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EXHIBIT (c)(5)
CONFORMED COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of December 14, 1998, by and
between C-ATS Software Inc., a Delaware corporation (the "Company"), and Xxxxx
Xxxxxxx ("Executive").
W I T N E S S E T H:
WHEREAS, Executive is currently employed by the Company; and
WHEREAS, pursuant to the Merger Agreement, dated as of
December 14, 1998, by and among Misys plc, a public limited liability company
incorporated under the laws of England ("Misys"), Kirsty, Inc., a Delaware
corporation and indirect wholly owned subsidiary of Misys, Moxie Acquisition
Corp., a Delaware corporation and a direct wholly owned subsidiary of Kirsty,
Inc., and the Company (the "Merger Agreement"), Moxie Acquisition Corp. will be
merged with and into the Company with the Company as the surviving corporation
(the "Merger"); and
WHEREAS, the Company desires to secure the continued services
of Executive from and after the effective time of the Merger (the "Effective
Time") and to enter into this agreement setting forth the terms and conditions
of Executive's continued employment with the Company (the "Agreement"); and
WHEREAS, Executive desires to accept such continued employment
on the terms and conditions set forth in this Agreement; and
WHEREAS, during the course of his employment with the Company,
Executive has and will obtain confidential information concerning the business
and operations of the Company and its subsidiaries that could be used to compete
unfairly with the Company and/or its subsidiaries and could be of great value to
its and their competitors.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the Company and Executive hereby agree as follows:
1. Employment.
a. Agreement to Continue Employment. Upon the terms and
subject to the conditions of this Agreement, the Company hereby agrees to
continue to employ Executive and Executive hereby accepts such continued
employment with the Company.
b. Term of Employment. The Company shall employ Executive
pursuant to the terms of this Agreement for the period commencing on the date
that includes the Effective Time (the "Commencement Date") and ending on the
third anniversary thereof (the "Initial Term"), subject to the early termination
provisions of Paragraph 5(a). The term will be extended for successive periods
of six months each, unless Executive or the Company provides a notice of
non-renewal to the other party at least 30 days prior to the
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expiration of the Initial Term or any renewal term. The period during which
Executive is employed pursuant to this Agreement shall be referred to as the
"Employment Period".
2. Position and Duties.
During the Employment Period, Executive shall serve as
President and Chief Executive Officer of the Company and in such position or
positions with the Company and its subsidiaries as the Board of Directors of
Misys (the "Misys Board") shall from time to time reasonably specify. During the
Employment Period, Executive shall have the duties, responsibilities and
obligations customarily assigned to individuals serving in the position or
positions in which Executive serves hereunder. Executive shall devote his full
business time to the services required of him hereunder except for vacation time
and reasonable periods of absence due to sickness, personal injury or other
disability, and shall use his best efforts, judgment, skill and energy to
perform such services in a manner consonant with the duties of his positions and
to improve and advance the business and interests of the Company and its
subsidiaries. A description of Executive's duties and responsibilities is
attached hereto as Exhibit A.
3. Compensation.
a. Base Salary. During the Employment Period, the Company
shall pay Executive a base salary at the annual rate of $250,000. The Board of
Directors of the Company (the "Company Board") shall review Executive's base
salary on each May 31 during the Employment Period, and may, subject to the
approval of the Misys Board (which approval may be withheld in the discretion of
the Misys Board), adjust such base salary upwards, but not downwards, in light
of the base salaries then paid to other Executives of the Company and the
performance of Executive. Executive's annual base salary payable hereunder is
referred to herein as "Base Salary". The Company shall pay Executive his Base
Salary in accordance with the Company's regular payroll practices as in effect
from time to time.
b. Long Term Incentive Compensation Plan. Executive is hereby
granted an Incentive Award with respect to the Incentive Pool of the Company's
Long Term Incentive Plan (the "LTIP"), at a Participation Level of 31.25%. The
terms of the LTIP, when finalized and adopted by the Company in consultation
with Executive, will substantially reflect the terms summarized and attached
hereto as Exhibit B.
4. Benefits, Perquisites and Expenses.
a. Benefits. During the Employment Period, Executive shall
participate in each pension and welfare benefit plan sponsored or maintained by
the Company to the extent Executive is eligible to participate in any such plan
under the generally applicable provisions thereof, including, without
limitation, each pension, profit sharing, retirement, deferred compensation or
savings, group life, medical, accident or disability insurance or similar plan
or program of the Company. Nothing herein shall limit the right of the Company
to amend or terminate any such plan in its discretion. Executive's years of
service with the Company and, if applicable, Lor/Xxxxx Xxxx Associates, Inc.,
prior to the Commencement Date shall be credited for purposes of determining
Executive's eligibility and/or vesting under any Company benefit plan.
