Exhibit 10.15
[FORM OF EMPLOYMENT AGREEMENT WITH SENIOR EXECUTIVE OFFICERS]
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made and entered into as of ________, 20__
(the "Effective Date"), by and between ______________________ ("Executive") and
Xxxxxx Software, Inc., an Ohio corporation (the "Company").
RECITALS:
A. Executive possesses an intimate knowledge of the business and
affairs of the Company and its policies, methods, personnel and plans for the
future.
B. The Board of Directors of the Company (the "Board") recognizes that
Executive's contribution to the growth and success of the Company has been
substantial and desires to assure the Company of Executive's continued
employment in an executive capacity and to compensate him accordingly.
C. Executive is desirous of committing himself to continuing to serve
the Company on the terms herein provided.
In consideration of the mutual covenants and agreements hereinafter set
forth, the parties agree as follows:
1. DUTIES AND SCOPE OF EMPLOYMENT.
(a) Position and Duties. During the "Employment Period," the Company
agrees to employ Executive as its , reporting directly to the Board.
Executive shall have such duties and authority as are commensurate with one
employed in his positions, as may be customarily incident to such positions, and
as may be assigned to Executive from time to time by the Board. Executive shall
diligently, to the best of his ability, and with the highest degree of good
faith and loyalty, perform all such duties incident to his positions and use his
best efforts to promote the interests of the Company.
(b) Obligations to the Company. During the Employment Period, Executive
shall devote his full time and energy to the business and affairs of the
Company. Executive shall comply with the Company's policies and rules, as they
may be in effect from time to time during the Employment Period.
(c) No Conflicting Obligations. Executive represents and warrants to the
Company that he is under no obligations or commitments, whether contractual or
otherwise, that are inconsistent with his obligations under this Agreement.
Executive represents and warrants that he will not use or disclose, in
connection with his employment by the Company, any trade secrets or other
proprietary information or intellectual property in which any third party has
any right, title or interest, without the consent of such third party; and that
his employment by the Company as contemplated by this Agreement will not
infringe or violate the rights of any third party. Executive acknowledges that
he was specifically told that (1) it is not the intention of the Company to
obtain from him any trade secrets or other proprietary information or
intellectual
property of Executive's prior employers, and (2) if he feels that any assignment
which he may be given while in the employ of the Company requires or makes
likely the use or disclosure of any such trade secrets or other proprietary
information or intellectual property, Executive should promptly bring this to
the attention of the Board.
(d) Conflict of Interest. During the Employment Period Executive agrees
that he shall not, acting alone or in conjunction with others, directly or
indirectly, become involved in a conflict of interest or, upon discovery
thereof, allow such a conflict of interest to continue. Moreover, Executive
agrees that he shall immediately disclose to the Company any facts that might
involve any reasonable possibility of a conflict of interest. It is agreed that
any direct or indirect interest, connection with or benefit from any outside
activities, where such interest might in any way adversely affect the Company,
involves a possible conflict of interest. Circumstances in which a conflict of
interest on the part of Executive might arise, and which must be reported
immediately by Executive to the Company, include, but are not limited to, the
following: (1) ownership of a material interest (which the parties agree shall
not include the ownership of less than one percent (1%) of the outstanding
voting securities of any business entity whose securities are listed on a
national securities exchange or on the NASDAQ National Market System) in any
supplier, contractor, subcontractor, customer or other entity with which the
Company does business; (2) acting in any capacity, including director, officer,
partner, consultant, employee, distributor, agent or the like for a supplier,
contractor, subcontractor, customer or other entity with which the Company does
business; (3) accepting, directly or indirectly, material payments, services or
loans (but specifically excluding personal loans from a bank or comparable
financial institution that are entered into on fair market terms comparable to
the terms extended by the lender to other customers) from a supplier,
contractor, subcontractor, customer or other entity with which the Company does
business, including gifts in excess of $50.00 in any individual case or any
trips; (4) misuse of the Company's information or facilities to which Executive
has access in a manner which will be detrimental to the Company's interests,
such as utilization for Executive's own benefit of know-how, inventions or
information developed through the Company's business activities; (5) disclosure
or other misuse of confidential or proprietary information of any kind obtained
through Executive's connection with the Company; (6) appropriation by Executive
or the diversion to others, directly or indirectly, of any business opportunity
in which it is known or could reasonably be anticipated that the Company would
be interested; and (7) the ownership, directly or indirectly, of a material
interest in a "Competitor" of the Company, or acting as an owner, director,
principal, officer, partner, consultant, employee, agent, servant or otherwise
of any Competitor of the Company. Notwithstanding the foregoing, no conflict of
interest will be in violation of this Section 1(d) if Executive has promptly
disclosed such conflict of interest in full and thereafter the Board approves
the transaction or transactions in which such conflict of interest arises.
