Special Compensation and Separation Agreement
This Special Compensation and Separation Agreement (Agreement) is executed by
Xxxxxxx X. Xxxxxx (Employee) and Effective Management Systems, Inc. its
operations, divisions, subsidiaries, and other affiliated organizations; its
successors, assigns, and transferees; and its directors, officers, shareholders,
partners, agents, employees, or representatives (Company). It is effective as of
January 1, 1998 (the Effective Date).
In light of the Company's pursuit of additional financing and needed
responsiveness to potential alliance partner inquiries and the effort and
continuity required for that effort, the parties find the terms of this
Agreement to be in their mutual best interests.
The terms of this Agreement are as follows:
1. Ongoing Services. From the Effective Date until the Separation Date ( the
Term), Employee shall continue to faithfully and diligently perform his present
duties as CFO, or such other duties as are assigned to him from time to time so
long as such duties are reasonably within his skills and capabilities and
involve, overall, a position of reasonably equivalent title and responsibility,
from his present or an equivalent substitute Milwaukee area location.
2. Consideration. In consideration for Employee's Ongoing Services, but only for
so long as the parties mutually agree to continue this relationship (Term),
Employee shall be compensated, with associated benefits, at a level consistent
with his position in relation to other executives. Except as affected by the
occurrence of a Special Event as hereafter set forth, this Agreement may be
terminated (Separation Date) by either party at any time for no reason or any
reason, without any severance or similar payment obligation.
3. Special Event. A Special Event shall have occurred when a Board approved
transaction has closed with an alliance partner prior to July 1, 1999 unless,
prior to the closing, Employee voluntarily resigns effective prior to the
closing.
4. Special Event Obligations. Upon the occurrence of a Special Event, the
following shall apply; a. Lump Sum Payment. A special bonus in the gross
amount of twenty-five thousand dollars ($25,000.) shall be due and payable,
subject to federal, state, and local income tax withholding and the
withholding of Employee's share of FICA taxes, and any other deductions
either required by law or consistent with past practices for Employee's
share of costs for benefits elected. b. Contingent on Actions Subsequent to
Occurrence. If, subsequent to the related definitive agreement and within
twenty-four (24) months of the Special Event occurrence, Employee is
terminated, as defined below, Employee shall be entitled to the following:
i) immediate vesting of all then outstanding but not then vested Company
stock options; ii) full tuition reimbursement for the period Employee
reasonably pursues completion, whether part time or full time, of his MBA
or equivalent degree at the actual cost of such tuition not to exceed the
then equivalent cost at the University of Wisconsin-Milwaukee; and iii)
continuation of Employee's base salary and all insurance benefits (eg.
medical, life, disability, etc.) as they existed prior to the earlier of
the termination or such an occurrence, and use of an executive level
Company supplied automobile, for a period of twelve months from such
termination, except that, if Employee obtains alternative full-time
employment, though not obligated to pursue such employment, then such
continuation shall cease upon the earlier of the expiration of such twelve
month period or four months after commencement of such alternative
employment. c. Termination. For purposes of this provision, `termination'
shall include, in addition to an actual termination, for whatever reason,
by the Company, a physical relocation outside the Milwaukee area, a
reduction in overall compensation and benefits, or a reduction in overall
level of job content, title, and responsibility. Employee may elect the
provisions in b) above at any time within ninety (90) days of such a
termination by written notice to the Company's President referencing this
Agreement.
5. Limitation. Except as specifically set forth above, Employee will be paid no
further wages, bonuses, commissions, benefits, compensation, or remuneration of
any kind, other than those required by law, specifically provided above, and any
earned benefits which Employee is otherwise entitled to pursuant to a plan or
policy sponsored by the Company, such as 401K, as of the Separation Date.
6. In exchange, Employee specifically agrees to the following:
a. Release of All Claims. Employee hereby irrevocably and unconditionally
releases and discharges forever the Company from any and all claims and
expenses, known or unknown, which Employee now has on account of Employee's
employment or termination. This Release includes, but is not limited to,
any claim arising under any federal, state, or local law, including the
Civil Rights Act, the Age Discrimination in Employment Act, and Section 510
of the Employee Retirement Income Security Act.
b. Return of Company Property. Employee agrees to return any Company
property in his possession by the Separation Date except as set forth
above.
c. Confidentiality. Employee is under a Confidentiality agreement with the
Company and agrees to abide by the terms of that agreement.
d. No Denigration. Employee agrees that he will not at any time in the
future make any statements to former, current, or prospective customers or
employees of Company or the media or to anyone in the industry or community
in general which could be construed by a reasonable person as being in any
way derogatory or negative about the Company.
e. Confidentiality of Agreement. Employee agrees that this Agreement and
its terms are strictly confidential and shall not be divulged to any person
other than to his legal counsel and accountant, but subject to this
confidentiality provision, solely for purposes of advice.
8. Complete Agreement. The parties understand and agree that this Agreement is
final and complete, with respect to the matters set forth herein, and may not be
amended except in writing referencing this Agreement and is binding upon them
and their heirs, successors, and assigns. The parties' preexisting
Confidentiality agreement remains in full force and effect.
9. Voluntary Act and Revocation. Employee acknowledges that he has been given a
copy of this Agreement with a period of twenty-one days to review and consider
it before signing it, and an opportunity to consult with an attorney, that he
has carefully read the entire document and understands its provisions and has
signed it as his free act and deed. Employee may revoke this Agreement within
seven days of signing by written notice delivered to Xxxx Xxxxxx, President at
the Company's Milwaukee office.
10. Other. This Agreement shall be interpreted and construed and enforced in
accordance with the laws of the State of Wisconsin, except as preempted by
federal law, and before the tribunals of the State of Wisconsin.
It has been executed in duplicate originals.
In Witness Whereof, the parties herein executed this Special Compensation and
Separation Agreement as of the Effective Date.
Effective Management Systems, Inc. Xxxxxxx X. Xxxxxx, an individual
by: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President Xxxxxxx X. Xxxxxx
Witness: /s/ Xxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxx
