EXHIBIT 10.6
EMPLOYMENT AGREEMENT
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Vice President and Chief Technology Officer
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THIS EMPLOYMENT AGREEMENT, is made and entered into as of the 1st day of
October, 1999, by and between TEMPLATE SOFTWARE, INC., a Virginia corporation
(the "Company") and Xxxxx X. Xxxxx (the "Executive").
RECITALS
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A. The Company desires to retain Executive to provide the services
hereinafter set forth.
B. Executive is willing to provide such services to the Company on the
terms and conditions hereinafter set forth.
AGREEMENT
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In consideration of the promises and the terms and conditions set forth in
this Agreement, the parties agree as follows:
1. Employment and Term. The Company agrees to employ the Employee and the
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Employee agrees to work for the company, effective as of the date hereof,
subject to the terms and conditions below. This Agreement shall be for a term
of twelve (12) months after the date hereof, provided, that the term of this
Agreement shall automatically extend for one additional month at the end of each
month during the term hereof unless either party provides thirty (30) days prior
written notice to the other of its desire not to automatically extend the term
of this Agreement.
2. Compensation; Benefits. Subject to the terms and conditions of this
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Agreement, the Company shall pay to the Executive a base salary as set forth on
Schedule A, attached hereto and made a part hereof, payable in accordance with
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the Company's regular payroll policies. In addition to this base salary, the
Executive shall be entitled to the benefits and bonuses described on Schedule A,
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subject to the terms and conditions described therein. In addition, the
Executive shall be entitled to receive such other benefits including, but not
limited to, vacation, holidays and sick leave, as the Company generally provides
to its employees holding similar positions as that of the Executive.
Notwithstanding the foregoing, the Company reserves the right to adopt, amend or
discontinue any employee benefit plan or policy in accordance with then-
applicable law.
3. Duties. The Executive shall initially be employed as Vice President and
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Chief Technology Officer. The Executive shall diligently and conscientiously
devote the Executive's full time, attention and best efforts to discharge the
duties assigned to the Executive by the Company. The Executive shall perform
such duties as may be assigned to the Executive from time to time by the
Company.
4. Right to Contract; Conflict of Interest. The Executive hereby represents
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and warrants to the Company that (i) the Executive has full right and authority
to enter into this Agreement and to perform
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the Executive's obligations hereunder and (ii) the execution and delivery of
this Agreement by the Executive and the performance of the Executive's
obligations hereunder will not conflict with or breach any agreement, order or
decree to which the Executive is a party or by which the Executive is bound.
During the term of this Agreement, the Executive shall not directly or
indirectly consult, advise, be retained or employed by, or in any manner perform
any service with any other business or entity engaged in a competing business in
the Enterprise Integration Application market to that of the Company without
first obtaining consent in writing from the Company.
5. Transfer by Company. If at any time during the term of this Agreement,
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the Company transfers the Executive to another location, the Company will
reimburse the Executive for all reasonable moving expenses incurred as a result
of such transfer. In the event that the Executive terminates this Agreement
without cause pursuant to Section 9 hereof within one year after any such
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transfer, the Executive shall refund to the Company all amounts paid to the
Executive by the Company as moving expenses (including temporary housing and
incidental expenses) pursuant to this Section 5. The Executive agrees that any
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amounts owing to the Company under this Section 5 may be deducted from any
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salary, bonuses or other amounts owed to the Executive by the Company,
consistent with applicable law.
6. Termination by the Company.
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(a) The Company shall have the right to terminate this Agreement with or
without cause at any time during the term of this Agreement by giving written
notice to the Executive. The termination shall become effective on the date
specified in the notice, which termination date shall not be a date prior to the
date 5 days following the date of the notice of termination itself. In the
event that the Executive is terminated for cause, the Company shall pay the
Executive base salary through the day on which such termination is effective.
