Exhibit 10.18
EMPLOYMENT AGREEMENT
This EMPLOYMENT Agreement (this "Agreement") is made and entered into
this 11th day of September, 2001 by and between MAPICS, Inc., a Georgia
corporation (hereinafter, the "Company"), and Xxxxxxx Xxxxx (hereinafter,
"Executive"), to be effective as of the date hereof (the "Effective Date").
BACKGROUND
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The Company desires to retain Executive as its Chief Financial Officer
and Executive desires to be employed on a full time basis by the Company in such
position.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Employment. Executive is hereby employed on the Effective Date as the
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Chief Financial Officer of the Company, being a full time employee of the
Company. Executive shall be located at the Company's headquarters in Alpharetta,
Georgia. The position of Executive is generally described in Exhibit A hereto.
In his capacity as Chief Financial Officer of the Company, Executive shall
faithfully and diligently perform the responsibilities and duties as are
assigned to him from time to time by the Chief Executive Officer or Board of
Directors of the Company. Executive will report directly to the Chief Executive
Officer.
2. Employment Period. Unless earlier terminated herein in accordance
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with Section 6 hereof, Executive's employment shall be for a three year term
(the "Employment Period"), beginning on the Effective Date. Beginning on the
third anniversary of the Effective Date and on each anniversary thereafter, the
Employment Period shall, without further action by Executive or the Company, be
extended by an additional one-year period; provided, however, that either party
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may, by notice to the other given not less than sixty (60) days prior to the
expiration of the Employment Period or any subsequent anniversary, cause the
Employment Period to cease to extend automatically. Upon such notice, the
Employment Period shall terminate upon the expiration of the then-current term,
including any prior extensions.
3. Extent of Service. During the Employment Period, and except as
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provided below, Executive agrees to devote his business time, attention, skill
and efforts exclusively to the faithful performance of his duties hereunder;
provided, however, that it shall not be a violation of this Agreement for
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Executive to (i) devote reasonable periods of time to charitable and community
activities and, with the approval of the Company, industry or professional
activities, and/or (ii) manage personal business interests and
investments, so long as such activities do not interfere or conflict with the
performance of Executive's responsibilities under this Agreement.
4. Compensation and Benefits.
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(a) Base Salary. During the Employment Period, the Company will
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pay to Executive a base salary in the amount of not less than U.S. $240,000 per
year ("Base Salary"), less normal withholdings, payable in equal semi-monthly or
more frequent installments as are customary under the Company's payroll
practices from time to time. The Compensation Committee of the Board of
Directors of the Company shall review Executive's Base Salary and Annual Bonus
annually and in its sole discretion, may adjust Executive's Base Salary and
Annual Bonus from year to year. The annual review of Executive's salary by the
Committee will consider, among other things, Executive's own performance and the
Company's performance.
(b) Initial Grant of Stock Options. On the Effective Date,
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Executive shall be granted options to acquire 200,000 shares of the common stock
of the Company (the "Options"), which Options will have a per-share exercise
price equal to the fair market value of such stock on the Effective Date and a
term of ten years, unless terminated earlier in certain circumstances set forth
in the Plan or the Award Certificate. The Options will become fully vested and
exercisable as to 25% of the option shares on the first, second, third and
fourth anniversaries of the Effective Date. The Options, which will be granted
under and pursuant to the terms of the Company's Amended and Restated 1998
Long-Term Incentive Plan and an Award Certificate, are intended to be incentive
stock options to the extent permitted by law.
(c) Incentive, Savings and Retirement Plans. During the
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Employment Period, Executive shall be eligible to participate in all incentive,
savings and retirement plans, practices, policies and programs applicable
generally to senior executive officers of the Company ("Peer Executives"), and
on the same basis as such Peer Executives. Without limiting the foregoing,
Executive will be entitled to the following special incentives:
(i) Retention Bonus. Executive will receive special
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retention bonuses (each a "Retention Bonus") as follows: $100,000 payable on the
first anniversary of the Effective Date, and $100,000 payable on the second
anniversary of the Effective Date, and $100,000 payable on the third anniversary
of the Effective Date; provided that Executive is still employed by the Company
on such dates or such Retention Bonuses become payable pursuant to Section
7(a)(i)(C), 7(b), 7(c) or 7(e) hereof.
