Pages where confidential treatment has been
requested have the words "Confidential Treatment
Requested" typed at the bottom of the page, and the
appropriate information has been marked with asterisks.
EXHIBIT 10.4
CONSULTING AND EMPLOYMENT AGREEMENT
THIS CONSULTING AND EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of the 23rd day of July, 1996, by and between VIASOFT, Inc., a
Delaware corporation (the "Company"), and ▇▇▇▇ ▇▇▇▇▇▇▇ Schonau, an individual
("Executive").
WITNESSETH:
WHEREAS, the Company desires to retain the services of Executive, and
Executive desires to be employed by the Company, following fulfillment of
certain commitments to his present employer, on the terms and conditions of this
Agreement;
WHEREAS, the Company desires to receive certain consulting services
from Executive prior to the commencement of his employment and Executive and his
current employer are willing for Executive to provide such consulting services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the Company and Executive, intending
to be legally bound, hereby agree as follows:
1. Consulting Services. For a period commencing on the date of this
Agreement through the Employment Date defined below (the "Consulting Term"),
Executive shall provide to the Company upon request at mutually agreed times
consulting services related to finance, accounting, shareholder relations and
such other matters as consultant and the Company's Chief Executive Officer
("CEO") shall agree from time to time. Company shall pay Executive a Five
Thousand Dollar ($5,000) lump sum payment on the Employment Date for the
services to be performed during the Consulting Term.
2. Employment. Effective on the last to occur of September 15, 1996 or
one (1) business day after the effective date of the currently-pending merger
between Cycare Systems, Inc. and HBOC of Georgia (the "Employment Date"), the
Company shall employ Executive as Vice President of Finance and Administration,
Treasurer and Chief Financial Officer of the Company, and Executive accepts such
employment and agrees to perform services for the Company, subject always to
such resolutions as are established from time to time by the Board of Directors
of the Company, for the period and upon the other terms and conditions set forth
in this Agreement.
3. Term of Employment. The term of Executive's employment hereunder
shall commence on the Employment Date, and shall continue until this Agreement
is terminated by either party, for any reason whatsoever, this being an "at
will" employment agreement, provided that Sections 6 and 10 of this Agreement
shall govern the amount of any compensation to be paid to Executive upon
termination of this Agreement.
4. Position and Duties.
4.1 Service with the Company. Commencing on the Employment
Date and thereafter during the term of this Agreement, Executive agrees to
perform such executive employment duties as the Company's CEO shall assign to
him from time to time, provided such duties are not inconsistent with his
position with the Company as described in Section 2 hereof.
4.2 No Conflicting Duties. During the term hereof, Executive
shall not serve as an officer, director, employee, consultant or advisor to any
other business (other than to Executive's current employer, Cycare Systems,
Inc., during the Consulting Term) without the prior written consent of the
Company's Board of Directors. Executive hereby confirms that he has disclosed
this Agreement to his current employer, he is under no contractual commitments
inconsistent with his obligations set forth in this Agreement, and that during
the term of this Agreement, he will not render or perform services, or enter
into any contract to do so, for any other corporation, firm, entity or person
which are inconsistent with the provisions of this Agreement.
5. Compensation.
5.1 Base Salary. As compensation for all services to be
rendered by Executive under this Agreement, the Company shall pay to Executive,
commencing on the Employment Date, a base annual salary at the rate of One
Hundred Sixty Thousand Dollars ($160,000) per year (the "Base Salary"), which
shall be paid on a regular basis in accordance with the Company's normal payroll
procedures and policies. The amount of the Base Salary shall be subject to
periodic review by the Board of Directors or a committee thereof.
5.2 Bonuses. Executive shall be eligible for an initial bonus for the
current fiscal year in accordance with the terms and conditions of the bonus
plan attached hereto as Exhibit A; *****************************************
************. If the Company adopts bonus plans for future periods for senior
vice-presidential level management of the Company, Executive shall be in the
class of employees eligible to participate therein; provided, that all specific
bonus awards remain subject to approval of the Board of Directors or a committee
thereof.
5.3 Stock Options. The Board of Directors of the Company will
grant to
2
"CONFIDENTIAL TREATMENT REQUESTED"
Executive "nonqualified stock options" to purchase up to seventy thousand
(70,000) shares of the Company's common stock at an exercise price of Thirty-one
and 75/100 Dollars ($31.75) per share. Such options shall be granted pursuant to
the Company's 1994 Equity Incentive Plan (the "Plan") and award agreements in
the form attached hereto as Exhibit B setting forth such terms and conditions as
the Board deems appropriate, including without limitation vesting conditions and
restrictions on transfer of such stock. The vesting conditions shall be as
follows: Provided that Executive is an employee of the Company on the applicable
vesting date, (i) twenty-five percent (25%) of the option shares shall vest on
the first anniversary date of this Agreement and the remaining seventy-five
percent (75%) of the option shares shall vest ratably on a quarterly basis over
the three (3) years following the first anniversary date of this Agreement so
that all shares will have vested on the fourth anniversary date of this
Agreement.
5.4 Participation in Benefit Plans. Executive shall be
included to the extent eligible thereunder in any and all plans of the Company
providing general benefits for the Company's employees, including but not
limited to insurance, employee stock purchase plan, 401(k) plan, sick days, and
holidays. Executive's participation in any such plan or program shall be subject
to the provisions, rules and regulations applicable thereto. Executive shall
also be entitled to three (3) weeks paid vacation per year for his first (1st)
thirty-six (36) months of employment with the Company and thereafter, if any
member of the senior vice-presidential level management of the Company receives
four (4) weeks' paid vacation per year upon attaining a specified tenure,
Executive will receive four (4) weeks of paid vacation upon attaining such
tenure.
5.5 Business Expenses. In accordance with the Company's
policies established from time to time, the Company will pay or reimburse
Executive for all reasonable and necessary out-of-pocket expenses incurred by
him in the performance of his duties under this Agreement, subject to the
presentment of appropriate documentation in accordance with standard Company
policies.
5.6 Change of Control. In the event the Board of Directors or
a committee thereof approves a severance benefit for senior vice-president level
management of the Company (other than the Executive Vice-President) that becomes
effective in the event of a Change of Control of the Company (as defined in the
Plan), Executive shall receive a benefit which is no less than the largest
benefit given to any member of such class of management.
