\ EXHIBIT 10.1
INDUS INTERNATIONAL
XXXXXXX X. XXXXX EMPLOYMENT AGREEMENT
This Agreement is entered into as of April 1, 2002 (the "Effective
Date"), by and between Indus International (the "Company"), and Xxxxxxx X.
Xxxxx (the "Executive").
1. Duties and Scope of Employment.
(a) Positions and Duties. As of the Effective Date,
Executive will serve as Executive Vice President and Chief Financial Officer of
the Company reporting to the Chief Executive Officer. Executive will render
such business and professional services in the performance of his duties,
consistent with Executive's position within the Company, as shall reasonably be
assigned to him by the Company's Board of Directors (the "Board").
(b) Obligations. During the Employment Term, Executive
will perform his duties faithfully and to the best of his ability and will
devote his business efforts and time to the Company at the Company's Atlanta,
Georgia offices. Executive understands and agrees that frequent travel may be
necessary in carrying out his duties hereunder including, without limitation,
frequent travel to the Company's global offices as well as client sites. During
the Employment Term, Executive agrees not to actively engage in any other
employment, occupation or consulting activity with or without any direct or
indirect remuneration without the prior approval of the Board; provided,
however, that Executive may serve in any capacity with any civic, educational
or charitable organization, or as a member of corporate Boards of Directors or
committees thereof and may continue to serve as a member of the board of
directors of HCI Technologies, Inc. without the approval of the Board, so long
as such activities do not materially interfere with his duties and obligations
under this Agreement.
2. Employment Term. Executive's employment with the Company
pursuant to this Agreement (the "Employment Term") shall commence on the
Effective Date and shall continue, unless otherwise terminated earlier as
provided in Section 9 hereof, until March 31, 2003; provided that the
Employment Term shall be extended by the Company, in its sole discretion, for
an additional twelve (12) month period (the "Additional Term") if, at least
ninety (90) days prior to the end of the Original Term, the Company has
notified the Executive in writing that the Employment Term shall be extended.
If the Company does not notify Executive in writing that the Employment Term
shall be extended at the end of the Original Term, then at such time, Executive
shall become an "at-will" employee of the Company and the employment
relationship may be terminated at any time, upon written notice to the other
party, with or without good cause or for any or no cause, at the option either
of the Company or Executive.
3. Compensation.
(a) Base Salary. During the Employment Term, the Company
will pay Executive as compensation for his services a base salary at the
annualized rate of $225,000 (the "Base Salary"). The Base Salary will be paid
periodically in accordance with the Company's normal payroll practices and be
subject to applicable tax withholding. The Board of Directors of the Company
shall
review the Base Salary each year and may increase, but not decrease, the Base
Salary at any time. Any increase in Base Salary shall not limit or reduce any
other obligations to the Executive under this Agreement. The term "Base Salary"
as used in this Agreement shall refer to the Base Salary as it may be increased
from time to time.
(b) Annual Bonus. In addition to the Base Salary,
Executive may receive a performance bonus during each year of employment with
the Company under this Agreement equal to an amount, to be determined by the
Board or the Company's Compensation Committee, of up to seventy percent (70%)
of Base Salary, with a guaranteed minimum performance bonus of thirty-five
percent (35%) of Base Salary for the fiscal year ending December 31, 2002;
provided, however, that, the payment of any such bonus shall be subject to
Executive's continued employment with the Company through the end of the
applicable Company fiscal year; provided further, that any such performance
bonus, including the guaranteed minimum performance bonus for the fiscal year
ended December 31, 2002, shall be prorated for the months of service during the
applicable fiscal year (i.e., the guaranteed minimum performance bonus for
fiscal year ended December 31, 2002, shall be $59,065.00, which is the product
of (225,000 x .35) x .75). Such performance bonus, if any, shall be determined
by the Compensation Committee of the Board based upon its evaluation of
performance relative to the business plan and other pertinent considerations.
(c) Stock Option. The Company will recommend to the
Board that, at the first Board meeting following the Effective Date, Executive
be granted a stock option, which will be, to the extent possible under the
$100,000 rule of Section 422(d) of the Internal Revenue Code of 1986, as
amended (the "Code") intended to be an "incentive stock option" (as defined in
Section 422 of the Code), to purchase Three Hundred and Fifty Thousand
(350,000) shares of the Company's Common Stock at an exercise price equal to
the per share market value of the Company's Common Stock on the date of the
grant (the "Option"). To the extent that any portion of the Option exceeds the
$100,000 rule of Section 422(d) of the Code, the excess shall be treated as
options which are not incentive stock options. Subject to the accelerated
vesting provisions set forth herein, the Option will vest as to 25% of the
shares subject to the Option on the date of grant, and as to 25% of the shares
subject to the Option each year thereafter, so that the Option will be fully
vested and exercisable three (3) years from the date of grant, subject to
Executive's continued service to the Company on the relevant vesting dates. The
Option will be subject to the terms, definitions and provisions of the
Company's Stock Plan (the "Option Plan") and the stock option agreement by and
between Executive and the Company (the "Option Agreement"), both of which
documents are incorporated herein by reference.