(ii) Annual Bonus. Executive will have a target annual bonus
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of not less than US $160,000 (the "Annual Bonus"), to be earned based on the
achievement of individual, group or Company performance objectives established
from year to year by the Chief Executive Officer. The Annual Bonus will be paid
at such times as are
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customary for Peer Executives. The Annual Bonus for fiscal year 2001 will be
prorated from the Effective Date to the end of the Company's fiscal year 2001.
(d) Welfare Benefit Plans. During the Employment Period,
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Executive and Executive's family shall be eligible for participation in, and
shall receive all benefits under, the welfare benefit plans, practices, policies
and programs provided by the Company (including, without limitation, vacation,
medical, prescription, dental, disability, employee life, group life, accidental
death and travel accident insurance plans and programs) ("Welfare Plans") to the
extent applicable generally to Peer Executives.
(e) Expenses. During the Employment Period, Executive shall be
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entitled to receive prompt reimbursement for all reasonable expenses incurred by
Executive in accordance with the policies, practices and procedures of the
Company to the extent applicable generally to Peer Executives.
5. Change of Control. For the purposes of this Agreement, a "Change
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of Control" shall mean:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection
(a), the following acquisitions shall not constitute a Change of
Control: (i) any acquisition by a Person who is on the date of this
Agreement the beneficial owner of 25% or more of the Outstanding
Company Voting Securities, (ii) any acquisition directly from the
Company, (iii) any acquisition by the Company, (iv) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, or (v) any
acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (c) of this Section 5;
or
(b) Individuals who, as of the date of this Agreement, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date of this Agreement whose
election, or nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
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(c) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets
of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of
the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and outstanding
Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 25% or more of the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination, and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
6. Termination of Employment.
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(a) Death or Disability. Executive's employment shall terminate
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automatically upon Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of Executive has occurred
during the Employment Period (pursuant to the definition of Disability set forth
below), it may give to Executive written notice in accordance with Section 13(b)
of this Agreement of its intention to terminate Executive's employment. In such
event, Executive's employment with the Company shall terminate effective on the
30th day after receipt of such notice by Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, Executive shall
not have returned to full-time performance of Executive's duties. For purposes
of this Agreement, "Disability" shall mean the absence of Executive from
Executive's duties with the Company on a full-time basis for 180 consecutive
days as a result of incapacity due to mental or physical illness which is
determined to be total and
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permanent by a physician selected by the Company or its insurers and acceptable
to Executive or Executive's legal representative.
(b) Cause. The Company may terminate Executive's employment during
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the Employment Period with or without Cause. For purposes of this Agreement,
"Cause" shall mean:
(i) the willful and continued failure, after demand as
described in this paragraph below, of Executive to perform substantially
Executive's duties with the Company or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to Executive by the
Board or the Chief Executive Officer of the Company which specifically
identifies the manner in which the Board or Chief Executive Officer believes
that Executive has not substantially performed Executive's duties, or
(ii) the willful engaging by Executive in illegal conduct (as
finally determined by a court or, in the event of a crime, final conviction or
entering a plea of nolo contendere) or misconduct which, in the case of illegal
conduct or misconduct, is materially and demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on the part of
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the Chief Executive Officer or a senior
officer of the Company or based upon the advice of counsel for the Company
(unless Executive's own independent counsel advises the Executive in writing
that such act or failure to act does not comply with applicable law) shall be
conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. The cessation of employment of
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to Executive and Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars
thereof in detail.
