EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is made as of February
28, 2002, by and between Xxx Xxx (the "Executive") and Precise Software
Solutions, Inc. and any of its subsidiaries, divisions and affiliates (the
"Company"). The Agreement as amended supercedes the prior agreement dated
February 9, 2000.
WHEREAS, the Executive and the Company deem it in their respective
best interests to enter into an agreement providing for the employment of the
Executive as the Company's Chief Financial Office ("CFO") and Chief Operating
Officer ("COO") subject to the terms and conditions hereinafter set forth; and
WHEREAS, the Company agrees to use all the best efforts to recruit
in a timely manner a Chief Financial Officer ("CFO") who will assume all
financial roles and responsibilities on behalf of the company.
THEREFORE, once the new CFO will join the Company, the Executive
will no longer serve as CFO and COO, but only as COO.
NOW, THEREFORE, in consideration of the foregoing and the agreements
herein contained, the parties hereto hereby agree as follows:
1. Employment. Subject to the terms and conditions set forth in this
Agreement, the Company offers and the Executive hereby accepts employment
in the role of CFO and COO, effective as of February 28, 2002 (the
"Effective Date"). Once the new CFO will join the Company, the Executive
will no longer serve as CFO and COO, but only as COO. The parties agree
that such employment shall be full time and on an at-will basis, which
means that either the Executive or the Company may, subject to the
provisions of this Agreement, terminate the employment relationship (and
this Agreement) at any time, for any or no reason, with or without cause,
upon written notice to the other party. The term of this Agreement as from
time to time may be modified and in effect, is hereafter referred to as
"the term of his Agreement" or the "term hereof."
2. Capacities and Performance. During the term hereof, the Executive shall
serve the Company as its Chief Financial Officer and Chief Operating
Officer. THEREFORE, once the new CFO will join the Company, the Executive
will no longer serve as CFO and COO, but only as COO. The Executive shall
report to the Company's CEO. The Executive shall comply with and perform,
faithfully, diligently and to the best of his
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ability, such directions and duties in relation to the business and
affairs of the Company as may from time to time be vested in or requested
of him by the Company. The Executive shall devote substantially all of his
business time, attention and energies to the business of the Company as
may from time to time be vested in or requested of him by the Company.
Executive shall not work as an executive, independent consultant or agent
for another entity, during the business hours of Precise, without the
permission or Precise.
3. Compensation and Benefits. As compensation for the satisfactory
performance by the Executive of his duties and obligations hereunder to
the Company and subject to the provisions of Section 5, the Executive
shall receive:
3.1 Base Salary. The Executive's initial base salary shall be paid a
rate of $20,750 per month (the "Base Salary"). The Base Salary shall
be payable in accordance with the customary payroll practices of the
Company, but at least paid monthly, as may be established or
modified from time to time and shall be subject to all applicable
federal, state and/or local payroll and withholding taxes.
3.2 Bonus.
(a) During the first year of employment the Company shall pay the
Executive a bonus of $37,000 per quarter for each fiscal
quarter end. All bonus payments will be subject to Company's
normal meritorious bonus practice described below based on
revenue and operating income attainment goals consistent with
those of the CEO and as described by 2002 MBO Plan approved by
the board
(b) Signing Bonus. None
3.3 Stock Options.
(a) Subject to the approval by the Company's Board of Director
(the" Board") and subject to the terms, conditions and
restrictions of the Company's [1998 Share Option and Incentive
Plan] and a stock option agreement between the Company and the
Executive, the Executive shall be eligible to be granted
options, as established by and at the sole discretion of the
Board, to purchase shares of Company's common stock at the
fair market value for each year of employment.