2. TERM OF EMPLOYMENT.
(a) General. The Company agrees to continue Executive's employment, and
Executive agrees to remain in the employment of the Company, from the Effective
Date for a period of three (3) years, unless Executive's employment terminates
earlier pursuant to the termination and resignation provisions of Section 2(b)
below (the "Employment Period"). Executive's employment with the Company shall
be "at will," which means that either Executive
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or the Company may terminate Executive's employment at any time, for any reason,
with "Cause," "Without Cause," for "Good Reason," without Good Reason or by
reason of "Disability." Any contrary representations, commitments or agreements
that may have been made to Executive shall be superseded by this Agreement. This
Agreement shall constitute the full and complete agreement between Executive and
the Company regarding the "at will" nature of Executive's employment, which may
only be changed in an express written agreement signed by Executive and the
Chairman; provided, that Executive also acknowledges that he shall be subject to
and shall comply with the provisions of the Company's Employee Handbook, as in
effect from time to time, other than any provisions of such Employee Handbook
that are in conflict with or inconsistent with this Agreement (with respect to
which the provisions of this Agreement will control).
(b) Termination.
(1) Resignation or Termination Requiring Notice. The Company may
terminate Executive's employment at any time for any reason (or no reason), and
for Cause, Without Cause or by reason of Disability. Executive may terminate
Executive's employment at any time for any reason (or no reason), and for Good
Reason, without Good Reason or by reason of Disability. The terminating party
shall effect any such resignation or termination by giving the other party
notice in writing to such effect specifying in reasonable detail the
circumstances providing a basis for resignation or termination.
(2) Notice Period. In the case of termination by the Company for
Cause or termination by either party for Disability, notice under subparagraph
(1) shall be effective immediately. In the case of termination by the Company
Without Cause, notice under subparagraph (1) shall be given at least ninety (90)
days in advance. In the case of resignation by Executive for Good Reason, notice
under subparagraph (1) shall be given at least thirty (30) days in advance. In
the case of resignation by Executive without Good Reason, notice under
subparagraph (1) shall be given at least ninety (90) days in advance.
(3) Termination Upon Death. Executive's employment shall terminate
automatically and immediately in the event of his death.
3. COMPENSATION.
(a) Base Salary. During the Employment Period, the Company shall pay
Executive as compensation for his services an annualized base salary of ________
Dollars ($________), less applicable deductions and withholdings, payable in
accordance with the Company's standard payroll schedule and practices. The
compensation specified in this Section 3(a), together with any increases in such
compensation that the Company may grant from time to time, are referred to in
this Agreement as "Base Salary." The Base Salary will be reviewed at least
annually and shall be subject to change from time to time as the Board (or, if
required, the Conflict of Interest Committee or the Compensation Committee of
the Board) may determine, in its discretion.
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(b) Bonus. During the Employment Period, Executive will be eligible to
earn cash bonuses, if any, as follows: (1) in accordance with the bonus plan
maintained by the Company for its executive officers generally, and (2) as the
Board (or, if required, the Conflict of Interest Committee or the Compensation
Committee of the Board) may determine, in its discretion.
(c) Stock Options. Prior to the Effective Date, Executive has been
granted stock options pursuant to the Company's 1998 Share Incentive
Compensation Plan (the "1998 Plan"). During the Employment Period, Executive
shall be entitled to participate in future stock option grants under the 1998
Plan, the Company's 2003 Share Incentive Compensation Plan (the "2003 Plan") and
such other stock-based incentive compensation plans as the Company may adopt
from time to time for its employees or senior executives generally, in
accordance with the terms and conditions of the 1998 Plan, the 2003 Plan and
such other plans and the determinations of the Stock Options Committee of the
Board. Executive's stock options shall continue to vest in accordance with the
1998 Plan, the 2003 Plan and such other plans and the stock option agreements
between the Company and Executive evidencing such stock options.
