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EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made
effective as of the 19th day of February, 1998 ("Effective Date"), by and
between PowerCerv Corporation, a Florida corporation located at 000 Xxxxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000 (the "Company") and Xxxxxxx X.
Xxxxxxx, an individual currently residing at 00000 Xxxxxx Xxxx Xxxx, Xxxxxx
Xxxxx, XX 00000 (the "Executive").
BACKGROUND INFORMATION
A. WHEREAS, the Company and its subsidiary are engaged in designing,
developing, promoting, licensing and supporting client/server application
products and development tools, and providing related technical consulting and
education services; and
B. WHEREAS, the Company desires to employ Executive as its President
and Chief Operating Officer, and Executive desires to be employed by the
Company in this capacity and devote his full time and efforts to the business
and affairs of the Company as described herein, all pursuant to the terms and
subject to the conditions set forth in this Agreement.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth herein, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. PRESIDENT AND CHIEF OPERATING OFFICER; DIRECTOR.
(a) The Company hereby agrees to hire Executive to serve in the
capacity of President and Chief Operating Officer of the
Company in accordance with the provisions of this
Agreement. The Executive will be responsible for overseeing
management of the Company's sales organization,
professional services organization, research and
development organization, and the accounting/financial and
human resources departments, and otherwise all in
accordance with the respective roles for the President and
Chief Operating Officer positions as set forth in the
Company's Bylaws. The Executive will report to the Chief
Executive Officer of the Company, will become part of the
Company's "Executive Management" team, and will be treated
as an "executive officer" of the Company for purposes of
Section 16 under the Securities Exchange Act of 1934, as
amended. The Executive hereby accepts such employment upon
the terms and conditions hereinafter set forth.
(b) In addition, upon the Executive's commencement of his
employment with the Company, the Executive will be elected
to serve as a member of the Company's Board of Directors
("Board of Directors"). The Executive agrees to serve in
such director capacity in accordance with the Bylaws of the
Company. In connection with the upcoming Annual Meeting of
the Shareholders of the Company (currently scheduled to
occur on June 2, 1998) and each Annual Meeting of the
Shareholders thereafter during the term of this Agreement,
the Executive shall be nominated to serve as a member of
the Board of Directors for one-year terms following each of
such Annual Meetings.
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2. TERM. Unless earlier terminated as provided herein, the term of
this Agreement shall commence on or before March 1, 1998 and terminate on
December 31, 2000. Notwithstanding the foregoing, if this Agreement is not
terminated as provided herein on or before the expiration of its initial term,
this Agreement will be automatically renewed for successive one (1) year terms
unless, at least sixty (60) days prior to the expiration of the initial term or
any subsequent one-year renewal term, either party has given written notice to
the other of its intention not to renew this Agreement beyond the end of such
term.
3. DUTIES.
(a) The Executive shall perform all functions and duties
consistent with his positions as described above in Section
1 on behalf of the Company and its subsidiary in a
faithful, efficient, trustworthy and professional manner,
as reasonably required by the Chief Executive Officer of
the Company or as otherwise requested by the Board of
Directors. The Executive agrees to comply with all policies
and regulations of the Company and the terms and conditions
of this Agreement, to devote his best efforts to the
interests of the Company, and will not, without the prior
written consent of the Chief Executive Officer or the Board
of Directors, engage in any other job or activity
detrimental to the Company's interests or in contravention
to the terms and conditions of this Agreement. The
Executive shall be principally based at the Company's
corporate offices in Tampa, Florida and shall travel as
required in connection with the performance of his duties
hereunder. During the term of this Agreement, the Executive
shall devote substantially all of his working time and
efforts to the business and affairs of the Company. The
Executive shall, upon request of the Company, perform
services for any parent or subsidiary of the Company
without compensation except as provided herein.
(b) In addition, the Executive represents that he has not
brought to the Company, and will not bring or use in the
performance of his duties at the Company, any property or
confidential information (whether or not in writing) of a
former employer or third party without that employer's or
third party's written consent. The Executive hereby
certifies that he is not a party to any other agreement (or
subject to any fiduciary obligation) which will interfere
with the Executive's full compliance with this Agreement.
The Executive has not entered into any agreement or
understanding either written or oral in conflict with the
provisions of this Agreement. The Executive acknowledges
and agrees that the Company is hiring him based upon its
understanding that the Executive will be fully capable,
without restriction, of performing under this Agreement in
his capacity as President and Chief Operating Officer for
the Company, and that the Company is relying upon the
representations set forth herein in connection with its
providing this Agreement to the Executive.
