EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement (the "Agreement") is entered into as of March 16, 2005 by
and between Xxxxxx X. Xxxxxxxxxxx (the "Executive") and Onyx Software
Corporation (the "Company" or "Onyx").
1. DUTIES AND SCOPE OF EMPLOYMENT.
(A) POSITION. For the term of his employment under this Agreement
(the "Employment"), the Company agrees to employ the Executive in the position
of Chief Financial Officer in charge of global finance operations or in such
similar other position as the Company subsequently may assign to the Executive
with the Executive's consent. The Executive shall report to the Company's Chief
Executive Officer.
(B) OBLIGATIONS TO THE COMPANY. During his Employment, the Executive
shall devote his full business efforts and time to the Company. During his
Employment, without the prior written approval of the Company's Chief Executive
Officer, the Executive shall not render services in any capacity to any other
person or entity and shall not act as a sole proprietor or partner of any other
person or entity or as a shareholder owning more than five percent of the stock
of any other corporation, except for reasonable civic and charitable activities,
as approved by the Chief Executive Officer. The approval of the Chief Executive
Officer shall not be unreasonably withheld if the anticipated activities and/or
service do not interfere with or conflict with the Executive's responsibilities
to the Company. The Executive shall comply with the Company's reasonable
policies and rules, as they may be in effect from time to time during his
Employment.
(C) NO CONFLICTING OBLIGATIONS. The Executive represents and
warrants to the Company that he is under no obligations or commitments, whether
contractual or otherwise, that are inconsistent with his obligations under this
Agreement. The Executive represents and warrants that he will not use or
disclose, in connection with his Employment, any trade secrets or other
proprietary information or intellectual property in which the Executive or any
other person has any right, title or interest and that his Employment will not
infringe or violate the rights of any other person. The Executive represents and
warrants to the Company that he has returned all property and confidential
information belonging to any prior employer.
(D) COMMENCEMENT DATE. The Executive shall commence full-time
employment on March 28th, 2005 (or earlier as agreed with Company's Chief
Executive Officer.)
2. CASH AND INCENTIVE COMPENSATION.
(A) BASE COMPENSATION. The Company shall pay the Executive as
compensation for his services a base salary at an annual rate of $250,000.00 or
$20,833.33 per month. Such salary shall be payable in accordance with the
Company's standard payroll procedures. (The annual compensation specified in
this Subsection (a), together with any
modifications in such compensation that the Company may grant from time to time,
is referred to in this Agreement as "Base Compensation.")
(B) INCENTIVE BONUS. The Executive shall be eligible to be
considered for a semi-annual incentive bonus under the Company's incentive
compensation plan with an annual target amount equal to 50% of his Base
Compensation. Such bonus (if any) shall be awarded based on the Chief Executive
Officer's assessment that the Executive has satisfied the objective and/or
subjective terms established by the Chief Executive Officer. Executive shall be
eligible to participate in the first half year of the Company's 2005 semi-annual
bonus on a pro-rated basis from the date of hire. The Executive shall only be
entitled to an incentive bonus if he is employed by the Company on the date when
such bonus is payable. Notwithstanding the foregoing, such bonus shall also be
payable in the event that Executive is employed by the Company through the end
of the relevant performance measurement period, but prior to the date on which
the bonus is paid either (i) is terminated without Cause or (ii) resigns for
Good Reason.
(C) STOCK OPTIONS. Subject to the approval of the Company's Board of
Directors or its Compensation Committee, the Company shall grant the Executive a
stock option covering 150,000 shares of the Company's Common Stock. Such option
shall be granted as soon as reasonably practicable after the effective date of
this Agreement. The exercise price of such option shall be equal to the fair
market value of such stock on the later of (i) the date of grant or (ii) the
first day of the Executive's Employment. The term of such option shall be ten
(10) years, subject to earlier expiration in the event of the termination of the
Executive's Employment. The Executive shall vest in 25% of the option shares
after the first 12 months of continuous service and shall vest in the remaining
option shares in equal monthly installments over the next three years of
continuous service, resulting in the option being fully vested after four (4)
years. The grant of such option shall be subject to the other terms and
conditions set forth in the 1998 Stock Incentive Compensation Plan (the "1998
Plan") and in the Company's standard form of Stock Option Agreement. The
foregoing notwithstanding, any dispute related to Executive's stock options that
is not resolved by agreement shall be decided by a court of competent
jurisdiction without regard to any provisions of the Stock Incentive
Compensation Plan, Stock Option Agreement or other agreement that grant
authority or discretion to the Company (through its Board of Directors, a
Committee of the Board of Directors, or otherwise), or to any third-party
administrator to decide disputes.
3. PAID TIME OFF AND EMPLOYEE BENEFITS. During his Employment, the Executive
shall be eligible for four (4) weeks of paid time off in accordance with the
Company's Time Away From Work policy, as it may be amended from time to time.
During his Employment, the Executive shall be eligible to participate in the
employee benefit plans maintained by the Company, subject in each case to the
generally applicable terms and conditions of the plan in question and to the
determinations of any person or committee administering such plan.
4. BUSINESS EXPENSES. During his Employment, the Executive shall be authorized
to incur necessary and reasonable travel, entertainment and other business
expenses in connection with his duties hereunder. The Company shall reimburse
the Executive for such expenses upon presentation of an itemized account and
appropriate supporting documentation, all in accordance with the Company's
generally applicable policies.
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5. TERM OF EMPLOYMENT.
(A) EMPLOYMENT AT WILL. The Executive' s Employment shall be "at
will," meaning that either the Executive or the Company shall be entitled to
terminate the Employment at any time and for any reason, with or without Cause.
Any contrary representations that may have been made to the Executive shall be
superseded by this Agreement. This Agreement shall constitute the full and
complete agreement between the Executive and the Company on the "at-will" nature
of the Executive's Employment, which may only be changed in an express written
agreement signed by the Executive and a duly authorized officer of the Company.
The Executive's Employment shall terminate automatically in the event of his
death. The termination of the Executive's Employment shall not limit or
otherwise affect his obligations under Section 7.
(B) RIGHTS UPON TERMINATION. Except as expressly provided in Section
6, upon the termination of the Executive's Employment, the Executive shall only
be entitled to the compensation and benefits earned and the reimbursements
described in this Agreement for the period preceding the effective date of the
termination.
6. TERMINATION BENEFITS.
(A) GENERAL RELEASE. Any other provision of this Agreement
notwithstanding, Subsection (b) below shall not apply unless the Executive (i)
has executed a general release of all claims in a form prescribed by the
Company, and (ii) has returned all Company property. If the Employee executes
and delivers to the Company a waiver and release agreement presented by the
Company, the Employee shall receive severance benefits as set forth in Section
6(b), below.
(B) SEVERANCE PAY. If, during the first year of Executive's
Employment with the Company, the Company terminates the Executive's Employment
for any reason other than Cause or Permanent Disability, or the Executive
terminates his employment for Good Reason, then for a period of three (3) months
after the termination of his employment, the Company will both (i) pay the
Executive severance pay at a rate equal to the monthly portion of the
Executive's Base Compensation in effect at the time of termination of his
Employment and (ii) will reimburse him for the COBRA premiums he pays to
continue his health care coverage. If, either (x) after the first year of
Executive's Employment with the Company or (y) at any time due to a Corporate
Transaction, the Company terminates Executive's Employment for any reason other
than Cause or Permanent Disability, or the Executive terminates his employment
for Good Reason, then for a period of six (6) months after the termination of
his employment, the Company will both (i) pay the Executive severance pay at a
rate equal to the monthly portion of the Executive's Base Compensation in effect
at the time of termination of his Employment and (ii) will reimburse him for the
COBRA premiums he pays to continue his health care coverage All such severance
payments contemplated above shall be paid in accordance with the Company's
standard payroll procedures. Further, if the Company terminates Executive's
Employment for any reason other than Cause or Permanent Disability in connection
with a Corporate Transaction, or the Executive terminates his employment for
Good Reason in connection with a Corporate Transaction , the Company will pay
the Executive the target amount
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of Executive's incentive bonus for the performance period during which the
termination occurs, pro-rated to the date of termination.
