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EXHIBIT 10.1
EMPLOYMENT AND NON-COMPETE AGREEMENT
This Employment and Non-Compete Agreement (this "Agreement")
is made and entered into as of June 9, 2000, by and between i2 Technologies,
Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxx, an individual
(the "Employee").
RECITALS
WHEREAS, Employee is employed as President and Chief Operating
Officer of Aspect Development, Inc. ("Target") and is a significant shareholder
of Target; and
WHEREAS, the Company and Target have entered into an Agreement
and Plan of Reorganization (the "Merger Agreement") dated March 12, 2000,
pursuant to which the Company is purchasing all of the outstanding shares of
capital stock of Target, which includes all of the shares owned by Employee (the
"Transaction"); and
WHEREAS, the execution and delivery of the Merger Agreement is
conditioned upon the execution and delivery of this Agreement; and
WHEREAS, the rights and obligations of Company and Employee
set forth in this Agreement are conditioned upon the Closing, as defined in the
Merger Agreement, of the transaction contemplated in the Merger Agreement; and
WHEREAS, the Company and the Employee have determined that it
is in their respective best interest to enter into this Agreement on the terms
and conditions as set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and promises contained herein, the execution of the Merger
Agreement and the sale and purchase of capital stock in connection therewith,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. EMPLOYMENT TERM AND DUTIES
1.1. EMPLOYMENT TERM. The Company shall employ Employee, and
Employee shall perform services for the Company, for the period commencing on
the Closing (as defined in the Merger Agreement) of the merger pursuant to the
Merger Agreement (the "Hire Date") and continuing for a period of fourteen (14)
months (the "Initial Term") unless terminated by Employee as set forth in
Section 1.4.2. Thereafter, Employee's employment under this Agreement will
automatically renew for each of four (4) consecutive one (1) year periods (the
"Renewal Term" and together with the Initial Term, the "Employment Term") unless
either party provides the other with written notification of its desire to
terminate the employment relationship no less than thirty (30) days prior to the
expiration of the Employment Term, in which case Employee's employment will
terminate upon completion of the Employment Term.
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This Agreement (except as otherwise provided herein) and Employee's employment
hereunder, will automatically terminate on the fourth (4th) anniversary of the
Hire Date.
1.2. DUTIES. Employee shall serve as a member of the Company's
Executive Management Committee. Employee shall perform all reasonable duties
assigned by the Company consistent with those assigned to other employees of the
Company possessing a comparable position. Employee understands and agrees that
his employment with the Company may require travel and overnight stays ("Travel
Assignments"), and Employee agrees to accept all Travel Assignments reasonably
assigned by the Company. Unless otherwise agreed upon by the Company, during the
Employment Term, the Employee shall devote all of his normal business time to
the performance of his duties to the Company and Employee shall diligently
perform his duties to further the interests of the Company.
1.3. COMPENSATION AND BENEFITS.
1.3.1 BASE SALARY. In consideration of the services rendered
to the Company hereunder by the Employee and the Employee's covenants hereunder,
including but not limited to, his covenants under Sections 3 and 5 below, and
under the Company's Confidentiality, Proprietary Information and Inventions
Agreement, the Company shall, during the Employment Term, pay the Employee a
salary at the annual rate of One Hundred Fifty Thousand Dollars ($150,000) (the
"Base Salary"). The Base Salary shall be payable in accordance with the normal
payroll practices of the Company then in effect. The Base Salary and all other
forms of compensation paid to the Employee hereunder shall be subject to all
applicable taxes required to be withheld by the Company pursuant to federal,
state or local law. The Employee shall be solely responsible for income taxes
imposed on the Employee by reasons of any cash or non-cash compensation and
benefits provided by this Agreement.
1.3.2 TARGET BONUS. Employee will be entitled to an annual
Target Bonus of Three Hundred Fifty Thousand Dollars ($350,000) based upon
Employee's achievement of goals established by the Company, of which One Hundred
Fifty Thousand Dollars ($150,000) shall be guaranteed during the first year of
the Agreement.