4. COMPENSATION. As his entire compensation for all services rendered
to the Company during the term of this Agreement, the Executive shall receive
the compensation provided for in this Section, subject to withholding and other
applicable employment taxes:
(a) Base Salary. Effective upon the Executive's actual first day
of employment with the Company, the Company will pay the
Executive an annual base salary (the "Base Salary") as
follows: (i) for the period commencing on the Executive's
first day of employment with the Company until December 31,
1998, the Annual Base Salary will be paid out at a rate of
$14,583.34 per month; (ii) for the period January 1, 1999
until December 31, 1999, the Annual Base Salary will be
$225,000; and (iii) for the period January 1, 2000 until
December 31, 2000, the Annual Base Salary will be $225,000.
The Base Salary shall be subject to review on an annual
basis by the Compensation Committee of the
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Board of Directors. The Compensation Committee shall not
have the authority to reduce the Base Salary from the
levels set forth in this Agreement.
(b) Target Annual Bonus. Consistent with the bonus program for
"Executive Management" of the Company (and pursuant to the
target annual bonus pay-out provisions of the employment
agreements of Messrs. Fratello, Crippen, Xxxx and Xxxxxx),
the Executive will be eligible to potentially earn an
annual bonus of $200,000 (the "Target Annual Bonus") per
the provisions of this Section 4(b) for each of the
Company's three (3) fiscal years during the term of this
Agreement. The Target Annual Bonus will be paid in one lump
sum for each of such fiscal years, subject to the Company
and/or Executive, as applicable, achieving certain criteria
as hereinafter set forth. References below to target
revenues and target operating income relate to Company's
"Management Plan Projections" approved by the Board of
Directors no less frequently than annually in advance of
the period or which the targets are being determined.
Actual revenues and actual operating income shall be
computed on a basis consistent with a method by which
target revenues and target operating income for the related
year were computed. Eligibility for payments of the Target
Annual Bonus to Executive shall be for each calendar year
during the term of the Agreement beginning with the
calendar year commencing January 1, 1998 and shall be
computed as follows:
(i) $70,000 will be earned upon Company achieving target
revenues for each calendar year;
(ii) $70,000 will be earned upon Company achieving target
operating income for each calendar year; and
(iii) $60,000 will be earned upon approval of the Board of
Directors after its review of the Executive
Management and/or Executive's presentation of
strategic business accomplishments of the Company
for each calendar year.
If a target referenced in subclause (i) or (ii) above is not
met in a particular calendar year, Executive shall not
receive for such calendar year the part of the Target Annual
Bonus tied to such target. However, notwithstanding anything
to the contrary in this subsection 4(b), if in any calendar
year the Company exceeds the target revenues or target
operating income for such year, the Executive shall be paid
an additional bonus computed as follows: for each 1% that
actual revenues for the calendar year exceed the target
revenues for such calendar year, and for each 1% that the
actual operating income for such calendar year exceeds the
targeted operating income for such year, the Executive shall
be paid an additional $630.00. For example, if Company's
target revenues for a calendar year were $40,000,000 and
actual revenues for such year computed as provided herein
were $50,000,000, then, as actual revenues would have
exceeded projected revenues by 25%, the Executive would be
entitled to an additional Target Annual Bonus related to
target revenues in the amount of $15,750.00 (i.e., 25 x
$630.00). The presentation by the Executive Management and/or
Executive of Company's strategic business accomplishments for
a fiscal year shall be promptly evaluated by the Board of
Directors and the potential related bonus shall be determined
by the Board of Directors in its reasonable discretion. The
Executive shall be eligible to earn all or a portion of such
potential bonus as so determined by the Board of Directors.
All amounts payable pursuant to this Section 4(b) shall be
paid to the Executive promptly after the amount is
determined. The minimum Target Annual Bonus to be paid to the
Executive pursuant to this Section 4(b) for the period
commencing on the Executive's first day of employment
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with the Company until December 31, 1998 shall be $50,000.
Thereafter, the Executive and the Company acknowledge and
agree that there shall be no such minimum Target Annual
Bonus due hereunder for any subsequent fiscal year(s).
Additionally, the Executive acknowledges and agrees that no
advances or draws will be paid under this Agreement.