(c) Good Reason. Executive's employment may be terminated by
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Executive for Good Reason or for no reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) the assignment to Executive of any duties materially
inconsistent with Executive's position (including status, office, title and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 1 of this Agreement, or
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any other action by the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4 of this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by Executive;
(iii) any termination by the Company of Executive's employment
without Cause or other than for Death or Disability;
(iv) any failure by the Company to comply with and satisfy
Section 12(c) of this Agreement; or,
(v) in order for Executive to perform his material duties, the
Executive is required to be based or spend a material portion of his time at any
offices or locations other than a location or office less than 35 miles from the
Company's headquarters in Alpharetta, Georgia; provided, however, that Executive
understands that the position and duties could involve a reasonable amount of
travel to other locations.
For purposes of this Section 6(c), any good faith determination of "Good
Reason" made by Executive shall be conclusive. Anything in this Agreement to the
contrary notwithstanding, a termination by Executive for any reason during the
30-day period immediately following the first anniversary of a Change in Control
of the Company shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause,
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or by Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 13(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than 30 days after
the giving of such notice). The failure by Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of Executive or the
Company, respectively, hereunder or preclude Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing Executive's
or the Company's rights hereunder.
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(e) Date of Termination. "Date of Termination" means (i) if
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Executive's employment is terminated by the Company for Cause, or by Executive
for Good Reason, the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be, (ii) if Executive's employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies Executive of such
termination or any later date specified in such notice, (iii) if Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of Executive or the Disability Effective
Date, as the case may be.
7. Obligations of the Company upon Termination or Non-renewal by Company.
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(a) Good Reason; Other Than for Cause, Death or Disability. If the
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Company shall terminate Executive's employment other than for Cause, Death or
Disability, or Executive shall terminate employment for Good Reason, then in
consideration of Executive's services rendered prior to such termination and of
Executive's covenants contained in Section 11 hereof:
(i) the Company shall pay to Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) Executive's Base Salary through the
Date of Termination to the extent not theretofore paid, (2) the product of (x)
Executive's Annual Bonus paid or payable, including any bonus or portion thereof
which has been earned but deferred, for the most recently completed fiscal year
during the Employment Period (provided that during the initial full fiscal year
of the Employment Period, the target amount specified in section 4(c)(ii) shall
be used to calculate the amount payable for purposes of this subsection
7(a)(i)(A)(2)(x)), if any, but specifically excluding any Retention Bonus (such
amount being referred to as the "Most Recent Annual Bonus") and (y) a fraction,
the numerator of which is the number of days in the current fiscal year through
the Date of Termination, and the denominator of which is 365, and (3) any
compensation previously deferred by Executive (together with any accrued
interest or earnings thereon and subject to any prior election by Executive to
receive such deferred amounts in installments) and any accrued vacation pay, in
each case to the extent not theretofore paid (the sum of the amounts described
in clauses (1), (2), and (3) shall be hereinafter referred to as the "Accrued
Obligations"); and
B. the amount equal to 50% of the sum of (1) Executive's
Base Salary and (2) the Most Recent Annual Bonus; and
C. any unpaid Retention Bonus(es); and
(ii) for six months after the Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to Executive and/or
Executive's family at least equal to
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those which would have been provided to them in accordance with the Welfare
Plans described in Section 4(d) of this Agreement if Executive's employment had
not been terminated or, if more favorable to Executive, as in effect generally
at any time thereafter with respect to other Peer Executives, provided, however,
that if Executive becomes re-employed with another employer and is eligible to
receive medical or other welfare benefits under another employer provided plan,
the medical and other welfare benefits described herein shall be secondary to
those provided under such other plan during such applicable period of
eligibility. For purposes of determining eligibility (but not the time of
commencement of benefits) of Executive for retiree benefits pursuant to such
plans, practices, programs and policies, Executive shall be considered to have
remained employed until six months after the Date of Termination and to have
retired on the last day of such period;
(iii) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to Executive any other amounts or benefits required
to be paid or provided or which Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").