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b. Perquisites. During the Employment Period, Executive shall
be entitled to sick leave and five weeks of paid vacation annually, subject in
all respects to the generally applicable provisions of the Company's vacation
and sick leave policies.
c. Business Expenses. During the Employment Period, the
Company shall pay or reimburse Executive for all reasonable expenses incurred or
paid by Executive in the performance of Executive's duties hereunder, upon
presentation of expense statements or vouchers and such other information as the
Company may require and in accordance with the generally applicable policies and
procedures of the Company.
5. Termination of Employment.
a. Early Termination of the Employment Period. Notwithstanding
Paragraph 1(b), the Employment Period shall end upon the earliest to occur of
(i) the date of Executive's death, (ii) 30 days following delivery by the
Company of written notice to Executive of a Termination due to Disability, (iii)
immediately upon delivery by the Company of written notice to Executive of a
Termination for Cause, (iv) three months following the date of delivery by the
Company of written notice to Executive of a Termination Without Cause, provided
that, subject to the continued payment to Executive of installments of his Base
Salary for the period ending three months following the date the Company
delivers such notice of termination to Executive, the Company may elect to
direct Executive to refrain from reporting to employment as of any earlier date
specified in such notice, (v) the date specified in any written notice delivered
by Executive to the Company of a Termination for Good Reason, which date shall
be at least 30 days after the delivery of such notice, or (vi) three months
following the date of delivery by Executive of written notice to the Company of
the Executive's resignation from employment, other than a Termination for Good
Reason. The provisions of this Paragraph 5 shall not apply to any termination of
employment occurring after the Initial Term.
b. Payments Upon Any Terminations. In the event of the
termination of Executive's employment pursuant to Paragraph 5, the Company shall
pay to Executive, within 30 days of the Termination Date, any Base Salary
earned, but unpaid, for services rendered to the Company on or prior to such
date (other than Base Salary deferred pursuant to Executive's election). In
addition, Executive shall be entitled to receive all vested benefits accrued and
payable to Executive under the terms of or in accordance with any plan, policy
or program of the Company or its subsidiaries (other than any severance plan,
policy or program) that are payable at or subsequent to the date of his
termination without regard to the performance by Executive of further services
or the resolution of a contingency. Such vested accrued benefits shall be
payable in accordance with the terms of the plan, policy or program under which
such benefits have accrued, except as otherwise expressly modified by this
Agreement.
c. Additional Benefits Payable Upon Certain Terminations.
(I) Payments.
(A) In the event of a termination of Executive's
employment pursuant to Paragraph 5(a) due to a
Termination Without Cause or a Termination for Good
Reason, (i) the Company shall continue to pay to
Executive installments of his Base Salary (at the
annual rate in
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effect immediately prior to the Termination Date), in
accordance with the Company's regular payroll
practices as then in effect, and provide Executive
with medical benefits during the six month period
beginning on the Termination Date and (ii) with
respect to the Incentive Compensation Award granted
to Executive pursuant to Paragraph 3(b)(i), Executive
shall be entitled to receive any amounts that become
payable with respect to such Award in accordance with
and subject to the terms and conditions of the Long
Term Incentive Compensation Plan, it being understood
that there shall be no duplication of payments under
this Agreement and under such plan.
(B) In the event of the termination of Executive's
employment pursuant to Paragraph 5(a) due to a
Termination due to Disability or as a result of
Executive's death, Executive shall be entitled to
receive any amounts that become payable in accordance
with and subject to the terms and conditions of the
Long Term Incentive Compensation Plan with respect to
the Incentive Compensation Award granted to Executive
hereunder, it being understood that there shall be no
duplication of payments under this Agreement and
under such plan.
(II) Limitations. Notwithstanding the provisions of Paragraph
5(c)(I), if Executive materially breaches any of the provisions of any
of Paragraph 6, Executive shall forfeit all rights to receive, and the
Company shall be relieved of all obligations to pay, any and all
amounts then remaining to be paid to Executive pursuant to Paragraph
5(c)(I).
d. Definitions. For purposes of Paragraphs 5 and 6, the
following capitalized terms have the following meanings:
"Termination Date" means the effective date of any early
termination of the Employment Period pursuant to Paragraph 5(a), it
being understood that in the event of a Termination Without Cause, the
effective date of such termination shall be the three month anniversary
of the date the Company delivers notice of such termination to
Executive.
"Termination for Cause" means a termination of Executive's
employment by the Company due to (a) Executive's conviction of a felony
or the entering by Executive of a plea of nolo contendere to a felony,
(b) Executive's gross negligence, dishonesty (other than of a de
minimis nature), willful malfeasance or substantial misconduct in
connection with his employment with the Company, (c) a substantial or
continual refusal by Executive to perform the duties, responsibilities
or obligations reasonably assigned to him by the Company or (d) a
material breach by Executive of any covenant or obligation in any
written agreement with the Company or any of its subsidiaries,
including any breach of any of the provisions of Paragraph 6 hereof.