6. Compensation Upon the Termination of Executive's Employment by the
Company.
6.1 In the event that Executive's employment is terminated
pursuant to Section 10.1 (Disability), 10.3 (Cause), or 10.4 (Resignation), then
Executive shall be entitled to receive Executive's then current monthly Base
Salary through the date his employment is terminated, but no other compensation
of any kind or amount.
3
6.2 In the event Executive's employment is terminated pursuant
to Section 10.2 (Death), Executive's beneficiary or a beneficiary designated by
Executive in writing to the Company, or in the absence of such beneficiary,
Executive's estate, shall be entitled to receive Executive's then current
monthly Base Salary through the end of the month in which his death occurs, but
no other compensation of any kind or amount.
6.3 In the event Executive is terminated by the Company
pursuant to Section 10.5 (Without Cause) or 10.6 (Good Reason), the Company
shall (i) pay to Executive, as a severance allowance, his then current monthly
Base Salary for the six (6) month period following the date of termination, (ii)
maintain in full force and effect health insurance for the Executive until the
first to occur of his attainment of alternative employment or six (6) months
following the termination date of his employment hereunder, and (iii) pay no
other compensation of any kind or amount. Further, in the event the Board of
Directors or a committee thereof approves a severance benefit longer than six
(6) months (other than in the event of a Change of Control) for any member of
the senior vice-president level management of the Company (other than the
Executive Vice-President), Executive's foregoing severance benefit will be
extended to such longer term.
All payments required to be made by the Company to Executive pursuant
to this Section 5 shall be paid in the manner and at the times specified in
Section 4.1 hereof.
7. Confidentiality and Proprietary Information. Executive shall execute
and deliver a Confidentiality and Proprietary Information Agreement in the form
of Exhibit C attached hereto on or before the Employment Date (the
"Confidentiality Agreement") and agrees that he shall be bound by the terms and
conditions set forth in the Confidentiality Agreement during the Consulting Term
to the same extent as if he were an employee of the Company. In the event that
the Employment Date does not occur, Executive's obligations set forth in the
Consulting Agreement shall survive termination of this Agreement in the manner
and to the extent set forth therein regarding termination of employment.
8. Ventures. If, during the term of this Agreement, Executive is
engaged in or associated with the planning or implementing of any project,
program or venture involving the Company and a third party or parties, all
rights in the project, program or venture shall belong to the Company and shall
constitute a corporate opportunity belonging exclusively to the Company. Except
as approved by the Company's Board of Directors, Executive shall not be entitled
to any interest in such project, program or venture or to any commission,
finder's fee or other compensation in connection therewith other than the salary
to be paid to Executive as provided in this Agreement.
4
9. Non-Competition; Solicitation of Customers and Solicitation of
Employees.
9.1 Non-Competition.
(a) Executive agrees that, during the period of his employment
hereunder and for a period of six (6) months following the termination of his
employment with the Company for any reason, he shall not, directly or
indirectly, engage in competition with the Company within any state in the
United States, or any country, in which the Company is then conducting its
business (the "Territory") in any manner or capacity (e.g., as a management
consultant, principal, partner, officer, director, stockholder or management
employee) in any phase of the Company's business as then being conducted.
(b) Ownership by Executive, as a passive investment, of less
than 1% of the outstanding shares of capital stock of any corporation listed on
a national securities exchange or publicly traded in the over-the-counter market
shall not constitute a breach of this Section 9.
(c) Executive further agrees that, during the term of this
Agreement and for six (6) months after its termination, he will not, directly or
indirectly, assist or encourage any other person in carrying out, directly or
indirectly, any activity that would be prohibited by the above provisions of
this Section 9 if such activity were carried out by Executive, either directly
or indirectly, and in particular Executive agrees that he will not, directly or
indirectly, induce any employee of the Company to carry out, directly or
indirectly, any such activity.
9.2 Agreement Not to Solicit Customers. Executive agrees that
during his employment by the Company hereunder and for the period in which a
covenant not to compete is in effect hereunder as to Executive, he will not,
either directly or indirectly, on his own behalf or in the service or on behalf
of others, solicit, divert or appropriate, or attempt to solicit, divert or
appropriate, to any competing business (i) any person or entity whose account
with the Company was sold or serviced by the Company during the year preceding
the termination of such employment, or (ii) any person or entity whose account
with the Company has been directly solicited at least twice by the Company
within the eighteen (18) month period prior to the date of termination of
employment.
9.3 Agreement Not to Solicit Employees. Executive agrees that
during his employment by the Company hereunder and for the three (3) year period
following the termination of such employment for any reason or no reason, he
will not, either directly or indirectly, on his own behalf or in the service or
on behalf of others solicit, divert or hire away, or attempt to solicit, divert
or hire away any person then employed by the Company or then serving as a sales
representative or distributor of the Company.
5
10. Termination.
10.1 Disability. Executive's employment shall terminate upon
Executive's becoming totally or permanently disabled for a period of three (3)
months or more. For purposes of this Agreement, the term "totally or permanently
disabled" or "total or permanent disability" means Executive's inability on
account of sickness or accident, whether or not job-related, to engage in
regularly or to perform adequately his assigned duties under this Agreement. A
reasonable determination by the Board of Directors of the existence of a
disability shall be conclusive for all purposes hereunder. In making such
determination of disability, the Board of Directors may utilize such advice and
consultation as the Board of Directors deems appropriate, but there is no
requirement of procedure or formality associated with the making of a
determination of disability.
10.2 Death of Executive. Executive's employment shall
terminate immediately upon the death of Executive.
10.3 Termination for Cause. The Company may terminate
Executive's employment at any time for "Cause" (as hereinafter defined)
immediately upon written notice to Executive. Such written notice shall set
forth with reasonable specificity the Company's basis for such termination. As
used herein, the term "Cause" shall mean the occurrence of any of the following:
(i) Executive's gross and willful misconduct which is
injurious to the Company;
(ii) Executive's engaging in fraudulent or dishonest
conduct with respect to the Company's business or in conduct of a criminal
nature or acts of serious moral turpitude that may have an adverse impact on the
Company's standing and reputation;
(iii) the continued and unjustified failure or
refusal by Executive to perform the duties required of him by this Agreement or
to adhere to written Company policy, which failure or refusal shall not be cured
within fifteen (15) days following receipt by Executive of written notice from
the Company specifying the factors or events constituting such failure or
refusal;
(iv) Executive's use of drugs and/or alcohol in
violation of then current Company policy; or
(v) Executive's breach of his obligation under
Section 4.2 hereof or under the Confidentiality Agreement which, if capable of
cure, shall not be cured within fifteen (15) days after written notice thereof
to Executive.