(c) Stock Options. As of the Effective Date of this Agreement, the
Company agrees to grant the Executive those stock options set
forth below in subsections 4(c)(i) and 4(c)(ii). The Executive
acknowledges and agrees that during the initial term of this
Agreement (through December 31, 2000), the Executive will not
receive nor be entitled to receive any additional stock
options from the Company. In addition, the Executive
acknowledges that all stock options being granted to him below
are not part of or granted pursuant to the Company's 1995
Stock Option Plan, as amended, and accordingly constitute
"non-qualified stock options" for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"). If the Company
and the Executive determine that no exemption from the
registration requirements from the Securities Act of 1933 is
available with respect to the shares to be issued upon
exercise of the options, the Company will file a registration
statement with respect to such shares. The stock options to be
granted to the Executive on the Effective Date are as follows:
i) A non-transferable option to purchase 62,000 shares
of the Company's common stock pursuant to a
"PowerCerv Corporation Stock Option Agreement". The
exercise price for this option will be the "fair
market value" on the date of grant, which shall be
the average of the high and low sales prices of the
Company's common stock as reported by the NASDAQ on
the Effective Date of this Agreement. If trading in
the stock or a price quotation does not occur on the
date as of which fair market value is being
determined, the last date on which the stock was
traded or a price was quoted shall determine the fair
market value. This option will vest according to the
following schedule:
Date Portion Vested
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March 31, 1998 1/10
April 30, 1998 2/10
May 31, 1998 3/10
June 30, 1998 4/10
July 31, 1998 5/10
August 31, 1998 6/10
September 30, 1998 7/10
October 31, 1998 8/10
November 30, 1998 9/10
December 31, 1998 Entire Option
The stock option described in subsection 4(c)(i)
will expire on the earlier of (x) ten years from the
date of grant, or (y) the first anniversary of
either the date of the Executive's separation of
employment from the Company or the date of the
Recipient's death or disability.
ii) A second non-transferable (except as set forth below
in this subsection 4(c)(ii)) option to purchase
938,000 shares of the Company's common stock pursuant
to a "PowerCerv Corporation Stock Option Agreement".
The exercise price for this
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option will be the "fair market value" on the date of
grant, which shall be the average of the high and low
sales prices of the Company's common stock as
reported by the NASDAQ on the Effective Date of this
Agreement. If trading in the stock or a price
quotation does not occur on the date as of which fair
market value is being determined, the last date on
which the stock was traded or a price was quoted
shall determine the fair market value. This option
will vest according to the schedule set forth on
Exhibit A attached hereto and incorporated herein by
this reference.
The stock option described in subsection 4(c)(ii)
will expire on the earlier of (x) ten (10) years
from the date of grant, or (y) the first anniversary
of the date of the Recipient's death or disability,
or (z) one hundred and fifty (150) days following
the Executive's separation of employment from the
Company. This stock option may be transferred and
assigned, in its entirety, by Executive to an
employee of the Company or its subsidiary, within
thirty (30) days following the Executive's receipt
of the written consent to make such transfer by the
Compensation Committee of the Board of Directors, in
which case the Executive acknowledges that there may
be Federal income tax implications to such transfer
and assignment for which the Executive will be
responsible. The Compensation Committee of the Board
of Directors may, at its sole discretion, review the
Executive's performance in light of the Company's
operating plan to determine whether or not to
accelerate the vesting of any portion of the stock
price-based stock options.
(d) Relocation. In addition to the compensation described above,
the Company will pay the Executive a one-time "Relocation
Allowance" of $40,000, on a pre-tax basis. The Executive
agrees to use the Relocation Allowance exclusively for his
relocation expenses. The Relocation Allowance will be paid
fifty percent (50%) on April 10, 1998 and the remainder on May
10, 1998, or upon such other time schedule as the Executive
and the Chief Executive Officer agree. If the Executive
separates his employment with the Company without Cause (as
"Cause" is defined in Section 9(a) of the Agreement) during
the initial term of this Agreement (before December 31, 2000),
the Executive agrees to promptly return the entire amount of
the Relocation Allowance to the Company. In addition to the
Relocation Allowance described above, the Company agrees to
reimburse the Executive up to $2,500 per month for no more
than six (6) months from the Effective Date for his and his
family's temporary travel and living expenses in Tampa. In
connection with obtaining such reimbursement, the Executive
agrees to submit expense receipts for these travel/living
costs.
