EXHIBIT 10.8
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This Employment and Non-Competition Agreement (this "Agreement") is
between Tyler Technologies, Inc., a Delaware corporation (the "Company"), on the
one hand, and Xxxxxx X. Xxxxxx ("Executive"), on the other hand. This Agreement
is dated to be effective as of July 1, 2003 (the "Effective Date").
The Company desires to employ Executive under the terms and conditions
set forth in this Agreement, Executive hereby representing that he is free from
any other obligation of continuing employment with any other employer.
Executive desires employment as an employee of the Company under the
terms and subject to the conditions set forth in this Agreement.
The non-competition and confidentiality obligations of Executive as set
forth in this Agreement are a material inducement for the Company to enter into
this Agreement, and the Company would not enter into this Agreement absent such
covenants by Executive.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which all parties mutually acknowledge, the parties
agree as follows:
1. Employment. The Company hereby employs Executive, and Executive
hereby accepts such employment, on the terms and subject to the conditions set
forth in this Agreement.
2. Duties of Executive.
(a) Executive will serve in the capacity of Executive Vice
President of the Company or such other capacity as may be assigned to
Executive by the Chief Executive Officer or the Board of Directors,
which capacity will be commensurate with the education, experience, and
skills of Executive. In such capacities, Executive shall have all
necessary power and authority to discharge his responsibilities.
Executive will report to the Chief Executive Officer of the Company.
(b) Executive will devote his full business time and effort to
the performance of his duties and responsibilities as Executive Vice
President of the Company, excluding vacation and reasonable absence due
to illness.
(c) Executive will perform his duties in a professional manner
and will use his best efforts, skills, and abilities to promote,
enhance, and preserve the business of the Company and its affiliates
and the goodwill and relationships they have with their employees,
agents, representatives, customers, suppliers, and other persons having
business relations with any of them.
(d) Executive shall observe and comply with the written rules
and regulations of the Company with respect to its business and shall
carry out and perform the directives and policies of the Company as the
Board of Directors or Chief Executive Officer may from time to time
state them to Executive in writing.
3. Employment Term. This Agreement shall commence as of the Effective
Date and continue for a period of five (5) years; provided, however, that at the
end of such initial term the term shall automatically extend for an additional
year unless the Company provides, at least six (6) months prior to the end of
such initial term or subsequent anniversary of the end of such initial term,
written notice that it does not wish to extend the term. Notwithstanding the
foregoing, this Agreement may be earlier terminated in accordance with Section 7
of this Agreement.
4. Compensation.
(a) Base Salary. For services performed by Executive pursuant
to this Agreement, the Company will pay Executive during the term of
this Agreement a base salary at the rate of $220,000 per year (the
"Base Salary"), which shall be payable in accordance with the Company's
standard payroll practices but not less than monthly. The Base Salary
shall not be subject to reduction, but may be increased at the
discretion of the Compensation Committee of the Board of Directors or
the Board of Directors as a whole. Any compensation that may be paid to
Executive under any additional compensation or incentive plan or which
may be otherwise authorized from time to time by the Board of Directors
shall be in addition to the Base Salary to which Executive is entitled
under this Agreement.
(b) Annual Bonus. For each calendar year during the term of
this Agreement, Executive shall be eligible to receive an annual
performance bonus (the "Bonus"), which shall be established and paid in
accordance with the incentive compensation plan set forth as Exhibit A
(or as otherwise established by the Executive Committee and/or
Compensation Committee of the Tyler Board of Directors). The Bonus will
be paid in accordance with the Company's standard bonus payment
practices.
(c) Equity Grants. During the term of this Agreement,
Executive shall be eligible and participate, in an appropriate manner
relative to other senior executives of the Company and consistent with
competitive pay practices generally, in any equity-based incentive
compensation plan or program of the Company, including, without
limitation, any plan or program providing for the grant of (i) options
to purchase common stock of the Company, (ii) restricted stock of the
Company, or (iii) similar equity-based units or interests. In
consideration of the mutual promises contained herein, the Company
shall grant Executive effective as of the Effective Date options to
purchase 200,000 shares of Company Common Stock, $.01 par value per
share, subject to the terms and conditions of the Company's Amended and
Restated Stock Option Plan and the Company's standard stock option
agreement.
5. Executive Benefits. During the term of this Agreement, the Company
shall provide Executive with all benefits made available from time to time by
the Company to its senior executives and to its employees generally, including,
without limitation, participation in medical and dental benefit plans and
programs, disability and death insurance, 401-K plans, paid vacation, and other
fringe benefits.