(iv) notwithstanding any provision of this Agreement to the
contrary, Executive shall forfeit his right to receive, or, to the extent such
amounts have previously been paid to Executive, shall repay in full to the
Company within thirty (30) days of a final determination of Executive's
liability therefor as set forth below, the amount described in Section
7(a)(i)(B) of this Agreement if 1) Executive fails to execute a Release in
substantially the form as attached hereto as Exhibit B promptly upon request by
the Company or 2) at any time during the period specified he violates the
Restrictive Covenants set forth in Section 11 hereof.
(b) Death. If Executive's employment is terminated by reason of
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Executive's death, this Agreement shall terminate without further obligations to
Executive's legal representatives under this Agreement, other than for payment
of Accrued Obligations and any unpaid Retention Bonus and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to Executive's
estate or beneficiary, as applicable, in a lump sum in cash within 30 days of
the Date of Termination. With respect to the provision of Other Benefits, the
term Other Benefits as utilized in this Section 7(b) shall include without
limitation, and Executive's estate and/or beneficiaries shall be entitled to
receive, benefits under such plans, programs, practices and policies relating to
death benefits, if any, as are applicable to Executive on the date of his death.
(c) Disability. If Executive's employment is terminated by reason of
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Executive's Disability, this Agreement shall terminate without further
obligations to Executive, other than for payment of Accrued Obligations and any
unpaid Retention Bonus and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to Executive in a lump sum in cash within 30
days of the Date of Termination.
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With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 7(c) shall include, and Executive shall be entitled
after the Disability Effective Date to receive, disability and other benefits
under such plans, programs, practices and policies relating to disability, if
any, as are applicable to Executive and his family on the Date of Termination.
(d) Cause; Other than for Good Reason. If Executive's employment
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shall be terminated for Cause, this Agreement shall terminate without further
obligations to Executive other than the obligation to pay to Executive (x) his
Base Salary through the Date of Termination, (y) the amount of any compensation
previously deferred by Executive, and (z) Other Benefits, in each case to the
extent theretofore unpaid. If Executive voluntarily terminates employment during
the Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to Executive, other than for Accrued
Obligations and the timely payment or provision of Other Benefits. In such case,
all Accrued Obligations shall be paid to Executive in a lump sum in cash within
30 days of the Date of Termination.
(e) Non-renewal by Company. If the Company notifies Executive of its
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decision not to renew this Agreement beyond the initial Employment Period, the
Company's obligation to pay any unpaid Retention Bonus as expressed in this
Agreement shall survive such termination.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
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limit Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which Executive may qualify, nor, subject to Section 13(f), shall
anything herein limit or otherwise affect such rights as Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
9. Full Settlement. Except as explicitly provided herein, the Company's
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obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to Executive under any of the provisions of this
Agreement and, except as explicitly provided herein, such amounts shall not be
reduced whether or not Executive obtains other employment. The Company agrees to
pay as incurred, to the full extent permitted by law, all legal fees and
expenses which Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, Executive or others of the
validity or enforceability of,
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or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by Executive about the
amount of any payment pursuant to this Agreement), plus in each case interest on
any delayed payment at the applicable federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
10. Limitation of Benefits.
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(a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the Company
to or for the benefit of the Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise) (a
"Payment") would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then, prior to the making of any Payment to the
Executive, a calculation shall be made comparing (i) the net benefit to the
Executive of the Payment after payment of the Excise Tax, to (ii) the net
benefit to the Executive if the Payment had been limited to the extent necessary
to avoid being subject to the Excise Tax. If the amount calculated under (i)
above is less than the amount calculated under (ii) above, then the Payment
shall be limited to the extent necessary to avoid being subject to the Excise
Tax (the "Reduced Amount"). In that event, the Executive shall direct which
Payments are to be modified or reduced.