5. WORKING FACILITIES. The Company shall provide the Executive with
office space, equipment, facilities, staffing and services which are suitable
to the position of President and Chief Operating Officer and adequate for the
performance of the Executive's duties hereunder.
6. EXPENSES. The Company shall reimburse the Executive for all
reasonable travel and other business expenses incurred by him in furtherance of
the Company's business in accordance with the Company's written policies and
procedures.
7. VACATION AND HOLIDAYS. The Executive shall be entitled to such
vacation with pay and holidays with pay during each fiscal year of the Company
as shall be approved by the Company. The amount of vacation and holidays
provided to the Executive shall be consistent with the amount given other
comparable executive employees of the Company.
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8. HEALTH, WELFARE AND INSURANCE PLANS. Subject to eligibility
requirements, the Executive will be entitled to participate in any plans,
insurance policies or contracts maintained by the Company relating to
retirement, health, disability and other related benefits. The Executive's
rights with respect to any such benefits shall be subject to the provisions of
the relevant plans, policies or contracts providing such benefits. Nothing
contained herein shall be deemed to impose any obligation on the Company to
adopt or maintain any such plan, policy or contract. As of the date of this
Agreement, the Company does not provide different types or levels of health,
welfare and insurance plan or benefit coverage to its executive employees, and
further, there is no present intention by the Company to change this benefit
policy. However, if the Company were to change its policy relative to executive
benefits, those health, welfare and insurance plan and benefit coverage made
available to the Executive will be consistent with the amount given other
comparable executive employees of the Company.
9. TERMINATION. This Agreement, and the Executive's employment
hereunder, shall terminate in accordance with the provisions of this Section.
(a) By Company. The Company may terminate this Agreement (i) with
Cause at any time upon thirty (30) days prior written notice
to the Executive, (ii) upon the Company's merger,
consolidation, acquisition, liquidation, sale or other
disposition of all or substantially all of its business
and/or assets to a third party; or (iii) without Cause upon
ninety (90) days prior written notice to the Executive, and
the Executive shall work for the Company during such notice
period unless otherwise directed by the Company.
As used in this Agreement, the term "Cause" shall mean (A)
willful and repeated failure to comply with the lawful
directions of the Company's Chief Executive Officer or Board
of Directors or repeated failure to perform the duties as
President and Chief Operating Officer of the Company; (B)
gross negligence or willful misconduct in the performance of
duties to the Company and/or its subsidiaries; (C) commission
of any act of fraud with respect to the Company and/or its
subsidiaries; or (D) conviction of a felony or a crime
involving moral turpitude causing material harm to the
standing and reputation of the Company and/or its
subsidiaries, in each case as determined in good faith by the
Company's Board of Directors.
(b) Death. This Agreement shall terminate immediately upon the
Executive's death.
(c) Disability. If the Executive incurs a Disability (as defined
below) which continues for a period of at least ninety (90)
consecutive days, this Agreement shall terminate on the last
day of such period. Unless the Executive shall perform his
duties hereunder for a continuous period of at least thirty
(30) consecutive days following a period of Disability before
the Executive again incurs a Disability, he shall not be
entitled to start a new ninety (90) consecutive day period
under the provisions of this subsection, but instead may only
continue under the remaining portion of the original ninety
(90) consecutive day period.
As used in this Agreement, the term "Disability" shall mean
the Executive's physical or mental inability, by reason of
illness or accident, to perform the normal duties of his
employment by the Company, subject to any obligation the
Company may have under applicable law to provide reasonable
accommodation. If there is any disagreement between the
Company and the Executive as to the Executive's Disability or
as to the date any such Disability began or ended, the same
shall be determined by a physician
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mutually acceptable to the Company and the Executive. The
determination of such physician shall be conclusive evidence
of any such Disability and of the date any such Disability
began or ended. The Executive shall be available for such an
examination at any reasonable time upon prior reasonable
notice thereof from the Company. If the Executive fails or
refuses to cooperate in such examination, the determination of
the Executive's Disability and the date any such Disability
began or ended shall be made by the Company in its sole
discretion.
