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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated October
29, 1999 (the "Effective Date"), is made and entered into by and between Retek
Information Systems, Inc., a Delaware corporation (the "Company"), and Xxxxxx
Xxxxxx (the "Executive").
WHEREAS, in connection with the Company's acquisition of
Webtrak Limited, a corporation organized under the laws of the United Kingdom,
pursuant to the Share Purchase Agreement, dated as of the date hereof, between
the shareholders of Webtrak Limited (the "Sellers") and the Company, the Company
desires to secure the Executive's employment in the manner hereinafter specified
and to make provision for payment of reasonable compensation to the Executive
for such services, and the Executive is willing to be employed by the Company to
perform the duties incident to such employment upon the terms and conditions
hereinafter set forth and thus to forego opportunities elsewhere; and
WHEREAS, the parties desire to enter into this Agreement, as
of the Effective Date, setting forth the terms and conditions of the employment
relationship of the Executive with the Company during the Term (as such term is
hereinafter defined).
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. Employment Duties.
(a) Employment. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to serve, as President of a division
of the Company.
(b) Duties. As President of a division of the Company,
the Executive will have full authority to act on behalf of the Company in a
manner that is consistent with his title and position. In such capacity, the
Executive also agrees to perform such duties and exercise such powers
commensurate with his office as may from time to time be reasonably requested of
him by Xxxxxx Xxxxxx or any person to whom the Executive shall report from time
to time. The Executive shall report exclusively to Xxxxxx Xxxxxx. During the
Term, the Executive shall:
(1) devote substantially all of his business time,
attention and abilities to the business of the Company (including its
subsidiaries or affiliates, when so required); and
(2) faithfully serve the Company and use his best efforts
to promote and develop the interests of the Company.
2. Term of Employment. The term (the "Term") of the
Executive's employment hereunder shall be for a period of two years, commencing
on the Effective Date, and
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(unless earlier terminated in accordance with the terms of Section 4(a) below or
as otherwise extended by the mutual agreement of the parties) ending on the
second anniversary thereof.
3. Compensation. Subject to the terms of this Agreement
and until the termination of the Term as provided in Section 4, the Company
shall pay compensation and provide benefits to the Executive as follows:
(a) Base Salary. The Company shall pay to the Executive a
base salary of $15,833.33 per month during the Term (the "Base Salary"). The
Executive shall receive his salary in equal monthly installments (or in such
other equal installments in accordance with the Company's payroll practices in
effect from time to time). The Executive shall be eligible for annual salary
increases in accordance with the compensation policies of the Company, as in
effect from time to time.
(b) Benefit Continuation and Perquisites. The Executive
shall participate during the Term, in such pension, life insurance, health,
disability and major medical insurance plans, and such other employee benefit
plans and programs, for the benefit of employees of the Company based in the
United States, and as may be maintained from time to time during the Term, in
each case to the extent and in the manner available to other executives or
officers of the Company and subject to the terms and provisions of such plans or
programs.
(c) Incentive Bonus. For each calendar quarter that
begins during the Term, the Company may pay a bonus to the Executive as
determined by the Company in accordance with the Company's incentive plan or
policies.
(d) Stock Options. The Company shall grant the Executive
250,000 options to purchase shares of the Company's common stock, par value of
$0.01 per share, pursuant to and subject to the terms and conditions of the
Company's 1999 Equity Incentive Plan and any stock option agreement entered into
by the Executive and the Company.
(e) Vacation. The Executive shall be entitled to paid
vacation in accordance with the Company's policy for employees based in the
United States.
(f) Reimbursement of Expenses. The Company shall
reimburse the Executive for all reasonable expenses incurred personally by him
on behalf of the Company in accordance with the policies and procedures
applicable to similarly situated executives of the Company.
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4. Termination and Compensation Payable Upon Termination
or Resignation.
