1
EXHIBIT 10.32
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made and
entered into as of October 5, 1999, to be effective for all purposes as of
October 1, 1999 (the "EFFECTIVE DATE"), by and between Cooperative Computing,
Inc., a Texas corporation (hereinafter, together with its successors, referred
to as the "COMPANY"), Cooperative Computing Holding Company, Inc., a Delaware
corporation (hereinafter, together with its successors, referred to as
"HOLDINGS") and Xxxx X. Xxxxx (hereinafter referred to as the "EXECUTIVE").
W I T N E S S E T H :
WHEREAS, the Company desires to employ the Executive in an
executive capacity with the Company, and the Executive desires to be employed by
the Company in said capacity; and
WHEREAS, the parties hereto desire to set forth in writing the
terms and conditions of their understandings and agreements.
NOW THEREFORE, in consideration of the foregoing, of the
mutual promises contained herein and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. DEFINITIONS.
"ACCRUED BENEFITS" means (i) all salary earned or accrued
through the date the Executive's employment is terminated, (ii)
reimbursement for any and all monies advanced in connection with the
Executive's employment for reasonable and necessary expenses incurred
by the Executive through the date the Executive's employment is
terminated, (iii) all other payments and benefits to which the
Executive may be entitled under the terms of any applicable
compensation arrangement or benefit plan or program of the Company
(including those arrangements, plans or programs contemplated by
Sections 4(e), (f) and (g)), including any earned and accrued, but
unused vacation pay and (iv) any earned but unpaid Quarterly Bonus in
respect of any full fiscal quarter ended prior to the date the
Executive's employment is terminated.
"ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"AFFILIATE" shall have the meaning given such term in Rule
12b-2 of the Act.
2
"BOARD" shall mean the board of directors of the Company.
"CAUSE" means (a) a conviction of any crime (other than minor
traffic offenses and the like), (b) the Executive breaches any
obligations under Section 6 of this Agreement (and fails to cure the
breach within 30 days after notice), (c) the Executive engages in
dishonesty or fraud, (d) the Executive is physically able to perform
his duties and services but refuses to do so or (e) the Executive
engages in gross negligence or willful misconduct injurious to the
Company, Holdings, or their respective Subsidiaries.
"COBRA" means the Consolidated Omnibus Reconciliation Act of
1985.
"EFFECTIVE DATE" shall have the meaning set forth in the
introductory paragraph hereto.
"EMPLOYMENT PERIOD" shall mean the period during which the
Executive is employed by the Company.
"GOOD REASON" shall mean (a) any breach by the Company of its
obligations hereunder, (b) any significant reduction, approved by the
Board without the Executive's written consent, in the Executive's
title, duties or responsibilities other than for Cause (unless in the
case of either clause (a) or (b) the Executive has notified the Company
within 30 days after the occurrence of such event and the Company has
cured such event within 30 days after receipt of such notice) or (c)
Executive is required to relocate without his consent to an area that
is outside a 50 mile radius of Austin, Texas.
"OPTION AGREEMENT" shall mean the agreement between the
Executive and the Company pursuant to which any Option is granted to
the Executive.
"OPTION PLAN" shall mean the Cooperative Computing Holding
Company, Inc. 1998 Stock Option Plan, as amended from time to time, and
any successor thereto.
"OPTIONS" shall mean the stock options to be granted to the
Executive hereunder.
"PERSON" shall mean any "person", within the meaning of
Sections 13(d) and 14(d) of the Act, including a "group" as therein
defined.
"QUARTERLY BONUS" shall have the meaning set forth in Section
4(b) hereof.
"SUBSIDIARY" shall mean, with respect to any Person, any other
Person of which such first Person owns the majority of the economic
interest in such Person or owns or has the power to vote, directly or
indirectly, securities representing a majority of the votes ordinarily
entitled to be cast for the election of directors or other governing
Persons.
2
3
"TARGET ANNUAL BONUS" shall mean, for any fiscal year, an
amount equal to one-half (1/2) of the difference obtained by
subtracting (i) Fifteen Thousand and No/100 Dollars ($15,000.00) from
(ii) the Base Salary for such fiscal year.
SECTION 2. TERM OF EMPLOYMENT. The Executive's Employment
Period shall commence on the Effective Date hereof and shall continue until
terminated by either party upon written notice delivered to the other party in
accordance herewith.
SECTION 3. DUTIES. During the Employment Period, the Executive
(i) shall serve as Senior Vice President and Chief Administrative Officer of the
Company, (ii) shall report directly to the President and Chief Operating Officer
of the Company, (iii) shall, subject to and in accordance with the authority and
direction of the Board and the President and Chief Operating Officer of the
Company have such authority and perform in a diligent and competent manner such
duties as may be assigned to him from time to time by the Board and the
President and Chief Operating Officer of the Company and (iv) shall devote his
best efforts and such time, attention, knowledge and skill to the operation of
the business and affairs of the Company as shall be reasonably necessary to
manage and supervise the Company and the other business and affairs of the
Company.