(d) Termination by Executive. The Executive may terminate this
Agreement (i) for Good Reason at any time upon thirty (30)
days prior written notice to the Company, or (ii) at any
time upon ninety (90) days prior written notice to the
Company; provided, however, the Executive shall continue to
work for the Company during such notice period unless
otherwise directed by the Company. For the purposes of the
Company's payment of severance under this Agreement,
termination without Cause (under Section 9(a)(iii)) and
termination with Good Reason (under Section 9(d)(i)) shall
effectively be treated in the same manner for severance
payment and stock option vesting purposes. Effectively,
"Good Reason" (as defined below) is equivalent to
"constructive termination" under this Agreement.
As used in this Agreement, "Good Reason" shall mean (A) any
material breach of this Agreement by the Company which has not
been cured within thirty (30) days of the Company's receipt of
written notice of such breach from the Executive, or as soon
thereafter as practicable so long as the Company is diligently
seeking to cure such failure or breach; (B) a material
reduction in the Executive's titles or responsibilities unless
replaced with a new title or new responsibilities of
comparable stature or value to the Company within thirty (30)
days; or (C) a change in the person to whom the Executive will
report, should that person be someone other than Xxx Xxxxxxx
or Xxxx Xxxxxxxx (which subsection "C" hereof shall not apply
if the Executive were elected Chief Executive Officer).
10. PAYMENTS BY COMPANY UPON TERMINATION.
(a) Within ten (10) business days following the effective date of
the termination of the Executive's employment (the
"Termination Date") if based upon the Company's termination of
the Executive with Cause as described under Section 9(a)(i);
or the Executive's death as described under Section 9(b); or
the Executive's Disability as described under Section 9(c); or
the Executive's notice of termination to the Company without
Good Reason as described under Section 9(d)(ii), then the
Company shall pay the Executive (or his estate in the case of
death per Section 9(b)) his Base Salary prorated through the
Termination Date plus any life insurance, disability or other
benefits to which the Executive is entitled in accordance with
the terms and conditions of the Company's health, welfare and
insurance plans.
(b) If the Company is merged, consolidated, acquired, sold,
liquidated, or any other disposition of all or substantially
all of its business and/or assets to a third party as
described under Section 9(a)(ii) above and in which the
Executive is not then offered an equal or better position,
salary and compensation package (as adjusted to reflect cost
of living increases), relocation package and other benefits
with said third party; or if the Company has given notice of
termination to the Executive as described under Section
9(a)(iii); or if the Executive has given notice of termination
to the Company under Section 9(d)(i), then in any one of these
circumstances, and further provided that the
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Executive is not in breach of Sections 11, 12 and 13 of
this Agreement or does not subsequently breach any of said
sections, then Company shall: (i) pay the Executive an
amount equal to twelve (12) months of the Executive's then
current year Base Salary, payable in twelve (12) equal
monthly installments from his Termination Date; (ii)
provide health, disability, life and such other insurance
benefits to the Executive and dependents that he would have
received during said twelve (12) month period following the
Termination Date had such termination not occurred (or if
such insurance plans are no longer available [in the case
of the Company's acquisition], reimbursement by the Company
to the Executive of his reasonable costs for the same or
similar insurance); and (iii) vest the Executive's stock
options in accordance with Section 10(c) below. The
obligation of the Company to pay such severance and vest
stock options is contingent upon the Executive's compliance
with Sections 11, 12 and 13 of this Agreement (as indicated
above) and the Executive's execution of a severance and
general release agreement reasonably satisfactory in form
and substance to the Company.
(c) For purposes of vesting the unvested portions of the
Executive's outstanding stock options, if the Company is
merged, consolidated, acquired, sold, liquidated or any
other disposition of all or substantially all of its
business and/or assets to a third party as described under
Section 9(a)(ii), and provided there is no "pooling"
concern, then one hundred percent (100%) of all outstanding
stock options then held by the Executive shall vest upon
the effective date of such event. If either (i) the Company
has given notice of termination to the Executive as
described under Section 9(a)(iii) of the Agreement, or (ii)
the Executive has given notice of termination to the
Company under Section 9(d)(i) of the Agreement, and
provided there is no "pooling" concern, then 200,000 of the
remaining unvested portion of the stock options then held
by the Executive shall vest upon the Termination Date, and
no further vesting of any nature shall occur with respect
to any other stock options then held by the Executive. For
purposes of the prior sentence, vesting priority shall be
given to the stock options granted under Section 4(c)(ii)
of this Agreement. To the extent there would be a "pooling"
concern, the Company and the Executive agree to work
together in good faith to carry out the intent of this
provision and preserve the Company's ability to do a
"pooling" transaction. If the accelerated vesting of the
options hereunder would (x) subject the Executive to a tax
pursuant to Section 4999 of the Code (or any successor
provision that may be in effect), or (y) result in a
disallowance of a deduction to the Company for all or any
part of the compensation attributable to the option by
reason of Section 280G of the Code (or any successor
provision that may be in effect), the Company shall reduce,
eliminate or postpone the acceleration of the vesting of
the option to the extent necessary to reduce the "present
value" (as this term is defined in Section 280G(d)(4) of
the Code, or any successor provision that may be in effect)
of the compensation attributable to the accelerated vesting
to one dollar less than an amount equal to three times the
Executive's "base amount" (as this term is defined in
Sections 280G(b)(3) and 280G(d) of the Code, or any
successor provisions that may be in effect).