(b) The determination of whether an Excise Tax would be imposed, the
amount of such Excise Tax, and the calculation of the amounts referred to
Section 10(a)(i) and (ii) above shall be made by the Company's regular
independent accounting firm at the expense of the Company or, at the election
and expense of the Executive, another nationally recognized independent
accounting firm (the "Accounting Firm") which shall provide detailed supporting
calculations. Any determination by the Accounting Firm shall be binding upon the
Company and the Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Payments which the Executive was
entitled to, but did not receive pursuant to Section 10(a), could have been made
without the imposition of the Excise Tax ("Underpayment"). In such event, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment plus interest on any delayed payment at the applicable
federal rate provided for in section 9 above shall be promptly paid by the
Company to or for the benefit of the Executive.
(c) In the event that the provisions of Code Section 280G and 4999 or any
successor provisions are repealed without succession, this Section 10 shall be
of no further force or effect.
11. Restrictions on Conduct of Executive. Executive and the Company
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understand and agree that the purpose of the provisions of this Section 11 is to
protect legitimate business interests of the Company, as more fully described
below, and is not intended to eliminate Executive's post-employment competition
with the Company per
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se, nor is it intended to impair or infringe upon Executive's right to work,
earn a living, or acquire and possess property from the fruits of his labor.
Executive hereby acknowledges that the post-employment restrictions set forth in
this Section 11 are reasonable and that they do not, and will not, unduly impair
his ability to earn a living after the termination of this Agreement. Therefore,
subject to the limitations of reasonableness imposed by law upon the
restrictions set forth herein by the time and geographical area described below,
Executive shall be subject to the restrictions set forth in this Section 11.
(a) Definitions. The following capitalized terms used in this Section
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11 shall have the meanings assigned to them below, which definitions shall apply
to both the singular and the plural forms of such terms:
"Competitive Services" means providing enterprise resource
planning or supply chain management software applications for discrete and
batch-process mid-size manufacturing enterprises (i.e., enterprises having
annual revenue of $20 million to $800 million). Attached as Exhibit C hereto is
a list of those companies (which list shall deemed to include their affiliated
entities and successors and assigns) which are considered by the Company as
providing Competitive Services.
"Confidential Information" means any confidential or proprietary
information possessed by the Company or its affiliated entities or relating to
its or their business, including without limitation, any confidential customer
lists, details of client or consultant contracts, current and anticipated
customer requirements, pricing policies, price lists, market studies, business
plans, operational methods, marketing plans or strategies, product development
techniques or plans, unannounced computer software programs, computer software
program source code, data and documentation, data base technologies, computer
program structures and architectures, inventions and ideas, past, current and
planned research and development, compilations, devices, methods, techniques,
processes, financial information and data, business acquisition plans, new
personnel acquisition plans and any other information that would constitute a
"trade secret(s)" under the common law or statutory law of the State of Georgia.
"Determination Date" means the date of termination of Executive's
employment with the Company for any reason whatsoever or any earlier date
(during the Employment Period) of an alleged breach of the Restrictive Covenants
by Executive.
"Person" means any individual or any corporation, partnership,
joint venture, association or other entity or enterprise.
"Principal or Representative" means a principal, owner, partner,
shareholder, joint venturer, investor, member, trustee, director, officer,
manager, employee, agent, representative or consultant.
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"Protected Customers" means customers of the Company that purchased
Competitive Services from the Company within one (1) year prior to the
Determination Date.
"Protected Employees" means employees of the Company who were employed
by the Company at any time within six (6) months prior to the Determination
Date.
"Restricted Period" means the period extending: a) eighteen (18)
months from the termination of Executive's employment by the Company for Cause
or Disability or by the Executive without Good Reason or b) six (6) months from
the termination of the Executive's employment by the Company without Cause or by
the Executive for Good Reason.
"Restricted Territory" means the following territory, in which
Executive engages in the provision of Competitive Services on behalf of the
Company: the State of Georgia.
"Restrictive Covenants" means the restrictive covenants contained in
Section 11 hereof.