1.3.3 BENEFITS PACKAGE. Employee shall be entitled to receive
such employee benefits as may be in effect from time to time as are afforded to
other comparable employees of the Company. For purposes of determining
eligibility and entitlement to benefits, Employee's date of hire will be
considered to be his hire date by Target, to the extent permissible by law.
Employee shall be provided with reimbursement (on a
basis that is "grossed up" for taxes) for term life insurance coverage in the
amount of $1.5 million and long term disability coverage in the amount of
$500,000 per year, both commencing on the Hire Date.
1.3.4 STOCK OPTIONS. Subject to approval by the Company's
Board of Directors, the Company shall grant to Employee within sixty (60) days
after Closing, in accordance with the terms of the Company's Stock Option Plan,
an option to purchase a total of Two Hundred Twenty Thousand (220,000) shares of
the Company's common stock (the "Option") at a xxxxx xxxxx equal to the fair
market value of the Company's common stock on the
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date of grant. The Option shall vest in four (4) equal installments as follows:
twenty-five percent (25%) upon Employee's completion of one (1) year of
employment with the Company and the remaining seventy-five percent (75%) in
twelve (12) equal installments upon Employee's completion of each three (3)
month period of employment thereafter. The Option shall be subject to the
Company's Stock Option Plan and form stock option documents. In addition,
Employee's shares of Target common stock and/or options to purchase shares of
Target common stock will be converted to shares of Company common stock and/or
options to purchase shares of Company common stock pursuant to the terms of the
Merger Agreement.
1.3.5 VACATION. Employee shall be entitled to vacation each
fiscal year in accordance with the vacation policies of the Company in effect
for other comparable employees of the Company. For purposes of determining
eligibility and entitlement to vacation, Employee's date of hire will be
considered to be his hire date by Target.
1.3.6 EXPENSES. The Company shall, upon receipt from the
Employee of signed and itemized lists of expenditures with supporting receipts
to the extent required by applicable income tax regulations and the Company's
reimbursement policies, reimburse the Employee for all out-of-pocket business
expenses reasonably incurred by the Employee in connection with his employment
hereunder.
1.3.7 TRAVEL. The Company agrees to reimburse Employee for
first class travel in connection with Employee's Travel Assignments.
1.3.8 ACCELERATION OF TARGET OPTIONS. Employee agrees to waive
all rights (if any) to acceleration of unvested options to purchase Target stock
("Target Option") contained in any agreement, stock option agreement, or any
other document, including but not limited to his offer letter dated April 5,
1999 (the "Offer Letter"), that grants Employee Target Options prior to Closing,
including, but not limited to, those Target Options granted on or about June 6,
2000. In connection therewith, Employee expressly acknowledges, understands and
agrees that he will not receive any accelerated vesting of Target or Company
options granted to Employee prior to Closing, including, but not limited to,
those Target Options granted on or about June 6, 2000. Employee further agrees
that his offer letter from Target dated April 5, 1999 shall cease to be
effective on the Closing and shall from the date of this Agreement cease to
govern in any way the effect of the Transaction on Employee's options to acquire
Target stock. Accordingly, this Agreement shall be the sole source of any
provision for the acceleration of vesting of Target Options as a result of or
following the Transaction, and the following are conditions of such vesting:
Each of Employee's Target Options from all option grants made by Target to
Employee prior to Closing, including, but not limited to, those Target Options
granted on or about June 6, 2000, will continue to vest in accordance with the
original vesting schedule for so long as Employee is employed by the Company.
Upon termination of employment for any reason, fifty percent (50%) of each of
Employee's unvested Target Options as of the date of termination shall become
fully vested.