(d) Except as provided in subsection (a), (b) and (c) above, the
Executive (or his estate, if applicable) shall not be
entitled to receive severance pay or any other compensation
upon any termination of his employment.
11. EMPLOYMENT POLICIES. The Executive shall abide by all policies and
procedures of the Company in effect from time to time.
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12. CONFIDENTIALITY AND INVENTIONS CLAUSES.
(a) The Executive agrees not to disclose the terms and conditions
of this Agreement to any other employee of the Company or any
other party except the Executive may disclose such
information to his immediate family, financial advisors or
attorneys.
(b) The Executive agrees to hold in confidence and not use or
disclose without the Company's prior written consent (i)
any information (technical or otherwise) that he obtains or
creates during the term of this Agreement which pertains to
any aspect of the Company's business or (ii) any
information received in confidence by the Company from a
third party, until such information becomes generally known
by the public. The Executive shall not make any
unauthorized copies of such information and will return to
the Company, upon termination of his employment or upon the
Company's request, all tangible forms of such information,
including, without limitation, research and development
projects and strategies, product strategies, internet or
intranet strategies, business or product development
strategies, financial information, partner and customer
relationships, and other information about former, current,
or prospective partners/customers, employee lists and other
information about former, current, or prospective
employees, software programs (source or object codes),
know-how, new product offerings, plans, projections,
confidential business information, copyrights, trade
secrets, and any other proprietary material.
(c) The Executive hereby assigns to the Company all of his rights
in all intellectual property (including, but not limited
to, trade secrets, know-how, inventions, copyrights,
designs, computer programs and software techniques) that
the Executive conceives or develops, in whole or in part,
during his employment with the Company. This assignment
does not cover any intellectual property which: (i) is
conceived and developed entirely on the Executive's own
time; (ii) is conceived and developed without any Company
equipment, supplies, facilities, or trade secrets; and
(iii) does not relate to Company's current or future
business or to the Company's actual or demonstrably
anticipated research or development efforts. The Executive
understand that this assignment does not cover any
inventions completed prior to his employment with the
Company, which inventions are specifically identified on
the attached schedule (which contains no confidential
information). During and after the Executive's employment
with the Company, the Executive agrees to do whatever is
requested by the Company, at the Company's expense, to sign
documents or otherwise assist in obtaining, confirming, and
enforcing the Company's rights in the assigned property
throughout the world.
13. NON-COMPETE.
(a) During the term of this Agreement, as extended, the Executive
may learn of confidential matters essential to the business
and competitive position of the Company, including, without
limitation, its business or product development strategies,
financial information, partner and customer relationships,
and other information about former, current, or prospective
partners/customers, employee lists and other information
about former, current, or prospective employees, software
programs (source or object codes), research and development
plans, know-how, projections, copyrights, trade secrets, or
any other proprietary material and confidential business
information that would unfairly disadvantage the Company
were the Executive to use or disclose such information in
business activities competitive with the Company. The
Executive also may develop contacts and relationships with
(i) former, current, or prospective customers of the
Company or (ii) former, current, or prospective business
partners, or licensors of the Company which, if those
contacts or relationships were used by the Executive in
competition with the Company, would unfairly
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disadvantage the Company. To protect the Company's trade
secrets, confidential business information, and current and
prospective business relationships, the Executive shall
not, during the term of this Agreement and for a period of
twelve (12) months immediately following the Termination
Date for whatever reason, whether voluntary or involuntary
(with or without cause), directly or indirectly, either as
an individual on the Executive's own account or as a
partner, employee, agent, contractor, officer, director,
stockholder, or otherwise:
(I) Solicit from, accept employment/business from,
consult with, or transact business with any former,
current, or prospective customer or vendor of the
Company with which the Executive had substantial
personal contacts on behalf of the Company
(excluding, however, those companies with whom the
Executive actually had a direct relationship with
prior to his becoming an employee of the Company)
during the twenty-four (24)-month period immediately
preceding the Termination Date; or
(II) Hire, solicit for hire, refer, or retain the
services of any employee of the Company or its
subsidiary for any matter whatsoever during the
period of time which said employee is employed by
the Company or its subsidiary and for six (6) months
thereafter; or
(III) Engage in, consult with, or accept employment from
any business in current or prospective competition
with the Company (excluding, however, those
companies with whom the Executive actually had a
direct relationship with prior to his becoming an
employee of the Company) where such engagement,
consultation, or employment is likely to require the
Executive to use or disclose trade secrets or
confidential business information of the Company.
