EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into
effective as of September 4, 1996, by and between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
(hereinafter "EMPLOYEE"), and MISSION CRITICAL SOFTWARE, INC., a Delaware
corporation having its principal office at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (hereinafter "EMPLOYER").
W I T N E S S E T H:
This Agreement is made and entered into under the following circumstances:
(1) Whereas, Employer is in the business of the development, marketing and
sale of software products and systems (the "BUSINESS ACTIVITIES"); and
(2) Whereas Employer desires, on the terms and conditions stated herein, to
employ Employee; and
(3) Whereas Employee desires, on the terms and conditions stated herein, to
be employed by Employer.
NOW, THEREFORE, in consideration of Five Hundred Dollars ($500.00) and the
foregoing recitals, and the promises, covenants, terms and conditions contained
herein, the receipt and sufficiency of which are forever acknowledged and
confessed, the parties hereto agree as follows:
1. EMPLOYMENT AND TERM. Employer hereby employs Employee, and Employee
hereby accepts employment with Employer commencing September 4, 1996
(hereinafter the "EFFECTIVE DATE").
2. DUTIES. Employee shall perform the duties and functions as are normal
and customary to the position for which Employee was hired, as well as any other
duties delegated to Employee by Employer. Employee shall, in all Employee's
actions, demonstrate the utmost good faith, honesty and loyalty towards Employer
and its interests. Employee will perform Employee's duties and assignments in
the offices and work spaces provided by Employer unless otherwise specifically
authorized by the management of Employee. Employee agrees that Employee's
employment with Employer shall be the exclusive, full-time employment of
Employee. Employee shall comply with all applicable policies of Employer.
Employee understands that the nature of Employer's Business Activities
requires that Employer be able to contact Employee twenty-four hours a day.
Employee shall carry at all times a beeper provided by Employer to allow
Employer and/or its customers to maintain such contact.
In addition to pagers, Employer may provide to Employee for business-
related use computers, cellular phones, equipment, funds, lists, books, records,
and other materials of Employer. Employee shall exercise due care in using such
items, and agrees that, upon the termination of Employee's employment with
Employer, Employee will immediately surrender to Employer all such items and any
other property of Employer in the possession of or provided to Employee.
3. COMPENSATION. Employee shall be entitled to initial base compensation
of $8,000.00 per month, subject to adjustment by Employer from time to time.
4. STATUS OF EMPLOYEE. The parties expressly acknowledge that Employee, in
the performance of services hereunder, is an employee of Employer. Accordingly,
Employer shall deduct from all compensation paid to Employee pursuant to this
Agreement any sums required by law or any other requirement of any governmental
body.
5. FRINGE BENEFITS. Employer shall provide to Employee, at Employer's
expense, fringe benefits commensurate with those provided to Employer's
employees of similar position and seniority. Employee shall be entitled to paid
leave for vacation and illness in accordance with Employer's policies.
6. TERMINATION. Notwithstanding any other provisions of this Agreement,
the Employee's employment with Employer shall terminate:
a. upon the death of Employee; or,
b. upon Employee's "disability" (For purposes of this Agreement, the
term "disability" shall mean the inability of Employee, arising out of any
medically determinable physical or mental impairment, to perform the services
required of him hereunder for a period of ninety (90) consecutive days during
which ninety (90) day period Employee's compensation hereunder shall continue);
c. immediately (unless Employer and Employee otherwise agree at the
time such notice is given) upon written notice from either party to the other,
with or without cause; or
d. at Employer's option, immediately upon the existence of "cause."
For purposes of this Agreement, the term "cause" shall be defined as:
(1) willful and continued failure of Employee to substantially
perform the duties required of him by Employer in a manner satisfactory to
Employer, in Employer's sole reasonable discretion, exercised in good
faith;
(2) a material violation of any written policy or procedure which
has been distributed by the Employer to its employees;
(3) any dishonesty by Employee in his dealings with Employer, the
commission of fraud by Employee, or gross negligence in the performance of
the duties of Employee;
-2-
(4) the arrest or conviction (or plea of guilty or nolo contendere)
of Employee of any felony or other crime involving dishonesty or moral
turpitude;
(5) any violation of any covenant or restriction contained in
Section 9 or Section 10 hereof; or
(6) unlawful use of narcotics or other controlled substances, or
use of alcohol or other drugs in a manner Employer reasonably determines to
be adverse to the best interests of Employer or in violation of Employer's
applicable policies.