As of the Effective Date, all Stock Option Agreements to which Executive
is currently a party with the Company related to the Company's Common Shares are
amended in accordance with the provisions set forth on Exhibit A attached to
this Agreement.
(d) Vacation and Other Benefits. During the Employment Period, Executive
shall be eligible for vacation each year in accordance with the Company's
standard policy for senior executives, as it may be amended from time to time.
Executive shall be eligible during the Employment Period to participate in any
employee benefit plans or programs generally available to the other senior
executives of the Company, subject in each case to the generally applicable
terms and conditions of the plan or program in question and to the
determinations of any person or committee administering such plan or program.
The Company reserves the right to amend, modify or terminate any employee
benefits generally available to senior executives at any time for any reason.
(e) Business Expenses. During the Employment Period, Executive shall be
authorized to incur necessary and reasonable travel and other business expenses
in connection with his duties hereunder, pursuant to and consistent with
policies and procedures as established by the Company and as may be modified
from time to time. The Company shall reimburse Executive for such expenses upon
presentation of an itemized account and appropriate supporting documentation, in
accordance with Company policies and procedures.
4. PAYMENTS, BENEFITS AND ACCELERATION FOLLOWING RESIGNATION OR TERMINATION.
(a) Resignation for Good Reason or Termination Without Cause Following
Change of Control. Subject to Section 4(e) of this Agreement, if, within one (1)
year following a "Change of Control," Executive resigns for Good Reason or the
Company terminates Executive's employment Without Cause, then Executive will be
paid his Base Salary and all unused vacation earned through the date of
termination and Executive also shall receive:
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(1) A lump sum severance payment equal to one hundred percent
(100%) of Executive's annual Base Salary for the Severance Determination Period,
less applicable deductions and withholdings;
(2) The full amount of any cash bonuses that would have been
earned by Executive for the fiscal year in which Executive is terminated, less
applicable deductions and withholdings; and
(3) Should Executive be eligible for and elect to continue his
Company health insurance pursuant to COBRA, payment of COBRA premiums for a
period following the termination date of Executive's employment equal in
duration to the Severance Determination Period.
(b) Resignation for Good Reason or Termination Without Cause Outside of
a Change of Control. Subject to Section 4(e) of this Agreement, if Executive
resigns for Good Reason or the Company terminates Executive's employment Without
Cause when no Change of Control has occurred in the prior one (1) year period,
then Executive shall receive:
(1) Base Salary continuation payments in accordance with the
Company's standard payroll practices until the last day of a period following
the termination date of Executive's employment equal in duration to the
Severance Determination Period, less applicable deductions and withholdings;
(2) The full amount of any cash bonuses that would have been
earned by Executive for the fiscal year in which Executive is terminated, less
applicable deductions and withholdings; and
(3) Should Executive be eligible for and elect to continue his
Company health insurance pursuant to COBRA, payment of COBRA premiums until the
earlier of: (A) the date on which Executive commences full-time employment for
any person, venture, partnership or other entity; or (B) the date upon which
Executive becomes eligible for any other plan or program providing any benefits
that are similar to any benefits provided under the Company health insurance.
(c) Resignation without Good Reason or Termination for Cause. If
Executive resigns without Good Reason or the Company terminates Executive's
employment for Cause, then upon the termination of Executive's employment
Executive will be paid his Base Salary and all unused vacation earned through
the date of termination, but nothing else, under this Agreement and all
compensation and benefits will cease on Executive's date of employment
termination.
(d) Termination Due to Death or Disability. If Executive's employment is
terminated due to death or Disability, then Executive, or Executive's estate,
will receive: (1) payment for all Base Salary and accrued but unused vacation
earned through the date of termination; and (2) a lump-sum payment equal to the
pro-rata portion of the full cash bonuses Executive otherwise would have earned
for the fiscal year in which such termination occurs, based on Executive's
length of service during such fiscal year.
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(e) Release Required. As a prior condition to Executive receiving any
payment or benefit under Sections 4(a) or 4(b) of this Agreement, Executive
shall execute a full release of known and unknown claims against the Company,
its successors, affiliates, shareholders, directors, officers, employees,
agents, advisors and representatives, in a form designated by the Company.