6
10.4 Resignation. Executive's employment shall be terminated
on the earlier of the date that is three (3) months following the written
submission of Executive's resignation to the Board or the earlier date such
resignation is accepted by the Company.
10.5 Termination Without Cause. The Company may terminate
Executive's employment without cause upon written notice to Executive.
Termination "without cause" shall mean termination of employment on any basis
other than termination of Executive's employment hereunder pursuant to Sections
10.1, 10.2, 10.3, 10.4 or 10.6.
10.6 Resignation for Good Reason. Executive's employment shall
be terminated on the date he submits written notice to the Board of his
resignation for Good Reason. For purposes of this Agreement, Good Reason shall
mean the occurrence of any of the following:
(i) The Company's failure to elect or reelect or to
appoint or reappoint Executive to offices, titles or positions carrying
comparable authority, responsibilities, dignity, and importance to that of
Executive's offices and positions as of the Employment Date;
(ii) Material change by the Company in Executive's
function, duties or responsibilities (including reporting responsibilities)
which would cause Executive's position with the Company to become of less
dignity, responsibility and importance than those associated with his functions,
duties or responsibilities as of the Employment Date;
(iii) Executive's Base Salary is reduced by the
Company or there is a material reduction in the benefits that are in effect for
the Executive on the Employment Date, and comparable reductions have not been
made in salary or benefits of the other members of senior vice-presidential
level management of the Company;
(iv) Except with Executive's prior written consent,
relocation of Executive's principal place of employment to a location outside of
Maricopa County, Arizona;
(v) The failure by the Company to obtain the
assumption by operation of law or otherwise of this Agreement by any entity
which is the surviving entity in any merger or other form of corporate
reorganization involving the Company or by any entity which acquires all or
substantially all of the Company's assets; or
(vi) Other material breach of this Agreement by the
Company, which breach is not cured within fifteen (15) days after written notice
thereof is received by the Company.
10.7 Termination prior to Employment Date. Either Executive or
the Company may terminate this Agreement upon written notice to the other if the
Employment Date shall not have occurred on or before September 30, 1996.
Executive may terminate this Agreement upon
7
written notice to the Company prior to the Employment Date if Executive shall
determine in good faith that such termination is required to fulfill his
fiduciary duties to Cycare Systems, Inc. No compensation of any kind or amount
shall be payable by the Company to Executive in the event of termination of this
Agreement by either party under this Section 10.7, including the lump sum
payment to Executive described under Section 1 above.
10.8 Surrender of Records and Property. Upon termination of
his employment with the Company, Executive shall deliver promptly to the Company
all records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof, which are the
property of the Company and which relate in any way to the business, products,
practices or techniques of the Company, and all other property, trade secrets
and confidential information of the Company, including, but not limited to, all
documents which in whole or in part contain any trade secrets or confidential
information of the Company, which in any of these cases are in his possession or
under his control.
11. Assignment. This Agreement shall not be assignable, in whole or in
part, by either party without the written consent of the other party, except
that the Company may, without the consent of Executive, assign its rights and
obligations under this Agreement to any corporation, firm or other business
entity (i) with or into which the Company may merge or consolidate, (ii) to
which the Company may sell or transfer all or substantially all of its assets or
(iii) which controls, is controlled by or is under common control with, the
Company, where control means the ownership of 50% or more of the equity
investment and of the voting power of an entity. Upon such assignment by the
Company, the Company shall obtain the assignees' written agreement enforceable
by Executive to assume and perform, from and after the date of such assignment,
the terms, conditions, and provisions imposed by this Agreement upon the
Company. After any such assignment by the Company and such written agreement by
the Assignee, the Company shall be discharged from all further liability
hereunder and such assignee shall thereafter be deemed to be the Company for the
purposes of all provisions of this Agreement including this Section 11.
12. Injunctive Relief. Executive agrees that it would be difficult to
compensate the Company fully for damages for any violation of the provisions of
this Agreement, including without limitation the provisions of Sections 7, 9 and
10.8. Accordingly, Executive specifically agrees that the Company shall be
entitled to temporary and permanent injunctive relief to enforce the provisions
of this Agreement. This provision with respect to injunctive relief shall not,
however, diminish the right of the Company to claim and recover damages in
addition to injunctive relief.
13. Dispute Resolution. If there shall be any dispute between the
Company and Executive (i) in the event of any termination of Executive's
employment by the Company, whether such termination was for Cause, or (ii) in
the event of any termination of employment by Executive, whether Good Reason
existed, or (iii) otherwise under any agreement between Company and Executive,
the dispute shall be resolved in accordance with the dispute resolution
8
procedures set forth in Exhibit D hereto, the provisions of which are
incorporated as a part hereof, and the parties hereto hereby agree that such
dispute resolution procedures shall be the exclusive method for resolution of
disputes under this Agreement. Notwithstanding anything herein to the contrary,
nothing in this Section 13 or Exhibit D shall preclude any party from seeking
interim or provisional relief, in the form of a temporary restraining order,
preliminary injunction or other interim equitable relief concerning a dispute,
either prior to or during any of the negotiations or proceedings provided for
herein, if deemed necessary by a party, in its discretion, to protect the
interests of such party. Further, this Section 13 shall be specifically
enforceable. IT IS EXPRESSLY UNDERSTOOD THAT BY SIGNING THIS AGREEMENT, WHICH
INCORPORATES BINDING ARBITRATION, THE COMPANY AND EXECUTIVE AGREE TO WAIVE COURT
OR JURY TRIAL AND TO WAIVE PUNITIVE, STATUTORY, CONSEQUENTIAL AND ANY DAMAGES,
OTHER THAN COMPENSATORY DAMAGES.
14. Miscellaneous.
14.1 Governing Law. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of Arizona.
14.2 Prior Agreements. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
all prior agreements and understanding with respect to such subject matter, and
the parties hereto have made no agreements, inducements, representations or
warranties relating to the subject matter of this Agreement which are not set
forth herein or in other contemporaneous written agreements.
