Exhibit 10.19
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SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") is made and entered into as of the 30th
day of June, 1997 by and between Sterling Software, Inc., a Delaware corporation
("Sterling Software"), and F. L. "Xxxx" Xxxxxx, an individual ("Executive").
RECITALS:
WHEREAS, Sterling Software acquires, develops, markets and supports a broad
range of products and services; and
WHEREAS, Sterling Software desires to retain Executive as its Senior Vice
President; and
WHEREAS, Executive is willing to accept such responsibilities;
NOW, THEREFORE, in consideration of the premises and covenants contained
herein and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
AGREEMENTS:
1. Employment. Executive agrees to render such managerial services as
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are customarily required of a Senior Vice President, and Sterling
Software agrees to utilize such services on the terms and conditions
contained herein.
2. Term. This Agreement shall commence on the date first set forth above
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and shall continue in effect for twenty-four (24) months after the
"Notice Date" as defined in Section 3 hereof.
3. Termination of Employment. The parties acknowledge that Executive is
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employed "at will" and may be terminated by Sterling Software at any
time with or without cause. The Executive shall be entitled to
termination pay calculated in accordance with Section 4 hereof upon
termination of Executive's employment by Sterling Software, with or
without cause.
The date on which a notice of termination is given to Executive by
Sterling Software shall be deemed the "Notice Date" with the
termination to be effective twenty-four (24) months following the
Notice Date. On the Notice Date, Executive shall be deemed to have
been assigned "no duties," shall vacate his or her office and shall
resign as an officer of Sterling Software and its subsidiaries. Since
Executive will be assigned "no duties" with Sterling Software,
Executive
shall be free to pursue other employment or consulting opportunities
during the 24-month period in which Executive receives termination
pay.
4. Termination Pay. For purposes of this Agreement, if Executive's
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employment is terminated (or deemed to be terminated) pursuant to
Section 3, upon receipt from Executive (or Executive's estate or
personal representative) of a fully executed release in form
reasonably acceptable to counsel for Sterling Software, Sterling
Software shall pay, or cause one of its subsidiaries to pay, to
Executive as termination pay:
(a) an amount equal to two hundred percent of Executive's aggregate
monthly salary for the twelve (12) months immediately preceding
the Notice Date (or, if Executive shall not have been employed
for such twelve month period, an amount equal to two hundred
percent of Executive's annual salary rate in effect immediately
prior to the Notice Date); and
(b) an amount equivalent to the product of two times:
(i) if Executive shall have completed at least twelve months
employment with Sterling Software prior to the Notice Date,
the amount of Executive's aggregate bonuses during the
twelve months immediately prior to the Notice Date (the
"Last Bonus"), after deducting from such product one hundred
percent (100%) of the accrued but unpaid bonus amount
Executive is entitled to receive on the Notice Date,
pursuant to any bonus or incentive compensation plan of
Sterling Software, for periods of service after the period
for which Executive received or was entitled to receive the
Last Bonus or
(ii) if Executive shall not have completed at least twelve months
employment with Sterling Software prior to the Notice Date,
an amount equal to the greater of
(x) the amount of the Last Bonus, if any or
(y) 100% of the aggregate of the budgeted annual bonus,
incentive or other budgeted payments of cash
compensation, in addition to the Executive's annual
base salary, at plan for such Executive in effect
immediately prior to the Notice Date,
after deducting from such product under this clause (ii) one
hundred percent (100%) of the accrued but unpaid bonus
amount Executive is entitled to receive on the Notice Date,
pursuant to any bonus or incentive plan of Sterling
Software, for periods of service
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after the period for which Executive received or was
entitled to receive the Last Bonus, if any.
In the event of Executive's death or disability following the Notice
Date, Executive, Executive's estate or Executive's personal
representative, as the case may be, shall continue to receive the
termination payments provided for in this Section 4.
5. Disbursement of Termination Pay. The aggregate amount of all
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termination payments that are payable to Executive as provided in
Section 4 hereof shall be determined in good faith by Sterling
Software within 15 days following the Notice Date, and such
termination payments shall be distributed by Sterling Software to
Executive in forty-eight (48) equal twice-monthly installments
beginning thirty (30) days following the Notice Date and continuing
twice-monthly thereafter.
6. Continuation of Medical and Health Benefits. For a period of twenty-
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four (24) months following the Notice Date, Sterling Software shall
arrange to provide Executive, at no additional charge to Executive,
with life, medical, dental, health, accident and disability insurance
benefits substantially similar to those that Executive is receiving or
is entitled to receive immediately prior to the Notice Date, which
benefits shall in no event be less than those benefits in effect
immediately prior to the Notice Date.
7. Continued Participation in Employee Plans. For a period of twenty-
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four (24) months following the Notice Date, Executive shall continue
to participate in Sterling Software's Employee Stock Ownership Plan
and/or 401(k) Plan and any other such plans as may be adopted in the
future for the benefit and retention of Sterling Software's executive
officers. In no event will Sterling Software be required to make any
new grants of options to such Executive under Sterling Software's
Stock Option Plans after the Notice Date.
8. Change-in-Control. Sterling Software and the Executive are parties to
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a Change-in-Control Severance Agreement, dated as of June 30, 1997 (as
such agreement may be amended from time to time, the "Change-in-
Control Agreement"). Notwithstanding anything contained in this
Agreement to the contrary, in the event the Notice Date occurs under
circumstances in which the Executive would otherwise be entitled to
receive payments and benefits under both this Agreement and the
Change-in-Control Agreement, the Executive shall have the right to
elect to receive payments and benefits under either this Agreement or
the Change-in-Control Agreement, but not both. Within five business
days following the Notice Date under circumstances in which this
Section 8 would apply, Sterling Software shall provide the Executive,
in writing, a reasonably detailed determination of the payments and
other benefits under each of this Agreement and the Change-in-Control
Agreement. The Executive shall make the election provided for in this
Section 8 within thirty calendar days after Executive's receipt of the
written
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determination referred to in the preceding sentence; provided,
however, that if such election is not so made within such 30-day
period, the Executive shall be irrevocably deemed to have elected to
receive payments and benefits under the Change-in-Control Agreement.
Prior to the date on which Executive makes or is deemed to have made
the election referred to above, he shall receive all benefits under
Sections 4, 5, 6 and 7 of this Agreement as if the Executive had made
the election to receive benefits and payments under this Agreement.
9. Miscellaneous.
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(i) Notices, demands, payments, reports and correspondence shall be
addressed to the parties hereto at the address for such party
set forth below or such other places as may from time to time be
designated in writing to the other party. Notices hereunder
shall be deemed to be given on the date such notices are
actually received.
If to Sterling Software, to: 000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: President
If to Executive, to: F. L. "Xxxx" Xxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxx. 00000
(ii) This Agreement shall be binding upon Sterling Software and
Executive and their respective successors, assigns, heirs and
personal representatives.
(iii) The substantive laws of the State of Texas shall govern the
validity, construction, enforcement and interpretation of the
provisions of this Agreement.
(iv) No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and Sterling
Software. No waiver by either party hereto at any time of any
breach by the other party hereto or compliance with any
condition or provision of this Agreement to be performed by such
other party will be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or
otherwise, expressed or implied with respect to the subject
matter hereof have been made by either party which are not set
forth expressly in this Agreement. References to Sections are to
references to Sections of this Agreement.
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Executed by the parties hereto as of the date first set forth above.
EXECUTIVE
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F. L. "Xxxx" Xxxxxx
XXXXXXXX SOFTWARE, INC.
By:
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Xxxxxxxx X. Xxxxxxxx
President and
Chief Executive Officer
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