(b) Restrictive Covenants.
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(i) Restriction on Disclosure and Use of Confidential Information.
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Executive understands and agrees that the Confidential Information constitutes a
valuable asset of the Company and its affiliated entities, and may not be
converted to Executive's own use. Accordingly, Executive hereby agrees that
Executive shall not, directly or indirectly, at any time during the Restricted
Period reveal, divulge, or disclose to any Person not expressly authorized by
the Company any Confidential Information, and Executive shall not, directly or
indirectly, at any time during the Restricted Period use or make use of any
Confidential Information in connection with any business activity other than
that of the Company. The parties acknowledge and agree that this Agreement is
not intended to, and does not, alter either the Company's rights or Executive's
obligations under any state or federal statutory or common law regarding trade
secrets and unfair trade practices.
(ii) Nonsolicitation of Protected Employees. Executive understands and
--------------------------------------
agrees that the relationship between the Company and each of its Protected
Employees constitutes a valuable asset of the Company and may not be converted
to Executive's own use. Accordingly, Executive hereby agrees that during the
Restricted Period Executive shall not directly or indirectly on Executive's own
behalf or as a Principal or Representative of any Person or otherwise solicit or
induce any Protected Employee to terminate his or her employment relationship
with the Company or to enter into employment with any other Person.
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(iii) Nonsolicitation of Protected Customers. Executive understands
--------------------------------------
and agrees that the relationship between the Company and each of its Protected
Customers constitutes a valuable asset of the Company and may not be converted
to Executive's own use. Accordingly, Executive hereby agrees that, during the
Restricted Period, Executive shall not, without the prior written consent of the
Company, directly or indirectly, on Executive's own behalf or as a Principal or
Representative of any Person or otherwise, solicit a Protected Customer for the
purpose of providing or selling Competitive Services; provided, however, that
the prohibition of this covenant shall apply only to Protected Customers with
whom Executive had Material Contact on the Company's behalf during the twelve
(12) months immediately preceding the Date of Termination. For purposes of this
Agreement, Executive had "Material Contact" with a Protected Customer if (a) he
had business dealings with the Protected Customer on the Company's behalf; (b)
he was responsible for supervising or coordinating the dealings between the
Company and the Protected Customer; or (c) he obtained Confidential Information
about the customer as a result of his association with the Company.
(iv) Noncompetition with the Company. Executive understands and
-------------------------------
agrees that, during the Restricted Period and within the Restricted Territory,
he shall not, directly or indirectly, on his own or on behalf of any Person, be
affiliated with as a Principal or Representative any Person engaged, in whole or
in part, in the provision of Competitive Services in a capacity where
Executive's duties or responsibilities for such Person will include strategic
planning, policymaking or management; provided, however, that the provisions of
Section 11 shall not be deemed to prohibit (i) the ownership by Executive of any
securities of the Company or its affiliated entities or not more than five
percent (5%) of any class of securities of any corporation having a class of
securities registered pursuant to the Exchange Act.
(c) Exceptions from Disclosure Restrictions. Anything herein to the
---------------------------------------
contrary notwithstanding, Executive shall not be restricted from disclosing or
using Confidential Information that: (a) is or becomes generally available to
the public other than as a result of an unauthorized disclosure by Executive or
his agent; (b) becomes available to Executive in a manner that is not in
contravention of applicable law from a source (other than the Company or its
affiliated entities or one of its or their officers, employees, agents or
representatives) that is not bound by a confidential relationship with the
Company or its affiliated entities or by a confidentiality or other similar
agreement; (c) was known to Executive on a non-confidential basis and not in
contravention of applicable law or a confidentiality or other similar agreement
before its disclosure to Executive by the Company or its affiliated entities or
one of its or their officers, employees, agents or representatives; or (d) is
required to be disclosed by law, court order or other legal process; provided,
however, that in the event disclosure is required by law, Executive shall
provide the Company with prompt notice of such requirement so that the Company
may seek an appropriate protective order prior to any such required disclosure
by Executive.