(C) DEFINITION OF "CAUSE." For all purposes under this Agreement,
"Cause" shall mean:
(i) Any material breach of this Agreement, the Proprietary
Information and Inventions Agreement between the Executive and the Company, or
any other material written agreement between the Executive and the Company;
(ii) Any material failure to comply with the Company's
reasonable written policies or rules, as they may be in effect from time to time
during the Executive's Employment;
(iii) Commission, conviction of, or a plea of "guilty" or "no
contest" to, a felony under the laws of the United States or any state thereof;
(iv) Willful neglect of duties; or
(v) Gross misconduct.
(D) DEFINITION OF "GOOD REASON." For all purposes under this
Agreement, "Good Reason" shall mean that any of the following events occurs and
the Company has not remedied the condition within ten (10) business days of
receipt of written notice of the existence of such Good Reason:
(i) Any reduction in Executive's title below CFO;
(ii) Any material reduction in the character or level of
Executive's duties, authority or work responsibility;
(iii) Any requirement that Executive report to any person
other than the Chief Executive Officer;
(iv) Any reduction in Executive's compensation
(v) Any material overall reduction in the level of Executive's
benefits, save for where such reduction has been applied to the Company's
employee base as a whole; and
(vi) Company requiring Executive to be based anywhere other
than the greater Seattle area (except for reasonable travel on Company's
business).
(E) DEFINITION OF "PERMANENT DISABILITY." For all purposes under
this Agreement, "Permanent Disability" shall mean Executive's inability to
perform the essential functions of his position with or without reasonable
accommodation for a period of one hundred twenty (120) consecutive days because
of Executive's physical or mental impairment.
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(F) DEFINITION OF "CORPORATE TRANSACTION" For all purposes under
this Agreement, "Corporate Transaction" shall have the meaning ascribed to it in
the 1998 Plan.
7. NON-SOLICITATION/HIRE, NON-DISCLOSURE AND NON-COMPETE.
(A) NON-SOLICITATION/HIRE. During the term of this Agreement and for
a period of one (1) year from the date of his termination of Employment with the
Company (whether voluntary or involuntary), the Executive shall not directly or
indirectly, personally or through others, (i) solicit, attempt to solicit or
hire (on the Executive's own behalf or on behalf of any other person or entity)
any employee or any consultant of the Company or of any of the Company's
affiliates, or (ii) solicit or attempt to solicit the business of any customer
of the Company or of any of the Company's affiliates.
(B) NON-DISPARAGEMENT. During the term of this Agreement and
following the date of Executive's termination of Employment with the Company
(whether voluntary or involuntary), Executive agrees he will not make (or direct
anyone to make) any negative or derogatory comment to any third party, including
current employees, consultants, customers and prospects of the Company and the
press, regarding the Company, its business or related activities, or the
relationship between the Company and Executive.
(C) NON-DISCLOSURE. The Executive shall as a condition of his
Employment sign a Proprietary Information and Inventions Agreement with the
Company, which is incorporated herein by this reference.