6. Reimbursement of Expenses. The Company shall reimburse Executive for
all expenses actually and reasonably incurred by Executive in the business
interests of the Company. Such reimbursement shall be made to Executive upon
appropriate documentation of such expenditures in accordance with the Company's
policies.
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7. Early Termination.
(a) It is the desire and expectation of each party that the
employer-employee relationship will continue for the full term as set
forth in Section 3 of this Agreement. The Company shall, however, be
entitled to terminate Executive's employment at any time with or
without Cause (as defined below), subject to the restrictions contained
in this Section 7.
(b) If Executive's employment is terminated by the Company
without Cause prior to the expiration of this Agreement, the Company
shall pay Executive a lump sum amount equal to Executive's Base Salary
(i) still due for the remainder of the term of this Agreement or (ii)
for a period of twelve (12) months, whichever is greater. Executive
shall also be entitled to receive the benefits set forth in Section 5
for a period equal to the greater of twelve (12) months or the number
of months then remaining on the term of this Agreement. A Change of
Control (as defined below) shall be deemed to be a termination without
Cause, unless otherwise agreed in writing by Executive.
(c) If Executive dies, is unable to perform his duties and
responsibilities as a result of a disability that continues for one
hundred and eighty (180) consecutive days or more, voluntarily resigns
from the Company, or is terminated by the Company for Cause (as defined
below), the Company shall pay Executive (or his estate, executor, or
legal representative, as the case may be) any accrued and unpaid Base
Salary and finally determined and unpaid Bonus to the date employment
ceases, and the Company's obligations to pay additional salary, cash
compensation, or benefits shall terminate as of such date. In addition,
if the Company terminates Executive due to disability, the Company will
continue to pay the benefits outlined in Section 5 to Executive and
Executive's dependents for a period equal to the greater of twelve (12)
months or the number of months then remaining on the term of this
Agreement.
(d) For purposes of this Agreement, "Cause" means a
determination by the Board of Directors of the Company or Tyler that
Executive has: (i) failed or been unable for any reason to devote
substantially all of his time during normal business hours to the
business of the Company and its affiliates (except for vacations and
absence due to illness); (ii) been convicted of any felony; (iii)
committed any act or engaged in any conduct that is fraudulent or
constitutes malfeasance or a breach of fiduciary duties of Executive;
(iv) persistently failed to abide by the corporate policies and
procedures as set forth in the Company's or Tyler's employee handbook;
(v) persistently failed to execute the reasonable and lawful
instructions of the Company's or Tyler's Board of Directors relating to
the operation of the Company's business; or (vi) committed any material
or continuing breach of any of the terms of, or has materially or
continually failed to perform any covenant contained in, this Agreement
to be performed by Executive. With respect to (i), (iv), (v), and (vi)
above, Executive may not be terminated for Cause unless Executive fails
to cure such breach or failure of performance within thirty (30) days
after written notice of such breach or failure.
(e) For purposes of this Agreement, "Change of Control" means
approval by the shareholders of the Company of a merger or
consolidation of the Company into an unaffiliated entity, the
dissolution or liquidation of the Company, the sale of all or
substantially all of the assets of the Company, the acquisition by any
person, entity, or group of more than 50% of the voting stock of the
Company, or a change in
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a majority of the Company's Board of Directors that was not approved by
the then existing Board of Directors.
8. Confidential Information.
(a) Executive acknowledges that the Company and its affiliates
are continuously developing or receiving Confidential Information (as
defined below), and that during Executive's employment, Executive will
receive Confidential Information from the Company and its affiliates
and will receive special training relating to the Company's and its
affiliates' business methodologies. Executive further acknowledges and
agrees that Executive's employment by the Company creates a
relationship of confidence and trust between Executive and the Company
and its affiliates that extends to all Confidential Information that
becomes known to Executive. Accordingly, Executive will not disclose or
use any Confidential Information, except in connection with the good
faith performance of his duties as an officer and employee, and will
take reasonable precautions against the unauthorized disclosure or use
of Confidential Information. Upon the Company's request, Executive will
execute and comply with a third party's agreement to protect its
confidential and proprietary information. In addition, Executive will
not solicit or induce the unauthorized disclosure or use of a third
party's confidential or proprietary information for the benefit of the
Company or its affiliates.