4. Employee Benefits; Indemnification. During the Employment
Term, Executive will be entitled to participate in the employee benefit plans
currently or hereafter maintained by the Company of general applicability to
other senior executives of the Company, including, without limitation, the
Company's group medical, dental, vision, disability, life insurance, and
flexible-spending account plans. The Company reserves the right to cancel or
change the benefit plans and programs it offers to its employees (including
Executive) at any time. Upon the Effective Date, Executive shall be offered an
indemnification agreement comparable in form and substance to indemnification
agreements previously entered into by and between the Company and its executive
officers.
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5. Paid Time Off. Executive will be entitled to twenty (20) days
of paid time off for vacation time, sick leave and personal time in accordance
with the Company's paid time off policy, with the timing and duration of
specific time off mutually and reasonably agreed to by the parties hereto.
6. Expenses. The Company will reimburse Executive for reasonable
travel, entertainment or other expenses incurred by Executive in the
furtherance of or in connection with the performance of Executive's duties
hereunder. Such expenses shall be reimbursed in accordance with the Company's
expense reimbursement policy as in effect from time to time.
7. [Reserved]
8. [Reserved]
9. Severance.
(a) Termination without Cause; Termination for Good
Reason. If Executive's employment with the Company is terminated (i) by the
Company without "Cause" (as defined herein) or (ii) by the Executive for "Good
Reason" (as defined herein), and Executive signs and does not revoke a standard
release of claims with the Company substantially in the form to be attached
hereto as Exhibit A, then, subject to Section 13, Executive shall be entitled
to receive as severance (i) an amount equal to Executive's then-current Base
Salary (less applicable withholding taxes), payable over a period of twelve
(12) months from the date of such termination in accordance with the Company's
normal payroll policies, and (ii) the Company will pay for full COBRA benefits
for Executive for the earlier of eighteen (18) months or until Executive
receives health, medical and/or dental benefits, respectively, from a new
employer, and (iii) the Option and any new stock options granted during the
term of this Agreement (collectively, the "Options"), to the extent vested on
the date of termination, may be exercised until fifteen (15) months after the
date of termination in order to minimize the volatility of the Company's stock.
(b) Voluntary Termination; Termination for Cause. If
Executive's employment with the Company is terminated by Executive without Good
Reason or by the Company for Cause, then (i) all vesting of the Options will
terminate immediately and all payments of compensation by the Company to
Executive hereunder will terminate immediately (except as to amounts already
earned), and (ii) Executive will only be eligible for severance benefits in
accordance with the Company's established policies as then in effect, if
applicable.
(c) Death or Disability. If Executive's employment with
the Company is terminated due to Executive's death or Disability (as defined
herein), and Executive or Executive's beneficiary or guardian signs and does
not revoke a standard release of claims with the Company substantially in the
form to be attached hereto as Exhibit A, then, subject to Section 13, Executive
or Executive's beneficiary shall be entitled to receive as severance (i) an
amount equal to Executive's then-current Base Salary (less applicable
withholding taxes), payable over a period of twelve (12) months from the date
of such termination in accordance with the Company's normal payroll policies,
and (ii) with respect to a termination for Disability, the Company will pay for
full COBRA benefits for Executive for the earlier of twelve (12) months or
until Executive receives health, medical and/or dental benefits, respectively,
from a new employer, and (iii) the Options, to the extent vested on the
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date of termination, may be exercised until fifteen (15) months after the date
of termination in order to minimize the volatility of the Company's stock.
10. Change of Control Benefits. In the event of a "Change of
Control" (as defined below) that occurs prior to the Executive's termination of
employment, then on the earlier of (A) the date six (6) months after the date
of the Change of Control or (B) upon the termination of Executive's employment
without Cause or for Good Reason pursuant to Section 9(a), Executive's
then-outstanding Options shall immediately vest and become exercisable, and may
be exercised until fifteen (15) months after the date of termination in order
to minimize the volatility of the Company's stock. In all other respects the
Options shall continue to be bound by and subject to the terms of their
respective agreements.
In the event that, following a Change of Control, (i) Executive's
employment is terminated without Cause or for Good Reason pursuant to Section
9(a) or (ii) Executive terminates his employment with the Company with or
without Good Reason at any time after six (6) months following a Change in
Control, and Executive signs and does not revoke a standard release of claims
with the Company substantially in the form to be attached hereto as Exhibit A,
then, subject to Section 13, Executive will receive the severance benefits set
forth in Section 9(a); provided, however, that the severance payments described
in Section 9(a)(i) shall be paid in a lump sum within 15 days following
Executive's termination.
