SEPARATION AGREEMENT
Exhibit 10.5
1. Xxxxxxxxxxx X. Xxxxxx (“Executive”) has been employed by JDA Software Group, Inc. (the
“Company”) since July 1, 2005, and he is currently employed by the Company as its Chief Operating
Officer pursuant to that certain Executive Employment Agreement, effective as of June 13, 2005, by
and between the Company and Executive (the “Employment Agreement”). Executive and the Company have
determined that they will terminate their employment relationship on July 31, 2009, and it is the
Company’s desire to ensure that there is a smooth and orderly transition of Executive’s duties, to
provide Executive with certain separation benefits that he would not otherwise be entitled to
receive upon his retirement, and to resolve any claims that the parties have or may have against
each other. Accordingly, Executive and the Company hereby agree to supersede and replace the
Employment Agreement in its entirety with this Agreement. This Agreement will become effective on
the eighth day after it is signed by Executive (the “Effective Date”), provided that Executive has
not revoked this Agreement (by email notice to Xxxxxxx Xxxxxx at xxxxxxx.xxxxxx@xxx.xxx) prior to
that date.
2. Executive and the Company hereby agree that his employment with the Company will terminate
effective August 3, 2009 (the “Termination Date”).
3. Executive and Company hereby agree that, subject to Executive’s strict compliance with all the
terms of this Agreement, and to his extension of the release of claims in Paragraph 5 without
revocation as described below and the execution of the Confidential Separation and Release
Agreement attached hereto as Exhibit A (the “Release Agreement”), the Company will provide
Executive with the following:
(a) a lump sum severance payment of $897,646, which shall be subject to applicable withholding
and paid to Executive on the day after the expiration of the Revocation Period in the Release
Agreement, provided Executive has not revoked the Release Agreement, and shall be deemed to include
(i) Executive’s current base salary for two (2) years ($574,750); (ii) base salary for a 60-day
notice period ($47,896) and (iii) Executive’s cash bonus for 2009 of $275,000, which amount has
been determined as assuming satisfaction of all performance based milestones at the 100% level by
both the Company and Executive, without regard to actual level of performance. In addition,
Executive will be paid the pro-rated portion of the 2009 bonus that has been earned based upon the
year to date EBITDA performance, but has been unpaid through the end of the second quarter
($89,462). Executive will also be allowed to keep his laptop computer and his blackberry cell
phone.
(b) upon the Termination Date, Executive will be paid all of his accrued, unused paid time off
that he earned during his employment with the Company;
(c) the immediate acceleration of all unvested equity awards granted pursuant to the Company’s
2005 Performance Incentive Plan (“2005 Plan”) set forth on Exhibit B hereto, which in no
event shall include any performance shares awards subject to the Company’s 2009 earnings before
income tax, depreciation and amortization and the Company shall take, prior to the Effective Date,
all action reasonably necessary to effect such acceleration under the 2005 Plan and applicable
securities laws including Rule 16b-3(d) promulgated under the Securities Exchange Act of 1934;
(d) all of Executive’s stock options that have not otherwise terminated shall be exercisable
until one month following the Termination Date;
(e) in the event that Executive timely elects to obtain continued group health insurance
coverage under COBRA following the Termination Date, the Company will pay the premiums for such
coverage through the earlier of (i) the date that is 18 months following the Termination Date, or
(ii) the first date on which Executive becomes eligible for other group health insurance coverage
pursuant to Executive’s
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subsequent employment; thereafter, Executive may elect to purchase continued group health insurance
coverage under COBRA at his own expense;
(f) outplacement assistance at the Company’s expense and reimbursement of outplacement and job
search expenses (including, without limitation, travel expenses, recruiter fees, outplacement
consultant fees, administrative expenses, etc.), provided, that the cost to the Company of such
assistance and reimbursement of such expenses shall not exceed $10,000;
(g) Section 7.5 of the Employment Agreement, Federal Excise Tax under Section 4999 of the
Code, shall survive and continue to be effective, to the extent applicable, to payments to
Executive under this Agreement. For the avoidance of doubt, this subsection (h) shall not imply
that this Agreement is related to a change in control.
In the event of any material breach by Executive of any of the provisions of this Agreement,
Executive shall not be entitled to receive any payments or benefits under this Paragraph 3, and his
failure to receive any of these payments and/or benefits as a result of his material breach shall
not affect or impair the validity of the remainder of this Agreement, including, but not limited
to, Paragraphs 4 through 10. Executive acknowledges and agrees that he shall not be entitled to
any payments or benefits from the Company other than those expressly set forth in this Paragraph 3
or as otherwise provided pursuant to the terms of any applicable employee benefit plan or
indemnification agreement.