SECTION 4. COMPENSATION. During the Employment Period, the
Company shall compensate Executive as follows:
(a) the Executive shall receive, at such intervals and in
accordance with such Company policies as may be in effect from time to
time, an annual salary (pro rata for any partial year) equal to (i) for
the first year of the Employment Period, Two Hundred Fifteen Thousand
and No/100 Dollars ($215,000.00) and (ii) for the second year of the
Employment Period and each year thereafter, Two Hundred Sixty Five
Thousand and No/100 Dollars ($265,000.00) (collectively, the "BASE
SALARY"), which Base Salary shall be subject to appropriate increase,
as determined by the sole discretion of the Board;
(b) the Executive shall be eligible to receive a quarterly
bonus (the "QUARTERLY BONUS") for each full fiscal quarter of the
Company commencing with the fiscal quarter ending December 31, 1999.
The Executive's eligibility to receive any Quarterly Bonus will be
determined based on the Company's achievement during the applicable
fiscal quarter of budgeted earnings before income tax, depreciation and
amortization as approved by the Board at the beginning of each fiscal
year and adjusted from time to time. The Quarterly Bonuses earned
during any fiscal year shall, except as provided in Section 5(c)(iii)
hereof, be paid quarterly in arrears no later than forty-five (45) days
after the end of each fiscal quarter. Each Quarterly Bonus is expected
to equal twenty five percent (25%) of the Target Annual Bonus.
Notwithstanding the foregoing, in no event will the aggregate of the
Executive's Quarterly Bonuses with respect to the fiscal year ending
September 30, 2000 be less than Seventy Five Thousand and No/100
Dollars ($75,000.00).
3
4
(c) Holdings will grant to the Executive, by October 15, 1999,
but effective as of the Effective Date, Options to purchase an
aggregate of 300,000 shares of Common Stock, par value $.000125 per
share, of Holdings. The Options will be evidenced by a separate Option
Agreement and will be granted pursuant to, and subject to the terms of
(except for those terms outlined below), the Option Plan. The Options
will be exercisable at $5.00 per share and, except as provided in the
next sentence, will vest and become exercisable in the manner and at
the times provided in the Option Plan. Notwithstanding the foregoing,
(i) the Options will fully vest and become exercisable upon the
occurrence of a Change of Control (as defined in the Option Plan) or
upon termination of the Executive's employment by the Company without
Cause or by the Executive for Good Reason and (ii) following any
termination of the Executive, the Executive shall be entitled to
exercise any then exercisable options at any time prior to the
expiration of such option. It is the present intention of Holdings to
reprice options outstanding as of the date hereof to more accurately
reflect the fair market value of the Common Stock. Holdings agrees that
the Options to be granted to Executive will be repriced in the same
manner as such outstanding options, if and when such repricing occurs.
(d) the Executive shall be reimbursed, upon submission of
proper vouchers, at such intervals and in accordance with such Company
policies as may be in effect from time to time, for any and all
reasonable business expenses incurred by him for the benefit of the
Company in connection with the Executive's responsibilities to the
Company;
(e) the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and
programs applicable generally to other executives of the Company as
determined by the Board from time to time;
(f) the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and programs
provided by the Company to similarly-situated executives of the Company
(including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental
death and travel accident insurance plans and programs) to the extent
applicable generally to other executives of the Company; and
(g) the Executive shall be entitled to receive (in addition to
the benefits described above) such perquisites and fringe benefits
appertaining to his position in accordance with any practice
established by the Board or applicable generally to other executives of
the Company.
SECTION 5. TERMINATION OF EMPLOYMENT.
(a) All Accrued Benefits to which the Executive (or his estate
or beneficiary) is entitled shall be payable by the Company in cash
promptly upon
4
5
termination of his Employment Period, except as otherwise specifically
provided herein, or under the terms of any applicable policy, plan or
program.
(b) Any termination by the Company, or by the Executive, of
the Employment Period shall be communicated by written notice of such
termination to the Executive, if such notice is delivered by the
Company, and to the Company, if such notice is delivered by the
Executive, each in compliance with the requirements of Section 13
hereinbelow.