In the event that the Executive is terminated without cause, the Company shall
pay to the Executive compensation equal to 6 months salary and bonus prorated
for 6 months. The bonus paid will be for 6 months, paid monthly at a monthly
rate, and calculated by taking the bonus earned for the prior twelve months,
based on the quarterly achievements of the most recent 4 reporting quarters of
the Company. Thus, should termination occur in late February, then the "bonus
year" would be the calendar year of the preceding year. Should termination
occur in late May, then the bonuses for the 2nd, 3rd, and 4th quarter of the
preceding year and the bonus for the 1st quarter of the same year constitute the
"prior twelve" months or stated in the prior paragraph. Benefits (insurance,
etc.) that are in force prior to termination will continue to be carried by the
Company for 6 months or until the Executive begins full time employment with
another organization, whichever occurs first.
(b) For purposes of this Section 6 and Section 8, "cause" shall mean (i)
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a material breach by the Executive of any covenant or condition hereunder; (ii)
a material neglect of duty by the Executive; (iii) the commission by the
Executive of any act or omission constituting gross negligence, dishonesty,
fraud, immoral or disreputable conduct which is, or in the reasonable opinion of
the Company's Board of Directors is likely to be, harmful to the Company or its
reputation; (iv) conviction of, or a plea or nolo contendere by, the Executive
with respect to any crime consisting of a felony; (v) violation by the Executive
of the Company's material policies as set forth in the Company's personnel
handbook, if one has been adopted, or announced by Company management from time
to time, which violation remains uncured thirty (30) days after written notice
to the Executive by the Company regarding such violation has been provided; (vi)
violation of the Company's drug and alcohol policy as set forth in the Company's
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personnel handbook, if one has been adopted, or announced by Company management
from time to time; or (vii) the performance by the Executive of any act or
omission demonstrating an intentional or reckless disregard of the interests of
the Company.
7. Termination by Death or Disability of the Executive.
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(a) In the event of the Executive's death during the term of this
Agreement, all obligations of the parties hereunder shall terminate immediately,
and the Company shall pay to the Executive's beneficiary or estate, the base
salary and other compensation due the Executive through the day on which the
Executive's death shall have occurred.
(b) If the Executive is unable to perform the Executive's duties
hereunder due to mental, physical or other disability for a period of 90
consecutive business days, as determined by the Company, or for 90 business days
in any period of 12 consecutive months, this Agreement may be terminated by the
Company, at its option, by written notice to the Executive, effective on the
termination date specified in such notice, provided such termination date shall
not be a date prior to the date of the notice of termination itself. The Company
shall pay to the Executive compensation equal to 6 months salary and bonus
prorated for 6 months. The bonus paid will be for 6 months, paid monthly at a
monthly rate, and calculated by taking the bonus earned for the prior twelve
months, based on the quarterly achievements of the most recent 4 reporting
quarters of the Company. Thus, should termination occur in late February, then
the "bonus year" would be the calendar year of the preceding year. Should
termination occur in late May, then the bonuses for the 2/nd/, 3/rd/, and 4/th/
quarter of the preceding year and the bonus for the 1st quarter of the same year
constitute the "prior twelve" months or stated in the prior paragraph. Benefits
(insurance, etc.) that are in force prior to termination will continue to be
carried by the Company for 6 months or until the Executive begins full time
employment with another organization, whichever occurs first.
8. Change of Control of the Company and Termination. In the event of a
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Change of Control (as defined below) of the Company, then following
stockholder approval of such Change of Control, all unexercisable
Incentive and Non-Qualified Stock Options granted to the Executive prior
to such date will become immediately exercisable in full. The Company and
the Executive will promptly enter into amendments to the appropriate
stock option agreements governing the Executive's previously-granted
stock options to reflect these agreements.