4. In consideration of the payments and benefits described in Paragraph 3, Executive has executed
the Release Agreement. Notwithstanding the executed Release Agreement, it is expressly understood
that this release does not apply to, and shall not be construed as, a waiver or release of any
claims or rights that cannot lawfully be released by private agreement, including any applicable
statutory indemnity rights under Delaware law.
5. As further consideration of the payments and benefits described in Paragraph 3, Executive agrees
for the two-year period following the Effective Date (the “Covenant Period”) on the following:
(a) Executive will not directly or indirectly, whether as an owner, director, officer,
manager, consultant, agent or employee work for any of the following companies or any entity that
succeeds to any part of the business of any of the following companies that is in competition with
the Company: i2 Technologies, Logility, Inc., Manhattan Associates, Inc., Oracle Corporation, SAP
AG, or SAS. Executive acknowledges that this non-competition prohibition is reasonable in scope and
duration. If a court of competent jurisdiction determines the scope or duration is unenforceable,
the non-compete shall be reformed and modified to the extent required to render them valid and
enforceable.
(b) Executive will not, either directly or indirectly, separately or in association with
others, interfere with, impair, disrupt or damage Company’s relationship with any of its customers
or customer prospects by soliciting or encouraging others to solicit any of them for the purpose of
diverting or taking away business from Company.
(c) Executive will not, either directly or indirectly, separately or in association with
others, interfere with, impair, disrupt or damage Company’s business by soliciting, encouraging,
hiring or attempting to hire any of the Company’s employees or causing others to solicit or
encourage any of the Company’s employees to discontinue their employment with Company.
Notwithstanding the previous sentence, Executive may give references for employees and tell
headhunters the names of employees of Company, in either event, where the Executive is aware that
the employee has been identified by Company as not being part of its long-term plans after a change
of control of the Company.
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6. Executive acknowledges and agrees that he shall continue to be bound by and comply with the
terms of the Proprietary Information and Inventions Agreement. On or before the Termination Date,
Executive will return to the Company, in good working condition, all Company property and equipment
that is in Executive’s possession or control, including, but not limited to, any files, records,
credit cards, keys, programs, manuals, business plans, financial records, and all electronic or
paper documents (and any copies thereof) that Executive prepared or received in the course of his
employment with the Company.
Executive acknowledges and agrees that Executive has continuing non-disclosure obligations
under the Proprietary Information and Inventions Agreement. Executive acknowledges and reaffirms
Executive’s obligation to continue to abide fully and completely with all post-employment
provisions of the Proprietary Information and Inventions Agreement and agrees that nothing in this
Agreement shall operate to excuse or otherwise relieve Executive of such obligations.
7. Each of Executive and the Company agree not to make any statements, written or verbal, or cause
or encourage others to make any statements, written or verbal, that defame, disparage or in any way
criticize the personal or business reputation, practices or conduct of the other including, in the
case of the Company, its employees and directors. Furthermore, the Company agrees that any
announcement of Executive’s departure shall be subject to Executive’s reasonable approval. The
Company shall respond to any inquiries regarding Executive’s employment by providing only
information as to Executive’s job title, dates of employment, and salary.
8. If any provision of this Agreement is deemed invalid, illegal, or unenforceable, that provision
will be modified so as to make it valid, legal, and enforceable, or if it cannot be so modified, it
will be stricken from this Agreement, and the validity, legality, and enforceability of the
remainder of the Agreement shall not in any way be affected. In the event of any legal action
relating to or arising out of this Agreement, the prevailing party shall be entitled to recover
from the losing party its attorneys’ fees and costs incurred in that action.
9. The Company intends that income provided to the Executive pursuant to this Agreement will not be
subject to taxation under Section 409A of the Internal Revenue Code (“Section 409A”). The
provisions of this Agreement shall be interpreted and construed in favor of satisfying any
applicable requirements of Section 409A of the Code. However, the Company does not guarantee any
particular tax effect for income provided to the Executive pursuant to this Agreement. In any
event, except for the Company’s responsibility to withhold applicable income and employment taxes
from compensation paid or provided to the Executive, the Company shall not be responsible for the
payment of any applicable taxes incurred by the Executive on compensation paid or provided to the
Executive pursuant to this Agreement. In the event that any compensation to be paid or provided to
Executive pursuant to this Agreement may be subject to the excise tax described in Section 409A,
the Company may delay such payment for the minimum period required in order to avoid the imposition
of such excise tax.