14.3 Withholding Taxes. The Company may withhold from any
benefits payable under this Agreement all federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.
14.4 Amendments. No amendment, modification or rescission of
this Agreement shall be deemed effective unless made in writing signed by the
parties hereto.
14.5 No Waiver. No term or condition of this Agreement shall
be deemed to have been waived nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
14.6 Severability. To the extent any provision of this
Agreement shall be invalid or unenforceable, it shall be considered deleted here
from and the remainder of such provision and
9
of this Agreement shall be unaffected and shall continue in full force and
effect. In furtherance and not in limitation of the foregoing, should the
duration or geographical extent of, or business activities covered by any
provision of this Agreement be in excess of that which is valid and enforceable
under applicable law, then such provision shall be construed to cover only that
duration, extent or activities which may validly and enforceably be covered.
Executive acknowledges the uncertainty of the law in this respect and expressly
stipulates that this Agreement shall be given the construction which renders its
provisions valid and enforceable to the maximum extent (not exceeding its
express terms) possible under applicable law.
14.7 Survival. Sections 8, 9 and 10.8 shall survive
termination of this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first set forth above.
VIASOFT, Inc.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Its President
-----------------------------------
"THE COMPANY"
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ Schonau
"EXECUTIVE"
10
[VIASOFT LOGO] FY97 INCENTIVE PLAN
Employee: ▇▇▇▇ ▇▇▇▇▇▇▇
--------
Position: Vice President, Finance & Administration/CFO
--------
Region: Corporate
------
Effective Date: Date of Employment per Consulting and Employment
-------------- Agreement
Territory or Geographic Scope:
------------------------------
All territories that encompass VIASOFT consolidated.
Incentive Compensation:
-----------------------
1. Quarterly Company Performance Bonus Target: $*****
A quarterly bonus will be paid if VIASOFT meets or exceeds its Income Before
Taxes (IBT) objective for the quarter. If IBT is below plan for the quarter,
there will be no bonus paid. Missed quarterly bonuses cannot be recovered in
future quarters. Bonuses will be prorated if participation begins within a
quarter.
2. Annual Company Performance Bonus Target: $*****
A bonus will be paid based on taking VIASOFT's annual IBT (Income Before Taxes)
attainment and applying it against the budgeted IBT (Profit Attainment
Percentage). Bonuses will be paid according to the following table. If IBT is
85% below plan for the year, there will be no bonus paid. Bonuses will be
prorated if participation begins within the fiscal year.
If Profit Attainment Percentage is less than 85%, the bonus is zero.
If Profit Attainment Percentage is greater than 85% and less than 90%,
the bonus is the Profit Attainment Percentage multiplied by (Target
Bonus X 0.5).
If Profit Attainment Percentage is greater than 90% and less than 105%,
the bonus is the Profit Attainment Percentage multiplied by the Target
Bonus.
If Profit Attainment Percentage is greater than 105% and less than
130%, the bonus is the Profit Attainment Percentage multiplied by
(Target Bonus X 1.25).
If Profit Attainment Percentage is greater than 130%, the bonus is the
Profit Attainment Percentage multiplied by (Target Bonus X 1.5).
Example: IBT performance at 110% will result in a bonus of $ **** (110% X $****
X 1.25).
Resolution:
-----------
Any questions, disputes, or ambiguities that arise hereunder will be
conclusively resolved by the President/CEO at his sole discretion. Any required
interpretations of this plan will be made by the President/CEO at his sole
discretion.
EXHIBIT A
"CONFIDENTIAL TREATMENT REQUESTED"
FY97 Vice President, Finance & Administration/CFO Incentive Plan for ▇▇▇▇
▇▇▇▇▇▇▇ Page 2
Payment of Bonuses:
-------------------
Bonuses are earned on the last day of the fiscal quarter, or year, to which they
are applicable. The employee must be actively employed as Vice President,
Finance & Administration/CFO when the bonus is earned to receive any bonuses.
Quarterly bonuses are paid on the last pay period of the month following the end
of the fiscal quarter in which the bonus is earned. For example, a bonus earned
at the completion of the first quarter (September 30) would be paid in the last
pay period in October. The annual company performance bonus is paid on the first
pay period following the completed annual audit.
Not an Employment Agreement:
----------------------------
Nothing in this incentive plan is intended to or does create terms of a contract
of employment between any employee and VIASOFT, nor shall anything in this
incentive plan restrict the right of VIASOFT to terminate an employee's
employment at any time. Employees to whom this incentive plan applies are
employed by VIASOFT on an "at-will" basis, and have no guarantee of continued
employment for any period of time. VIASOFT may terminate such employees at any
time without cause, without reason, and without prior notice.
The terms of this incentive plan only apply during VIASOFT's fiscal year
commencing July 1, 1996, and ending June 30, 1997, and shall have no effect
whatsoever in any other period. This plan replaces any and all plans in effect
prior to July 1, 1996.
In the event of employment termination (voluntary or involuntary) during the
stated plan period, the employee will be paid any earned commissions and bonuses
in accordance with this plan and applicable state and federal laws. VIASOFT
reserves the right to withhold any commission or bonus payments if VIASOFT has
not yet received payment by the customer for that sale.
VIASOFT reserves the right to change, amend, or separate any employee from this
plan at any time and for any reason, including (without limitation) changes in
business conditions, corporate objectives, or an individual's performance. This
can be done without prior notice.
No participant will have any right to money accrued through the plan unless and
until all terms, provisions, or conditions, as set forth in this plan, have been
met.
Employee Acknowledgment and Agreement:
--------------------------------------
I acknowledge that I have received, read, understand and agree to the terms and
conditions of this plan.
------------------------------------------- -----------------------
▇▇▇▇ ▇▇▇▇▇▇▇ DATE
NON-QUALIFIED STOCK OPTION AGREEMENT
VIASOFT, Inc., a Delaware corporation (the "Company"), hereby grants to
▇▇▇▇ ▇▇▇▇▇▇▇ Schonau (the "Optionee") an Option to purchase a total of seventy
thousand (70,000) shares of Common Stock, at the price determined as provided
herein, and in all respects subject to the terms, definitions and provisions of
the 1994 Equity Incentive Plan (the "Plan") of the Company.
The Plan and each of its terms and conditions are incorporated herein by
reference. The terms defined in the Plan shall have the same defined meanings
herein.