7. EFFECTS OF TERMINATION. In the event of termination of this Agreement,
neither party shall have any further obligations hereunder except for (i)
obligations accruing prior to the date of termination and (ii) obligations,
promises or covenants contained herein which are expressly made to extend beyond
the term of this Agreement, including, without limitation, confidentiality of
information, indemnities and Employee's covenants not to compete (which
covenants and agreements shall survive the termination or expiration of this
Agreement). The termination of this Agreement, for whatever reason, shall not
extinguish those obligations of Employee specified in the Restrictive Covenants
(hereinafter defined), nor shall the same extinguish the right of either party
to bring an action, either in law or in equity, for breach of this Agreement by
the other party.
8. COPYRIGHT ASSIGNMENT/WORK MADE FOR HIRE. Employee does hereby sell,
grant, convey and assign unto Employer, its successors, assigns and licensees
forever, all right, title and interest in and to all computer software programs,
computer code, system design, documents, system architecture, and the data base
model/structure, and other material constituting or otherwise relating to the
Property (as defined herein) hereafter written by Employee or to the development
of which Employee may have contributed ideas, know-how, skill or labor, and all
changes, additions, adjuncts, alterations, modifications, translations,
transformations, adaptions, elaborations, emulations, revisions or other
developments made in connection with the Property, which may heretofore have
been written or which may hereafter be written for the benefit of, at the
request of or with the sanction of Employer.
As used herein, Property includes all computer software, source code and
programs and other computer products, (i) acquired by Employer from a third
party specifically including that Property acquired from Mission Critical
Software I, Inc. by Employer in that certain Assignment Agreement dated
September 4, 1996, (ii) made, conceived and/or developed, or in the process of
being made, conceived or developed, by an employee or employees of Employer
while employed by Employer in its business or by its customers or (iii) made,
conceived and/or developed, or in the process of being made, conceived or
developed, by an employee or employees of Employer in the course of performing
services for or at the request of or while being compensated by Employer or
within a reasonable period of time thereafter if they involved the use of
company time or materials or facilities or if they resulted from or were
suggested by the employee's or employees' work with Employer whether or not they
are used or usable by Employer in its business or by its customers. Property
shall also include advertisements, marketing materials,
-3-
collateral files of all types, word processing, spreadsheets, slogans,
trademarks and service marks.
Employee agrees and acknowledges that any and all Property written,
developed, created or produced by Employee, in whole or in part, for Employer
constitutes and will constitute a "work made for hire" for Employer, as
contemplated in 17 U.S.C. Section 101. Employer is and shall be considered the
author of the Property for all purposes and the sole and exclusive owner of all
rights to the Property and all derivative works, including all right, title, and
interest comprised in the copyright and all trademarks, patents and other right
in and to the Property and each and every part of the Property. Employee assigns
to Employer all rights whatsoever that Employee has in the Property and any
adaption, version or derivation of the Property. This assignment of rights
includes an assignment of any copyright in the Property not owned by Employer as
a result of the parties' agreement that the Property constitutes a work
made-for-hire for Employer. Employee will, upon request, execute, acknowledge
and deliver to Employer such additional documents as Employer may deem necessary
to evidence Employer's right hereunder, and grants to Employer the right, as
attorney-in-fact, to execute, acknowledge, deliver and record in the U.S.
Copyright Office or elsewhere any and all such documents.
9. TERRITORY. In recognition of the existing and potential worldwide
Business Activities of Employer and the narrow and precise definitions of
Prohibited Activities as defined below, Employer and Employee agree that the
terms of this Agreement shall apply to any Prohibited Activities engaged by
Employee anywhere in the world including all states and territories of the
United States of America (the "Territory"). Prohibited Activities shall include
any activities which would be directly or indirectly in competition with
Employer's Business Activities as defined in the Agreement.
10. NON-COMPETITION. Employee recognizes and agrees that there are certain
property rights such as trade secrets and products of Employer which are
critical to Employer's continued success. Because of their importance to
Employer and to Employee and other employees who are dependent on Employer for
their livelihood, it is necessary for Employer to take all permissible steps to
protect these property rights. This being the case, Employee agrees that during
the Employee's employment with Employer and for a continuous period of two (2)
years thereafter commencing upon termination of such employment, in the event of
any voluntary or involuntary termination or resignation by Employee, Employee
shall not, individually or jointly with others, directly or indirectly, manage,
operate, control, render services related to Prohibited Activities to,
participate in the management or control of, or own or hold any ownership or
voting interest in, any person or entity engaged in Prohibited Activities
(except for the ownership of up to 5% of the outstanding stock issued by
publicly traded companies); and Employee shall not act as an officer, director,
employee, partner, independent contractor, consultant, principal, agent,
proprietor, or in any other capacity for, nor lend any assistance (financial,
managerial, professional or otherwise) or cooperation to, nor perform any
services for, any such person or entity or any business that provides consulting
services to any person or entity engaged in Prohibited Activities anywhere in
the Territory.