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1.4. TERMINATION. Employee's employment with the Company shall
terminate upon the occurrence of any of the following, at the time set forth
therefor (the "Termination Date"):
1.4.1 DEATH OR DISABILITY. Immediately upon the death of the
Employee or the determination by the Board that the Employee has ceased to be
able to perform his essential job duties, with or without reasonable
accommodation, due to a mental or physical illness or incapacity for a period of
more than twelve (12) weeks during any twelve (12) month period ("Disability")
(termination pursuant to this Section 1.4.1 being referred to herein as
termination for "Death or Disability"); or
1.4.2 VOLUNTARY TERMINATION. Thirty (30) days following the
Employee's written notice to the Company of termination of employment; provided,
however, that during such thirty (30) day notice period, the Company may suspend
the Employee from his duties as set forth herein (including, without limitation,
the Employee's position as a representative and agent of the Company)
(termination pursuant to this Section 1.4.2 being referred to herein as
"Voluntary" termination); or
1.4.3 TERMINATION FOR CAUSE. Immediately following notice of
termination for "Cause" (as defined below), specifying such Cause, given by the
Company (termination pursuant to this Section 1.4.3 being referred to herein as
termination for "Cause"). As used herein, "Cause" means termination based on (i)
Employee's commission of any crime constituting a felony or any other offense
involving fraud, (ii) willful malfeasance or gross misconduct by the Employee
which discredits or damages the Company, (iii) any material breach of Employee's
obligations under Section 3 or under the Company's Confidentiality, Proprietary
Information and Inventions Agreement, provided that Employee fails to cure the
material breach within 60 days after receipt of written notice from the Company
identifying the material breach; and (iv) any material breach by Employee of
this Agreement, provided that Employee fails to cure the material breach within
60 days after receipt of written notice from the Company identifying the
material breach; or
1.4.4 TERMINATION WITHOUT CAUSE. Thirty (30) days following
notice of termination without Cause given by the Company; provided, however,
that during any such thirty (30) day notice period, the Company may suspend the
Employee from his duties as set forth herein (including, without limitation, the
Employee's position as a representative and agent of the Company) (termination
pursuant to this Section 1.4.4 being referred to herein as termination "Without
Cause").
1.4.5 OTHER REMEDIES. Termination pursuant to Section 1.4.3.
above shall be in addition to and without prejudice to any other right or remedy
to which the Company may be entitled at law, in equity, or under this Agreement.
1.4.6 Notwithstanding any of the foregoing, during the Initial
Term of this Agreement, the Company shall have no right to terminate Employee's
employment for any reason.
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1.5. SEVERANCE AND TERMINATION.
1.5.1 VOLUNTARY TERMINATION, TERMINATION FOR CAUSE,
TERMINATION FOR DEATH OR DISABILITY. In the case of a termination of Employee's
employment hereunder for Death or Disability in accordance with Section 1.4.1
above, or Employee's Voluntary termination of employment hereunder in accordance
with Section 1.4.2 above, or a termination of the Employee's employment
hereunder for Cause in accordance with Section 1.4.3 above, (i) the Employee
shall not be entitled to receive payment of, and the Company shall have no
obligation to pay, any severance or similar compensation attributable to such
termination, other than Base Salary earned but unpaid as of the Termination
Date.
1.5.2 TERMINATION WITHOUT CAUSE. In the case of a termination
of the Employee's employment hereunder Without Cause in accordance with Section
1.4.4 above, Employee shall be entitled to four (4) months of salary
continuation based upon his Base Salary, less statutory deductions and
withholdings, to be paid in accordance with the Company's normal payroll
practices (hereinafter the "Severance Payment").
2. PROPRIETARY INFORMATION AGREEMENT. Employee understands and
agrees that his employment with the Company is contingent upon signing the
Company's Confidentiality, Proprietary Information and Inventions Agreement,
which is attached hereto as Exhibit A, prior to beginning work for the Company.