Notwithstanding the foregoing, a termination shall not be treated as a
Termination for Cause unless the Company shall have delivered a written
notice to Executive stating that it intends to terminate his employment
for Cause and specifying the factual basis for such termination, and
the event or events
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that form the basis for the notice, if capable of being cured, shall
not have been cured within 10 days of the receipt of such notice.
"Termination due to Disability" means a termination of
Executive's employment by the Company because Executive has been
incapable of substantially fulfilling the positions, duties,
responsibilities and obligations of his employment because of physical,
mental or emotional incapacity resulting from injury, sickness or
disease for a period of at least six months in any twelve month period.
Any question as to the existence, extent or potentiality of Executive's
disability upon which Executive and the Company cannot agree shall be
determined by a qualified, independent physician selected by the
Company and approved by Executive (which approval shall not be
unreasonably withheld). The determination of any such physician shall
be final and conclusive for all purposes of this Agreement. Executive
or his legal representative or any adult member of his immediate family
shall have the right to present to such physician such information and
arguments as to Executive's disability as he, she or they deem
appropriate, including the opinion of Executive's personal physician.
"Termination for Good Reason" a termination of Executive's
employment by Executive within 30 days following (a) a material
reduction in Executive's aggregate compensation, (b) a material breach
by the Company of any covenant or obligation of the Company in any
written agreement with Executive, in any such case, without Executive's
written consent, (c) a material reduction in Executive's roles and
responsibilities with the Company or (d) the relocation of Executive's
principal place of business to a location more than 50 miles from
Executive's current principal place of business. Notwithstanding the
foregoing, a termination shall not be treated as a Termination for Good
Reason unless the Executive shall have delivered a written notice to
the Company stating that he intends to terminate his employment for
Good Reason and specifying the factual basis for such termination, and
the event or events that form the basis for the notice, if capable of
being cured, shall not have been cured within 10 days of the receipt of
such notice.
"Termination Without Cause" means any termination of
Executive's employment by the Company other than (i) a termination as a
result of Executive's death, (ii) a Termination due to Disability or
(iii) a Termination for Cause.
e. Full Discharge of Party's Obligations. Prior to Executive's
receipt of any amounts otherwise payable to Executive pursuant to Paragraph
5(c)(I)(A)(i) above, upon or following termination of his employment, and as a
condition to Executive's right to receive such amounts, Executive shall deliver
to the Company an acknowledgment that such amounts shall be in full and complete
satisfaction of Executive's rights under this Agreement and any other claims he
may have in respect of his employment by the Company or any of its subsidiaries.
Such amounts shall constitute liquidated damages with respect to any and all
such rights and claims and, upon Executive's receipt of such amounts, the
Company and its subsidiaries and "Affiliates" shall be released and discharged
from any and all liability to Executive in connection with this Agreement or
otherwise in connection with Executive's employment with the Company or any of
its subsidiaries. The acknowledgment shall constitute a general release of all
claims against the Company and its subsidiaries and Affiliates. If Executive
fails to deliver such
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acknowledgment within thirty days of the receipt by Executive of a request for
such acknowledgment, Executive shall not be entitled to any payments pursuant to
Paragraph 5(c)(I)(A)(i) above. For purposes of this Agreement, the term
"Affiliate" means any entity that controls, is controlled by or is under common
control with the Company.
6. Noncompetition and Confidentiality.
a. Noncompetition. During (i) the Employment Period and (ii)
the period ending six months following the Termination Date (the Employment
Period, together with the period under clause (ii) collectively, the
"Restriction Period"; provided however that, following the expiration of the
Initial Term, the Restriction Period shall not include the period under clause
(ii) above), Executive shall not engage in Competitive Activity. "Competitive
Activity" shall mean to be engaged in a business which at the time of
Executive's termination of employment is competing with the Company or any of
its subsidiaries and may reasonably be considered as being potentially harmful
to the profitability of the Company or any of its subsidiaries. In case of
doubt, Executive must, before engaging in the activity, seek written approval
from the Misys Board, which shall decide, based on the facts, whether the
activity is likely to be competitive and exercise discretion accordingly.