11. Definitions.
(a) Cause. For purposes of this Agreement, "Cause" is
defined as (i) an act of dishonesty made by Executive in connection with
Executive's responsibilities as an employee, (ii) Executive's conviction of, or
plea of nolo contendere to, a felony, (iii) Executive's gross misconduct, or
(iv) Executive's continued substantial violations of his employment duties
after Executive has received a written demand for performance from the Company
which specifically sets forth the factual basis for the Company's belief that
Executive has not substantially performed his duties.
(b) Change of Control. For purposes of this Agreement,
"Change of Control" of the Company is defined as: (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) (and provided "person" for purposes of this definition shall
not include any funds managed by X.X. Xxxxxxx Xxxxxx & Co. or Warburg Pincus
LLC or their affiliates ) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the
Company representing 50% or more of the total voting power represented by the
Company's then outstanding voting securities; or (ii) a change in the
composition of the Board occurring within a two-year period, as a result of
which fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" will mean directors who either (A) are directors of the
Company as of the date hereof, or (B) are elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but will not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors to the Company);
or (iii) the date of the consummation of a merger or consolidation of the
Company with any other corporation that has been approved by the stockholders
of the Company, other than a merger or consolidation which would result in the
voting securities of the Company
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outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or such entity's parent) more than fifty percent (50%) of the
total voting power represented by the voting securities of the Company or such
surviving entity or such entity's parent outstanding immediately after such
merger or consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company; or (iv) the date of the consummation of
the sale or disposition by the Company of all or substantially all the
Company's assets.
(c) Disability. "Disability" shall mean that the
Executive has been unable to perform his Company duties as the result of his
incapacity due to physical or mental illness, and such inability, at least
twenty-six (26) weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and acceptable
to the Executive or the Executive's legal representative (such Agreement as to
acceptability not to be unreasonably withheld). Termination resulting from
Disability may only be effected after at least 30 days' written notice by the
Company of its intention to terminate the Executive's employment. In the event
that the Executive resumes the performance of substantially all of his duties
hereunder before the termination of his employment becomes effective, the
notice of intent to terminate shall automatically be deemed to have been
revoked.
(d) Good Reason. "Good Reason" means without the
Executive's express written consent (i) a significant reduction of the
Executive's duties, position or responsibilities, or the removal of such
Executive from such position and responsibilities, unless the Executive is
provided with a comparable position (i.e., a position of equal or greater
organizational level, duties, authority, compensation and status); (ii) a
substantial reduction, without good business reasons, of the facilities and
perquisites (including office space and location) available to the Executive
immediately prior to such reduction; (iii) any attempted reduction by the
Company in the base compensation of the Executive as in effect immediately
prior to such attempted reduction; (iv) a material reduction by the Company in
the kind or level of benefits to which the Executive was entitled immediately
prior to such reduction with the result that such Executive's overall benefits
package is significantly reduced; or (v) the relocation of the Executive to a
facility or a location more than fifty (50) miles from such Executive's then
present location.
12. Confidential Information. Executive agrees to enter into the
Company's standard Confidential Information and Invention Assignment Agreement
(the "Confidential Information Agreement") upon commencing employment
hereunder.
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13. Conditional Nature of Severance Payments.
(a) Noncompete. Executive acknowledges that the nature
of the Company's business is such that if Executive were to become employed by,
or substantially involved in, the business of a competitor of the Company
during the twelve (12) months following the termination of Executive's
employment with the Company, it would be very difficult for the Executive not
to rely on or use the Company's trade secrets and confidential information.
Thus, to avoid the inevitable disclosure of the Company's trade secrets and
confidential information, Executive agrees and acknowledges that Executive's
right to receive the severance payments set forth in Section 9 (to the extent
Executive is otherwise entitled to such payments) shall be conditioned upon the
Executive not directly or indirectly engaging in (whether as an employee,
consultant, agent, proprietor, principal, partner, stockholder, corporate
officer, director or otherwise), nor having any material ownership interest in
or participating in the financing, operation, management or control of, any
person, firm, corporation or business that competes with Company or is a
customer of the Company. Upon any breach of this section, all severance
payments pursuant to this Agreement shall immediately cease and any payments
already made shall be repaid by Executive to the Company.