(D) NON-COMPETE. During the term of this Agreement and for a period
of nine (9) months from the date of his termination of Employment (whether
voluntary or involuntary), Executive will not within North American, Europe or
Asia directly or indirectly be employed by, own, manage, operate, join, or
benefit in any way from any business activity that is competitive with the
Company's business. In addition, Executive will not control or participate in
the ownership, management, or operation of, or be connected with, any such
competitive business. For purposes of the foregoing, Executive will be deemed to
be connected with such business if the business is carried on by (a) a
partnership in which the Executive is a general or limited partner; employee;
consultant; agent; member; or other representative or (b) a corporation of which
Executive is a shareholder (other than a shareholder owning less than 5% of the
total outstanding shares of the corporation); officer; director; employee;
consultant; agent; member; or other representative. Provided, however, that
during the non-compete period specified herein, Executive may be employed by a
business with multiple divisions only some of which compete with the Company,
immediately upon the Executive's termination, if the Executive works in one of
the divisions that does not compete in any way with the Company's. For the
avoidance of doubt, the phrase "competitive with the Company's business" shall
mean that the applicable activity, business or entity offers a software product
or service in the areas of sales force automation, customer sales and service,
marketing automation or business process management (provided that at such time
the Company is in such business) or competes directly with any of the other
primary proprietary software products or services then marketed and sold by the
Company.
8. SUCCESSORS.
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(A) COMPANY'S SUCCESSORS. This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.
(B) EXECUTIVE'S SUCCESSORS. This Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
9. MISCELLANEOUS PROVISIONS.
(A) NOTICE. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Executive,
mailed notices shall be addressed to him at the home address that he most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.
(B) MODIFICATIONS AND WAIVERS. No provision of this Agreement shall
be modified, waived or discharged unless the modification, waiver or discharge
is agreed to in writing and signed by an authorized officer of the Company
(other than the Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
(C) WHOLE AGREEMENT. This Agreement supersedes any Term Sheet
provided to the Executive. No other agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement
(including attached Exhibits) and the Proprietary Information and Inventions
Agreement contain the entire understanding of the parties with respect to the
subject matter hereof.
(D) WITHHOLDING TAXES. All payments made under this Agreement shall
be subject to reduction to reflect taxes or other charges required to be
withheld by law.
(E) CHOICE OF LAW AND SEVERABILITY. This Agreement shall be
interpreted in accordance with the laws of the State of Washington (except its
provisions governing the choice of law). If any provision of this Agreement
becomes or is deemed invalid, illegal or unenforceable in any applicable
jurisdiction by reason of the scope, extent or duration of its coverage, then
such provision shall be deemed amended to the minimum extent necessary to
conform to applicable law so as to be valid and enforceable or, if such
provision cannot be so amended without materially altering the intention of the
parties, then such provision shall be
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stricken and the remainder of this Agreement shall continue in full force and
effect. If any provision of this Agreement is rendered illegal by any present or
future statute, law, ordinance or regulation (collectively, the "Law") then that
provision shall be curtailed or limited only to the minimum extent necessary to
bring the provision into compliance with the Law. All the other terms and
provisions of this Agreement shall continue in full force and effect without
impairment or limitation.
(F) REMEDY FOR BREACH. The parties agree that, in the event of
breach or threatened breach of any covenants or provisions of this Agreement by
the Executive, the damage or imminent damage to the value and the goodwill of
the Company's business shall be inestimable, and that therefore any remedy at
law or in damages shall be inadequate. Accordingly, the parties agree that the
Company shall be entitled to injunctive relief against Executive in the event of
any breach or threatened breach of any such provisions by the Executive, in
addition to any other relief (including damages) available to the Company under
this Agreement or under law.
(G) NO ASSIGNMENT. This Agreement and all rights and obligations of
the Executive hereunder are personal to the Executive and may not be transferred
or assigned by the Executive at any time. The Company may assign its rights
under this Agreement to any entity that assumes the Company's obligations
hereunder in connection with any sale or transfer of all or substantially all of
the Company's assets to such entity.
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(H) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
EXECUTIVE
/s/ Xxxxxx X. Xxxxxxxxxxx
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ONYX SOFTWARE CORPORATION
By /s/ Xxxxxx X. Xxxxxxxx
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Title: CEO
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