1. Nature of the Option. This Option is a Non-Qualified Stock Option
within the meaning of the Plan and is not intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Code.
2. Exercise Price. The exercise price is $31.75 for each share of
Common Stock.
3. Exercise of Option. This Option shall be exercisable during its term
in accordance with the provisions of the Plan as follows:
(i) Term of Option. Notwithstanding any other provision to the
contrary, this Option may not be exercised more than six (6) years from the date
of grant of this Option, shall expire automatically at the close of business of
the Company on the sixth anniversary of such date of grant and may be exercised
during such term only in accordance with the Plan and the terms of this Option.
(ii) Vesting Schedule. Subject to the terms and conditions of this
Agreement and the Plan, twenty-five percent (25%) of the total number of shares
subject to this Option shall become exercisable on the first (1st) anniversary
of the Effective Date, and cumulatively thereafter, 6.25% of the shares subject
to this Option shall become exercisable at the end of each three-month period
during the term of this Agreement until all shares subject to this Option have
become exercisable on the fourth (4th) anniversary of the Effective Date.
(iii) Termination. Notwithstanding any other provision of this
Agreement to the contrary, this Option shall be subject to the following
provisions:
(a) If Optionee's employment is terminated due to (i)
Disability, (ii) Retirement, or (iii) for any other reason or no reason,
Optionee may exercise this Option, only to the extent that this Option would
have been exercisable on the Termination Date; provided, that such exercise is
made prior to the earlier of (i) the expiration of three (3) months (six (6)
months in the case of Disability) after the Termination Date or (ii) the
expiration date of the Option set forth in this Agreement. The exercise of this
Option after termination of Optionee's employment pursuant to this paragraph (a)
shall be subject to the satisfaction of the conditions precedent that (A) the
Optionee shall not have breached any agreement with the Company providing for
noncompetition or nonsolicitation of employees or customers and (B) the Optionee
shall not have conducted himself in a manner adversely affecting the Company in
the determination of its Board of Directors.
(b) If Optionee dies before this Option expires pursuant to
this Agreement, then this Option may be exercised, only to the extent that this
Option would have been exercisable on the date of the Optionee's death; provided
that such exercise is made prior to the earlier of (i) the first anniversary of
Optionee's death or (ii) the expiration date of the Option set forth in this
Agreement. Upon Optionee's death, this Option may be exercised by the
Participant's legal representative or representatives, to the extent so
exercisable.
(c) This Option shall terminate to the extent not exercised in
accordance with (a) and (b) of this Section 3(iii), if applicable.
EXHIBIT B
(iv) This Option may not be exercised for a fraction of a share.
(v) Method of Exercise. This Option shall be exercisable by written
notice which shall state the election to exercise the Option and the number of
Shares in respect of which the Option is being exercised. Such written notice
shall be made together with payment of the full exercise price in the manner
provided herein and in accordance with the terms hereof, shall be signed by
Optionee and shall be delivered in person or by certified mail to the President,
Secretary or Chief Financial Officer of the Company. No shares will be issued
pursuant to the exercise of any Option unless such issuance and such exercise
shall comply with all relevant provisions of law and the requirements of any
stock market or exchange upon which the Shares may then be listed.
4. Method of Payment. Payment of the exercise price shall be made (i)
by cash or check or (ii) at the discretion of the Committee, by any of the
methods set forth in Article 11 of the Plan.
5. Restrictions on Exercise. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations (Regulation G) as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
6. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent and distribution and
may be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee. Optionee may not assign any interest in the
Option to any person or pledge or hypothecate the Option in any way.
7. Taxation Upon Exercise of Option. Optionee understands that, upon
exercise of this Option, Optionee will recognize income for tax purposes in an
amount equal to the excess of the then fair market value of the Stock over the
exercise price. The Company will be required to withhold tax from Optionee's
current compensation with respect to such income; to the extent that Optionee's
current compensation is insufficient to satisfy the withholding tax liability,
Optionee shall be required to remit the amount of such liability to the Company
as a condition of exercise of this Option.
8. Not an Employment Agreement. Optionee is an employee at will of the
Company and may be terminated at any time with or without cause. Nothing in this
or any other agreement with the Company shall imply or be construed as a promise
or guarantee of continued employment for any period, including without
limitation, any period of time required for full vesting or exercise of rights
under this Agreement.
9. Governing Law. The Plan and this Option granted thereunder are
governed by, and shall be interpreted according to, the laws of the State of
Delaware.
10. Acceptance of Option. By acceptance of this Option (i) Optionee
acknowledges receipt of a copy of the Plan, a copy of which is annexed hereto,
and represents that Optionee is familiar with the terms and provisions thereof,
(ii) agrees that this Option represents a binding agreement between Optionee and
the Company and accepts this Option subject to all of the terms and provisions
of the Plan and this Option, and (iii) agrees to accept as binding, conclusive
and final all decisions or interpretations of the Committee upon any questions
arising under the Plan.
DATE OF GRANT: July 23, 1996
VIASOFT, INC. ACCEPTED:
_____________________________ ____________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President ▇▇▇▇ ▇▇▇▇▇▇▇ Schonau
"Company" "Optionee"
CONSENT OF SPOUSE
I, the undersigned, spouse of ▇▇▇▇ ▇▇▇▇▇▇▇ Schonau, have read and
approve the foregoing Non-Qualified Stock Option agreement. In consideration of
the granting of the right to my spouse to purchase shares of Viasoft, Inc. as
set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact
with respect to the exercise of any rights under the Agreement and agree to be
bound by the provisions of the Agreement insofar as I may have any rights in
said Agreement or any shares issued pursuant thereto under the community
property laws of the State of Arizona or similar laws relating to marital
property in effect in the state of our residence as of the date of the signing
of the foregoing Agreement or otherwise.
Dated as of July 23, 1996.
______________________________________
VIASOFT, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
EXERCISE FORM
I desire to exercise my vested Options to purchase _____ shares of
Common Stock at _______ per share, for a total purchase price of $_______,
pursuant to my Non-Qualified Stock Option Agreement dated ____________________.
Enclosed is payment in full by [ ] cash [ ] cashier's check [ ] bank
draft [ ] money order [ ] other (describe) _______________.
I have, or have been given access to, all information necessary for me
to make an informed decision as to the advisability of investing in the
Company's stock, and I have the skill and experience necessary to make such
decision.
