received by the Employee attributable to any subsequent employment that he
may obtain.
6.9 Any amounts due under this Section 6 are considered to be reasonable
by Mercator and are not in the nature of a penalty.
6.10 For purposes of this Agreement, a "Change of Control" shall be deemed
to have occurred if (a) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than a trustee or other fiduciary holding
securities under an employee benefit plan of Mercator, or a corporation
owned, directly or indirectly by the stockholders of Mercator in
substantially the same proportions, becomes after November 15, 2000 the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Mercator representing 20% or more
of the combined voting power of Mercator's then outstanding securities;
(b) the composition of the Board changes such that, during the employment
period, individuals who at the beginning of such period constitute the
Board and any new director whose election by the board or nomination for
election by Mercator's stockholders was approved by a vote of at least
three-fourths (3/4) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to
constitute a majority thereof; (c) substantially all the assets of
Mercator are disposed of by Mercator pursuant to a merger, consolidation,
partial or complete liquidation, a sale of assets (including stock of a
subsidiary) or otherwise, but not including a reincorporation or similar
transaction resulting in a change only in the form of ownership of such
assets, or (d) Mercator combines with another Company and is the surviving
corporation but, immediately after the combination, the shareholders of
Mercator immediately prior to the combination hold, directly or
indirectly, 50% or less of the voting stock of the combined company.
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7. Restrictive Covenants.
7.1 The Employee agrees that during the term of this Agreement and for a
period of twelve (12) months following the Date of termination of this
Agreement, he will not, directly or indirectly, own, operate, manage,
join, control, or participate in the ownership, management, operation or
control of, or be connected with as a partner, stockholder, director,
officer, agent, employee, or consultant, any business, firm, or
corporation in any capacity that involves the development, production or
sale of any product that is directly competitive with Mercator in the
territories Mercator serves; except that nothing in this Section 7.1 shall
bar the acquisition of any publicly traded securities which do not confer
upon the Employee the right to control or influence the policy of the
issuer.
7.2 The Employee further agrees that for a period of one (1) year
following the termination of this Agreement, he will not, without the
prior written consent of Mercator, (a) solicit for employment any of the
staff of Mercator or of Mercator's customers, or (b) solicit the business
of Mercator's customers for products that are directly competitive to
Mercator products.
7.3 In the event a court of competent jurisdiction finds any part of this
Article 7 unenforceable, the parties agree that such finding shall not
effect or render invalid or unenforceable any other provision of this
Article. The parties further agree to execute any amendments necessary to
accomplish the intent of this Article to the fullest extent possible under
the law.
8. Remedies. The parties hereto recognize that, in the event of any breach by
the Employee of the provisions of Paragraphs 5.2 or 7 hereof, damages may
be difficult, if not impossible to ascertain and it is therefore agreed
that Mercator, in addition to and without limiting any other remedy it
might have under this Agreement, or at law or in equity, shall be entitled
to an injunction against the Employee issued by any court of competent
jurisdiction enjoining any such breach.
9. Representation and Warranty, The Employee represent and warrants that he
is not now or on the date of commencement of this Agreement, a party to
any agreement, contract or understanding, whether of employment or
otherwise, which would in any way restrict or prohibit him front
undertaking or performing employment in accordance with the terms and
conditions of this Agreement.
10. Indemnification. (a) Mercator agrees that (i) if the Employee is trade a
party, or is threatened to he made a party, to any threatened or actual
action, suit or proceeding, whether civil, criminal, administrative,
investigative, appellate or otherwise (a "Proceeding") by reason of the
fact that he is or was a director, officer or employee of Mercator or is
or was serving at the request of Mercator as a director, officer, member,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, including service with respect to employee
benefit plans, whether or not the basis of such Proceeding is the
Employee's alleged action in an official capacity while serving as a
director, officer, member, employee or agent, the Employee shall promptly
he indemnified and held harmless by Mercator to the fullest extent legally
permitted or authorized by Mercator's certificate of incorporation or
bylaws or, if greater, by the laws of the State of Delaware against any
and all costs, expenses, liabilities and losses (including, without
limitation, attorney's fees, judgments, interest, expenses of
investigation, penalties, fines, ERISA, excise taxes or penalties, amounts
paid or to be paid in settlement) reasonably incurred or suffered by the
Employee in connection therewith. Such indemnification shall continue as
to the Employee even if he has ceased to be a director, member, trustee,
fiduciary, partner, employee, agent, manager, consultant or representative
of Mercator or, at Mercator's request, of another person or entity and
shall inure to the benefit of the Employee's heirs, executors and
administrators. Mercator shall advance to the Employee all costs and
expenses incurred by the Employee in connection with any such Proceeding
within 15 days after
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receiving written notice requesting such an advance. Such notice shall
include, to the extent required by applicable law, an undertaking by the
Employee to repay the amount advanced if he is ultimately determined not
to be entitled to indemnification against such costs and expenses.
(b) Neither the failure of Mercator (including its board of directors,
independent legal counsel or stockholders) to have made a determination
prior to the commencement of any proceeding concerning payment of amounts
claimed by the Employee under paragraph 10(a) that indemnification of the
Employee is proper because he has met the applicable standard of conduct,
nor a determination by Mercator (including its board of directors,
independent legal counsel or stockholders) that the Employee has not met
such applicable standard of conduct, shall create a presumption that the
Employee has not met the applicable standard of conduct.
(c) Mercator agrees to continue and maintain a directors' and officers'
liability insurance policy covering the Employee to the extent Mercator
provides such coverage for its other executive officers, and to no
significantly lesser extent than in effect on the date hereof
11. Miscellaneous.
11.1 Should any provision or part of this Agreement be declared void or
unenforceable by any court or administrative body of competent
jurisdiction, such provisions or part shall be deemed severable and,
without farther action by the parties to this Agreement, shall be severed
from the remainder of this Agreement which shall continue in all respects
valid and enforceable.
11.2 Any notices or communications hereunder shall be in writing and shall
be personally delivered or sent by registered or certified mail to the
addresses specified on the last page hereof or, after proper notice, to
such addresses as the parties may specify.
11.3 This Agreement shall be binding upon and inure to the benefit of
Mercator, its successors or assigns, or any corporation which acquires all
or substantially all of its assets. This Agreement is personal as to the
Employee and shall not be assignable by the Employee.
11.4 This Agreement constitutes the entire understanding of the parties
hereto with respect to the Employee's employment and her compensation
therefor and supersedes any prior Agreements and understandings between
the parties concerning employment or compensation.
11.5 Except as otherwise set forth in this Agreement, the respective
rights and obligations of the parties hereunder shall survive any
termination of the Employee's employment hereunder.
11.6 This Agreement shall be governed by and construed under the laws of
the State of Connecticut.
11.7 The captions appearing in this Agreement appear as a matter of
convenience only and in no way define or limit the scope and intent of any
of the provisions hereof.
11.8 No provision in this Agreement may be amended unless such amendment
is set forth in a writing signed by the parties. No waiver by either parry
of any breach of any condition or provision contained in this Agreement
shall be deemed a waiver of any similar or dissimilar condition or
provision at the same or any prior or subsequent time. To be effective,
any waiver must be set forth in a writing signed by the waiving party.
11.9 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which, when taken together,
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the panes hereto have executed this Agreement as of the date
first set forth above.
Mercator Software Inc. The Employee:
00 Xxxxxxx Xxxx
Xxxxxx, XX 00000
By: /s/ X. X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------- --------------------------
X. X. Xxxxxx Xxxxxxx X. Xxxxxxxxx
Chairman 000 Xxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
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