Following any termination of employment occurring after the expiration of the
Initial Term, the Company may elect to continue paying Executive's Base Salary,
subject to Executive's continued compliance with this Paragraph 6(a) and
Paragraph 6(f) below.
b. Confidentiality. Without the prior written consent of the
Company Board, except to the extent required by an order of a court having
competent jurisdiction or under subpoena from a government agency, during the
Employment Period and the ten year period following any termination of
Executive's employment with the Company, Executive shall not disclose any trade
secrets, customer lists, drawings, designs, information regarding product
development, marketing plans, sales plans, manufacturing plans, management
organization information (including data and other information relating to
members of the Misys Board or the Company Board and management), operating
policies or manuals, business plans, financial records, packaging design or
other financial, commercial, business or technical information relating to the
Company or any of its subsidiaries or Affiliates or information designated as
confidential or proprietary that the Company or any of its subsidiaries or
Affiliates may receive belonging to suppliers, customers or others who do
business with the Company or any of its subsidiaries or Affiliates
(collectively, "Confidential Information") to any third person unless such
Confidential Information has been previously disclosed to the public by the
Company or is in the public domain (other than by reason of Executive's breach
of this Section 6(b)) or unless the disclosure of such confidential information
would not reasonably be likely to have a material adverse effect on the market
value, business, operations, results of operations, assets, financial conditions
or prospects of the Company or any of its subsidiaries.
c. Ownership of Intellectual Property Rights. Executive
acknowledges that all of Executive's work on and contributions to the business
of the Company and/or any of its subsidiaries or Affiliates, including, without
limitation, any and all ideas, processes, methods, systems, programs,
programming aids, manufacturing techniques, software, flowcharts, developments,
inventions, enhancements, modifications and improvements which contribute to the
business of the Company and/or any of its subsidiaries, whether patented,
patentable or unpatentable, created by Executive during his employment by the
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Company (collectively, the "Works") are within the scope of Executive's
employment with the Company, are a part of the services, duties and
responsibilities of Executive for the Company, are a result of the efforts of
the Company and is the property of the Company and not of Executive. All of
Executive's work on and contributions to the Works shall be rendered and made by
Executive for, at the instigation of, and under the overall direction of the
Company, and all of Executive's said work and contributions, as well as the
Works, are and at all times shall be regarded as "work made for hire" as that
term is used in the United States Copyright Laws. Without curtailing or limiting
these acknowledgments, Executive hereby assigns, grants and delivers exclusively
to the Company all rights, titles and interests in and to any such Works, and
all copies and versions, including all copyrights and renewals. At any time upon
reasonable request by the Company, Executive will execute and deliver to the
Company, or its successors and assigns, such other and further assignments,
instruments and documents as the Company (or such successors or assigns) from
time to time reasonably may request for the purpose of establishing,
registering, evidencing, and enforcing or defending its complete, exclusive,
perpetual and worldwide ownership of all rights, titles, interests and
copyrights, in and to the Works, and Executive hereby constitutes and appoints
the Company as his agent and attorney-in-fact, with full power of substitution,
to execute and deliver such assignments, instruments or documents as Executive
may fail or refuse to execute and deliver, within five business days of
Executive's receiving written request from the Company to execute said
assignment, instrument or document, this power and agency being coupled with an
interest and being irrevocable. Executive shall from time to time as the Company
may reasonably request communicate and make known to the Company all knowledge
possessed by him relating to the Works; provided, however, that nothing herein
shall be construed as requiring any such communication where the Work is
lawfully protected from disclosure as the trade secret of a third party. Every
Work shall be and remain the exclusive property of the Company, it being the
intention of the parties that the Company shall have sole and exclusive
ownership rights in and to the Works.
Executive shall keep such records in connection with his
employment as the Company may from time to time reasonably direct, and all such
records shall be the sole and exclusive property of the Company. At any time and
from time to time, promptly after the Company's request, Executive shall
surrender to the Company any and all documents, memoranda, computer programs,
codes, disks, diskettes, magnetic tapes, books, papers, letters, price lists,
notebooks, reports, logbooks, sales records, customer lists, activity reports,
video or audio recordings, and any and all copies thereof, relating to the
business of the Company or any of its subsidiaries, any Confidential Information
and all Works.
d. Company Property. Promptly following Executive's
termination of employment with the Company, Executive shall return to the
Company all property of the Company or any of its subsidiaries or Affiliates,
and all copies thereof, in whatever medium, in Executive's possession or under
his control.
e. Non-Solicitation of Employees. During the Employment Period
and for 12 months thereafter, except in connection with the performance of
Executive's duties hereunder during the Employment Period, Executive shall not,
and shall not encourage or assist any other person, firm, corporation or other
entity to, induce any employee of the Company or any of its subsidiaries or
Affiliates to terminate employment with such entity, and shall not directly or
indirectly, either individually or as owner, agent, employee,
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consultant or otherwise, employ or offer employment to any person who is or was
employed by the Company or any of its subsidiaries or Affiliates unless such
person shall have ceased to be employed by such entity for a period of at least
6 months.