11. NON-DISCLOSURE; NON-SOLICITATION. Except in the performance of
Employee's duties hereunder, at no time during the employment or at any time
thereafter shall Employee,
-4-
individually or jointly with others, for the benefit of Employee or any third
party, publish, disclose, use or authorize anyone else to publish, disclose or
use, any secret or confidential material or information relating to any aspect
of the business or operations of Employer or any information regarding the
business methods, business policies, procedures, techniques, or trade secrets,
or other knowledge or processes of or developed by Employer (and/or any other
consultant, Employee or agent of Employer), any affiliate of Employer, or any
entity in which Employer has an interest, including, without limitation, any
secret or confidential material or information relating to the business,
customers, financial position, trade or industrial practices, trade secrets,
technology or know-how of Employer or Employer's affiliates. As used herein, the
term "trade secrets" includes all research and development information,
technical information, data, technology, computer software, source code,
programs and information and other computer technology, techniques, services,
equipment, marketing and sales information, customer lists and other customer
information, methods of doing business and other secret or proprietary methods
and information and trade secrets used or usable by Employer or a third party
having a contractual relationship with Employer which have been or are developed
or used by Employer or any such third party or which are developed by Employee
during Employee's employment with Employer.
Moreover, during Employee's employment with Employer, Employee shall not
act as an officer, director, employee, partner, independent contractor,
consultant, principal, agent, proprietor, owner or part owner, or in any other
capacity for, nor lend any assistance (financial, managerial or otherwise) or
cooperation to, any person or entity which employs any person or hires or
contracts with, as a consultant or other independent agent or independent
contractor, any person or entity (other than Employee) who was employed by or
acted as an agent for, consultant to, or independent contractor of Employer, any
affiliate of Employer, or any entity in which Employer has an interest, at any
time during Employee's employment with Employer. During the Employees'
employment with Employer and for a continuous period of two (2) years thereafter
commencing upon termination of Employee's employment, Employee shall not employ
any such person or induce or attempt to influence any such person to voluntarily
terminate employment with Employer.
12. REASONABLENESS OF RESTRICTIONS; REFORMATION; ENFORCEMENT. The parties
hereto recognize and acknowledge that the geographical and time limitations
contained in Sections 9 and 10 hereof (hereinafter the "RESTRICTIVE COVENANTS")
are reasonable and properly required for the adequate protection of Employer's
interest. Employee acknowledges that Employer will provide to Employee
confidential information concerning Employer's and Employer's affiliates'
business methods and operating practices in reliance on the covenants contained
in the Restrictive Covenants. It is agreed by the parties hereto that if any
portion of the restrictions contained in the Restrictive Covenants are held to
be unreasonable, arbitrary or against public policy, then the restrictions shall
be considered divisible, both as to the time and to the geographical area, with
each month of the specified period being deemed a separate period of time and
each radius mile of the restricted territory being deemed a separate
geographical area, so that the lesser period of time or geographical area shall
remain effective so long as the same is not unreasonable, arbitrary or against
public policy. The parties hereto agree that in the event any court of
competent jurisdiction determines the specified period or the specified
geographical area of the restricted territory to be unreasonable, arbitrary or
against public policy, a lesser time period or
-5-
geographical area which is determined to be reasonable, nonarbitrary and not
against public policy may be enforced against Employee. If Employee shall
violate any of the covenants contained herein and if any court action is
instituted by Employer to prevent or enjoin such violation, then the period of
time during which Employee's business activities shall be restricted, as
provided in this Agreement, shall be lengthened by a period of time equal to the
period between the date of Employee's breach of the terms or covenants contained
in this Agreement and the date on which the decree of the court disposing of the
issues upon the merits shall become final and not subject to further appeal.