(c) If prior to the expiration of the Employment Period, the
Employment Period is terminated by the Executive for Good Reason or by
the Company for any reason other than Cause or the Executive's death,
permanent disability (as defined in the Company's Board-approved
disability plan or policy, as in effect from time to time or if no such
plan is then in effect as such term is normally defined in such plans)
or retirement (as defined in the Company's Board-approved retirement
plan or policy, as in effect from time to time or if no such plan is
then in effect as such term is normally defined in such plans), then,
as his exclusive right and remedy in respect of such termination:
(i) the Executive shall receive from the Company his
Accrued Benefits, except that, for this purpose, Accrued
Benefits shall not include any entitlement to severance under
any Company severance policy generally applicable to the
Company's salaried employees and shall not, in respect of any
Quarterly Bonus, be duplicative of any payment to be made
under Section 5(c)(iii) below;
(ii) the Executive shall receive from the Company, as
long as the Executive does not violate the provisions of
Section 6 hereof, severance pay equal to the Executive's then
current monthly Base Salary, payable in accordance with the
Company's regular pay schedule, for twelve (12) months from
the date of termination of employment;
(iii) the Executive shall receive from the Company
any earned but unpaid Quarterly Bonuses in respect of any full
fiscal quarter ended prior to such termination, payable to the
Executive in a lump sum payment to be made on or before ninety
(90) days after the date of termination; and
(iv) the Executive, and/or the Executive's family, as
the case may be, shall continue to be covered, upon the same
terms and conditions as described in Section 4(f) hereinabove,
by the same or equivalent medical, dental, and life insurance
coverages as in effect for the Executive, and/or the
Executive's family, as the case may be, immediately prior to
the termination of his employment, until the earlier of (A)
the expiration of the period for which he receives severance
pay pursuant to clause (c)(ii) above or (B) the date the
Executive has commenced new employment and has thereby become
eligible for comparable benefits, subject to the Executive's
rights under COBRA.
5
6
(e) Any amounts payable to the Executive in installments
pursuant to this Section 5 may, at the option of the Company, be paid
in a lump sum rather than in installments as provided above. In any
event, all such amounts (whether paid in installments or in a lump sum)
shall be considered severance payments and be in full and complete
satisfaction of the obligations of the Company to the Executive in
connection with the termination of the Executive.
(f) Notwithstanding anything else contained herein, if the
Executive voluntarily terminates his employment without Good Reason, or
the Company terminates the Executive for Cause or the Executive is
terminated by reason of death or permanent disability, all of his
rights to severance from the Company (including pursuant to any plan or
policy of the Company) shall terminate immediately, except the right to
payment for Accrued Benefits (other than severance) in respect of
periods prior to such termination.
SECTION 6. NONCOMPETE AND NONSOLICITATION.
(a) During and following the Executive's employment by the
Company, the Executive shall hold in confidence and not directly or
indirectly disclose or use or copy or make lists of any confidential
information or proprietary data of the Company, or any of its
Subsidiaries, except to the extent authorized in writing by the Board
or required by any court or administrative agency, other than to an
employee of the Company or any of its Subsidiaries, or a Person to whom
disclosure is reasonably necessary or appropriate in connection with
the performance by the Executive of his duties as an executive of the
Company. Confidential information shall not include any information
known generally to the public. All records, files, documents and
materials, or copies thereof, relating to the Company's or any of its
Subsidiaries' business which the Executive shall prepare, or use, or
come into contact with, shall be and remain the sole property of the
Company, Holdings or any of their respective Subsidiaries, as the case
may be, and shall be promptly returned by the Executive to the Company,
Holdings, or such Subsidiary (as applicable) upon termination of the
Executive's employment with the Company.
(b) Except with the Board's prior written approval, during the
Employment Period and for two (2) years after the termination of the
Employment Period, the Executive shall not, directly or indirectly:
(i) solicit, entice, persuade or induce any employee
of the Company, Holdings, or any of their respective
Subsidiaries to terminate his employment by the Company,
Holdings or any of their respective Subsidiaries or to become
employed by any Person other than the Company, Holdings, or
any of their respective Subsidiaries; or
(ii) approach any such employee for any of the
foregoing purposes; or
6
7
(iii) authorize, solicit or assist in the taking of
such actions by any third party.
(c) During the Employment Period and for two (2) years after
the termination of the Employment Period, the Executive shall not,
directly or indirectly, anywhere within the United States, engage,
participate, make any financial investment in, or become employed by or
render advisory or other services to or for any Person or other
business enterprise (other than the Company, Holdings, and their
Affiliates) providing or servicing management information systems and
solutions for the automotive parts aftermarket industry or the
hardlines and lumber industry (any of the foregoing activities being
referred to herein as "Competitive Activities"). The foregoing covenant
respecting Competitive Activities shall not be construed to preclude
the Executive from making any investments in the securities of any
company, whether or not engaged in competition the Company, Holdings or
any of their respective Subsidiaries, to the extent that such
securities are actively traded on a national securities exchange or in
the over-the-counter market in the United States or any foreign
securities exchange and such investment does not exceed one percent
(1%) of the issued and outstanding shares of such company or give the
Executive the right or power to control or participate directly in
making the policy decisions of such company.