For purposes of the "pre-existing relationship"
exclusion described in subsections (a) and (c) of
this Section 13(a), the parties agree that the
burden of proof to establish the existence of this
relationship will be on the Executive.
(b) The Executive acknowledges that, in the course of his
employment with the Company, the Executive may (i) obtain
information and knowledge of confidential matters essential
to the business and competitive position of the Company and
(ii) have contacts with customers, partners or vendors of
the Company, which information and knowledge and contacts
are being so provided to the Executive in reliance upon his
execution of this Agreement. The Executive hereby
acknowledges the sufficiency of consideration for this
Agreement, and the Executive further acknowledges that the
confidentiality and customer/vendor protection covenants in
this Agreement are reasonable and necessary to protect the
valid business interests of the Company, including the
Company's valuable trade secrets, other confidential
business information, and relationships with its former,
current, and prospective customers, business partners,
licensors, and vendors.
(c) If any of the provisions of Sections 11, 12 or 13 are found
to be unreasonable in duration, geographical scope, or line
of business, the provision shall not be rendered
unenforceable by this finding, but rather the duration,
geographical scope, or line of business of such provision
shall be deemed automatically reduced or modified with
retroactive effect to the extent necessary to render the
provision enforceable, and such provision shall be enforced
as modified.
(d) The parties to this Agreement acknowledge and agree that
damages in the event of a breach of any of the provisions of
Sections 11, 12 or 13 by the Executive would be
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difficult to ascertain, and therefore the Company, in addition
to and not in limitation of any other rights, remedies or
damages available to it in law or in equity, shall have the
right to injunctive or other equitable relief in any court of
competent jurisdiction, enjoining such breach.
14. INDEMNIFICATION. The Executive shall be, and hereby is,
indemnified by the Company, to the fullest extent permitted by applicable law,
for all costs, claims, expenses (including reasonable attorney's fees and other
litigation costs), damages and losses incurred by Executive by reason of being
employed, or serving in any capacity, as an employee or officer of the Company
or any affiliate thereof.
15. SUCCESSORS; BINDING AGREEMENT.
(a) The Company will require any successor (whether by merger,
consolidation, purchase, acquisition or otherwise) to all or
substantially all of the business and/or assets of the
Company, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession
had taken place. As used in this Section 15(a), "Company"
shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this
Section or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) 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.
16. MISCELLANEOUS.
(a) Notice. Any notice required or permitted to be given
hereunder shall be in writing and shall be deemed to have
been given three (3) calendar days following the day in which
it is personally delivered or deposited in the United States
certified mail, return receipt requested and postage prepaid.
Any such notice so mailed to the Executive shall be addressed
to the Executive's last known residence address. Any such
notice so mailed to the Company shall be addressed to its
principal office in Tampa, Florida.
(b) Modification. No provisions of this Agreement may be
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by
the Founders or their designee and the Executive.
(c) Waiver of Breach or Violation Not Deemed Continuing. The
waiver by either party of a breach or violation of any
provision of this Agreement shall not operate as, or be
construed to be, a waiver of any subsequent breach hereof.
(d) Assignment. The Executive shall not assign all or any portion
of his rights, obligations, or duties under this Agreement to
any third party without the prior written approval of the
Company. Any assignment in violation of this provision shall
be void and of no force or effect.
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(e) Necessary Action. Each party shall perform any further acts
and execute and deliver any documents which may be reasonably
necessary to carry out the provisions of this Agreement.