f. Non-Solicitation of Customers. During the Restriction
Period, Executive shall not, and shall not encourage or assist any other person,
firm, corporation or other entity to, solicit or otherwise attempt to establish
for himself or any other person, firm or entity any business of a nature that is
competitive with the business or relationship of the Company or any of its
subsidiaries with any person, firm or corporation which during the twelve-month
period preceding the prohibited activity was a customer, client or distributor
of the Company or any of its subsidiaries, other than any such solicitation on
behalf of the Company during Executive's employment hereunder during the
Employment Period.
g. Injunctive Relief with Respect to Covenants. Executive
acknowledges and agrees that the covenants and obligations of Executive with
respect to noncompetition, "works made for hire," nonsolicitation,
confidentiality and Company property relate to special, unique and extraordinary
matters and that a violation or threatened violation of any of the terms of such
covenants or obligations will cause the Company and its subsidiaries and
Affiliates irreparable injury for which adequate remedies are not available at
law. Therefore, Executive agrees that the Company shall be entitled to an
injunction, restraining order or such other equitable relief (without the
requirement to post bond) restraining Executive from committing or threatening
to commit any violation of the covenants and obligations contained in this
Paragraph 6. These injunctive remedies are cumulative and are in addition to any
other rights and remedies the Company may have at law or in equity or pursuant
to this Agreement.
7. Miscellaneous.
a. Survival. Paragraphs 5 (relating to early termination), 6
(relating to noncompetition, "works made for hire," nonsolicitation and
confidentiality) and 7 (relating to miscellaneous provisions) shall survive the
termination hereof, whether such termination shall be by expiration of the
Employment Period or an early termination pursuant to Paragraph 5 hereof.
b. Binding Effect. This Agreement shall be binding on, and
shall inure to the benefit of, the Company and any person or entity that
succeeds to the interest of the Company (regardless of whether such succession
does or does not occur by operation of law) by reason of the sale of all or a
portion of the Company's stock, a merger, consolidation or reorganization
involving the Company or, unless the Company otherwise elects in writing, a sale
of the assets of the business of the Company (or portion thereof) in which
Executive performs a majority of his services. This Agreement shall also inure
to the benefit of Executive's heirs, executors, administrators and legal
representatives.
c. Assignment. Except as provided under Paragraph 7(b),
neither this Agreement nor any of the rights or obligations hereunder shall be
assigned or delegated by any party hereto without the prior written consent of
the other party.
d. Entire Agreement. This Agreement (together with Exhibit A
hereto) constitutes the entire agreement between the parties hereto with respect
to the matters
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referred to herein. No other agreement relating to the terms of Executive's
employment by the Company, oral or otherwise, shall be binding between the
parties unless it is in writing and signed by the party against whom enforcement
is sought. There are no promises, representations, inducements or statements
between the parties related to the subject matter hereof (or in any Exhibit
hereto) or otherwise relating to Executive's employment other than those that
are expressly contained herein. Executive acknowledges that he is entering into
this Agreement of his own free will and accord, and with no duress, that he has
been represented and fully advised by competent counsel in entering into this
Agreement, that he has read this Agreement and that he understands it and its
legal consequences. This Agreement supersedes all prior agreements between the
Company and Executive.
e. Severability; Reformation. In the event that one or more of
the provisions of this Agreement shall become invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby. In the event any
subparagraph of Paragraph 6 is not enforceable in accordance with its terms,
Executive and the Company agree that such subparagraph shall be reformed to make
such subparagraph enforceable in a manner which provides the Company the maximum
rights permitted at law.
f. Waiver. Waiver by any party hereto of any breach or default
by the other party of any of the terms of this Agreement shall not operate as a
waiver of any other breach or default, whether similar to or different from the
breach or default waived. No waiver of any provision of this Agreement shall be
implied from any course of dealing between the parties hereto or from any
failure by either party hereto to assert its or his rights hereunder on any
occasion or series of occasions.
g. Notices. Any notice required or desired to be delivered
under this Agreement shall be in writing and shall be delivered personally, by
courier service, by registered mail, return receipt requested, or by telecopy
and shall be effective upon actual receipt by the party to which such notice
shall be directed, and shall be addressed as follows (or to such other address
as the party entitled to notice shall hereafter designate in accordance with the
terms hereof):
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If to the Company:
0000 Xxxxxxxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Chairman of the Board
with a copy to:
Kirsty, Inc.
00 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
and
Misys plc
Burleigh House
Salford Priors
Evesham
WORCS, WR115SH
England
Attention: Company Secretary
If to Executive, to him at the address set forth on the
signature page hereof.
h. Amendments. This Agreement may not be altered, modified or
amended without the consent of the Purchasers and except by a written instrument
signed by each of the parties hereto.
i. Headings. Headings to paragraphs in this Agreement are for
the convenience of the parties only and are not intended to be part of or to
affect the meaning or interpretation hereof.
j. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
k. Withholding. Any payments provided for herein shall be
reduced by any amounts required to be withheld by the Company from time to time
under applicable Federal, State or local income or employment tax laws or
similar statutes or other provisions of law then in effect. All determinations
of the amount required to be withheld by the Company hereunder shall be
determined by the Company.
l. Governing Law. This Agreement shall be governed by the laws
of the State of California, without reference to principles of conflicts or
choice of law under which the law of any other jurisdiction would apply.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and Executive has hereunto set his
hand as of the day and year first above written.