10. This Agreement, together with the Release Agreement attached hereto as Exhibit A, and
the Proprietary Information and Inventions Agreement, constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior negotiations and
agreements between the parties, whether written or oral, with the exception of any stock option or
other equity agreements between the parties. Notwithstanding the foregoing, the Company confirms
that the Agreement, dated July 1, 2005 by and between the Company and Executive regarding, inter
alia, indemnification rights of Executive, remains in full force and effect. This Agreement may
not be modified or amended except by a document signed by an authorized officer of the Company and
Executive.
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EXECUTIVE UNDERSTANDS THAT HE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT
AND THAT HE IS GIVING UP ANY LEGAL CLAIMS (AS DESCRIBED ABOVE IN THE RELEASE AGREEMENT) HE HAS
AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EXECUTIVE FURTHER UNDERSTANDS THAT
HE MAY HAVE UP TO 21 DAYS TO CONSIDER THIS AGREEMENT, THAT HE MAY REVOKE IT AT ANY TIME DURING THE
7 DAYS AFTER HE SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS
PASSED. EXECUTIVE ACKNOWLEDGES THAT HE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND
VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 3, WHICH
COMPENSATION AND BENEFITS HE WOULD NOT OTHERWISE BE ENTITLED TO RECEIVE.
Dated: August 6, 2009
|
/s/ Xxxxxxxxxxx
X. Xxxxxx |
| Dated: August 6, 2009 | JDA SOFTWARE GROUP, INC. | |||||
| By: | /s/ Hamish
X. Xxxxxx |
|||||
| President and Chief Executive Officer | ||||||
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EXHIBIT A
FORM OF
CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT
CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT
This Confidential Separation and Release Agreement (“Agreement”) is between Xxxxxxxxxxx X.
Xxxxxx (“Executive”) and JDA Software Group, Inc. (the “Company”) (hereinafter the “parties”), and
is entered into as of August ___, 2009. This Agreement will not become effective until the
expiration of seven (7) days from Executive’s execution of this Agreement (the “Effective Date”).
WHEREAS, Executive has been employed by the Company as Chief Operating Officer:
WHEREAS, the Company and Executive are entering into a Confidential Separation Agreement (the
“Separation Agreement”) dated on the date hereof, which provides for, among other things, certain
severance benefits and for Executive’s employment with the Company to cease as of the date set
forth therein (the “Termination Date”);
WHEREAS, the Company and Executive desire to avoid disputes and/or litigation regarding
Executive’s termination from employment or any events or circumstances preceding or coincident with
the termination from employment;
WHEREAS, the Company and Executive have agreed upon the terms on which Executive is willing,
for sufficient and lawful consideration, to compromise any claims known and unknown which Executive
may have against the Company and on which the Company is willing, for sufficient and lawful
consideration, to compromise any claims known and unknown which the Company may have against
Executive; and
WHEREAS, the parties desire to settle fully and finally, in the manner set forth herein, all
differences between them which have arisen, or which may arise, prior to, or at the time of, the
execution of this Agreement, including, but in no way limited to, any and all claims and
controversies arising out of the employment relationship between Executive and the Company, and the
termination thereof.
NOW, THEREFORE, in consideration of these recitals and the promises and agreements set forth
in this Agreement, Executive’s employment with the Company will terminate upon the following terms:
1. General Release: Executive for himself and his assigns hereby IRREVOCABLY AND
UNCONDITIONALLY RELEASES, ACQUITS AND FOREVER DISCHARGES the Company and any current or former
stockholders, directors, parent, subsidiary, affiliated, and related corporations, firms,
associations, partnerships, and entities, and their successors and assigns (the “Company Parties”),
and the Company for itself and the Company Parties hereby IRREVOCABLY AND UNCONDITIONALLY RELEASES,
ACQUITS AND FOREVER DISCHARGES Executive and his assigns, from any and all claims and causes of
action whatsoever, whether known or unknown or whether connected with Executive’s employment by the
Company or not, which may have arisen, or which may arise, prior to, or at the time of, the
execution of this Agreement, including, but not limited to, any claim or cause of action arising
out of any contract, express or implied, any covenant of good faith and fair dealing, express or
implied, any tort (whether intentional or released in this agreement), or under Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities
Act, the Worker Adjustment and Retraining Notification (WARN) Act, the Older Workers Benefit
Protection Act, or any other municipal, local, state, or federal law, common or statutory.