5. NON-COMPETITION; NON-SOLICITATION; NON-DISCLOSURE AND INVENTIONS.
(a) Non-Competition. During the Employment Period and:
(1) in the event Executive's employment is terminated by the
Company for Cause or Executive resigns without Good Reason, then for a period of
two (2) years thereafter; or
(2) in the event Executive's employment is terminates for any
reason (other than Executive's death) not covered by clause (1) above, then for
a period of eighteen (18) months thereafter,
Executive shall not engage in any "Competitive Activity." Executive agrees that
if there is any reasonable question regarding whether or not a contemplated
activity would be a Competitive Activity, Executive will consult with the Board
before engaging in the contemplated activity. The Board will determine in its
sole discretion whether the activity contemplated by Executive is a Competitive
Activity.
(b) Non-Solicitation. During the Employment Period and for a period of
three (3) years thereafter, Executive shall not, directly or indirectly,
personally or through others, solicit or encourage, or attempt to solicit or
encourage (on Executive's own behalf or on behalf of any other person or
entity), for hire any employee or consultant of the Company or of any of the
Company's "affiliates."
(c) Non-Disclosure and Inventions.
(1) Confidentiality. Executive will not, either during the
Employment Period or thereafter, except as authorized or directed by the Company
in writing, disclose to others or use for Executive's or any others' benefit any
confidential information, trade secrets, or business sensitive information
relating to the Company's business or disclosed to the Company by other parties
(such as persons or organizations having a contractual relationship with the
Company) which come to Executive's knowledge during employment with the Company.
(2) Return of Records. On termination of employment, Executive
shall deliver to the Company all software, records, reports, data, notes,
memoranda, models, and equipment of any nature that are in Executive's
possession or under Executive's control and that are prepared or acquired in the
course of Executive's employment relationship with Xxxxxx. Further, Executive
agrees not to take with him information or data of any description or
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reproduction of any information that relates to the business of the Company or
to parties in a contract relationship with the Company.
(3) Assignment and Discoveries. Except as provided below,
Executive will promptly disclose and assign to the Company or others designated
by the Company, free from any obligation to Executive, every invention, product,
process, apparatus, or design that Executive, individually or jointly, during
the period of Executive's employment by the Company, may make, invent, discover,
conceive or originate. Executive warrants that he or she has no obligation to
assign the property described in this paragraph (3) to any other party. This
provision does not apply to those items excepted in paragraph (7) below.
(4) Cooperation. Executive will, without expense to Executive,
fully cooperate with the Company or its designees in applying for and securing
in the name of the Company or its designees patents with respect to the
discoveries described in paragraph (3) above in each country in which the
Company or its designees may desire to secure patent protection. Executive will
promptly execute all proper documents presented to him for signature and do all
things reasonably required to enable the Company or its designees to secure such
patent protection or to transfer legal title therein, together with any patents
that may be issued thereon, to the Company or its designees.
(5) Information and Testimony. Executive will, without expense to
Executive, give such true information and testimony, under oath if requested, as
may be required by the Company or its designees relative to any discoveries or
other property described in paragraph (3) above.
(6) Assignments of Copyrights. Executive agrees to convey the
right to register and to assent to, and assist in the registration or renewal or
extension of, copyrights by the Company or its designees in respect of
copyrightable material produced or composed by Executive during the period of
his employment by the Company, unless excepted in paragraph (7) below or by
written consent of Xxxxxx.
(7) Interests of Executive. As to inventions, applications for
patent, and copyrightable material (property) in which Executive presently holds
an interest, and which are not subject to this Agreement:
[ ] Executive has no such property.
[ ] Executive has attached separate pages(s) fully describing all such
property.
[ ] Executive previously has disclosed such property to the Company in
writing and/or his ownership thereof has been established by action
of the Board.
6. COMPANY'S SUCCESSORS. This Agreement shall be binding upon any successor
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business or assets. For all purposes under this
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Agreement, the term "Company" shall include any such successor to the Company's
business or assets that becomes bound by this Agreement.
7. ARBITRATION. Except as provided in Section 7(b) of this Agreement,
Executive and the Company agree to arbitrate before a neutral arbitrator any and
all disputes or claims arising from or relating to Executive's employment with
the Company, or the termination of that employment, including disputes or claims
against any current or former agent or employee of the Company.