(b) Acceleration of Vesting of Option for Business Combinations -
Upon a Transfer of Control (as defined in the Plan), 50% of
the employee's total
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unvested shares shall, immediately prior to the consummation
of such Transfer of Control, become vested in accordance with
Section 3 of the option agreement and immediately exercisable
by the Employee. In addition to the above, upon (1) a closing
of a Transfer of Control and (2) the occurrence of a
Termination Event (as defined below), the remaining 50% of the
unvested shares subject to this option shall, immediately
exercisable by Employee.
A Termination Event is defined as the involuntary termination
of employment of the Employee within one (1) year after the
closing of a Transfer of Control other than under Disgraceful
Circumstances In addition, a Termination Event shall also
include the following if such event has occurred within one
(1) year after the closing of a Transfer of Control: (1)
reduction in salary or reduction in the level of benefits of
the Employee as in effect on the date immediately prior to the
closing of the Transfer of Control: (2) a diminution in the
nature of scope of the Employee's authority, duties or
responsibilities in effect immediately prior to the closing of
the Transfer of Control; or (3) change in location of the
principle office to which the Employee must report of greater
that 50 miles.
3.4 Vacation. Subject to and in accordance with the Company's policy.
The Executive shall be eligible for 15 days of paid vacation per
calendar year.
3.5 Benefits. Subject to any contribution therefore generally required
of executives of the Company, the Executive will be eligible to
participate in the Company's benefits plans to the same extent as,
and subject to the same terms, conditions and limitations applicable
to other executives of the Company in similar positions. Such
participation shall be subject to (i) the terms of the applicable
plan documents, (ii) generally applicable Company policies, and
(iii) the discretion of the Company and/or the Board or any
administrative or other committee provided for in or contemplated by
such plan. The Company's current plans and policies shall govern all
other benefits. The Company may alter, modify, add to, or delete its
employee benefits plans and/or policies at any time as the Company
and/or the Board, in their sole judgment, determines to be
appropriate.
3.6 Relocation. None
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3.7 Business Expenses. The Company shall pay or reimburse the Executive
for all reasonable business expenses incurred or paid by the
Executive in the performance of his duties and responsibilities
hereunder, subject to (i) any reasonable expense policy set by the
Company as may be modified from time to time, and (ii) such
reasonable substantiation and documentation requirements as may be
specified by the Company from time to time.
4. Termination of Employment. The Executive's employment and this Agreement
shall terminate under the following circumstances:
4.1 Death or Disability. In the event of the Executive's death or
Disability (as defined herein) during the term hereof, the
Executive's employment and this Agreement shall immediately and
automatically terminate and the Company shall pay to the Executive
(or in the case of death, the Executive's designated beneficiary, or
if no beneficiary has been designated by Executive, his estate), any
Base, pro rata bonus and pro rata vested options earned but unpaid
through the date of death or Disability. For the purposes of this
Agreement, "Disability" shall mean any physical incapacity or mental
incompetence (i) as a result of which the Executive is unable to
perform substantially all his duties responsibilities hereunder for
an aggregate of 120 days, whether or not consecutive, during any
calendar year, and (ii) which cannot be reasonably accommodated by
the Company without material undue hardship. Any determination of
disability shall be made by a qualified physician or physicians
selected by the Company and the Executive. The failure of the
Executive to submit to a reasonable examination by such physician
shall constitute determination of a permanent Disability.
4.2 By the Company because of Disgraceful Circumstances.
(a) The Company may terminate the Executive's employment and this
Agreement because of Disgraceful Circumstances at any time
during the term hereof. The Company shall thereafter have no
further obligation or liability to the Executive relating to
the Executive's employment or this Agreement, other that Base
Salary and pro rata bonus earned but unpaid and pro rata
vested shares through the date of termination.
(b) The following events or conditions shall constitute
"Disgraceful Circumstances" for termination (which shall
hereafter only referred to as
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"Dismissal for Cause"): (i) willful gross negligence, willful
misconduct or willful breach of fiduciary duty to the Company
and its subsidiaries (ii) commission of an act of embezzlement
or fraud; (iii) deliberate disregard of the rules or policies
of the Company, Precise Ltd. or any Subsidiary which results
in direct material loss, damage or injury to the Company,
Precise Ltd. or any Subsidiary, (iv) the unauthorized
disclosure of any trade secret or confidential information of
the Company, Precise Ltd. or any Subsidiary which materially
xxxxx the Company.