(a) Earlier Termination of Term. Notwithstanding the
provisions of Section 2, the Executive's employment with the Company may be
terminated or the Executive may resign such employment prior to the expiration
of the Term as follows:
(1) The Company may terminate the Executive's employment
hereunder for Cause (as defined hereunder), provided that the Company
complies with the provisions of Section 4(e)(1);
(2) The Company may terminate the Executive's employment
hereunder without Cause, provided that the Company complies with the
provisions of Section 4(e)(1) and (2);
(3) The Company may terminate the Executive's employment
hereunder upon the Executive's Disability, provided that the Company
complies with the provisions of Section 4(e)(1) and (3);
(4) The Executive's employment hereunder shall terminate
automatically upon his death; or
(5) The Executive may resign from his employment with the
Company with or without Good Reason.
(b) Definition of "Cause". As used herein, "Cause" shall
mean, during the Term of this Agreement, the occurrence of any of the following:
(1) acts of common law fraud against the Company or its
affiliates on the part of the Executive;
(2) the conviction after the exhaustion of all appeals by
the Executive of a felony involving moral turpitude or the entry of a
plea of nolo contendere for such a felony;
(3) a material violation by the Executive of his
responsibilities set forth herein which is willful and deliberate;
provided, however, that prior to the determination that "Cause" under
this Section 4(b)(3) has occurred, the Company shall: (A) provide to
the Executive in writing, in reasonable detail, the reasons for the
determination that such "Cause" exists, (B) afford the Executive a
reasonable opportunity to remedy any such breach, (C) provide the
Executive an opportunity to be heard prior to the final decision to
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terminate the Executive's employment hereunder for such "Cause" and (D)
make any decision that such "Cause" exists in good faith; or
(4) a material violation of the Company's policies and
procedures as in effect from time to time.
(c) Definition of "Disability". The Executive shall be
considered to have a "Disability" if he satisfies the definition set forth in
the disability benefits plan in which he is enrolled at the time of the
determination or if there is no such plan, for a continuous period of three
months, he is unable to perform his duties under this Agreement for reasons of
health, and, in the opinion of a physician appointed by the Company, such
disability will continue for a prolonged period of time or if the Executive is
deemed to be "Disabled" by an authorized officer of the Company who shall notify
the Executive in writing that he qualifies for "Disability" status.
(d) Definition of "Good Reason". As used herein, "Good
Reason" shall mean the occurrence of any of the following:
(1) a materially adverse change in the Executive's
status, authority, duties or reporting responsibilities provided for
under this Agreement; or
(2) any failure by the Company to pay to the Executive
the Base Salary or other compensation and benefits provided for herein
after failure to cure such nonpayment within thirty (30) days after
written demand by the Executive to the Company.
(e) Payments to the Executive Upon Termination of
Employment. In the event that the Executive's employment with the Company is
terminated prior to the expiration of the Term for the reasons provided in
Section 4(a), then the Company shall pay to the Executive the following amounts
on the date of such termination, and shall provide to the Executive the
following benefits, as applicable:
(1) In the event that the Executive's employment
hereunder terminates for any reason whatsoever (including for Cause),
the Company shall pay to the Executive an amount equal to the sum of:
(i) his accrued but unpaid Base Salary, and (ii) his accrued but unpaid
vacation pay.
(2) In the event that: (i) the Executive's employment
hereunder is terminated by the Company for any reason other than for
Cause, Disability or death or (ii) the Executive terminates his
employment with Good Reason, the Company shall also pay or provide to
the Executive a lump-sum amount equal to the product of: (1) the amount
of his then current Base Salary and (2) the greater of: (I) one, or
(II) the number of years
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(including fractional years) remaining in the Term, said amounts under
this Section 4(e)(2) to be in lieu of payments under any severance
policy of the Company.
(3) In the event that the Executive's employment is
terminated by reason of Disability, the Executive shall receive the
disability benefits under the disability benefit plan in which the
Executive is enrolled at the time of such determination in addition to
the benefits described in Section 4(e)(1) above.
5. Maximum Payment. Notwithstanding anything herein to
the contrary, if it is determined by the Company in its sole discretion that any
payment made to the Executive, whether pursuant to the terms of this Agreement
or otherwise (the "Payment"), would be subject to the excise tax imposed by
Section 4999 of the Code, or any interest or penalties with respect to such
excise tax (such excise tax, together with any interest or penalties thereon, is
herein referred to as an "Excise Tax"), then the Payment to the Executive shall
be reduced to the maximum amount that could be paid to the Executive without
giving rise to the Excise Tax. The reductions in the Payments if applicable
shall be made in such a manner as determined by the Company.