(a) Arbitrable Claims. Arbitrable disputes or claims include those which
arise in tort, contract or pursuant to a statute, regulation or ordinance now in
existence or which may in the future be enacted or recognized, including, but
not limited to, the following claims:
(1) claims for fraud, promissory estoppel, fraudulent inducement
of contract or breach of contract or contractual obligation, whether such
alleged contract or obligation be oral, written or express or implied by fact or
law;
(2) claims for wrongful termination of employment, violation of
public policy and constructive discharge, infliction of emotional distress,
misrepresentation, interference with contract or prospective economic advantage,
defamation, unfair business practices, and any other tort or tort-like causes of
action relating to or arising from the employment relationship or the formation
or termination thereof;
(3) claims of discrimination, harassment or retaliation under any
and all federal, state or municipal statutes, regulations or ordinances
that prohibit discrimination, harassment or retaliation in employment, as well
as claims for violation of any other federal, state or municipal statute,
regulation or ordinance, except as set forth in Section 7(b) below; and
(4) claims for non-payment or incorrect payment of wages,
commissions, bonuses, severance, employee fringe benefits, stock options and the
like, whether such claims be pursuant to alleged express or implied contract or
obligation, equity, the Ohio Revised Code, the Fair Labor Standards Act, the
Employee Retirement Income Securities Act, and any other federal, state or
municipal laws concerning wages, compensation or employee benefits.
(b) Non-Arbitrable Claims. Executive and the Company further understand
and agree that the following disputes and claims are not covered by the
arbitration agreement contained in this Section 7 and shall therefore be
resolved as required by the law then in effect:
(1) claims for workers' compensation benefits, unemployment
insurance or state or federal disability insurance;
(2) claims concerning the validity, infringement, enforceability
or misappropriation of any trade secret, patent right, copyright, trademark or
any other intellectual or confidential property held or sought by Executive or
the Company;
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(3) claims by the Company seeking specific performance or a
restraining order or injunction and based upon any alleged breach by Executive
of any of the covenants of Executive set forth in Section 1(d) or Section 5 of
this Agreement; and
(4) any other dispute or claim that has been expressly excluded
from arbitration by statute.
(c) Relief and Review. The arbitrator shall have the authority to award
any relief authorized by law in connection with the asserted claims or disputes
and shall issue a written award that sets forth the essential findings and
conclusions on which the award is based. The arbitrator's award shall be final
and binding on both the Company and Executive and it shall provide the exclusive
remedy(ies) for resolving any and all disputes and claims subject to arbitration
under this Agreement. The arbitrator's award shall be subject to correction,
confirmation or vacation, as provided by applicable Ohio law setting forth
standards for review of arbitration awards.
(d) Location and Rules. The arbitration shall be conducted in Cuyahoga
County, Ohio, or such other location as is mutually agreeable to the parties,
in accordance with the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association. To the extent that any of the National
Rules for the Resolution of Employment Disputes or anything in this Agreement
conflicts with any arbitration procedures required by Ohio law, the arbitration
procedures required by Ohio law shall govern.
(e) Costs and Attorneys' Fees. The Company will bear the arbitrator's
fee and any other type of expense or cost that Executive would not be required
to bear if he were free to bring the dispute(s) or claim(s) in court as well as
any other expense or cost that is unique to arbitration. Executive and the
Company shall each bear their own attorneys' fees incurred in connection with
the arbitration, and the arbitrator will not have authority to award attorneys'
fees unless a statute or contract at issue in the dispute specifically
authorizes the award of attorneys' fees to the prevailing party, in which case
the arbitrator shall have the authority to make an award of attorneys' fees as
required or permitted by applicable law. If there is a dispute as to whether the
Company or Executive is the prevailing party in the arbitration, the arbitrator
will decide this issue.
(f) WAIVER OF RIGHT TO JURY. EXECUTIVE AND THE COMPANY UNDERSTAND AND
AGREE THAT THE ARBITRATION OF DISPUTES AND CLAIMS UNDER THIS AGREEMENT SHALL BE
INSTEAD OF A TRIAL BEFORE A COURT OR JURY OR A HEARING BEFORE A GOVERNMENT
AGENCY.
8. Reasonableness of Restraints; Irreparable Harm; Breach of Agreement No
Defense.
