EXHIBIT (d)(7)
SERVICE AGREEMENT
THIS SERVICE AGREEMENT (this "AGREEMENT"), is made and entered into on
this 16th day of August, 2000, by and between XXXXXXX X. XXXXXX (the "Employee")
and GENERAL ELECTRIC COMPANY, a New York corporation (together with its
subsidiaries, "GE");
W I T N E S S E T H:
WHEREAS, GE (in its individual capacity) has entered into an acquisition
agreement dated as of the date hereof, between GE and Smallworldwide plc
(together with its subsidiaries, "SMALLWORLDWIDE", unless the context requires
otherwise), a public limited company organized under the laws of England and
Wales (the "ACQUISITION AGREEMENT"), pursuant to which GE has agreed to commence
an offer to purchase all of the issued and outstanding ordinary shares,
(pound)0.01 par value per share, and, without duplication, THe American
Depositary Shares, of Smallworldwide (the "TENDER OFFER");
WHEREAS, the Employee is currently employed by Smallworldwide and is a
party to an employment agreement by and between Smallworldwide and the Employee
(the "EMPLOYMENT AGREEMENT"); and
WHEREAS, upon the consummation of the Tender Offer, GE desires that
Employee continue as an employee of Smallworldwide (or GE) and the Employee
desires to continue to be employed by Smallworldwide (or GE) ; and
WHEREAS, to induce the Employee to continue in the employ of
Smallworldwide (or GE), GE wishes to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS.
For the purposes of this Agreement, the following definitions shall apply:
(a) "Company Activities" shall mean the business of developing, marketing,
selling, implementing, delivering and maintaining software products to the
utility (oil, gas, hydro and nuclear) and communications (voice, Internet, data)
industries, including but not limited to, distribution management systems,
outage management systems, energy management systems, network management systems
and geospatial information systems.
(b) "Confidential Information" shall mean any data or information of GE or
Smallworldwide, other than Trade Secrets, which is valuable to GE or
Smallworldwide and not generally known to the public.
(c) "Constructive Discharge Termination Event" shall mean, the occurrence
of any of the following events, without the Employee's express written consent,
or such other events as the parties may expressly agree to: (i) the assignment
to the Employee of any duties or responsibilities that are inconsistent in any
material adverse respect with the Employee's position(s), duties,
responsibilities or status in GE, or Smallworldwide (including any material
adverse diminution of such duties or responsibilities); (ii) a material adverse
change in the Employee's reporting responsibilities or titles in GE or
Smallworldwide, or (iii) any requirement of GE that Employee be relocated more
than 50 miles from the work location where Employee is located as of the date
hereof for a period in excess of 120 days.
(d) "Disability Termination Event" shall mean the death or total
disability of the Employee.
(e) "Good Cause Termination Event" shall mean the Employee's employment is
terminated as a result of any of the following: (i) the Employee is convicted
of, pleads guilty to, or confesses to any felony or any act of fraud,
misappropriation or embezzlement, (ii) the Employee engages in a fraudulent act
to the material damage or prejudice of GE or Smallworldwide or in conduct or
activities materially damaging to the property, business or reputation of GE or
Smallworldwide, (iii) the Employee illegally uses controlled substances, (iv)
the Employee is negligent in performing Employee's duties to GE or
Smallworldwide and, within 30 days after written notice from GE of any such act
or omission, the Employee has not corrected such act or omission, or (v) the
Employee otherwise fails to comply with the terms of the Employment Agreement,
breaches any obligation or violates any duty to GE or Smallworldwide under
applicable GE policies (as such policies may be amended from time to time) or
law or deviates from any written policies or directives of the Board of
Directors of GE or Smallworldwide.
(f) "Noncompete Period," "Nondisclosure Period,", and "Nonsolicitation
PERIOD" shall mean the period beginning on the date hereof and ending on the
second anniversary of the last day of the later to occur of the Service Term or
Term.
(g) "Territory" shall mean Australia, Canada, Germany, Singapore, the
United Kingdom and the United States.