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2. Covenant Not to Xxx: The parties also COVENANT NOT TO XXX, OR OTHERWISE PARTICIPATE
IN ANY ACTION OR CLASS ACTION against the other party or any of the released parties based upon any
of the claims released in this Agreement.
3. Right to Revoke: Either party may revoke this Agreement by notice to the other
party, in writing, received within seven (7) days of the date of its execution by Executive (the
“Revocation Period”). Executive agrees that Executive will not receive the benefits provided by the
Separation Agreement if Executive revokes this Agreement. Executive also acknowledges and agrees
that if the Company has not received from Executive notice of Executive’s revocation of this
Agreement prior to the expiration of the Revocation Period, Executive will have forever waived
Executive’s right to revoke this Agreement, and this Agreement shall thereafter be enforceable and
have full force and effect.
4. Acknowledgement: Executive acknowledges and agrees that: (A) except as provided by
this Agreement and the Separation Agreement, no additional consideration, including salary, wages,
bonuses or stock options, is to be paid to his by the Company in connection with this Agreement and
the Separation Agreement; (B) except as provided by this Agreement and the Separation Agreement,
Executive has no contractual right or claim to the severance payments described herein and therein;
and, (C) payments pursuant to this Agreement and the Separation Agreement shall terminate
immediately if Executive breaches any of the provisions of this Agreement or the Separation
Agreement.
5. Non-Admissions: The parties acknowledge that by entering into this Agreement, the
other party does not admit, and does specifically deny, any violation of any local, state, or
federal law.
6. Severability: If any provision of this Agreement is held to be illegal, invalid, or
unenforceable, such provision shall be fully severable and/or construed in remaining part to the
full extent allowed by law, with the remaining provisions of this Agreement continuing in full
force and effect.
7. Entire Agreement: This Agreement, along with the Proprietary Information and
Inventions Agreement and the Separation Agreement constitute the entire agreement between the
Executive and the Company, and supersede all prior and contemporaneous negotiations and agreements,
oral or written. This Agreement cannot be changed or terminated except pursuant to a written
agreement executed by the parties.
8. Governing Law: This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, except where preempted by federal law.
9. Statement of Understanding: By executing this Agreement, Executive acknowledges
that (a) Executive has had at least twenty-one (21) days to consider the terms of this Agreement
and has considered its terms for such a period of time or has knowingly and voluntarily waived
Executive’s right to do so by executing this Agreement and returning it to the Company; (b)
Executive has been advised by the Company to consult with an attorney regarding the terms of this
Agreement; (c) Executive has consulted with, or has had sufficient opportunity to consult with, an
attorney of Executive’s own choosing regarding the terms of this Agreement; (d) any and all
questions regarding the terms of this Agreement have been asked and answered to Executive’s
complete satisfaction; (e) Executive has read this Agreement and fully understands its terms and
their import; (f) except as provided by this Agreement and the Separation Agreement, Executive has
no contractual right or claim to the benefits and payments described herein and therein; (g) the
consideration provided for herein is good and valuable; and (h) Executive is entering into this
Agreement voluntarily, of Executive’s own free will, and without any coercion, undue influence,
threat, or intimidation of any kind or type whatsoever.
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EXECUTED in , this day of August ___, 2009.
EXECUTED in , this day of August ___, 2009.
| JDA SOFTWARE GROUP, INC. | ||||||
| By: | |
|||||
| President and Chief Executive Officer | ||||||
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EXHIBIT B
EQUITY AWARDS PURSUANT TO THE COMPANY’S
2005 PERFORMANCE INCENTIVE PLAN SUBJECT TO VESTING ACCELERATION
2005 PERFORMANCE INCENTIVE PLAN SUBJECT TO VESTING ACCELERATION
| Unvested Shares | ||||||||||||
| Subject to Award | ||||||||||||
| Automatically | ||||||||||||
| Shares Subject to | Vesting as of the | |||||||||||
Type
of Award |
Date of Grant | Award | Effective Date | |||||||||
Restricted Stock Units |
3/13/07 | 45,788 | 5,722 | |||||||||
Restricted Stock Units |
5/14/07 | 6,058 | 761 | |||||||||
Performance Shares |
2/7/08 | 20,945 | 7,856 | |||||||||
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