6. Protection of the Company's Interests. The Executive
has executed and delivered to the Company an Employee Invention Assignment and
Confidentiality Agreement, an executed copy of which is attached hereto (the
"Invention Agreement").
7. Indemnification. The Company agrees to indemnify,
defend and hold harmless the Executive from and against any and all liabilities
to which he may be subject as a result of his employment hereunder (as a result
of his service as an officer or director of the Company or as an officer or
director of any of its subsidiaries or affiliates), as well as the costs,
including attorney's and other professional fees and disbursements, of any legal
action brought or threatened against him as a result of such employment in
accordance with the indemnification policies of the Company, to the fullest
extent permitted by, and subject to the limitations of, applicable corporate
law.
8. Successors; Binding Agreement.
(a) Assumption by Successor. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company
expressly to assume and to agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession had taken place; provided, however, that no such assumption
shall relieve the Company of its obligations hereunder. As used in this
Agreement, the "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law or otherwise.
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(b) Enforceability; Beneficiaries. This Agreement shall
be binding upon and inure to the benefit of the Executive (and his personal
representatives and heirs) and the Company and any organization which succeeds
to substantially all of the business or assets of the Company, whether by means
of merger, consolidation, acquisition of all or substantially all of the assets
of the Company or otherwise, including, without limitation, by operation of law.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees or other beneficiaries.
If the Executive should die while any amount would still be payable to him
hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
his beneficiary.
9. Assignment. Neither party may assign this Agreement
or any of his or its rights, benefits, obligations or duties hereunder to any
other person, firm, Company or other entity.
10. Notices. All notices and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when personally delivered or on the fourth business day after
being placed in the mail, postage prepaid, addressed to the parties hereto as
follows (provided that notice of change of address shall be deemed given only
when actually received):
If to the Company: Retek Information Systems, Inc.
Midwest Plaza
000 Xxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
With a copy to:
Shearman & Sterling
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
If to the Executive: Xxxxxx Xxxxxx
Xxxxxxxxxxx,Xxxxx Xxxxx
Xxxxxxx, Xxxx, XX00XX, Xxxxxx Xxxxxxx
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The address of any of the parties may be changed from time to time by such party
serving notice upon the other parties.
12. Law Applicable. This Agreement shall be governed by
the laws of New York (other than New York principles of conflicts of laws). Any
dispute between the parties relating to this Agreement may be heard only in the
federal or state courts of New York and both parties hereby submit to the
exclusive jurisdiction of such courts.
13. Entire Agreement; Modification. This Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes and cancels all prior or contemporaneous oral or
written agreements and understandings between them with respect to the subject
matter hereof. This Agreement may not be changed or modified orally but only by
an instrument in writing signed by the parties hereto, which instrument states
that it is an amendment to this Agreement.
14. Severability. Should any provision of this Agreement
or any part thereof be held invalid or unenforceable, the same shall not affect
or impair any other provision of this Agreement or any part thereof and the
invalidity or unenforceability of any provision of this Agreement shall not have
any effect on or impair the obligations of the Company or the Executive.
15. Rules of Construction. The captions in this Agreement
are for convenience of reference only and in no way define, limit or describe
the scope or intent of any provisions or Sections of this Agreement. All
references in this Agreement to particular Sections are references to the
Sections of this Agreement, unless some other reference is clearly indicated.
16. Execution. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
17. Non-Payment of Note. In the event that the Company
shall not have paid all amounts due under the promissory notes entered into
between the Company and the Sellers (the "Notes") within fifteen Business Days
(as defined in the Notes) after the Maturity Date (as defined in the Notes),
this Agreement shall terminate and be of no further force and effect.
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IN WITNESS WHEREOF, the Company and the Executive have
executed this Agreement, all as of the day and year first above written.
RETEK INFORMATION
SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
EXECUTIVE
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