C-ATS Software Inc.
By: /s/ Xxx X. Xxxxxxxxx
Xxx X. Xxxxxxxxx
Chairman
EXECUTIVE:
/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Address:
0 Xxxxxxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
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EXHIBIT A
PRESIDENT/CHIEF EXECUTIVE OFFICER
SUMMARY: Manages and directs the organization toward its primary objectives,
based on profit and return on capital, in accordance with the prevailing
business plans as approved by the Misys Board, performing the following duties
personally or through subordinate managers. Member of the MKI Risk Board of
Directors. Plans, coordinates, and controls the daily operation of the
organization through the organization's managers and consistent with the overall
framework of internal controls.
Establishes current and long range goals, objectives, plans and policies,
subject to approval by the Board of Directors.
Dispenses advice, guidance, direction, and authorization to carry out major
plans, standards and procedures, consistent with established policies and
Board approval.
Creates the structure and processes necessary to manage the organization's
current activities and its projected growth.
Directs other executives to ensure that operations, responsibilities,
authorities, and accountability are being executed in accordance with the
organization's policies.
Oversees the adequacy and soundness of the organization's financial structure.
Reviews operating results of the organization, compares them to established
objectives, and takes steps to ensure that appropriate measures are taken
to correct unsatisfactory results.
Establishes and maintains an effective system of communications throughout the
organization.
Ensures that all organization activities and operations are carried out in
compliance with local, state, and federal regulations and laws governing
business operations.
Represents the organization with major customers, the financial community, and
the public.
MANAGEMENT
Performs function in a manner that complies with company's commercial and
operating standards and upholds company values.
Ensures staffing levels and skills meet current and future business needs by
recruiting, developing and retaining superior talent.
Analyzes and controls expenditures of division to conform to budgetary
requirements.
Oversees the infrastructure to support responsibilities.
Directs the liaison between all other functional areas.
Represents company in activities of professional organizations serving as a
product champion and industry leader.
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EXHIBIT B
C*ATS - Long Term Incentive Plan ("LTIP") Term Sheet
Preamble - The LTIP will be based on the profitability of the
new entity, MKI Risk, to be created from the
combination of C*ATS and MKI's Global Manager/Risk
Vision operation.
- It is structured in the form of a deferred
compensation plan in which awards earned can increase
in value by reference to any rise in the Misys share
price, all within a favorable tax environment.
- The shaded line on the attached LTIP Award Chart
represents the expected level of Profits (as defined
below) during the three year Term of the Plan. It
follows that the anticipated pay-out from the plan is
$8 million but could be as much as $20 million (both
amounts struck before assuming credit from any
investment return).
- The LTIP Awards are separate from and in addition to
normal annual bonuses.
- The Plan is based on the Misys financial year ending
May 31. This will also reflect the time of salary
reviews which, save in exceptional circumstances,
will thereafter take place annually.
Eligible Participants Messrs. Xxxxxxxxx and Xxxxxxx will participate in the
Pool and will select other key employees of C*ATS, with
the consent of Misys, who will also participate in the
Pool.
Term The amounts payable to the Pool under the LTIP will be
determined over the three year period commencing June 1,
1999 and ending May 31, 2002. Each June 1 through May 31
during such period constitutes one of three "Plan
Years". Actual payment of a Participant's Award,
however, may be deferred until October 31, 2004.
Awards Participants will be granted an "Award" with respect to
the Pool. The Award will set forth the Participant's
allocable percentage ("Participation Level") of the
vested portion of the Pool.
14
Calculation of LTIP accruals will be determined based on the cumulative
Maximum LTIP Pool pre-tax "Profits" (as defined below) of the GMRV / C*ATS
Accruals business ("MKI Risk") for the relevant Plan Years. The
attached chart illustrates the different levels of
pay-out dependent on varying performance achievements.
- Following Plan Year 1, provided that Profits equal or
exceed $3,674,000 during Year 1, $1.6 million will be
credited to the Pool. No amount will be credited to the
Pool if Year 1 Profits fall below $3,674,000.
- Following Plan Years 2 and 3, the total amounts
credited to the LTIP Pool (inclusive of any prior year's
credit) will be the amounts set forth on the attached
chart under the "Maximum Payout" column, opposite where
the Cumulative Profits for such year falls (to be pro
rated on a linear basis in the case of actual Cumulative
Profits between such targets).