(b) Non-Solicitation. Until the date one (1) year after
the termination of Executive's employment with the Company for any reason,
Executive agrees and acknowledges that Executive's right to receive the
severance payments set forth in Section 9 (to the extent Executive is otherwise
entitled to such payments) shall be conditioned upon Executive not either
directly or indirectly soliciting, inducing, attempting to hire, recruiting,
encouraging, taking away, hiring any employee of the Company or causing an
employee to leave his or her employment either for Executive or for any other
entity or person and upon breach of this section, any payments already made
shall be repaid by Executive to the Company
(c) Understanding of Covenants. The Executive represents
that he (i) is familiar with the foregoing covenants not to compete and not to
solicit, and (ii) is fully aware of his obligations hereunder, including,
without limitation, the reasonableness of the length of time, scope and
geographic coverage of these covenants.
14. Limitation on Payments. In the event that the severance and
other benefits provided for in this Agreement or otherwise payable to the
Executive (i) constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") and (ii) but
for this Section 14, would be subject to the excise tax imposed by Section 4999
of the Code, then the Employee's severance benefits under Section 4(a)(i) shall
be either:
(a) delivered in full, or
(b) delivered as to such lesser extent which would
result in no portion of such severance benefits being subject to excise tax
under Section 4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by Section
4999, results in the receipt by the Employee on an after-tax basis, of the
greatest amount of severance benefits, notwithstanding that all or some portion
of such severance benefits may be taxable under Section 4999 of the Code.
Unless the Company and the Executive otherwise agree in writing, any
determination required under this
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Section 14 shall be made in writing by the Company's independent public
accountants immediately prior to a Change of Control (the "Accountants"), whose
determination shall be conclusive and binding upon the Employee and the Company
for all purposes. For purposes of making the calculations required by this
Section 14, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the
Code. The Company and the Executive shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 14.
15. Assignment. This Agreement will be binding upon and inure to
the benefit of (a) the heirs, executors and legal representatives of Executive
upon Executive's death and (b) any successor of the Company. Any such successor
of the Company will be deemed substituted for the Company under the terms of
this Agreement for all purposes. For this purpose, "successor" means any
person, firm, corporation or other business entity which at any time, whether
by purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by will or the laws of descent
and distribution. Any other attempted assignment, transfer, conveyance or other
disposition of Executive's right to compensation or other benefits will be null
and void.
16. Notices. All notices, requests, demands and other
communications called for hereunder shall be in writing and shall be deemed
given (i) on the date of delivery if delivered personally, (ii) one (1) day
after being sent by a well established commercial overnight service, or (iii)
four (4) days after being mailed by registered or certified mail, return
receipt requested, prepaid and addressed to the parties or their successors at
the following addresses, or at such other addresses as the parties may later
designate in writing:
If to the Company:
Copies to each of the Chief Executive Officer and General Counsel
at the Company's principal executive office
If to Executive:
at the last residential address known by the Company.
17. Severability. In the event that any provision hereof becomes
or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement will continue in full force and effect
without said provision.
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18. Arbitration.
(a) Executive agrees that any dispute or controversy
arising out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, performance, breach, or termination
thereof, shall be settled by binding arbitration to be held in Cherokee County,
Georgia in accordance with the National Rules for the Resolution of Employment
Disputes then in effect of the American Arbitration Association (the "Rules").
The arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator will be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.
(b) The arbitrator(s) will apply Georgia law to the
merits of any dispute or claim, without reference to rules of conflicts of law.
The arbitration proceedings will be governed by federal arbitration law and by
the Rules, without reference to state arbitration law. The Executive hereby
consents to the personal jurisdiction of the state and federal courts located
in Georgia for any action or proceeding arising from or relating to this
Agreement or relating to any arbitration in which the parties are participants.
(c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION,
WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS
AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO,
OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING
ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF
EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES
RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT
NOT LIMITED TO, DISCRIMINATION CLAIMS.
All parties must initial here for Section 18 to be effective:
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19. Integration. This Agreement, together with the Option Plan,
Option Agreement and the Confidential Information Agreement represents the
entire agreement and understanding between the parties as to the subject matter
herein and supersedes all prior or contemporaneous agreements whether written
or oral. No waiver, alteration, or modification of any of the provisions of
this Agreement will be binding unless in writing and signed by duly authorized
representatives of the parties hereto.
20. Tax Withholding. All payments made pursuant to this Agreement
will be subject to withholding of applicable taxes.
21. Governing Law. This Agreement will be governed by the laws of
the State of Georgia (with the exception of its conflict of laws provisions).
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22. Acknowledgment. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement. Company agrees to reimburse Executive
for attorney fees related to review of this Agreement.
[signatures on following page]
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IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of the Company by their duly authorized officers, as of the day and
year first above written.
INDUS INTERNATIONAL
By: /s/ Xxxx X. Xxxxxx Date: 3/28/02
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Xxxx X. Xxxxxx
Title: President & Chief Executive Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxxxx Date: 3/29/02
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Xxxxxxx X. Xxxxx
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