(d) Enforcement of Restrictive Covenants.
------------------------------------
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(i) Rights and Remedies Upon Breach. In the event Executive
-------------------------------
breaches, or threatens to commit a breach of, any of the provisions of the
Restrictive Covenants, the Company shall have the following rights and remedies,
which shall be independent of any others and severally enforceable, and shall be
in addition to, and not in lieu of, any other rights and remedies available to
the Company at law or in equity:
(A) the right and remedy to enjoin, preliminarily and
permanently, Executive from violating or threatening to violate the Restrictive
Covenants and to have the Restrictive Covenants specifically enforced by any
court of competent jurisdiction, it being agreed that any breach or threatened
breach of the Restrictive Covenants would cause irreparable injury to the
Company and that money damages would not provide an adequate remedy to the
Company; and
(B) the right and remedy to require Executive to account for
and pay over to the Company all compensation, profits, monies, accruals,
increments or other benefits derived or received by Executive as the result of
any transactions constituting a breach of the Restrictive Covenants.
(ii) Severability of Covenants. Executive acknowledges and agrees
-------------------------
that the Restrictive Covenants are reasonable and valid in time and scope and in
all other respects. If any court determines that any of the Restrictive
Covenants, or any part thereof, are invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions.
(iii) Attorneys' Fees. In any action relating to the enforcement of
---------------
the Restrictive Covenants, the prevailing party in such action shall be entitled
to be paid any and all costs and expenses incurred by him or it in enforcing or
establishing his or its rights thereunder, including, without limitation,
reasonable attorneys' fees, whether suit be brought or not, and whether or not
incurred in trial, bankruptcy or appellate proceedings.
12. Successors.
----------
(a) This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in
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the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
13. Miscellaneous.
-------------
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Georgia, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than-by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:
Mr. Xxxxxxx Xxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
If to the Company:
MAPICS, Inc.
0000 Xxxxxxxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
-15-
(e) Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right Executive or the Company may have hereunder, including, without
limitation, the right of Executive to terminate employment for Good Reason
pursuant to Section 6(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
(f) Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between Executive and
the Company, the employment of Executive by the Company is "at will". From and
after the Effective Date, this Agreement shall supersede any other agreement
between the parties with respect to the subject matter hereof, including without
limitation any then-current employment agreement between the Company and
Executive.
IN WITNESS WHEREOF, Executive has hereunto set Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf by its
undersigned officer thereunto, duly authorized, all as of the day and year first
above written.
_____________________________
[Executive]
MAPICS, INC.
By: ______________________________________
Xxxxxxx X. Xxxx, Chief Executive Officer
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Exhibit A
Executive's Position
--------------------
Executive shall have the position of Chief Financial Officer of the Company,
responsible for finance department functions for the Company, and shall report
to the Chief Executive Officer of the Company. In the event of merger, sale or
reorganization of the Company, Executive's position shall be as Chief Financial
Officer of the parent or surviving entity resulting from any such transaction.
EXHIBIT B
Form of Release
---------------
This Release ("Release") is granted effective as of the ____ day of
_____, ____, by ________________ ("Executive") in favor of MAPICS, Inc. (the
"Company"). This is the Release referred to that certain Employment Agreement
dated as of September ___, 2001 by and between the Company and Executive (the
"Employment Agreement"). Executive gives this Release in consideration of the
Company's promises and covenants as recited in the Employment Agreement, with
respect to which this Release is an integral part.