(f) Attorneys Fees. In the event of a dispute arising under or in
connection with this Agreement, the prevailing party shall be
entitled to collect from the other party all reasonable legal
fees and expenses.
(g) Venue. The Executive hereby consents to personal jurisdiction
and venue, for any action brought by the Company
arising out of a breach or threatened breach of this
Agreement, exclusively in the United States District Court
for the Middle District of Florida, Tampa Division, or in
the Circuit Court in and for Hillsborough County, Florida.
The Executive hereby agrees that any action brought by him,
alone or in combination with others, against the Company,
whether arising out of the Agreement or otherwise, shall be
brought exclusively in the United States District Court for
the Middle District of Florida, Tampa, Division, or in the
Circuit Court in and for Hillsborough County, Florida. The
Executive hereby agrees that any controversy which may
arise under this Agreement would involve complicated and
difficult factual and legal issues. Therefore, if a court
of law determines for any reason that the arbitration
clause of Section 16(h) of this Agreement is unenforceable,
then any action brought by the Company against the
Executive or brought by Executive, alone or in combination
with others, against the Company, whether arising out of
this Agreement or otherwise, shall be determined by a judge
sitting without a jury.
(h) Arbitration. All controversies, claims, disputes, and matters
in question arising out of, or related to, this Agreement
or the breach of this Agreement, or the relations between
the signatories to this Agreement, shall be decided by
arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The parties
agree that the arbitration shall take place exclusively in
Tampa, Florida, and shall be governed by the substantive
law of the state of Florida. Any award rendered by the
arbitrator shall be final, and final judgment may be
entered upon the parties in accordance with applicable law
in any court having jurisdiction thereof, including a
federal district court, pursuant to the Federal Arbitration
Act. The arbitrator may grant the Company injunctive
relief, including mandatory injunctive relief, to protect
the rights of the Company, but the arbitrator shall not be
limited to such relief. This arbitration provision shall
not preclude the Company from seeking temporary or
preliminary injunctive relief in a court of law to protect
its rights, nor shall the filing of such an action
constitute any waiver by the Company of its right to
arbitrate. In connection with the arbitration of any
dispute between the signatories to this Agreement, each
signatory may utilize all methods of discovery authorized
by the Federal and Florida Rules of Civil Procedure.
(i) Entire Agreement. This Agreement, including any attached
schedules, contains the entire agreement of the parties
relating to the subject matter hereof and supersedes all
prior understandings and agreements related to Executive's
employment with the Company.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first above written.
WITNESSED BY: EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxx
------------------------ ------------------------------
Xxxxxxx X. Xxxxxxx
POWERCERV CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
------------------------ ---------------------------
Xxxx X. Xxxxxxxx,
Chief Executive Officer
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EXHIBIT A
SHARES WITH RESPECT TO WHICH
DATE/EVENT THE STOCK OPTION IS EXERCISABLE
---------- ---------------------------------
Executive's first day of employment w/Company 200,000
March 31 1998 210,000
April 30, 1998 220,000
May 31, 1998 230,000
June 30, 1998 240,000
July 31, 1998 250,000
August 31, 1998 260,000
September 30, 1998 308,000
October 31, 1998 318,000
November 30, 1998 328,000
December 31, 1998 338,000
January 31, 1999 346,333
February 28, 1999 354,666
March 31, 1999 362,999
April 30, 1999 371,332
May 31, 1999 379,665
June 30, 1999 387,998
July 31, 1999 396,331
August 31, 1999 404,664
September 30, 1999 412,997
October 31, 1999 421,330
November 30, 1999 429,663
December 31, 1999 438,000
January 31, 2000 446,333
February 29, 2000 454,666
March 31, 2000 462,999
April 30, 2000 471,332
May 31, 2000 479,665
June 30, 2000 487,998
July 31, 2000 496,331
August 31, 2000 504,664
September 30, 2000 512,997
October 31, 2000 521,330
November 30, 2000 529,663
December 31, 2000 538,000
The remaining portion of the option, covering the remaining 400,000 shares,
shall become vested on December 31, 2001; provided, however, that this portion
of the option may become vested prior to December 31, 2001, based upon the
performance of the Company's common stock as traded on the NASDAQ as follows:
- $5.00/share or higher close price
for 20 consecutive trading days 100,000
- $9.00/share or higher close price
for 20 consecutive trading days 150,000
- $14.00/share or higher close price
for 20 consecutive trading days 150,000
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