Vested Portion of - Following Year 1, 20% of the amount (if any) credited
LTIP Pools to the Pool (i.e., 20% of the Maximum Payout at 30%
Profits CAGR) will become vested.
- Following Year 2, the aggregate vested portion of the
Pool (inclusive of the amount vested after Year 1) will
equal the greater of (i) the amount vested after Year 1
or (ii) 40% of the amount under the "Maximum Payout"
column, opposite where the Cumulative Profits for Year 2
falls (to be appropriately pro rated in the case of
actual Cumulative Profits between the stated CAGR
targets).
- Following Year 3, the aggregate vested portion of the
Pool (inclusive of the amount vested after Year 2) will
equal the greater of (i) the amount vested after Year 2
or (ii) 100% of the amount under the "Maximum Payout"
column, opposite where the Cumulative Profits for Year 3
falls (to be pro rated on a linear basis in the case of
actual Cumulative Profits between the stated CAGR
targets).
- The vested portions of the Pool will be
nonforfeitable.
2
15
Calculation of Profit Profit (i.e., EBIT) shall be calculated (in $U.S.) based
on Misys GAAP as soon as is reasonably practicable
following receipt by the C*ATS Board of the audited
financial statements for the applicable period. LTIP
Accruals will not be charged to Profits.
LTIP Payout - A Participant may cash out his or her LTIP Award at
any time, based on the vested portion of the Pool at
such time. However, by cashing out the LTIP Award,
he/she will forfeit all rights to any subsequent LTIP
accruals. A participant who cashes in his or her LTIP
accrual will also forfeit the SAR feature described
below.
- Generally, a Participant may not cash out a fractional
portion of his or her Award. However, such fractional
distributions may be permitted (at the sole discretion
of the C*ATS Board) in the case of a Participant's
demonstrated hardship and in such circumstances
subsequent LTIP accruals will not be forfeited.
- All LTIP Payouts will include 5% simple interest from
June 1, 1999 through the applicable payment date. Within
14 days following the determination of the final vested
portion of the LTIP Pool after Year 3, all accrued
interest will be paid out in cash. Thereafter, interest
on LTIP Awards will continue to be paid on each November
30 and May 31 so long as the Participant continues to
hold his Award.
- If not previously paid out (either directly, or upon
exercise of the SAR described below), all LTIP Awards
(including any unpaid interest) will be paid on October
31, 2004.
3
16
Option following Year Commencing on June 1, 2003 as to 50% of a Participant's
Four to Redeem LTIP LTIP Award, and June 1, 2004 as to the remaining 50%, a
Accruals based on the Participant will have the right to redeem his or her
Appreciation of Misys LTIP Award (excluding any simple interest that may have
shares (the "SAR") accrued thereon) for a cash payment based on a portion
of the appreciation of Misys Ordinary Shares since the
closing date of the Tender Offer (the "SAR"). The base
price for the SAR will equal 125% of the closing price
of a Misys Ordinary Share as of the closing date of the
Tender Offer, expressed in Pounds Sterling (the "Base
Price"). Upon exercise of the SAR, a Participant will
receive a cash payment equal to the product of (A) the
quotient of (x) the dollar value (absent the SAR) of the
portion of the LTIP Award being so redeemed and (y) the
Base Price, and (B) the closing price (in Pounds
Sterling) of a Misys Ordinary Share as of the exercise
date. With respect to each Participant, the SAR will
terminate on the earlier of October 31, 2004 or the date
on which the participant terminates employment (other
than due to a termination "without cause" by the Company
or a termination for "good reason" by the participant).
Effect of Termination - Voluntary Termination (other than for Good Reason) and
of Employment Termination for Cause: Participants will be paid out
their vested LTIP Awards (including interest), based on
the amounts vested as of the end of the most recently
completed LTIP Year.
- All Other Terminations (i.e., Death, Disability,
Retirement, Termination without Cause; Termination with
Good Reason): Participants will be credited with the pro
rata portion of the LTIP accrual they would have
received for the year in which termination occurs (based
on months employed), in addition to their vested Award
from any completed LTIP Year. In the case of a
termination for Good Reason or without Cause, payment
will not be accelerated unless the participant so
elects, and participants will be permitted to continue
to defer receipt of payment and will continue to be
eligible for the SAR.
Basic Features: - Payments under the LTIP will be in addition to the
Company's regular annual bonus.
- The terms of the LTIP may be modified with the consent
of the Misys Board if advantageous tax results may be
achieved without changing the material provisions of the
LTIP.
4
17
Xxxxxxxxx Provisions - If Xxxxxxxxx remains employed through the end of Year
1 (May 31, 2000), any subsequent termination by him
(other than for "Cause") will be deemed to be for "Good
Reason".