4.3 By the Company. The Company may terminate the Executive's employment
and this Agreement at any time, for any or no reason, during the
term hereof. In the event of such termination, the Executive will be
entitled to a continuation, for twelve (12) months from the date of
the Executive's termination of employment, of (i) his salary in an
amount equal to the Executive's Base Salary (in effect at the time
of such termination) and full bonus based on company results (ii)
pro rata monthly vesting of options, and (iii) payment of premiums
(in the same amount as of the Executive's date of termination) on
the Executive's behalf to continue his health insurance, to the
extent the Executive elects to continue such coverage in accordance
with and pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA").
4.4 By the Executive. The Executive also may terminate this Agreement
and/or his employment with the Company for any or no reason during
the term hereof upon 15 days' prior notice to the Company. Upon
receipt of such notice, the Company may accelerate the Executive's
termination and pay to the Executive (i) an amount equivalent to his
base monthly salary (at that time) and (ii) pro rata bonus based on
company's results for the quarter prior to the date of termination.
The Executive shall also be entitled to exercise his stock options
only with respect to those options in which he was fully vested as
of the effective date of his termination. In the event Executive's
termination is accelerated under this provision, vesting of options
shall continue through the next vesting date within the remainder of
the 15-day notice period. The Company shall thereafter have no
further obligation or liability to the Executive relating to the
Executive's employment or this Agreement, other that for (1) any
Base Salary earned but unpaid through the date of termination (2)
pro rata bonus earned but unpaid based on company's results for the
quarter prior to the date of termination. (3) Reimbursement for
business expenses through the date of termination.
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5. Effect of Termination. The provisions of this Section 5 shall apply in the
event of termination of this Agreement and/or the Executive's employment
pursuant to Sections
5.1 Payment in Full. Payment by the Company to the Executive of any Base
Salary, bonus, vested stock options, related benefit and other
compensation amounts shall constitute the entire obligation of the
Company to the Executive, except that nothing in this Section 5.1 is
intended or shall be construed to affect the rights and obligations
of the Company, on the one hand, and the Executive, on the other,
with respect to any loans, stock warrants, stock pledge
arrangements, option plans or other agreements to the extent said
rights or obligations survive the Executive's termination of
employment under the provisions of documents relating thereto.
5.2 Termination of Benefits. Except for any right of continuation of
benefits coverage to the extent provided herein and/or provided by
COBRA or other applicable law, benefits shall terminate pursuant to
the terms of the applicable benefit plans as of the termination date
of the Executive's employment without regard to any continuation of
Base Salary or other payments to the Executive following such
termination date.
5.3 Cessation of Compensation and Benefits. . If the Executive
materially breaches his obligations under this Agreement and/or the
Confidentiality Agreement, the Company may immediately cease payment
of all compensation, severance and benefits described in this
Agreement. The cessation of these payments shall be in addition to,
and not as an alternative to, any other remedies at law or in equity
available to the Company, including the right to seek specific
performance or an injunction.
6. Survival of Certain Provisions. The obligations of the Executive under the
Confidentiality Agreement expressly survive any termination of the
Executive's employment for up to twelve months, regardless of the manner
of such termination, or termination of this Agreement.
7. Conflicting Agreements. The Executive and Company hereby warrants that the
execution of this Agreement and the performance of obligations hereunder
will not
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breach or be in conflict with any other agreement to which or by which the
Executive or Company is a party or is bound and that the Executive is not
now subject to and will not enter into any covenants against competition
or similar covenants that would affect the performance of his obligations
hereunder. Moreover, where this Agreement conflicts with other of the
Company's agreements the terms included in this agreement will be
determinative.