(h) "Trade Secret" shall mean information of GE and Smallworldwide
including, but not limited to, technical or nontechnical data, a formula,
pattern, compilation, program, device, method, technique, drawing, process,
financial data, financial plan, product plan, list of actual or potential
customers or suppliers, or other information similar to any of the foregoing,
which derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can derive economic value from its disclosure or use.
(i) "Voluntary Termination Event" shall mean a voluntary resignation by
the Employee of the Employee's employment with GE.
2
SECTION 2. SALARY RETENTION AND SEVERANCE PAYMENTS.
2.1. SERVICE TERM AND SALARY
For the twelve month period commencing on the Purchase Date (as defined in
the Acquisition Agreement) and ending on the one year anniversary thereof (the
"SERVICE TERM"), GE shall pay the Employee a base salary at a rate not less than
his current base salary as of the Purchase Date, payable in accordance with GE's
normal payroll practices. In addition to such base salary, Employee shall be
entitled to receive an annual bonus, such amount to be determined in the
discretion of GE, based upon the operating results of Smallworldwide and GE. The
aggregate salary and bonus amounts payable to the Employee over such twelve
month period shall not be less than the Employee's actual base salary plus
earned bonus for the year ended June 30, 2000. Subsequent salary and bonus
adjustments will be in accordance with GE's standard salary planning process.
After the expiration of the twelve month period, the Service Term shall continue
until the date two years after such expiration. Provided however that the
Service Term shall end if at any time (i) a Constructive Discharge Termination
Event occurs and the Employee notifies GE in writing that he is terminating the
Service Term as a consequence, or (ii) a Good Cause Termination Event occurs and
GE notifies the Employee that it is terminating the Service Term as a
consequence or (iii) after the expiry of the initial twelve month period GE
provides the Employee with a minimum of one hundred and eight days (180) prior
written notice of Employee's employment or Employee provides GE with a minimum
of one hundred and eighty days (180) prior written notice of a Voluntary
Termination Event. The Employee's employment shall cease upon the Service Term
ceasing or terminating. GE and the Employee acknowledge that each is willing to
explore potentially mutually acceptable variations to both (i) the period of
time for which the Employee is an employee under this Agreement (whether a
longer or shorter period than that currently provided for) and (ii) the nature
of the contractual relationship between GE and the Employee (such that the
Employee might become a consultant to GE on terms acceptable to them both).
During the Service Term, the Employee shall have the title of Chief Technology
Officer of Smallworldwide.
2.2. RETENTION PAYMENT.
Subject to the terms hereof and as consideration for the Employee's
continued employment and service to Smallworldwide, GE shall pay the Employee a
retention payment equal to 100% of Employee's actual base salary plus earned
bonus for the year ended June 30, 2001 (the "RETENTION PAYMENT"), PROVIDED, that
in no event shall such amount be less than the Employee's actual base salary
plus earned bonus for the year ended June 30, 2000. The Retention Payment shall
be paid to the Employee in two equal payments on each of January 1, 2002 and
January 1, 2003; PROVIDED, that no such Retention Payment shall be made if the
Employee is not an employee of GE on such date as a result of a Good Cause
Termination Event or a Voluntary Termination Event.
2.3. OPTION GRANT
On the Purchase Date, GE shall grant to the Employee stock options to
purchase 3,000 shares of Common Stock of GE at an exercise price equal to the
fair market value of such Common Stock on the date of grant of the options (the
"OPTIONS"). The Options shall be issued
3
under, and shall be subject to the terms and conditions of the GE Stock Option
Plan (the "PLAN"). The Options shall vest as follows: 1,500 of such Options
shall vest on the third anniversary of the date of grant of the Options and
1,500 of such Options shall vest on the fifth anniversary of the date of grant
of the Options. In addition to any provisions regarding accelerated vesting
under the Plan, anytime after the first anniversary of the Purchase Date, the
options shall automatically vest upon the voluntary termination of the
Employee's employment with GE upon terms mutually satisfactory to GE and the
Employee, which shall be set forth in a written agreement between GE and the
Employee.