(a) Executive acknowledges that the covenants of Section 1(d) and
Section 5 of this Agreement are reasonably necessary to protect the Company's
goodwill, trade secrets and other business interests and that they will cause
Executive no undue hardship.
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(b) Executive acknowledges that any breach of the covenants of Section
1(d) or Section 5 of this Agreement will cause the Company immediate irreparable
harm and continuing damage for which there will be no adequate remedy at law,
and Executive agrees that, in the event of any breach of said obligations and
agreements, the Company shall be entitled to temporary and permanent injunctive
relief without the necessity of proving damages or posting any bond and to such
further relief, including damages, as is proper in the circumstances.
(c) Executive acknowledges that the covenants of Section 1(d) and
Section 5 of this Agreement are of the essence of this Agreement. Such covenants
shall be construed as independent of any other provision in this Agreement, and
the existence of any claim or cause of action of Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of any of such covenants.
(d) If any of the covenants contained in Section 1(d) or Section 5 of
this Agreement, or any portion thereof, shall be found by a court of competent
jurisdiction to be invalid or unenforceable to any extent for any reason, such
court shall exercise its discretion to reform such covenant to the end that
Executive shall be subject to covenants that are reasonable under the
circumstances and are enforceable by the Company.
9. DEFINITIONS. Certain terms used in this Agreement are defined as follows:
(a) "Affiliate." For all purposes of this Agreement, affiliate of a
party shall mean a person that controls, is controlled by or is under common
control with such party, either directly or indirectly through one or more other
entities that control, are controlled by or are under common control with such
party. The term "control" (including the terms "controlling," "controlled by"
and "under common control with") means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
party, whether through the ownership of voting securities, through membership,
by contract or otherwise.
(b) "Change of Control." For all purposes of this Agreement, Change of
Control shall mean: (1) a sale, exchange or other transfer or assignment, in a
single transaction or a series of related transactions, in which securities
possessing at least fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
transaction or series of related transactions; (2) the sale, exchange, transfer
or other disposition of all or substantially all of the Company's assets in a
transaction or a series of related transactions intended to be a complete
liquidation or dissolution of the Company; or (3) a merger, consolidation or
other similar transaction or series of related transactions that has a result
similar to a transactions or series of related transactions described in clause
(1) or (2) above.
(c) "Good Reason." For all purposes of this Agreement, Good Reason for
Executive's resignation will exist if he resigns within sixty (60) days of any
of the following events: (1) any change in Executive's Base Salary and/or in the
terms of any cash bonus plan or program in which Executive is a participant as a
result of which Executive's total cash compensation as in effect immediately
prior to such change is reduced by more than twenty-five percent (25%); (2) a
change in Executive's position with the Company which substantially
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reduces his duties or level of responsibility; (3) any requirement that
Executive relocate his place of employment by more than two hundred fifty (250)
miles from his then current office; provided that any such reduction, change or
relocation is effected by the Company without Executive's written consent. A
resignation by Executive under any other circumstance or for any other reason
will be a resignation without Good Reason.
(d) "Cause" and "Without Cause." For all purposes of this Agreement, a
termination for Cause shall mean a termination by the Company of Executive's
employment for any of the following reasons: (1) gross negligence or willful
misconduct in the performance by Executive of his duties hereunder; (2) any act
of personal dishonesty by Executive in connection with his duties hereunder that
has the effect, or could have the effect, of producing substantial personal
enrichment of Executive; (3) conviction of Executive of, or a plea of "guilty"
or "no contest" by Executive to, a felony under the laws of the United States or
any state or political subdivision thereof; (4) Executive's commission of an act
of fraud against, or of an act of misappropriation of property belonging to, the
Company; or (5) Executive's material breach of any confidentiality and
inventions agreement between Executive and the Company. A termination by the
Company of Executive's employment other than for Cause or upon Disability will
be a termination "Without Cause."
(e) "Disability." For all purposes of this Agreement, Disability shall
mean Executive's inability to carry out his material duties and responsibilities
under this Agreement for more than six (6) months in any twelve (12) consecutive
month period as a result of incapacity due to mental or physical illness or
injury.
(f) "Competitive Activity." For all purposes of this Agreement, a
Competitive Activity means any activity in which Executive directly or
indirectly provides services of any kind or nature (whether or not Executive is
compensated for such services), including, but not limited to, Executive working
in an employment, advisory or consulting capacity, for any Competitor of the
Company.