(d) If any court determines that any portion of this Section 6
is invalid or unenforceable, the remainder of this Section 6 shall not
thereby be affected and shall be given full effect without regard to
the invalid provision. If any court construes any of the provisions of
this Section 6, or any part thereof, to be unreasonable because of the
duration or scope of such provision, such court shall have the power to
reduce the duration or scope of such provision and to enforce such
provision as so reduced.
(e) The Executive hereby acknowledges and agrees that damages
will not be an adequate remedy for the Executive's breach of any of his
covenants contained in this Section 6, and further agrees that the
Company shall be entitled to obtain appropriate injunctive and/or other
equitable relief for any such breach, without the posting of any bond
or other security.
SECTION 7. SUCCESSORS. The Company and Holdings may assign
their respective rights under this Agreement to any successor to all or
substantially all the assets of the Company or Holdings, by merger or otherwise,
and may assign or encumber this Agreement and its rights hereunder as security
for indebtedness of the Company or Holdings. Any such assignment by the Company
or Holdings shall remain subject to the Executive's rights hereunder, including
those under Section 5 hereof. The rights of the Executive under this Agreement
may not be assigned or encumbered by the Executive, voluntarily or
involuntarily, during his lifetime, and any such purported assignment shall be
void ab initio. However, all rights of the Executive under this Agreement shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, estates, executors, administrators, heirs and beneficiaries.
All amounts payable to the
7
8
Executive hereunder shall be paid, in the event of the Executive's death, to the
Executive's estate, heirs or representatives.
SECTION 8. THIRD PARTIES; PARTIES BOUND. Except for the rights
granted to the Company, Holdings, and their respective Subsidiaries pursuant
hereto (including, without limitation, pursuant to Section 6 hereof) and except
as expressly set forth or referred to herein, nothing herein expressed or
implied is intended or shall be construed to confer upon or give any person
other than the parties hereto and their successors and permitted assigns any
rights or remedies under or by reason of this Agreement. Notwithstanding
anything to the contrary contained herein, neither Holdings nor any Subsidiary
shall be bound by, or otherwise responsible for the Company's compliance with,
Sections 2, 3, 4 (other than Section 4(c))or 5 hereof.
SECTION 9. ENFORCEMENT. The provisions of this Agreement shall
be regarded as divisible, and if any of said provisions or any part thereof is
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remainder of such provisions or parts hereof
and the applicability thereof shall not be affected thereby.
SECTION 10. AMENDMENT. This Agreement may not be amended or
modified at any time except by a written instrument approved by the Board, and
executed by the Company and the Executive; provided, however, that any amendment
to Section 4(c) hereof or this proviso shall also require the written consent of
Holdings; and provided further that any attempted amendment or modification
without the requisite approval and execution shall be null and void ab initio
and of no effect.
SECTION 11. WITHHOLDING. The Company shall be entitled to
withhold from any amounts to be paid to the Executive hereunder any federal,
state, local, or foreign withholding or other taxes or charges which it is from
time to time required to withhold. The Company shall be entitled to rely on an
opinion of counsel if any question as to the amount or requirement of any such
withholding shall arise.
SECTION 12. GOVERNING LAW. This Agreement and the rights and
obligations hereunder shall be governed by and construed in accordance with the
laws of the State of Texas, without regard to principles of conflicts of law of
Texas or any other jurisdiction.
SECTION 13. NOTICE. Notices given pursuant to this Agreement
shall be in writing and shall be deemed given when received and, if mailed,
shall be mailed by United States registered or certified mail, return receipt
requested, addressee only, postage prepaid:
8
9
If to the Company or Holdings:
0000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: President
If to the Executive:
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
With Copies to:
Xxxxxx Xxxxx Xxxx & Xxxxx, P.C.
0000 Xxxxxxxx Xxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
or to such other address as the party to be notified shall have given
to the other in accordance with the notice provisions set forth in this
Section 13.
SECTION 14. NO WAIVER. No waiver by either party at any time
of any breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by the other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at any time.
SECTION 15. HEADINGS. The headings contained herein are for
reference only and shall not affect the meaning or interpretation of any
provision of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
9
10
IN WITNESS WHEREOF, the parties have executed this Agreement
in one or more counterparts, each of which shall be deemed one and the same
instrument, as of the day and year first written above.
COOPERATIVE COMPUTING, INC.
By: /s/ XXX XXXXXXXXXX
------------------------------------
Name: Xxx Xxxxxxxxxx
----------------------------------
Title: Director
---------------------------------
COOPERATIVE COMPUTING HOLDING
COMPANY, INC.
By: /s/ XXX XXXXXXXXXX
------------------------------------
Name: Xxx Xxxxxxxxxx
----------------------------------
Title: Director
---------------------------------
EXECUTIVE:
/s/ XXXX X XXXXX
----------------------------------------
Xxxx X. Xxxxx
SIGNATURE PAGE TO
EXECUTIVE EMPLOYMENT AGREEMENT