2.4. SEVERANCE PAYMENT.
Subject to the terms hereof, GE shall pay the Employee a severance payment
equal to the greater of 100% of Employee's: (i) actual base salary plus earned
bonus for the year ended June 30, 2001, and (ii) actual base salary plus earned
bonus for the year ended June 30, 2000, if, on or prior to January 1, 2003,
Employee's employment with GE is terminated as a result of a Disability
Termination Event, Constructive Discharge Termination Event or as a result of
any other event except a Voluntary Termination Event or a Good Cause Termination
Event. Employee hereby agrees that any severance payment made pursuant to this
Section 2.4 shall be (i) payment in full of any obligations of GE as a result of
such termination and (ii) a full release of any claims the Employee may have
against GE in connection with GE's employment of Employee or otherwise.
SECTION 3. TERM.
This Agreement shall become effective as of the date hereof and shall
continue until the occurrence of a Good Cause Termination Event or Voluntary
Termination Event or the end of the Service Term (in either case, the "Term");
PROVIDED, that the rights and obligations of the parties under Section 4
hereunder shall survive any such termination. Notwithstanding anything to the
contrary herein, this Agreement shall automatically terminate and be of no
further force or effect (and none of GE, Smallworldwide or the Employee shall
have any rights or obligations hereunder) if the Acquisition Agreement is
terminated or the Tender Offer is not consummated, for any reason whatsoever.
SECTION 4. TRADE SECRETS, CONFIDENTIAL INFORMATION AND NONCOMPETITION
COVENANTS.
4.1. TRADE SECRETS.
The Employee shall hold in confidence at all times after the date hereof
all Trade Secrets, and shall not disclose, publish or make use at any time after
the date hereof of Trade Secrets without the prior written consent of GE or
Smallworldwide. Nothing in this Agreement shall diminish GE's or
Smallworldwide's rights regarding the protection of trade secrets pursuant to
applicable law.
4.2. TRADENAME AND CONFIDENTIAL INFORMATION.
The Employee hereby agrees that during the Nondisclosure Period:
4
(a) the Employee shall not, directly or by assisting others, own, manage,
operate, join, control or participate in the ownership, management, operation or
control of any business conducted under any corporate or trade name of GE,
Smallworldwide or any name similar thereto without the prior written consent of
GE.
(b) The Employee shall hold in confidence all Confidential Information and
will not disclose, publish or make use of Confidential Information without the
prior written consent of GE.
4.3. NONCOMPETITION.
(a) Coverage. The Employee acknowledges that Smallworldwide conducts
Company Activities throughout the Territory. The Employee acknowledges that to
protect adequately the interest of GE and Smallworldwide in the business of
Smallworldwide it is essential that any noncompete covenant with respect thereto
cover all Company Activities and the entire Territory.
(b) Covenant. The Employee hereby agrees that the Employee shall not,
during the Noncompete Period, in any manner, directly or by assisting others,
engage in, be employed or retained by, have any equity or profit interest in,
make any loan to or for the benefit of, or guarantee any obligation of or with
respect to, or render services (of any executive, advertising, marketing, sales,
administrative, supervisory or consulting nature) to, any business conducting or
engaged in Company Activities in the Territory.
Notwithstanding anything in this Section 4.3 to the contrary, nothing
contained herein shall prohibit the Employee from acquiring not more than five
percent (5%) of any company whose common stock is publicly traded on a national
securities exchange, the Nasdaq Stock Market or in the over-the-counter market.
4.4. NONSOLICITATION.
The Employee hereby agrees that the Employee shall not, during the
Nonsolicitation Period, in any manner, directly or by assisting others (other
than as an employee of GE or Smallworldwide):
(a) solicit or attempt to solicit, any business from any of GE's or
Smallworldwide's customers, including actively sought prospective customers, for
purposes of providing products or services that are competitive with those
provided by GE or Smallworldwide; or
(b) without the prior written consent of GE, solicit or attempt to solicit
any employee or former employee of GE or Smallworldwide, unless such former
employee has ceased to be employed by GE or Smallworldwide for a period of one
(1) year.