For purposes of this Section 8, a Change of Control shall mean any of the
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following:
(a) the merger or consolidation of the Company with or into another
unaffiliated entity, or the merger of another unaffiliated entity into the
company or any subsidiary thereof with the effect that immediately after such
transaction the stockholders of the Company immediately prior to such
transaction hold less than fifty percent (50%) of the total voting power of
all securities generally entitled to vote in the election of directors,
managers or trustees of the entity surviving such merger or consolidation;
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(b) the sale, lease or other transfer of all or substantially all of
the Company's assets to an unaffiliated person or group (as such term is used
in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) or
the sale or transfer of more than fifty-one percent (51%) of the Company's
then outstanding voting stock (other than in a restructuring transaction
which results in the continuation of the Company's business by an affiliated
entity) to such persons or group; or
(c) the adoption by the stockholders of the Company of a plan relating
to the liquidation or dissolution of the Company.
9. Termination by the Executive.
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(a) The Executive may voluntarily terminate this Agreement at any time,
with or without cause, by giving 30 days written notice to the Company. Any
such termination, if without cause, shall become effective on the date specified
in such notice, provided that the Company may elect to have such termination
become effective on a date after, but not less than 14 days after, the date of
the notice. If such termination is with cause, it shall become effective on the
30 days after the date of such notice, provided the Company has failed to cure
the cause specified in the notice.
(b) After the date of any such termination, the Executive shall be
entitled to the base salary due the Executive through the day on which such
termination becomes effective plus base salary for any accumulated vacation,
unless such termination was for cause, in which case the Executive shall be
entitled to receive from the Company compensation equal to the compensation the
Executive would have received had the Company terminated this Agreement without
cause pursuant to Section 6(a).
(c) For purposes of this Section 9, "cause" shall mean a material
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failure the Company to perform its obligations under this Agreement.
10. Suspension. In the event the Company has reasonable cause to believe
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that there exists cause for termination of this Agreement as defined in Section
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6, immediately upon written notice to the Executive, the Company may but shall
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not be obligated to suspend the Executive, with pay, for a period not to exceed
four (4) weeks, either as a disciplinary measure or in order to investigate the
Company's belief that such cause exists. No such suspension shall prevent the
Company from thereafter exercising its rights to terminate this Agreement in
accordance with its terms.
11. Non-Competition and Non-Solicitation.
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Not applicable.
12. Confidentiality and Non-Disclosure.
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(a) The Executive shall hold in strict confidence and shall not, either
during the term of this Agreement or after the termination hereof, disclose,
directly or indirectly, to any third party, person, firm, corporation or other
entity, irrespective of whether such person or entity is a competitor of the
Company or is engaged in a business similar to that of the Company, any trade
secrets or other proprietary or confidential information of the Company obtained
by the Executive from or through the Executive's employment hereunder. The
Executive hereby acknowledges and agrees that all proprietary
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information referred to in this Section 12 shall be deemed trade secrets of the
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Company and-that the Executive shall take such steps, undertake such
actions and refrain from taking such other actions, as mandated by the
provisions hereof and by the provisions of the Virginia Uniform Trade Secret
Act. Executive further acknowledges that the Company's products and titles
consist of copyrighted material, and Executive shall exercise the Executive's
best efforts to prevent the use of such copyrighted material by any person or
entity which has not prior thereto been authorized to use such information by
the Company.
(b) The Executive further hereby agrees and acknowledges that any
disclosure of any proprietary information prohibited herein, or any breach of
the provisions of Sections 4 of this Agreement, may result in irreparable injury
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and damage to the Company which will not be adequately compensable in monetary
damages, that the Company will have no adequate remedy at law therefor, and that
the Company may obtain such preliminary, temporary or permanent mandatory or
restraining injunctions, orders or decrees as may be necessary to protect the
Company against, or on account of, any breach by the Executive of the provisions
contained in Sections 4 or 12.
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(c) The Executive further agrees that, upon termination of this
Agreement, whether voluntary or involuntary or with or without cause, the
Executive shall notify any new employer, partner, associate or any other firm or
corporation with whom the Executive shall become associated in any capacity
whatsoever of the provisions of this Section 12, and that the Company may give
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such notice to-such firm, corporation or other person.