8. Withholding Taxes. All payments made by the Company under this Agreement
shall be subject to and reduced by any federal, state and/or local taxes
or other amounts required to be withheld by the Company under any
applicable law.
9. Miscellaneous.
9.1 Assignment. The Executive shall not assign this Agreement or any
interest herein. The company may assign this Agreement. No such
assignment shall be deemed a "termination" of the Executive's
employment within the meaning of Section 4. This Agreement shall
inure to the benefit of and be binding upon the successors and
assigns of the Company.
9.2 Severability. The Executive and Company agrees that each provision
and the subparts of each provision herein shall be treated as
separate and independent clauses and the unenforceability of any one
clause shall in no way impair the enforceability of any of the other
clauses of the Agreement. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be
excessively broad as to scope, activity, subject or otherwise so as
to be unenforceable at law, such provision or provisions shall be
construed by the appropriate judicial body by limiting or reducing
it or them, so as to be enforceable to the maximum extent compatible
with the applicable law as it shall then appear. The Executive and
Company hereby further agrees that the language of all parts of this
Agreement shall in all cases be construed as a whole according to
its fair meaning and not strictly for or against either of the
parties.
9.3 Waiver Amendment. Any waiver by the Company of a breach of any
provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach of such provision or any other
provision hereof. In addition, any amendment to or modification of
this Agreement or any waiver of any provision hereof must be in
writing and signed by the Company and the Executive.
9.4 Notices. All notices, requests and other communications provided for
by this Agreement shall be in writing and shall be effective when
delivered in person on
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four business days after being deposited in the mail of the United
States, postage prepaid, registered or certified, and addressed (a)
in the case of the Executive, to the address set forth underneath
his signature to this Agreement or (b) in the case of the Company,
to the attention of Xxxxxx Xxxx c/o Precise Software Solutions, Inc,
000 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000; and/or to such other address
as either party may specify by notice to the other.
9.5 Entire Agreement. This Agreement, and any stock option agreement
between the Company and the Executive constitute the entire
agreement between the Company and the Executive with respect to the
terms and conditions of the Executive's employment with the Company
and supersede and cancel all prior communications, agreements and
understandings, written or oral, between the Executive and the
Company with respect to the terms and conditions of the Executive's
employment with the Company.
9.6 Counterparts. This Agreement may be executed in counterparts, each
of which shall be original and all of which together shall
constitute one and the same instrument.
9.7 Governing Law. This Agreement, the employment relationship
contemplated herein and any claim arising from such relationship,
whether or not arising under this Agreement, shall be governed by
and construed in accordance with the internal laws of the
Commonwealth of Massachusetts without giving effect to any choice or
conflict of laws provision or rule thereof, and this Agreement shall
be deemed to be performable in such Commonwealth.
9.8 Consent to Jurisdiction. The Executive and the Company agree to be
in good faith seek arbitration to settle any differences. The
arbitration will be in Boston, Massachusetts at the American
Arbitration Association ("AAA") before a single arbitrator. Such
arbitrator shall be selected in accordance with AAA's then current
rules and regulation. In the event no settlement is reached, the
Executive, by his execution hereof, hereby irrevocably submits to
the exclusive jurisdiction of the state or federal courts of the
Commonwealth of Massachusetts for the purpose of any claim or action
arising out of or based upon this Agreement, the Executive's
employment with the Company and/or termination thereof, or relating
to the subject matter hereof, and agrees not to commence any such
claim or action other than in the above-named courts.
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IN WITNESS WHEREOF, this Agreement has been executed by the Company,
by its duly authorized representative, and by the Executive, as of the date
first above written.
PRECISE SOFTWARE SOLUTIONS, INC.
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
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Title: CEO
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THE EXECUTIVE
/s/ J. Xxxxxxxx X. Xxx
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Xxx Xxx