(b) For purposes of this Agreement, "Confidential Information"
means all written, machine-reproducible, oral and visual data,
information, and material, including, without limitation, business,
financial, and technical information, computer programs, documents, and
records (including those that Executive develops in the scope of his
employment) that (i) the Company and its affiliates, or any of their
respective customers or suppliers treats as confidential or proprietary
through markings or otherwise, (ii) relates to the Company and its
affiliates, or any of their respective customers or suppliers or any of
their respective business activities, products, or services (including
software programs and techniques) and is competitively sensitive or not
generally known in the relevant trade or industry, or (iii) derives
independent economic value from not being known to, and is not
generally ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use. Confidential
Information shall not include information or material that: (A) was in
the public domain prior to the date of this Agreement or subsequently
came into the public domain through no fault of Executive; (B) was
lawfully received by Executive from a third party free of any
obligation of confidentiality; (C) is approved by the Company for
unrestricted public disclosure; or (D) is required to be disclosed in a
judicial or administrative proceeding or by a governmental or
regulatory authority, domestic or foreign.
9. Non Compete; No Solicitation.
(a) Executive understands that, during the course of his
employment by the Company, Executive will have access to and receive
the benefit of Confidential Information (as defined in Section 8) and
special training, as well as come into contact with customers and
potential customers of the Company and its affiliates, which
Confidential Information, training, knowledge, and contacts would
provide invaluable benefits to competitors and potential competitors of
the Company and its affiliates. To protect such entities' interest in
this information and in these contacts and relationships, and in
consideration for the Company entering into this Agreement, Executive
agrees and covenants that for a period beginning on the
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Effective Date of this Agreement and continuing until (i) if Executive
voluntarily resigns or is terminated for Cause, the then remaining term
of this Agreement, or (ii) if Executive is terminated without Cause
pursuant to Section 7(b), the greater of one year or the then remaining
term of this Agreement, Executive will not (without the prior written
consent of the Company), directly or indirectly, (A) engage in any
business that provides the same or competitive products or services as
those provided by the Company and its affiliates (including Incode,
Inc.) in the State of Texas or in any other state in which the Company
or its affiliates (including Incode, Inc.) is conducting or conducts
such business during the term of this Agreement or at the time of
termination of Executive's employment hereunder, or (B) solicit or
encourage or assist other persons or entities to solicit or encourage
any customers of the Company or its affiliates (including Incode, Inc.)
to terminate or materially alter their relationship with the Company or
its affiliates or to become a customer of any other person or entity
competing with the Company or its affiliates, or (C) recruit, solicit
or hire, or encourage or assist other persons or entities to recruit,
solicit or hire, any employees of the Company or its affiliates.
(b) Executive understands and agrees that the foregoing
covenant is reasonable as to time, area, and scope and is necessary to
protect the legitimate business interests of the Company and its
affiliates. It is further agreed that such covenant will be regarded as
divisible and will be operative as to time, area, and scope to the
extent it may be so operative, and if any part of such covenant is
declared invalid, unenforceable, or void as to time, area, or scope,
the validity and enforceability of the remainder will not be affected.
(c) Executive understands and acknowledges that the
determination of damages in the event of a breach of any provision of
this Section 9 would be difficult. Executive agrees that the Company or
its affiliates, in addition to all other remedies it or any of them may
have at law or in equity (and notwithstanding Section 19), will have
the right to injunctive relief if there is a breach without the
necessity of proving the inadequacy or unavailability of damages as an
effective remedy.
10. Proprietary Rights.
(a) Executive will disclose to the Company all works of
authorship and inventions that Executive produces while employed by the
Company, working alone or jointly with others, including all computer
programs, documents, and records, together with all related ideas,
know-how, and techniques. These disclosures will be considered
Confidential Information. All copyrights, patent rights, and other
intellectual property rights in and to works of authorship and
inventions that Executive produces while employed by the Company,
working alone or jointly with others, are intended to be and will be
owned exclusively by the Company, except for such rights, interests,
and works that are not assigned to the Company pursuant to Section
10(b).
(b) Executive assigns to the Company all of his rights in and
to all works of authorship and inventions that Executive produces while
employed by the Company, working alone or jointly with others, and
waives all rights therein. Executive agrees to sign, without additional
compensation, all necessary documents and otherwise assist the Company,
at its expense, to register and enforce all copyrights, patents, and
other intellectual property rights. Executive appoints the Company as
his attorney-in-fact for the sole purpose of executing all necessary
documents relating to the registration or enforcement of any
copyrights, patents, and
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other intellectual property rights produced while employed by the
Company and assigned to the Company in accordance with, and subject to
the restrictions contained in, this Section 10. Notwithstanding the
foregoing, Executive does not assign works of authorship or inventions
which (i) Executive developed on his own time without using the
Company's equipment, facilities, supplies, or Confidential Information,
or (ii) do not relate to either (A) the Company's or its affiliates'
business, (B) the Company's or its affiliates' actual or demonstrably
anticipated research or development, or (C) work done by Executive for
the Company or its affiliates.