1. Release of the Company. Executive, for himself, his successors,
----------------------
assigns, attorneys, and all those entitled to assert his rights, now and forever
hereby releases and discharges the Company and its respective officers,
directors, stockholders, trustees, employees, agents, parent corporations,
subsidiaries, affiliates, estates, successors, assigns and attorneys ("the
Released Parties"), from any and all claims, actions, causes of action, sums of
money due, suits, debts, liens, covenants, contracts, obligations, costs,
expenses, damages, judgments, agreements, promises, demands, claims for
attorney's fees and costs, or liabilities whatsoever, in law or in equity, which
Executive ever had or now has against the Released Parties, including any claims
arising by reason of or in any way connected with any employment relationship,
including the Employment Agreement, which existed between the Company or any of
its parents, subsidiaries, affiliates, or predecessors, and Executive. It is
understood and agreed that this Release is intended to cover all actions, causes
of action, claims or demands for any damage, loss or injury, which may be traced
either directly or indirectly to the aforesaid employment relationship, or the
termination of that relationship, that Executive has, had or purports to have,
from the beginning of time to the date of this Release, whether known or
unknown, that now exists, no matter how remotely they may be related to the
aforesaid employment relationship including but not limited to claims for
employment discrimination under federal or state law, except as provided in
Paragraph 2; claims arising under Title VII of the Civil Rights Act, 42 U.S.C.
(S) 2000(e), et seq. or the Americans With Disabilities Act, 42 U.S.C. (S) 12101
-- ---
et seq.; claims for statutory or common law wrongful discharge, including any
-- ---
claims arising under the Fair Labor Standards Act, 29 U.S.C. (S) 201 et seq.;
-- ---
claims for attorney's fees, expenses and costs; claims for defamation; claims
for wages or vacation pay; claims for benefits, including any claims arising
under Executive Retirement Income Security Act, 29 U.S.C. (S) 1001, et seq.
-- ---
2. Release of Claims Under Age Discrimination in Employment Act. Without
------------------------------------------------------------
limiting the generality of the foregoing, Executive agrees that by executing
this Release, he has released and waived any and all claims he has or may have
as of the date of this Release for age discrimination under the Age
Discrimination in Employment Act, 29 U.S.C. (S) 621, et seq. It is understood
-- ---
that Executive is advised to consult with an attorney prior to executing this
Release; that he in fact has consulted a knowledgeable,
-2-
competent attorney regarding this Release; that he may, before executing this
Release, consider this Release for a period of twenty-one (21) calendar days;
and that the consideration he receives for this Release is in addition to
amounts to which he was already entitled. It is further understood that this
Release is not effective until seven (7) calendar days after the execution of
this Release and that Executive may revoke this Release within seven (7)
calendar days from the date of execution hereof.
Executive agrees that he has carefully read this Release and is signing
it voluntarily. Executive acknowledges that he has had twenty one (21) days from
receipt of this Release to review it prior to signing or that, if Executive is
signing this Release prior to the expiration of such 21-day period, Executive is
waiving his right to review the Release for such full 21-day period prior to
signing it. Executive has the right to revoke this release within seven (7) days
following the date of its execution by him. However, if Executive revokes this
Release within such seven (7) day period, no severance benefit will be payable
to him under the Employment Agreement and he shall return to the Company any
such payment received prior to that date.
EMPLOYEE HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT IT
CONSTITUTES A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE
CORPORATION UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. EMPLOYEE
ACKNOWLEDGES THAT HE HAS HAD A FULL OPPORTUNITY TO CONSULT WITH AN ATTORNEY OR
OTHER ADVISOR OF HIS CHOOSING CONCERNING HIS EXECUTION OF THIS RELEASE AND THAT
HE IS SIGNING THIS RELEASE VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE
CORPORATION FROM ALL SUCH CLAIMS.
______________________
Executive
Date: _______________
-3-
Exhibit C
Competitive Services Companies
X.X. Xxxxxxx
FrontStep
Epicor
IFS
Powercerv
QAD
Invensys
GEAC
Gores Technology
Aremissoft
Infinium
I2 Technologies
Manugistics
Oracle
Xxxx
Intentia
Computer Associates Acacia group
American Software
Logility
Synquest
Viewlocity
Adexa
Peoplesoft
SAP
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