EXHIBIT 10.17
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") is made and entered into as of the 15th
day of November, 1999, by and between Sterling Software, Inc., a Delaware
corporation ("Sterling Software"), and Xxxx X. 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 continue to retain Executive as its
Executive Vice President and Chief Operating Officer; and
WHEREAS, Executive is willing to continue to accept and fulfill 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
----------
are customarily required of the Executive Vice President and Chief
Operating Officer.
2. Term. This Agreement shall commence on the date first set forth above
----
and shall continue in effect for sixty (60) months after the "Notice
Date" as defined in Section 3 hereof.
3. Termination of Employment. The parties acknowledge that Executive is
-------------------------
employed "at will" and may be terminated by Sterling Software at any
time with or without cause. Executive shall be entitled to
termination pay calculated in accordance with Section 4 hereof upon
receiving notice of the intended 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 (whether orally or in writing) shall be deemed the
"Notice Date" with the termination to be effective sixty (60) 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 60-month period in which Executive receives
termination pay.
4. Termination Pay. For purposes of this Agreement, if Executive's
---------------
employment is 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 Sterling
Software, Sterling Software shall pay, or cause one of its
subsidiaries to pay, to Executive as termination pay:
(a) an amount equal to 500 hundred percent of Executive's annual base
salary rate in effect immediately prior to the Notice Date; and
(b) an amount equivalent to the product of five times:
(i) 100% of the Plan Bonus Amount (as hereinafter defined) in
effect immediately prior to the Notice Date, or
(ii) if no Plan Bonus Amount shall be in effect or readily
determinable by Sterling Software with respect to Executive
immediately prior to the Notice Date, an amount equal to
the aggregate amount of the bonus, incentive or other cash
compensation, in addition to (but not including)
Executive's annual base salary, received by Executive
pursuant to any bonus, incentive compensation, performance,
discretionary pay or similar agreement, policy, plan,
program or arrangement (whether or not funded) of Sterling
Software during the 365 days immediately prior to the
Notice Date.
As used herein, the term "Plan Bonus Amount" shall mean the
aggregate amount (calculated to avoid duplication, on an
annualized basis and with respect only to the fiscal year of
Sterling Software in which the Notice Date occurs) of the
budgeted or otherwise authorized or contemplated bonus, incentive
or other cash compensation, in addition to (but not including)
Executive's base salary, to be paid to Executive under any bonus,
incentive compensation, performance, discretionary pay or similar
agreement, policy, plan, program or arrangement (whether or not
funded) of Sterling Software upon the attainment of 100% of the
objective(s) and 100% of the planned or targeted amount(s)
specified in or pursuant to such agreement, policy, plan, program
or arrangement, whether or not attained as of the Notice Date.
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.
-2-
5. Disbursement of Termination Pay. The aggregate amount of all
-------------------------------
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 one hundred twenty (120) equal twice monthly installments
beginning thirty (30) days following the Notice Date and continuing
twice monthly thereafter.
6. Continuation of Insurance Benefits. For a period of sixty (60) months
----------------------------------
following the Notice Date, Sterling Software shall arrange to provide
Executive, at no additional charge to Executive, with life, medical,
dental, vision, 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 sixty (60)
-----------------------------------------
months following the Notice Date, Executive shall, to the fullest
extent permitted by applicable law, be permitted to continue to
participate in Sterling Software's Deferred Compensation Plan, Savings
and Security (401(k)) Plan and any other similar plan that may be
adopted prior to the Notice Date for the benefit and retention of
Sterling Software's executive officers. In no event will Sterling
Software be required after the Notice Date to make any new grants of
stock options to such Executive under any Sterling Software stock
option plan or otherwise.
8. Change-in-Control. Sterling Software and Executive are parties to a
-----------------
Change-in-Control Severance Agreement, dated as of November 15, 1999
(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 Executive would otherwise be entitled to
receive payments and benefits under both this Agreement and the
Change-in-Control Agreement, 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 Executive, in writing, a
reasonably detailed determination of the payments and other benefits
under each of this Agreement and the Change-in-Control Agreement.
Executive shall make the election provided for in this Section 8
within thirty calendar days after Executive's receipt of the written
determination referred to in the preceding sentence; provided,
however, that if such election is not so made within such 30-day
period, Executive shall be irrevocably deemed to have elected to
receive payments and benefits under the
-3-
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 Executive had made the election to receive benefits
and payments under this Agreement.
9. Miscellaneous.
-------------
(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: Sterling Software, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: President
If to Executive, to: Xxxx X. Xxxxxx
c/o Sterling Software, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 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 Delaware 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 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.
10. Termination of Prior Agreements. Upon the execution and delivery of
-------------------------------
this Agreement, the Severance Agreement between Executive and Sterling
Software,
-4-
dated February 12, 1996, as amended to the date hereof (the "Prior
Agreement"), shall terminate automatically and shall thereafter be of
no further force or effect; provided, however, that if this Agreement
is held by a court of competent jurisdiction to be wholly invalid,
unenforceable or otherwise illegal, the preceding clause shall have no
effect and the Prior Agreement shall be deemed to have continued at
all times in force and effect. Subject to the foregoing proviso, this
Agreement supersedes all prior agreements, arrangements and
understandings with respect to the subject matter hereof, excluding,
however, the Change-in-Control Agreement.
Executed by the parties hereto as of the date first set forth above.
EXECUTIVE
------------------------------------
Xxxx X. Xxxxxx
STERLING SOFTWARE, INC.
By:
---------------------------------
Xxxxxxxx X. Xxxxxxxx,
President and
Chief Executive Officer
-5-