(g) "Competitor." For all purposes of this Agreement, a Competitor is
defined as any person or entity, other than a person or entity that is a
solution provider (reseller, OEM, ASP, BPO or other similar business partner
under a written agreement that is in effect at the time Executive begins to
provide any services in the nature of a Competitive Activity for such solution
provider, and that remains in effect for at least one (1) year after the
commencement of such services) of the Company, involved in the design,
development and creation, and/or the marketing, licensing and distribution, of
computer software products that are commonly referred to as "enterprise content
management" or "business process management" products.
(h) "Severance Determination Period." For all purposes of this
Agreement, Severance Determination Period means a period of eighteen (18)
months.
10. MISCELLANEOUS PROVISIONS.
(a) Notices. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or
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when mailed by prepaid overnight courier or by U.S. registered or certified
mail, return receipt requested and postage prepaid. Mailed notices shall be
addressed to Executive at the home address that he most recently communicated to
the Company in writing. In the case of the Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Chief Financial Officer.
(b) Modifications and Waivers. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by Executive and by an authorized officer of the
Company (other than Executive). No waiver by either party of any breach of, or
of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.
(c) Entire Agreement. Except as set forth in the following sentence, no
other agreements, representations or understandings (whether oral or written)
which are not expressly set forth in this Agreement have been made or entered
into by either party with respect to the subject matter of this Agreement. This
Agreement and the applicable stock option agreements and stock plans referred to
in Section 3(c) contain the entire understanding of the parties with respect to
the subject matter hereof.
(d) Taxes. All payments made under this Agreement shall be subject to
reduction to reflect taxes or other charges required to be withheld by law.
(e) Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Ohio, without regard to the conflicts of laws principles thereof.
(f) Severability. Subject to Section 8(d) of this Agreement, the
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
(g) No Assignment; Binding Effect. This Agreement and all rights and
obligations of Executive hereunder are personal to Executive and may not be
transferred or assigned by Executive at any time. The Company may assign its
rights under this Agreement to any entity that assumes the Company's obligations
hereunder. This Agreement is binding upon and inures to the benefit of Executive
and his heirs, personal representative and successors, and the Company and its
successors and assigns.
(h) 280G. Executive understands and acknowledges that certain benefits
provided for under this Agreement may constitute "parachute payments" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"). Such parachute payments may be subject to the excise tax imposed by
Section 4999 of the Code. Executive acknowledges and agrees that he will review
any tax consequences which may arise as the result of any such parachute
payments with his own tax advisors and that he is relying and will rely solely
on such advisors and not on any representations of the Company or any of its
employees or agents with regard to the possible tax implications of receiving
such parachute payments. Executive further
12
acknowledges and agrees that he is responsible for his own tax liability that
may arise as the result of any such payments.
(i) Headings. The headings of the Sections and paragraphs contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of any provision of this Agreement.
(j) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
EXECUTIVE:
----------------------------------------
COMPANY:
XXXXXX SOFTWARE, INC.
By:
-------------------------------------
Print Name:
-----------------------------
Title:
----------------------------------
13
EXHIBIT A TO EMPLOYMENT AGREEMENT
AMENDMENTS TO STOCK OPTION AGREEMENTS
1. Each Schedule A attached to each of the Stock Option Agreements between
Executive and the Company in effect on the Effective Date of this Agreement
(which Schedules A set forth the terms applicable to individual grants of stock
options to Executive covered by such Stock Option Agreements) is amended to
delete the provisions thereof entitled "Duration of Exercise Period of Option"
and to substitute the following in lieu thereof:
"DURATION OF EXERCISE PERIOD OF OPTION:
General. The period from the date, and to the extent, such Option
becomes exercisable under "VESTING SCHEDULE" below until the tenth (10th)
anniversary of the date of grant of such Option, subject to earlier expiration
as provided for below. Such Option shall expire at the close of regular business
hours at the Company's principal office in Cleveland, Ohio, on the last day of
the term of such Option, or, if earlier, on the applicable expiration date
provided for below.
Termination as an Employee of the Company.