4.5. SEVERABILITY.
If judicial determination is made that any of the provisions of this
Section 4 constitutes an unreasonable or otherwise unenforceable restriction
against the Employee, the provisions of this Section 4 shall be rendered void
only to the extent that such judicial determination finds such provisions to be
unreasonable or otherwise unenforceable. In this regard, the Employee, GE and
5
Smallworldwide hereby agree that any judicial authority construing this
Agreement shall be empowered to sever any portion of the Territory, any
prohibited business activity or any time period from the coverage of this
Section 4 and to apply the provisions of this Section 4 to the remaining portion
of the Territory, the remaining business activities and the remaining time
period not so severed by such judicial authority. Moreover, notwithstanding the
fact that any provision of this Section 4 is determined not to be specifically
enforceable, GE and Smallworldwide shall nevertheless be entitled to recover
monetary damages in addition to any other relief as a result of the breach of
such provision by the Employee. The time period during which the prohibitions
set forth in this Section 4 shall apply shall be tolled and suspended with
respect to the Employee for a period equal to the aggregate quantity of time
during which the Employee violates such prohibitions in any respect.
4.6. INJUNCTIVE RELIEF.
The Employee hereby agrees that any remedy at law for any breach of the
provisions contained in Sections 4.1, 4.2, 4.3 or 4.4 hereof shall be inadequate
and that GE and Smallworldwide shall be entitled to injunctive relief in
addition to any other remedy GE and Smallworldwide might have under this
Agreement, and applicable law.
SECTION 5. EXISTING EMPLOYMENT AGREEMENT
5.1. INCONSISTENT PROVISIONS
To the extent that any of the provisions of this Agreement conflict with
the provisions of Employee's Employment Agreement, the provisions of this
Agreement shall control.
SECTION 6. MISCELLANEOUS
6.1. BINDING EFFECT.
This Agreement shall inure to the benefit of and shall be binding upon the
Employee and the Employee's personal or legal representatives, executors,
administrators, heirs, distributees, devisees, legatees and assigns, and GE and
Smallworldwide and their respective successors and assigns; PROVIDED, HOWEVER,
that the Employee shall not be entitled to assign or delegate any of his rights
or obligations hereunder without the prior written consent of GE.
6.2. GOVERNING LAW.
This Agreement shall be deemed to be made in, and in all respects shall be
interpreted, construed and governed by and in accordance with, English law.
6.3. HEADINGS.
The section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6
6.4. NOTICES.
Unless otherwise agreed to in writing by the parties hereto, all
communications provided for hereunder shall be in writing and shall be deemed to
be given when delivered in person or 5 business days after being sent by first
class mail and addressed as follows:
(a) If to the Employee, addressed to:
Xxxxxxx X. Xxxxxx
Xxx Xxxxx Xxxx
Xxxxx Xxx
Xxxxxxxxx
Xxxxxxxxx
XX0 0XX
(b) If to GE, addressed to:
General Electric Company
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: President -
GE Energy Management Services
or to such other person or address as shall be furnished in writing by any party
to the other prior to the giving of the applicable notice or communication.
6.5. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one
and the same instrument.
6.6. ENTIRE AGREEMENT.
This Agreement is intended by the parties hereto to be the final
expression of their agreement with respect to the subject matter hereof and is
the complete and exclusive statement of the terms thereof, notwithstanding any
representations, statements or agreements to the contrary heretofore made;
PROVIDED, HOWEVER, except as set forth in, and subject to, Section 5, all terms
and conditions of the Employee's Employment Agreement shall remain in full force
and effect. This Agreement may be modified only by a written instrument signed
by each of the parties hereto.
6.7. SEVERABILITY.
In the event that any provision of this Agreement shall be deemed invalid
or unenforceable, the remaining provisions of this Agreement shall remain in
full force and effect.
[Remainder of the page intentionally left blank.]
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GENERAL ELECTRIC COMPANY
BY: /s/ XXXXXXX X. XXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Attorney-in-Fact
THE EMPLOYEE
/s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxx
