EMPLOYMENT AGREEMENT
Employment Agreement made this 1st day of June, 1995, by and
between SYSTEMS & COMPUTER TECHNOLOGY CORPORATION, a Delaware corporation
(the "Company"), and XXXXXX X. X'XXXXXXX ("Executive").
WHEREAS, the Company, Adage Systems International, Inc., a Michigan
corporation ("Adage"), Executive and certain other persons have entered
into an Agreement and Plan of Merger and Reorganization dated as of May 12,
1995 (the "Merger Agreement");
WHEREAS, execution and delivery of this Agreement is a condition to
the obligations of each of the Company and Adage to consummate the
transactions contemplated by the Merger Agreement;
WHEREAS, upon consummation of the merger contemplated by the Merger
Agreement, Adage and a subsidiary of the Company will merge, and the
survivor of such merger is referred to below as "Adage."
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto agree as follows:
I. EMPLOYMENT
The Company hereby employs Executive, and Executive hereby accepts
employment with the Company, for the term, and on and subject to the terms
and conditions, hereinafter set forth.
II. POSITION AND DUTIES
2.01. Scope of Services. Executive shall serve the Company as the
President of Adage and shall have such authority, duties and
responsibilities, consistent with such position, as the Board may determine
from time to time. In the performance of his responsibilities hereunder,
Executive shall not take any action, or omit to take any action, for the
purpose of arbitrarily increasing the ability of Adage to maximize the
Floor Price (as defined in the Merger Agreement). In his capacity as
President of Adage, Executive shall report to the Board. Executive
acknowledges that Adage will be operated as part of the SCT Software Group
unless and until such arrangement is changed at the direction of the Board
or the Company. The term "Board," as used herein, shall have the meaning
assigned to it in Section 3.8 of the Merger Agreement. Nothing contained
in this Agreement shall be construed to require the Company to maintain the
separate corporate existence of Adage.
2.02. Full Business Efforts. During the term of this Agreement,
Executive shall devote his full business time, attention and energies to
the performance of his duties hereunder, and shall not be employed by,
participate or engage in, or be part of, in any manner, the management or
operation of any business enterprise other than that of the Company and its
affiliates (as defined below); provided that the foregoing shall not
prevent Executive from serving as a director or officer of an educational,
religious, social or civic organization or otherwise participating in any
of the ventures identified on Exhibit A hereto (or hereafter approved by
the Company) so long as such service or participation does not interfere
with the performance by Executive of his responsibilities hereunder. For
purposes of this Agreement, the term "affiliate" shall mean any
corporation, company, partnership, joint venture and/or firm which is
controlled by or under common control with the Company.
2.03. Relocation; Principal Residence. Executive agrees that he will
perform his day-to-day responsibilities hereunder from the headquarters of
the Company in Malvern, Pennsylvania, commencing on the date hereof.
Executive further agrees that he will establish a residence in the Greater
Philadelphia metropolitan area promptly following the date hereof, but in
no event later than 180 days following the date hereof. In connection with
such establishment, Executive shall be entitled to receive full benefits
under the Company's relocation policy, "existing employees (level 15 and
above)," as modified and attached hereto as Exhibit B.
III. COMPENSATION
3.01. (a) Salary. Executive shall receive a salary at the rate of
$130,000 per annum, commencing on the date of this Agreement, payable by
the Company in semi-monthly installments or at such other intervals (not
less frequently than monthly) as the Company may determine. In addition,
Executive shall be eligible to participate in any bonus plan established by
the Company for similarly situated employees, but such eligibility shall
not be construed to obligate the Company to award Executive any bonus.
Whether or not Executive receives a bonus from the Company shall be
determined by the Board of Directors of the Company, or the Compensation
Committee of the Board of Directors, in its sole discretion.
(b) Health Care Benefits. During the term of this Agreement,
Executive shall be included in all medical, dental, disability and other
insurance plans identified on Exhibit C hereto, subject to the provisions
of such plans as the same may be in effect from time to time.
3.02. Vacation. During the term of this Agreement, Executive shall
be entitled to vacation on the terms described in Exhibit C hereto.
3.03. Expense Reimbursement. During the term of this Agreement, the
Company shall reimburse Executive for all ordinary and necessary business
expenses incurred by him in connection with the business of the Company on
the terms described in Exhibit C hereto.
IV. TERM OF EMPLOYMENT; TERMINATION
4.01. Term. The term of this Agreement shall be for a period
commencing on the date hereof and ending on the Measurement Date (as
defined in the Merger Agreement) (the "Term").
4.02. Termination.
(a) Death or Disability. The employment of Executive
hereunder shall immediately terminate upon the death of Executive, and may
be terminated by the Company upon the total disability of Executive; and
the Company shall not thereafter be obligated to make any further payments
under this Agreement other than compensation payments and reimbursement for
expenses due, accrued or payable as of the date of Executive's death or
total disability pursuant to paragraphs 3.01(a) and 3.03. Executive shall
be deemed to have a "total disability" if (i) as a result of Executive's
incapacity, Executive has become eligible for full benefits under the
Company's long-term disability policy, if any, or (ii) the Company
determines, on the basis of a written report (the "Committee Report") of a
committee comprised of a majority of the Board, that Executive has been
unable or can reasonably be expected to be unable, due to physical or
mental illness or incapacity, to perform the essential duties of his
employment with reasonable accommodation for a period of 90 days during any
180-day period. The Committee Report shall be based upon the reports of at
least two physicians (at least one of which shall be reasonably acceptable
to Executive or his personal representatives); provided that if the two
physician reports are materially different in their conclusions, the
Committee Report shall be based upon, and consistent with, the reports of a
majority of three physicians at least one of which shall be reasonably
acceptable to Executive or his personal representatives.
(b) Discharge for Cause. The employment of Executive
hereunder shall immediately terminate if the Company elects to discharge
Executive for cause. If the Company has grounds to elect to discharge
Executive for cause pursuant to this paragraph, but does not elect to
discharge him within one year of the later of the time the grounds for
discharge arise or become known to the Company, the Company shall be deemed
to have waived or forfeited its right thereafter to discharge Executive on
the basis of such grounds, but shall not be deemed to have waived its right
thereafter to discharge Executive on the basis of any other similar or
different grounds for discharge for cause; provided that if grounds for the
discharge of Executive arise and become known to the Company, the Company
shall provide Executive with notice of such grounds within 30 days after
such grounds become known to the Company in order for the Company to elect
to discharge Executive for cause on the basis of such grounds. In
addition, if the Company has grounds to elect to discharge Executive for
cause as the result of the occurrence of a Performance-Based Trigger (as
defined below), but does not elect to discharge him for cause within the
foregoing one-year period, the Company will not be deemed to have waived
its right to count the failure of Adage to achieve the required level of
Pretax Profits for a given fiscal year for purposes of determining whether
another Performance-Based Trigger will have occurred in the event Adage
fails to achieve the required level of Pretax Profits for a subsequent
fiscal year. "Cause" shall mean any of the following: (i) the material
breach by Executive of any of his obligations under this Agreement
(provided that in order for the Company to discharge Executive on account
of his material breach of any of his obligations under this Agreement, the
Company shall have first given Executive written notice of such material
breach and afforded him the opportunity to cure such material breach within
the 10-day period following the date such written notice is given to him,
but, notwithstanding the foregoing, the Company shall not be required to
give Executive any such written notice of material breach or afford him any
opportunity to cure a material breach if the Company has, within the
preceding 12-month period, given him written notice of a similar breach and
afforded him an opportunity to cure such similar breach and,
notwithstanding the foregoing, the Company shall not be required to give
Executive any such written notice of material breach or opportunity to cure
if the grounds constituting such material breach also fall within one of
the other clauses covered by this definition of the term "cause"), (ii) an
act of insubordination by Executive (including, without limitation, a
refusal by Executive to carry out a written directive of the President of
the Company or the Board), (iii) a failure by Executive to follow the
Company's written business policies, procedures or strategies, (iv)
Executive's conviction of a felony, (v) Executive's act of fraud on the
Company, willful breach of his duty of loyalty to the Company or
misappropriation of Company funds, (vi) Executive's appropriation to
himself of a Company corporate opportunity or (vii) the occurrence of a
Performanced-Based Trigger (as defined below). Upon termination of
Executive's employment for cause pursuant to this paragraph 4.02(b), the
Company shall have no further obligations to Executive hereunder other than
to pay Executive such compensation payments and reimbursement for expenses
as may be due, accrued or payable as of the date of such termination
pursuant to paragraphs 3.01(a) and 3.03. The term "Performance-Based
Trigger" means the failure of Adage to achieve, for two consecutive fiscal
years (commencing with the fiscal year ending September 30, 1996), Pretax
Profits (as defined in the Merger Agreement) (a) at least at the level set
forth in an annual business plan for Adage for a fiscal year if such annual
business plan has been approved by a Joint Vote of the members of the Board
or (b) if the Board does not approve a business plan for either or both of
the fiscal years ending September 30, 1997 and September 30, 1998,
respectively, by a Joint Vote of its members, at least equal to $4,000,000
and $5,000,000 (or such lesser amount as may be set forth in the applicable
business plan), respectively, in such fiscal years. A "Joint Vote" of the
members of the Board shall mean a vote of at least a majority of the
members of the Board in which either or both of Executive and Xxxxx Xxxxxx
(if then a member of the Board) is member of such majority.
Notwithstanding the foregoing, a Performance-Based Trigger will not be
deemed to have occurred, based on the failure of Adage to achieve at least
the minimum required level of Pretax Profits for a given fiscal year, as
provided above, if the failure was attributable to a "reasonably
unforeseeable event." In order for an event to qualify as reasonably
unforeseeable, the event must be generally not of a type that businesses
similarly situated to Adage customarily take into account in their
contingency planning. Examples of reasonably unforeseeable events include,
but are not limited to, unavailability of announced computer equipment or
computer programs from suppliers necessary for essential development
activities of Adage or the death of several key employees of Adage in a car
or airplane accident or by fire or the development after the date hereof of
disputes between key strategic partners or alliances (in which dispute
neither the Company nor Adage is involved) resulting in a significant
reduction in sales by Adage to one or more of its customers. In no event
shall the performance or non-performance, financially or in any other
respect not constituting a separate basis for discharge for cause
hereunder, of the business of Adage constitute "cause" for purposes of
terminating the employment of Executive except as expressly set forth in
clause (vii) above. Executive agrees that he will not, in his capacity as a
member of the Board, arbitrarily refuse to approve an annual business plan
which Executive actually believes to be reasonable.
(c) Discharge Without Cause. The employment of Executive
hereunder shall immediately terminate if the Company discharges Executive
without cause. Upon termination of Executive's employment without cause
pursuant to this paragraph 4.02(c), the Company shall have no further
obligations to Executive hereunder other than (i) to pay Executive such
compensation payments and reimbursement for expenses as may be due, accrued
or payable as of the date of such termination pursuant to paragraphs
3.01(a) and 3.03 and (ii) to pay and provide to Executive the amount of the
salary and the health care benefits Executive would have been entitled to
receive during the remaining term of this Agreement pursuant to paragraphs
3.01(a) and 3.01(b) hereof if he had not been discharged, in any such case
at the time or times Executive would have received such payments or
benefits if he had not been discharged.
V. ADDITIONAL COVENANTS
5.01. Non-competition.
(a) General Prohibition. Executive hereby agrees that he will
not, during the Restricted Period (as defined below), compete, directly or
indirectly, with the Company or any of its successors, affiliates, related
companies or subsidiaries, whether now existing or hereafter created or
acquired, during the Restricted Period (all of the foregoing being
collectively referred to herein as the "Companies") in any business engaged
in or under consideration by the Companies, or any of them, during the term
of Executive's employment hereunder. In recognition of the scope of the
Company's activities, the foregoing prohibition against competition shall
apply worldwide.
(b) Prohibition on Indirect Competition. Executive shall be
deemed to be competing as described in paragraph (a) hereof if Executive
shall engage, directly or indirectly, in any of the businesses covered
thereby, whether for his own account or that of any other person, firm,
corporation, partnership or other business entity, and whether his
participation shall be as a stockholder, general or limited partner, or
investor in any such entity (except to the extent that Executive's
investment constitutes less than 2% of the equity of a publicly-traded
company) or as a principal, agent, proprietor, officer, director, employee,
sales representative, consultant, lender or in any other capacity.
Notwithstanding the foregoing, Executive shall be permitted to retain his
investments identified on Exhibit A.
(c) Restricted Period. The "Restricted Period" shall mean the
period commencing on the date hereof and continuing until the later of (i)
one year from the date of termination of Executive's employment by the
Company other than for cause (as defined in Section 4.02(b) above), (ii)
two (2) years from the date of termination of Executive's employment with
the Company hereunder for cause and (iii) five (5) years from the date
hereof.
(d) Non-Solicitation. During the Restricted Period, Executive
shall not, directly or indirectly: (i) solicit, divert, take away or induce
customers or prospective customers of any of the Companies to avail
themselves of, or to distribute or market, the services or products of
others which are competitive with any of the Companies' services or
products or (ii) solicit, direct, take away or induce any employee of any
of the Companies to leave the employ of the Companies.
5.02. Confidentiality. Executive recognizes and acknowledges that
the Proprietary Information (as hereinafter defined) is a valuable, special
and unique asset of the Company. As a result, both during the Term and
thereafter, Executive shall not, without the prior written consent of the
Company (which consent may be withheld by the Company in its sole
discretion), for any reason either directly or indirectly divulge to any
third-party or use for his own benefit, or for any purpose other than the
exclusive benefit of the Company, any confidential, proprietary, business
or technical information or trade secrets of any of the Companies
(collectively, "Proprietary Information") revealed, obtained or developed
in the course of his employment with the Company or Adage. Failure by any
of the Companies to xxxx any of the Proprietary Information as confidential
or proprietary shall not affect its status as Proprietary Information under
the terms of this Agreement. Notwithstanding the foregoing, Proprietary
Information shall not include information which (i) is or becomes generally
available to the public other than as a result of a disclosure by Executive
in violation of this Agreement, (ii) becomes available to Executive on a
non-confidential basis from a person other than any of the Companies who is
not otherwise bound by a confidentiality agreement with any of the
Companies or (iii) is disclosed in response to a valid order of a court or
other governmental body of the United States or any political subdivision
thereof; provided, however, that such disclosure is not greater than what
was required to be produced or disclosed and provided further that
Executive will first have given notice of such order as soon as practical
to the Company, and render reasonable cooperation to enable the Company to
contest the order.
5.03. Property. All Proprietary Information shall be and remain the
sole property of the Company. During the Term, Executive shall not remove
from the Company's offices or premises any documents, records, notebooks,
files, correspondence, reports, memoranda or similar materials of or
containing Proprietary Information unless necessary or appropriate in
accordance with the duties and responsibilities required by or appropriate
for his position and, in the event that such materials or property are
removed, all of the foregoing shall be returned to their proper files or
places of safekeeping as promptly as possible after the removal shall serve
its specific purpose.
5.04. Equitable Relief. Executive expressly acknowledges that
damages alone will be an inadequate remedy for any breach or violation of
any of the provisions of this Section V, and that the Company, in addition
to all other remedies available at law or hereunder, shall be entitled, as
a matter of right, to injunctive relief, including specific performance,
with respect to any such breach or violation, in any court of competent
jurisdiction. If any of the provisions of this Section V are held to be in
any respect an unreasonable restriction upon Executive, then they shall be
deemed to extend only over the maximum period of time, geographic area or
range of activities as to which they may be enforceable. In the event that
Executive shall be in violation of the restrictive covenants in paragraph
5.01, then the Restricted Period shall be extended for a period of time
equal to the period of time between the time the Company delivers written
notice of such breach to Executive and the time such breach is cured.
Executive acknowledges that the restrictions in Section V are reasonably
necessary to protect the Company's interests, and that Executive will not,
as a result of such restrictions, be unable to earn a livelihood during the
Restricted Period.
VI. MISCELLANEOUS
6.01. Notices. Any notice, request, instruction, waiver or other
communication to be given hereunder by any party hereto to any other party
hereto shall be in writing and deemed to be duly given for all purposes
when (i) delivered personally, (ii) sent by certified or registered mail
(postage prepaid and return receipt requested), (iii) sent by recognized
overnight courier (such as Federal Express), or (iv) sent by telegram or
telecopier as follows:
(a) if to the Company, to it at:
Systems & Computer Technology Corporation
0 Xxxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: Senior Vice President - Finance and
Administration and Chief
Financial Officer
Telecopier Number: (000) 000-0000
with a copy to:
Systems & Computer Technology Corporation
0 Xxxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: Senior Vice President and
General Counsel
Telecopier Number: (000) 000-0000
with an additional copy to:
Pepper, Xxxxxxxx & Xxxxxxx
3000 Two Xxxxx Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799
Attention: Xxxxx X. Xxxxxxx, Esquire
Telecopier Number: (000) 000-0000
(b) if to the Executive, to it at:
Xxxxxx X. X'Xxxxxxx
000 Xxxxxx Xxxxx
Xxx Xxxxxx, XX 00000
with a copy to:
Xxxxxxx & Associates
Tower Plaza
000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
Telecopier Number: (000) 000-0000
or to such other address for a party as shall be specified by like notice.
A notice shall be deemed to have been duly given to the party to whom it is
directed (i) when received personally, (ii) on the third business day after
the day it is placed in the mail, if sent by certified or registered mail,
(iii) on the business day following the mailing thereof if sent by
recognized overnight courier or (iv) when sent by telegram or telecopier,
upon receipt by the sender of a confirmed answer-back. Whenever the giving
of notice is required, the giving of such notice may be waived in writing
by the party entitled to receive such notice.
6.02. Waiver of Breach. The waiver by the Company of a breach or
violation of any of the provisions of this Agreement shall not operate or
be construed as a waiver of any subsequent breach or violation thereof.
6.03. Assignability. This Agreement shall not be assignable by
Executive, but otherwise shall be binding upon and inure to the benefit of
the parties hereto and their successors and assigns.
6.04. Entire Agreement. This writing represents the entire agreement
and understanding of the parties with respect to the matters addressed
herein and may not be altered or amended except by a written instrument
signed by the Company and Executive. Any and all promises, agreements,
representations, warranties and other statements, written or oral, made
among the parties in respect to such matters prior to, or contemporaneously
with, the execution hereof are hereby canceled and superseded and shall be
of no further force and effect.
6.05. Severability. If any provision of this Agreement shall be or
become illegal or unenforceable in whole or in part for any reason
whatsoever, the remaining provisions shall be deemed severable and
independent and shall nevertheless be deemed valid, binding and
enforceable.
6.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.
6.07. Headings. The headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its
interpretation.
6.08. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
By: /s/ Xxxx Xxxxxxx
---------------------------------
Title: Senior Vice President
- Finance and Administration and Chief Financial Officer
/s/ Xxxxxx X. X'Xxxxxxx
---------------------------------
Xxxxxx X. X'Xxxxxxx