(1) By the Company Without Cause or By Optionee For Good
Reason. If the Optionee ceases to be an employee of the Company by reason of:
(A) termination of Optionee's employment by act of the
Company "Without Cause," as defined in any Employment Agreement between Optionee
and the Company that is in effect at the time of such termination ("Optionee
Employment Agreement"); or
(B) termination of Optionee's employment by Optionee
for "Good Reason," as defined in the Optionee Employment Agreement,
and during a period in which the Optionee was entitled to exercise the Option as
described under "VESTING SCHEDULE" below, then Optionee may exercise such Option
to the extent of the purchase rights, if any, which existed immediately prior to
such termination for a period of three (3) months after the date of such
termination. Notwithstanding anything to the contrary set forth herein, the
right of Optionee to exercise such Option hereunder shall terminate on the last
day of the term of such Option as described under "General" above. Optionee's
employment with the Company shall not be deemed to have terminated while he is
on a military, sick or other bona fide approved leave of absence from the
Company, as such leave of absence is described in Section 1.42-7(h) of the
Federal Income Tax Regulations or any lawful successor regulations thereto.
(2) By Reason of Death. If Optionee dies while he is an
employee of the Company and during a period in which Optionee was entitled to
exercise the Option as described under "VESTING SCHEDULE" below, such person or
persons as shall have
14
acquired, by will or by the laws of descent and distribution, the right to
exercise such Option (the "Personal Representative") may exercise such Option to
the extent of the purchase rights, if any, which existed as of the date of the
Optionee's death and which have not theretofore been exercised. Notwithstanding
anything to the contrary set forth herein, the right of the Optionee's Personal
Representative to exercise such Option hereunder shall terminate upon the
earlier of the date which is (a) the last day of the term of such Option, or (b)
the first anniversary of the date of the Optionee's death.
(3) For any Other Reason. On the date the Optionee ceases to
be an employee of the Company for any reason not described in paragraph (1) or
(2) above, the Option shall terminate. The Optionee's employment with the
Company shall not be deemed to have terminated while he is on a military, sick
or other bona fide approved leave of absence from the Company, as such leave of
absence is described in Section 1.42-7(h) of the Federal Income Tax Regulations
or any lawful successor regulations thereto.
Dissolution, Liquidation and Certain Mergers. Upon the dissolution
or liquidation of the Company the Option shall terminate. Unless the surviving
corporation assumes the Option, upon the occurrence of a merger or consolidation
in which the Company is not the surviving corporation the Option shall
terminate."
2. Each Schedule A attached to each of the Stock Option Agreements between
Executive and the Company in effect on the Effective Date of this Agreement
(which Schedules A set forth the terms applicable to individual grants of stock
options to Executive covered by such Stock Option Agreements) is amended to
delete the last sentence in the section captioned "VESTING SCHEDULE" and to add
to such section immediately after the table showing the vesting schedule the
following:
"If the Optionee ceases to be an employee of the Company by reason of:
(1) termination of Optionee's employment by act of the
Company "Without Cause," as defined in the Optionee Employment Agreement; or
(2) termination of Optionee's employment by Optionee for
"Good Reason," as defined in the Optionee Employment Agreement,
and prior to the last day of the term of such Option as described under
"DURATION OF EXERCISE PERIOD OF OPTION - General" above, any portion of the
Option that is not then vested and entitled to be exercised by Optionee shall
immediately vest in full and become exercisable in full by Optionee immediately
prior to the time at which such termination of Optionee's employment becomes
effective under the terms of the Optionee Employment Agreement.
To the extent that the Option becomes exercisable with respect to any
Shares, as provided above, such Option may be exercised by the Optionee in
minimum amounts of at least 1,000 Shares for which such Option is then
exercisable, at any time or from time to time prior to the expiration of such
Option.
15
Schedule of Parties to Form of Employment Agreement
with Senior Executive Officers
EXECUTIVE OFFICER POSITION EFFECTIVE DATE BASE SALARY
----------------- -------- -------------- -----------
Xxxxxxx X. Xxxxxx President and Chief Executive Officer May 18, 2004 $260,000
Xxxxxxxxxxx X. Xxxxxx Chairman of the Board, Executive Vice May 18, 2004 $198,000
President and Chief Financial Officer
Xxxxxx X. Xxxxxxxxxxx Executive Vice President-Development May 18, 2004 $242,000
and Chief Technology Officer