Dated: _______________.
Signature: _____________________________
Print full name: _____________________________
Social Security No.: _____________________________
EMPLOYMENT CONFIDENTIALITY
--------------------------
AND
---
PROPRIETARY INFORMATION AGREEMENT
---------------------------------
This Agreement is entered into today,________________, 1996 between
VIASOFT, Inc., a Delaware corporation (together with any subsidiaries, jointly
and severally the "Company"), and ▇▇▇▇ ▇▇▇▇▇▇▇ Schonau ("you") as employee.
Definitions of many of the capitalized terms contained in this
Agreement are provided in section 4 (a) below, and you should refer to them for
a full understanding of the provision.
General Principles
------------------
The Company is involved in a highly competitive industry. The success
of the Company's business depends upon safeguarding its Proprietary Information.
Unless conscientiously safeguarded, the Company's Proprietary Information will
lose its unique competitive value to the Company.
You are about to be employed by the Company. You are about to occupy a
position of trust and confidence due to your employment with the Company.
During your employment with the Company, you will have access to the
Company's Proprietary Information, or may develop or may work on the development
of Proprietary Information.
ACCORDINGLY, in consideration of your employment by the Company, the
general principles and covenants contained in this Agreement, and other good and
valuable consideration the receipt and sufficiency of which you and Company
acknowledge, and in recognition of the position of trust and confidence that you
will occupy due to your employment with the Company, the parties agree as
follows:
1. Safeguarding Proprietary Information and Other Company Documents and
Materials.
(a) Ownership; Nondisclosure. All Proprietary Information of
the Company received by you is the exclusive property of the Company. During
your employment or at any later time, you may not use for your own or other's
benefit or purposes, or disclose or communicate to any Person, directly or
indirectly, any Proprietary Information of any kind concerning any matters
affecting or relating to the Company or its business, EXCEPT as strictly
required to carry out the internal business of the Company consistently with its
policies, or as expressly authorized in writing in advance on behalf of the
Company.
(b) Third Parties' Rights. You agree not to use or disclose to
the Company, or induce or cause the Company to use, any Proprietary Information
belonging to any Person without the prior written consent of that Person. If you
use your own Inventions, Trade Secrets or other Proprietary Information, you
will automatically confer on the Company the unrestricted right to use freely
all of those matters used.
(c) Use and Return of Information, Documents and Things. You
agree that all information, documents and things (including, but not limited to,
printouts, disks, tapes, programs, documentation, reports, records, notes,
supplies, equipment, drawings, designs, and all business, product, marketing and
sales information) which you make or which come into your possession or control
by reason of your employment are the property of the Company. You will not use
them in any way except in the regular course of the Company's internal business
and consistent with its policies and you will return them to the Company
promptly upon any termination of your employment. You will not deliver,
reproduce, or in any way allow any information documents or things to be
delivered or used by any Person without specific direction or consent of the
Company. You will not take or retain originals or copies of any information,
documents or things of the Company.
EXHBIIT C
(d) Other Obligations. You acknowledge that the Company from
time to time may have agreements with other Persons including the U.S.
Government, or agencies thereof, which impose obligations or restrictions on the
Company regarding Proprietary Information or regarding the confidential nature
of their work. You agree to be bound by all such obligations and restrictions
and to take all action necessary to discharge the obligations of the Company
thereunder, including signing such confidentiality agreements as may be required
by other Persons as a condition to the Company obtaining or using Proprietary
Information.
2. Best Efforts, Company Policies, Unfair Competition.
(a) Best Efforts and Unfair Competition. You agree to devote
your full time and best efforts to the interests of the Company. Without prior
written consent of the Company, during the period of your employment, you will
not engage in other employment or business activity adverse to or competitive
with the Company, or which so occupies your attention that it will interfere
with the proper performance of your work for the Company. You further agree not
to use any Proprietary Information or other property of the Company to compete
with the Company during or after employment.
(b) Company Policies. You agree to abide by all Company
policies, guidelines, rules and regulations, including but not limited to, any
policies on Proprietary Information, confidentiality and conflicts of interest,
as they are issued and updated from time to time.
(c) Customers and Employees. You agree that you shall not for
a period of six (6) months immediately following the termination of your
employment with the Company for any reason, whether with or without cause,
either directly or indirectly; (1) call on, solicit, or take away any of the
Customers of the Company either for yourself or for any other Person, or (2)
solicit or take away any employees of the Company either for yourself or for any
other Person.
3. Intellectual Property Rights.
(a) Assignment. You agree that any Intellectual Property which
you conceive, create or reduce to practice while employed by the Company, either
alone or with the help of others, belongs to the Company if it (i) is made by
use of the Company's property, staff, facilities, or Proprietary Information or
on Company time, (ii) relates to the Company's actual or anticipated business,
research or development, or (iii) results from, or is suggested by, any work
which you perform for the Company, and you hereby assign all right, title and
interest in this Intellectual Property to the Company or its nominee. You also
agree that the Company has the right (but not the obligation) to patent,
copyright, keep as a trade secret or otherwise deal with this Intellectual
Property as the Company chooses. You agree to assign to the Company or its
nominee all rights which you may possess in any Intellectual Property regardless
of where or how created where the Company is required to grant those rights to
the United States Government or any of its agencies.
If any Intellectual Property relating in any manner to the actual or
anticipated business, research or development of the Company is disclosed by you
to any Person within six (6) months after the end of your employment by the
Company, it shall be conclusively presumed that such Intellectual Property was
conceived or resulted from developments made during the period of your
employment by the Company and you agree that any such Intellectual Property will
belong to the Company. You agree that any patent application filed within six
(6) months after termination of your employment shall be conclusively presumed
to relate to an Invention made during the term of your employment. All works of
authorship which you create under this section 3(a) are intended to be and will
be deemed "works for hire" within the copyright laws, meaning that the Company
will be the owner of the copyrights.
(b) Disclosure. To permit the Company to claim rights to which
it may be entitled under this Agreement, you agree to disclose promptly and in
writing to the Company, in confidence, all Intellectual Property which you
(alone or with others) conceive, make or create during the course of your
employment, whether or not you consider it patentable or otherwise protectable.