3. NON-COMPETITION AND NON-INTERFERENCE. In consideration of
the Company's entering in this Agreement, the Merger Agreement, and purchasing
all of Employee's outstanding shares of stock in Target, and providing the Base
Salary and other benefits to the Employee, and in consideration of the Company's
promise to provide Employee with its confidential and proprietary information
and trade secrets of the Company, and the experience Employee will gain
throughout Employee's employment with the Company, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
Employee, the Employee covenants as follows:
3.1. NON-COMPETITION.
(i) Employee agrees that during the Employment Term,
Employee will not engage in any employment, business, or activity that is in any
way competitive with the Business, and Employee will not assist any other person
or organization in competing with the Company or in preparing to engage in
competition with the Business. The provisions of this paragraph shall apply both
during normal working hours and at all other times including, without
limitation, nights, weekends and vacation time, during the Employment Term.
(ii) Employee agrees that for a period equal to the
greater of two (2) years from Employee's Hire Date or one (1) year from the date
that Employee's employment with the Company is terminated, for any reason,
Employee will not, directly or indirectly, engage in Business in the State of
California, or in any other State of the United States, or in any country in the
world where the Company engages in Business, or proposes to engage in Business,
on the date of the termination of Employee's employment with the Company.
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(iii) For purposes of this Agreement "Business" shall
mean the business of Aspect Development, Inc. and those portions of the
Company's business in which Employee participates.
3.2. NO DIVERSION OF OTHERS. During the Employment Term and
for one (1) year from the date that Employee's employment with the Company is
terminated, for any reason, the Employee shall not, either for himself or for
any other person, firm, corporation or other entity, directly or indirectly, or
by action in concert with others:
(i) directly or indirectly, individually or on behalf
of any other person, firm, partnership, corporation, or business entity of any
type, solicit, assist or in any way encourage any current employee or consultant
of the Company or any subsidiary of the Company to terminate his or her
employment relationship or consulting relationship with the Company or
subsidiary nor will Employee solicit the employment services of any former
employee of the Company or any subsidiary of the Company whose employment has
been voluntarily terminated for less than six (6) months; or
(ii) divert or take away or attempt to divert or take
away, or solicit or attempt to solicit, any existing or potential customer of
the Company (whether or not such customer is actually a customer of the Company
as of the date hereof, including without limitation any customer solicited by
the Employee or which became known by the Employee prior to the date hereof)
with the purpose of obtaining such person as an employee or customer for a
business competitive with the Company's business.
3.3. ORGANIZING COMPETITIVE BUSINESS. Without limiting any of
the other provisions contained in this Section 3, during the Employment Term and
any period during which Employee receives any severance payment, the Employee
shall not undertake planning for or organization of any business competitive
with the Company, or conspire with agents, employees, consultants or other
representatives of the Company for the purpose of organizing any such
competitive business.
4. INJUNCTIVE RELIEF AND ADDITIONAL REMEDY
The Employee acknowledges and agrees that any breach of the
terms of Section 3 above would result in irreparable injury and damage to the
Company for which the Company would have no adequate remedy at law; the Employee
therefore also acknowledges and agrees that in the event of such breach or any
threat of breach, the Company shall be entitled to an immediate injunction and
restraining order to prevent such breach and/or threatened breach and/or
continued breach by the Employee and/or any and all persons and/or entities
acting for and/or with the Employee, without having to prove damages, in
addition to any other remedies to which the Company may be entitled at law or in
equity. The terms of this paragraph shall not prevent the Company from pursuing
any other available remedies for any breach or threatened breach hereof,
including but not limited to the recovery of damages from the Employee.
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5. REPRESENTATIONS AND WARRANTIES BY THE EMPLOYEE
The Employee represents and warrants to the Company that (i)
the Employee is not bound by or subject to any contractual or other obligation
that would be violated by his execution or performance of this Agreement,
including, but not limited to, any non-competition agreement presently in
effect, and (ii) the Employee is not subject to any pending or, to the
Employee's knowledge, threatened claim, action, judgment, order or investigation
that could adversely affect his ability to perform his obligations under this
Agreement or the business reputation of the Company.
6. SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS
Section 3 above shall survive any termination of this
Agreement and continue in full force and effect as is necessary or appropriate
to enforce the covenants and agreements of the Employee in Section 3. The
existence of any claim or cause of action by the Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of the covenants and agreements of
Section 3 above.
7. MISCELLANEOUS
7.1. AGREEMENT CONTINGENT ON CLOSING. The rights and
obligations of the parties to this Agreement are conditioned upon the Closing of
the transaction contemplated in the Merger Agreement. For purposes of this
Agreement, "Closing" shall have the meaning set forth in the Merger Agreement
7.2. NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission with
answer back confirmation or mailed (postage prepaid by certified or registered
mail, return receipt requested) or by overnight courier to the parties at the
following addresses or facsimile numbers:
If to the Employee, to:
Xxxxxx X. Xxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
If to the Company, to:
Xxxxxx Xxxxxxx
i2 Technologies, Inc.
000 X. Xxx Xxxxxxx Xxxx., 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Facsimile No: (000) 000-0000
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 7.2, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 7.2, be deemed given
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upon receipt, and (iii) if delivered by mail in the manner described above to
the address as provided in this Section 7.2, be deemed given upon receipt (in
each case regardless of whether such notice, request or other communication is
received by any other Person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this Section). Any party from time
to time may change its address, facsimile number or other information for the
purpose of notices to that party by giving written notice specifying such change
to the other parties hereto.
7.3. ENTIRE AGREEMENT. This Agreement, the Merger Agreement
and the documents executed in connection with the Merger Agreement, supersede
all prior discussions and agreements among the parties and/or among Employee and
Target with respect to the subject matter hereof, including but not limited to,
Employee's offer letter dated April 5, 1999, and the Employment and Non-Compete
Agreement entered into as of March 12, 2000, and contain the sole and entire
agreement between the parties hereto with respect thereto.
7.4. WAIVER. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party hereto of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by law or otherwise afforded, will be
cumulative and not alternative.
7.5. AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
7.6. NO THIRD PARTY BENEFICIARY. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto
(including the Employee's estate, foundations, family members and trusts for the
benefit of family members) and the Company's successors or assigns, and it is
not the intention of the parties to confer third-party beneficiary rights upon
any other person.
7.7. NO ASSIGNMENT; BINDING EFFECT. This Agreement shall inure
to the benefit of any successors or assigns of the Company. The Employee shall
not be entitled to assign his obligations under this Agreement.
7.8. HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
7.9. SEVERABILITY. The Company and the Employee intend all
provisions of this Agreement to be enforced to the fullest extent permitted by
law. Accordingly, if a court of competent jurisdiction determines that the scope
and/or operation of any provision of this Agreement is too broad to be enforced
as written, the Company and the Employee intend that the court should reform
such provision to such narrower scope and/or operation as it determines to be
enforceable. If, however, any provision of this Agreement is held to be illegal,
invalid, or unenforceable under present or future law, and not subject to
reformation, then (i) such provision shall be fully severable, (ii) this
Agreement shall be construed and enforced as if such provision
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was never a part of this Agreement, and (iii) the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
illegal, invalid, or unenforceable provisions or by their severance.
7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts executed and performed in such State without giving effect to
conflicts of laws principles.
7.11. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by facsimile, each of which will be deemed an
original, but all of which together will constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
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[SIGNATURE PAGE TO EMPLOYMENT
AND NON-COMPETE AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused Agreement
to be executed on the date first written above.
"COMPANY"
i2 TECHNOLOGIES, INC.
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
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Title: Executive Vice President &
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Chief Financial Officer
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"EMPLOYEE"
XXXXXX X. XXXXX
/s/ XXXXXX X. XXXXX
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