- If Xxxxxxxxx quits after Year 1, but before the end of
Year 2, he shall be deemed to have continued in
employment through the end of Year 2, except that his
Award shall only relate to 20% of the amount credited to
the Pool after Year 2 (rather than 40%).
Xxxxxxxxx and Xxxxxxx - During the 3 year performance period, neither
bonuses and initial Xxxxxxxxx nor Xxxxxxx will receive a separate annual
salaries bonus.
- The starting salaries for both Xxxxxxxxx and Xxxxxxx
will be set at $250,000 to continue until May 31, 2000.
5
18
EXAMPLES
1. A Participant remains employed through Year 3. The cumulative Profit
through Year 3 is $35,821,500. The total Pool accrual would be $8,000,000,
of which 100% is vested. The Participant's Award is equal to his
applicable percentage times the vested amount in the Pool.
2. Same case, except the cumulative Profit is $40,000,000. Since the results
fall between the "targets" of $35,821,500 and $42,765,360, the pool
accrual would be similarly pro rated between the $8,000,000 and
$12,800,000 Maximum Payouts (i.e., $10,888,422). [8,000,000 +
(40,000,000-35,821,500)/(42,765,360-35,821,500) X (12,800,000-8,000,000)
= 10,888,422.]
3. A Participant quits after Year 2 (but before the end of Year 3). The
vested percentage of the Pool is 40%. The cumulative Profits through Year
2 are $12,869,000. At that same level of performance through Year 3, the
LTIP pool accrual would have been $8,000,000. The participant would
receive his applicable percentage of $3,200,000 (40% of $8 million).
4. A Participant remains employed through Year 3. The cumulative Profits
through Year 2 were $16 million and the cumulative Profits through Year 3
were $24 million. Since the vested percentage in the Pool after Year 2
(40% x $19,200,000) exceeds the amount which would be vested after Year 3
(100% x $3,200,000), no additional amount has vested in Year 3.
Accordingly, the vested portion of the Pool after Year 3 remains $7.68
million. The Participant is entitled to his allocable percentage of that
amount.
5. Xxxxx Xxxxxxx quits after Year 2 (but before the end of Year 3). Year 1
Profits were $4 million and the cumulative Profits through Year 2 were $5
million. Since no amount was credited to the Pool with respect to Year 2,
the vested portion of the Pool remains $320,000 (the amount which was
vested after Year 1 (20% X $1,600,000)). Xxxxx is entitled to his
applicable percentage of the Pool -- i.e., $100,000 (31.25% of $320,000).
6. Same as #5, except Xxx Xxxxxxxxx is the Participant. Since the termination
is deemed to be for Good Reason, Rod will also be entitled to a pro-rata
portion of the Year 3 LTIP accrual (if any), based on the number of months
he was employed during Year 3 prior to termination.
6
19
MOXIE - LONG TERM INCENTIVE PLAN ("LTIP") AWARD CHART
Year 1 Year 2 Year 3
----------------- -------------------------------- --------------------------------
CAGR Annual/Cumulative Annual Cumulative Annual Cumulative MAXIMUM PAYOUT
----------------- -------------- -------------- -------------- -------------- --------------
Less than 30% $ -- $ -- $ -- $ -- $ -- $ --
30% $3,674,000.00 $ 4,776,200.00 $ 8,450,200.00 $ 6,209,060.00 $14,659,260.00 $ 1,600,000.00
60% $3,674,000.00 $ 5,878,400.00 $ 9,552,400.00 $ 9,405,440.00 $18,957,840.00 $ 2,400,000.00
90% $3,674,000.00 $ 6,980,600.00 $10,654,600.00 $13,263,140.00 $23,917,740.00 $ 3,200,000.00
120% $3,674,000.00 $ 8,082,800.00 $11,756,800.00 $17,782,160.00 $29,538,960.00 $ 4,800,000.00
150% $3,674,000.00 $ 9,185,000.00 $12,859,000.00 $22,962,500.00 $35,821,500.00 $ 8,000,000.00
180% $3,674,000.00 $10,287,200.00 $13,961,200.00 $28,804,160.00 $42,765,360.00 $12,800,000.00
210% or more $3,674,000.00 $11,389,400.00 $15,063,400.00 $35,307,140.00 $50,370,540.00 $19,200,000.00
*** NOTE: ALL DOLLAR FIGURES LISTED ABOVE AS PROFITS TARGETS (AND REFERENCED IN
THE LTIP TERM SHEET) ARE FOR ILLUSTRATION PURPOSES ONLY SINCE THEY WERE
CALCULATED BASED ON CALENDER YEAR ASSUMPTIONS. THE ACTUAL PROFITS TARGETS FOR
PURPOSES OF THE LTIP WILL BE ADJUSTED TO REFLECT A MAY 31 FISCAL YEAR.