You agree that this Intellectual Property will be deemed Company Proprietary
Information subject to this Agreement for purposes of your nondisclosure
obligations under Section 1(a) beginning on the date of its conception or
creation. You agree to keep current and complete records concerning all
Intellectual Property which you develop (which records shall be Company's
property) and to deliver the records to the Company on request.
(c) Assistance. You agree, at any time during or after your
employment, on request of the Company and at the Company's expense, to execute
specific assignments in favor of the Company or its nominee of any of the
Intellectual Property covered by this Section 3, and to execute all papers and
perform all lawful acts the Company considers necessary for the procurement,
protection from infringement, and enforcement of patent or copyrights of the
United States and foreign countries or other forms of protection and for the
transfer of any interest you may have in such patents, copyrights or other forms
of protection to the Company or its nominee. You agree, at any time during your
employment or afterwards, on the request of the Company, to execute all
documents and assist at the Company's expense in the preservation or exercise of
all of the Company's interests arising under this Agreement.
(d) Your Rights; Rights of First Refusal. You will retain all
rights to any Intellectual Property not belonging to or assignable to the
Company under this Section 3; provided, however, that you will offer to the
Company a right of first refusal to purchase, license or otherwise acquire
rights in your Intellectual Property on the same basis as you offer the bona
fide opportunity to any other Person. The Company will have ninety (90) days
following receipt (the "Exercise Period") of written notice from you of an
opportunity to purchase, license or otherwise acquire rights in any of your
Intellectual Property setting forth the terms and conditions of the bona fide
offer ("Notice of Offer") in which to give written notice to you of its election
to acquire those rights.
If the Company fails to exercise this right of first refusal
within the Exercise Period, you will be free to sell, license, or otherwise
transfer rights to your Intellectual Property to the other Person, but only on
the same terms and conditions as set forth in the Notice of Offer; provided,
however, if the transfer is not consummated within ninety (90) days from
expiration the Exercise Period, then all the terms and conditions of this
paragraph will be deemed to apply again to any proposed transfer.
(e) Previous Obligations. You hereby represent and warrant
that (i) you have no continuing obligations to any Person with respect to
assignment of Intellectual Property rights, or not to compete, or not to
disclose Intellectual Property or Proprietary Information, and (ii) you do not
claim as your own any previous Intellectual Property rights within the scope of
this Agreement, except the following:
(If there are any obligations, indicate the nature of the obligations and the
other Person's name. If any prior Intellectual Property is claimed as your own,
indicate by title or suitable identification. If neither, write "None".)
You hereby further represent and warrant that you have not disclosed
and will not disclose to Company or use in Company's business any Proprietary
Information or Intellectual Property belonging to any other Person.
4. General Provisions.
(a) Definitions. For purposes of this Agreement, the following
terms have the meanings ascribed to them below.
(i) "Invention" means any new discoveries,
innovations, programs, machines, manufacturing methods, processes, uses,
apparatuses, compositions of matter, data or designs, or improvements,
modifications or additions to any of the same, and is not limited to the
definition of an invention contained in the United States patent laws.
(ii) "Trade Secrets" means all concepts, ideas,
formulae, patterns, devices or compilations of information used in a company's
business which may relate to the development, production, licensing, or sale of
the company's goods or services, to the management or administration of the
company, or which otherwise give it a competitive advantage, which are not
publicly known without restriction and without breach of this Agreement. You
will have the burden of proving public knowledge.
(iii) "Intellectual Property" means all Inventions
(whether or not patentable), Trade Secrets, works of authorship (whether or not
copyrightable), patents, copyrights, trademarks, trade names, ideas or concept,
or improvements, modifications or additions to any of the above.
(iv) "Proprietary Information" means all information
treated by a Person as proprietary, whether in tangible or intangible form, and
whether or not it is marked as proprietary, including without limitation
Intellectual Property and other property rights, as well as business or
technical information such as, for example, methods of doing business, business
plans, development plans, product information, profit and loss statements and
other financial information and lists of customers, suppliers and employees.
(v) "Person" means any individual, corporation,
partnership, trust or other association or entity.
(b) Not an Employment Agreement. You understand and agree that
this is not an employment agreement and does not require the Company to continue
to employ you for any period of time. The provisions of this Agreement will
survive any termination of your employment for any reason.
(c) Remedies. You understand and agree that, if you breach
this Agreement, irreparable harm would result to the Company and that money
damages would be inadequate to compensate the Company for the breach.
Accordingly, you agree that the equitable remedy of injunction will be available
to the Company to enforce this Agreement. You will also agree that if you fail
to perform any of your agreements in this Agreement, you will indemnify and hold
the Company harmless on demand from any claims, damages, losses, or costs
(including attorneys' fees) incurred by the Company as a result.
(d) Governing Law; Severability and Waiver. You understand and
agree that this Agreement will be construed under and governed by the internal
laws of the State of Arizona as if you and the Company were residents of the
State and the Agreement were entered into and fully performed within Arizona.
Where consistent with Arizona law, you understand and agree that this Agreement
will be construed so as to avoid and prevent the invalidity or unenforceability
of any of its provisions.
If any provision of this Agreement is held invalid or unenforceable,
the remainder of this Agreement will nevertheless remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it will nevertheless remain in full force and effect
in all other circumstances. The remedies provided in this Agreement will not be
deemed exclusive, but will be in addition to all other remedies provided by law
or equity. No waiver of any provision of this Agreement or of any rights or
obligations of either party under it will be effective unless in writing and
signed by the party or parties waiving compliance, and any waiver will be
effective only in the specific instance and for the specific purpose stated in
the writing.
(e) Attorneys' Fees and Costs. If suit is brought (or
arbitration instituted) or an attorney is retained by you or Company in any
matter arising under or to enforce the terms of this Agreement or to collect any
money due hereunder, or to collect money damages for breach hereof, the
prevailing party shall be entitled to recover, in addition to any other remedy,
reimbursement for reasonable attorney's fees, court costs, costs of
investigation and other related expenses incurred in connection therewith.
(f) Caption and Gender. The captions in this Agreement are for
ease of reference only and have no substantive effect. All references to the
masculine gender also include the female gender.
(g) Succession. The provisions of this Agreement inure to the
benefit of, and are binding on, you, your representatives, successors and
assigns and the Company and its successors and assignees.