13. Assignment and Disclosure of Inventions.
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(a) From and after the date the Executive first became employed with the
Company, the Executive hereby agrees to promptly disclose in confidence to the
Company all inventions, improvements, designs, original works of authorship,
formulas, processes, compositions of matter, computer software programs,
databases, mask works, and trade secrets ("Inventions"), whether or not
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patentable, copyrightable or protectible as trade secrets, that are made or
conceived or first reduced to practice or created by the Executive, either alone
or jointly with others, during the period of the Executive's employment, insofar
as such developments (a) relate to the actual or anticipated business or
research and development of Template Software as stated in the Company's
Business Plan and (b) are suggested by or result from any task assigned to me
for or on behalf of Template Software.
(b) The Executive hereby acknowledges that copyrightable works prepared
by the Executive within the scope of the Executive's employment are "works for
hire" under the Copyright Act and that the Company will be considered the author
thereof. The Executive hereby agrees that all Inventions that (a) are developed
using equipment, supplies, facilities or trade secrets of the Company, (b)
result from work performed by the Executive for the Company or (c) relate to the
Company's business or current or anticipated research and development as stated
in the Company's Business Plan, will be the sole and exclusive property of the
Company and are hereby assigned by the Executive to the Company.
14. Severability. The Company and the Executive recognize that the laws and
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public policies of the Commonwealth of Virginia are subject to varying
interpretations and change. It is the intention of the Company and of the
Executive that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies of the Commonwealth of
Virginia, but that the
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unenforceability (to the modification to conform to such laws or public
policies) of any provision or provisions hereof shall not render unenforceable,
or impair, the remainder of this Agreement. Accordingly, if any provisions of
this Agreement shall be determined to be invalid or unenforceable, either in
whole or in part, this Agreement shall be deemed amended to delete or modify, as
necessary, the offending provision or provisions and to alter the balance of
this Agreement in order to render it valid and enforceable.
15. Assignment. Neither the rights nor obligations under this Agreement may
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be assigned by either party, in whole or in part, by operation of law or
otherwise, except that it shall be binding upon and inure to the benefit of any
successor of the Company and its subsidiaries and affiliates, whether by merger,
reorganization or otherwise, or any purchaser of all or substantially all of the
assets of the Company.
16. Notices. Any notice expressly provided for under this Agreement shall
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be in writing, shall be given either manually or by mail and shall be deemed
sufficiently given when actually received by the party to be notified or when
mailed, if mailed by certified or registered mail, postage prepaid, addressed to
such party at their addresses as set forth below. Either party may, by notice
to the other party, given in the manner provided for herein, change their
address for receiving such notices.
(a) If to the Company, to:
Template Software, Inc.
00000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
with a copy to:
Cooley Godward LLP
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esquire
(b) If to the Executive, to
Xxxxx Xxxxx
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00000 XxXxxx Xxxxx Xxx
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Xxxxxxxx, XX 00000
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17. Governing Law. This Agreement shall be executed, construed and
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performed in accordance with the laws of the Commonwealth of Virginia without
reference to conflict of laws principles.
18. Headings. The section headings contained in this Agreement are for
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reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
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19. Entire Agreement; Amendments. This Agreement constitutes and embodies
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the entire agreement between the parties in connection with the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings in connection with such subject matter, including the agreement
regarding Confidential Information and Intellectual Property of November 25,
1985. No covenant or condition not expressed in this Agreement shall affect or
be effective to interpret, change or restrict this Agreement. In the event of a
conflict or inconsistency between the terms of this Agreement and the Company's
policies regarding employees, the terms of this Agreement shall supersede the
conflicting or inconsistent Company policies. No change, termination or
attempted waiver of any of the provisions of this Agreement shall be binding
unless in writing signed by the Executive and on behalf of the Company by an
officer thereunto duly authorized by the Company's Board of Directors. No
modification, waiver, termination, rescission, discharge or cancellation of this
Agreement shall affect the right of any party to enforce any other provision or
to exercise any right or remedy in the event of any other default.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
TEMPLATE SOFTWARE, INC.
By: /s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
Chief Executive Officer
EXECUTIVE:
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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