(c) The Company can waive the rights in any work of authorship
or invention only through a written instrument signed by an officer of
the Company after Executive has fully and completely disclosed in
writing the existence and nature of that work or authorship or
invention.
11. End of Employment
(a) Executive agrees that all documents of any nature
pertaining to the activities of the Company or its affiliates, or that
include Confidential Information, in his possession now or at any time
during the term of his employment, including, without limitation,
memoranda, notebooks, notes, data sheets, records, and computer
programs, are and shall be the property of the Company and that all
copies thereof shall be surrendered to the appropriate entity upon end
of employment.
(b) Executive authorizes the Company to offset any liquidated
amounts payable or reimbursable to the Company by Executive against,
and to withhold such amounts from, any amounts payable or reimbursable
to Executive by the Company, including, without limitation, any base
salary, bonus, other incentive compensation, and expense reimbursements
to the maximum extent permitted by law.
12. Specific Performance. The parties hereby acknowledge and agree that
the failure of either party to perform the agreements and covenants set forth in
Section 8, Section 9, Section 10, and Section 11 of this Agreement will cause
irreparable injury to the other party for which damages, even if available, may
not be an adequate remedy. Accordingly, each party hereby consents,
notwithstanding Section 19, to the issuance of injunctive relief by any court of
competent jurisdiction to compel performance of such party's obligations and to
the granting by any court of the remedy of specific performance of such
obligations.
13. Continuing Obligations. Executive acknowledges and agrees that the
provisions of Section 8, Section 9, Section 10, and Section 11 will survive the
termination or expiration of this Agreement.
14. Notices. Any notice, consent, demand, or request, or other
communication to be given under this Agreement must be in writing and shall be
deemed given or made when delivered in person or within three (3) days upon
being sent certified mail, postage prepaid with return receipt requested, to the
following addresses:
If to the Company: Tyler Technologies, Inc.
0000 Xxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
If to Executive: Home address of Executive,
as shown on current records of the Company
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15. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the specific subject matter hereof and
supersedes all prior agreements, whether written or oral, between the parties
with respect to the terms and conditions of employment of Executive by the
Company.
16. Modification. Any change or modification of this Agreement shall
not be valid or binding upon the parties, nor will any waiver of any term or
condition in the future be binding, unless the change or modification or waiver
is in writing and signed by all parties hereto.
17. Waiver of Breach. The waiver by the Company of a breach of any
provision of this Agreement by Executive will not operate or be construed as a
waiver of any subsequent breach by Executive.
18. Governing Law. This Agreement is governed by, and will be construed
in accordance with, the substantive laws of the State of Texas, without giving
effect to any conflicts-of-law, rule, or principle that might require the
application of the laws of another jurisdiction.
19. Arbitration. Any controversy, dispute, or claim arising under this
Agreement will be finally settled by arbitration conducted in accordance with
the American Arbitration Association Rules then in effect; provided, however,
that the parties will be obligated to negotiate in good faith for a period of
thirty (30) days to resolve such controversy, dispute, or claim prior to
submitting the same to arbitration. Any such arbitration proceeding will take
place in the City of Dallas, Texas, and the arbitrator will apply the laws of
the State of Texas. Any decision rendered by the arbitrator will be final and
binding and judgment thereon may be entered in any court having jurisdiction or
application thereon may be made to such court for an order of enforcement as the
case may require. The parties intend that this agreement to arbitrate be
irrevocable. If arbitration is invoked in accordance with the provisions of this
Agreement, the prevailing party will be entitled to receive from the other all
costs, fees, and expenses pertaining to or attributable to such arbitration,
including reasonable attorneys' fees.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will constitute one document.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
effective as of the date first written above.
EXECUTIVE TYLER TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
-------------------- ------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx X. Xxxxxx
Title: President and Chief
Executive Officer
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EMPLOYMENT AND NON-COMPETITION AGREEMENT
EXHIBIT A
INCENTIVE COMPENSATION PLAN
Attach copy of the Tyler Technologies, Inc. Incentive Compensation Plan.
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