(h) Integration. This Agreement represents the entire
agreement between you and Company on its subject matter. All agreements entered
into prior hereto are revoked and superseded by this Agreement. No
representations, warranties, inducements or oral agreements have been made by
you or Company except as expressly set forth herein or in other contemporaneous
written agreements. This Agreement may not be changed, modified or rescinded
except in writing, signed by you and Company, and any attempt at oral
modification of this Agreement shall be void and of no effect.
IN WITNESS WHEREOF, you and Company have executed this Agreement
effective on the date at the top of the first page.
Employee: VIASOFT, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By:
-------------------------------------------- ------------------------
Authorized Officer
July 23, 1996
-------------------------------------- ---------------------------
Date Date
EXHIBIT D
DISPUTE RESOLUTION PROCEDURES
-----------------------------
A. If a controversy should arise which is covered by Section 13, then
not later than three (3) months from the date of the event which is the subject
of dispute either party may serve on the other a written notice specifying the
existence of such controversy and setting forth in reasonably specific detail
the grounds thereof ("Notice of Controversy"); provided that, in any event, the
other party shall have at least thirty (30) days from and after the date of the
Notice of Controversy to serve a written notice of any counterclaim ("Notice of
Counterclaim"). The Notice of Counterclaim shall specify the claim or claims in
reasonably specific detail. If the Notice of Controversy or the Notice of
Counterclaim, as the case may be, is not served within the applicable period,
the claim set forth therein will be deemed to have been waived, abandoned and
rendered unenforceable.
B. Following receipt of the Notice of Controversy (or the Notice of
Counterclaim, as the case may be), there shall be a three week period during
which the parties will make a good faith effort to resolve the dispute through
negotiation ("Period of Negotiation"). Neither party shall take any action
during the Period of Negotiation to initiate arbitration proceedings.
C. If the parties should agree during the Period of Negotiation to
mediate the dispute, then the period of Negotiation shall be extended by an
amount of time to be agreed upon by the parties to permit such mediation. In no
event, however, may the Period of Negotiation be extended by more than five
weeks or, stated differently, in no event may the Period of Negotiation be
extended to encompass more than a total of eight weeks.
D. If the parties agree to mediate the dispute but are thereafter
unable to agree within a week on the format and procedures for the mediation,
then the effort to mediate shall cease, and the Period of Negotiation shall
terminate four weeks from the Notice of Controversy (or the Notice of
Counterclaim, as the case may be).
E. Following the termination of the Period of Negotiation, the dispute
(including the main claim and counterclaim, if any) shall be settled by
arbitration, governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et seq.
("FAA") and judgment upon the award may be entered in any court having
jurisdiction thereof. The format and procedures of the arbitration are set forth
below (referred to below as the "Arbitration Agreement").
F. A notice of intention to arbitrate ("Notice of Arbitration") shall
be served within 45 days of the termination of the Period of Negotiation. If the
Notice of Arbitration is not served within this period, the claim set forth in
the Notice of Controversy (or the Notice of Counterclaim, as the case may be)
will be deemed to have been waived, abandoned and rendered unenforceable.
G. The arbitration, including the Notice of Arbitration, will be
governed by the Commercial Rules of the American Arbitration Association ("AAA")
in effect on the date of the Notice of Arbitration, except that the terms of
this Arbitration Agreement shall control in the event of any difference or
conflict between such Rules and the terms of this Arbitration Agreement.
H. The arbitrator shall reach a decision on the merits on the basis of
applicable legal principals as embodied in the law of the State of Arizona. The
arbitration hearing shall take place in Phoenix, Arizona.
I. There shall be one arbitrator, regardless of the amount in
controversy. The arbitrator selected, in order to be eligible to serve, shall be
a lawyer in Phoenix, Arizona (i) who has at least twenty (20) years experience
specializing in either general commercial litigation or general corporate and
commercial matters, and (ii) who has had both training and experience as an
arbitrator. In the event the parties cannot agree on a mutually acceptable
single arbitrator from the list submitted by the AAA, the AAA shall appoint the
arbitrator who shall meet the foregoing criteria.
J. At the time of appointment and as a condition thereto, the
arbitrator will be apprised of the time limitations and other provisions of this
Arbitration Agreement and shall indicate such arbitrators agreement to comply
with such provisions and time limitations.
K. During the thirty-day period following appointment of the
arbitrator, either party may serve on the other a request for limited numbers of
documents directly related to the dispute. Such documents will be produced
within seven days of the request.
L. Following the thirty-day period of document production, there will
be a forty-five day period during which limited depositions will be permissible.
Neither party will take more than five depositions, and no deposition will
exceed three hours of direct testimony.
M. Disputes as to discovery or prehearing matters of a procedural
nature shall be promptly submitted to the arbitrator pursuant to telephone
conference call or otherwise. The arbitrator shall make every effort to render a
ruling on such interim matters at the time of the hearing (or conference call)
or within five business days thereafter.
N. Following the period of depositions, the arbitration hearing shall
promptly commence. The arbitrator will make every effort to commence the hearing
within thirty days of the conclusion of the deposition period and, in addition,
will make every effort to conduct the hearing on consecutive business days to
conclusion.
O. An award will be rendered, at the latest, within six (6) months of
the date of the Notice of Arbitration and within thirty days of the close of the
arbitration hearing. The award shall set forth the grounds for the decision
(findings of fact and conclusions of law) in reasonably specific detail. The
award shall be final and nonappealable except as provided in the FAA and except
that a court of competent jurisdiction shall have the power to review whether,
as a matter of law, based upon the findings of fact by the arbitrator, the award
should be confirmed or should be modified or vacated in order to correct any
errors of law made by the arbitrator. Such judicial review shall be limited to
issues of law, and the parties agree that the findings of fact made by the
arbitrator shall be final and binding on the parties and shall serve as the
facts to be relied upon by the court in determining the extent to which the
award should be confirmed, modified or vacated.
The award may only be made for compensatory damages, and if any other
damages (whether exemplary, punitive, consequential, statutory or other) are
included, the award shall be vacated and remanded, or modified or corrected, as
appropriate to promote this damage limitation.
P. All negotiations and proceedings pursuant to this Exhibit D and
information disclosed therein shall constitute confidential information of each
party, and shall be subject to the protections afforded in the Confidentiality
Agreement. All arbitrators and mediators shall agree in writing, prior to the
start of any mediation or arbitration, to keep any such confidential information
confidential under terms substantially similar to the obligations set forth in
the Confidentiality Agreement.