13. NO REMEDY AT LAW. Employee agrees that the remedy at law for any breach
by him of the Restrictive Covenants will be inadequate and would be difficult to
ascertain and therefore, in the event of the breach or threatened breach of any
such covenants, Employer, in addition to any and all other remedies, shall have
the right to enjoin Employee from any threatened or actual activities in
violation thereof; and Employee hereby consents and agrees that temporary and
permanent injunctive relief may be granted in any proceedings which might be
brought to enforce any such covenants without the necessity of proof of actual
damages and without necessity of posting a bond in cash or otherwise. In the
event Employer does apply for such an injunction, Employee shall not raise as a
defense thereto that Employer has an adequate remedy at law.
14. ASSIGNABILITY. This Agreement and the rights and duties created
hereunder shall not be assignable or delegable by Employee. Employer may, at
Employer's option and without consent of Employee, assign its rights and duties
hereunder to any successor entity or transferee of Employer's assets.
15. NOTICES. All notices or other communications provided for herein to be
given or sent to a party by the other party shall be deemed validly given or
sent if in writing and (i) mailed, postage prepaid, by registered or certified
United States mail or hand delivered, (ii) sent by facsimile, addressed to the
parties at their addresses hereinabove set forth, or (iii) sent by Employer's
intercompany electronic mail to the appropriate address designated for the
receiving party. Any party may give notice to the other party at any time, by
the method specified above, of a change in the address at which, or the person
to whom, notice is to be addressed.
16. SEVERABILITY. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant or provision
hereof. In the event that any provision of this Agreement shall be determined to
be invalid or unenforceable, such provision shall be deemed limited by
construction in scope and effect to the minimum extent necessary to render the
same valid and enforceable, and, in the event such a limiting construction is
impossible, such invalid or unenforceable provision shall be deemed severed from
this Agreement, but every other provision of this Agreement shall remain in full
force and effect.
17. WAIVER. The failure of a party to enforce any term, provision or
condition of this Agreement at any time or times shall not be deemed a waiver of
that term, provision or condition for the future, nor shall any specific waiver
of a term, provision or condition at one time be deemed a waiver of such term,
provision or condition for any future time or times.
-6-
18. PARTIES. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their heirs, personal representatives, legal
representatives, and proper successors and assigns, as the case may be.
19. GOVERNING LAW. The validity, interpretation and performance of this
Agreement shall be governed by the laws of the State of Texas, without giving
effect to the principles of comity or conflicts of laws thereof. Each party
hereto agrees to submit to the personal jurisdiction and venue of the state and
federal courts having jurisdiction over ▇▇▇▇▇▇ County, Texas, for a resolution
of all disputes arising in connection with the interpretation, construction, and
enforcement of this Agreement, and hereby waives the claim or defense therein
that such courts constitute an inconvenient forum.
20. ENFORCEMENT/DISPUTES SUBJECT TO ARBITRATION. Employee recognizes that
differences may arise between Employer and Employee during or following
employment with Employer, and that those differences may or may not be related
to employment. Employee understands and agrees that by entering into this
Agreement, Employee anticipates gaining the benefits of a speedy, impartial
dispute-resolution procedure.
Employee understands that any reference in this Agreement to Employer will
be a reference also to its affiliated entities, all benefit plans, the benefit
plans' sponsors, fiduciaries, administrators, affiliates, and all successors and
assigns of any of them.
a. CLAIMS COVERED. Employer and Employee mutually consent to the
resolution by arbitration of all claims or controversies ("claims"), whether or
not arising out of Employee's employment (or its termination), that Employer may
have against Employee or that Employee may have against Employer or against its
officers, directors, employees, or agents in their capacity as such or
otherwise. The claims covered by this Agreement include, but are not limited to,
claims for wages or other compensation due; claims for breach of any contract or
covenant (express or implied); tort claims; claims for discrimination
(including, but not limited to race, sex, religion, national origin, age,
marital status, or medical condition, handicap, or disability); claims for
benefits (except where an employee benefit or pension plan specifies that its
claims procedure shall culminate in an arbitration procedure different from this
one), and claims for violation of any federal, state or other governmental law,
statute, regulation, or ordinance, except claims excluded in the following
paragraph.
b. CLAIMS NOT COVERED. Claims Employee may have for Workers' Compensation
or unemployment compensation benefits are not covered by this Agreement. Also
not covered are claims by Employer for injunctive and/or other equitable relief
for unfair competition and/or the use and/or unauthorized disclosure of trade
secrets or confidential information, as to which Employee understands and agrees
that Employer may seek and obtain relief from a court of competent jurisdiction.
c. REQUIRED NOTICE OF ALL CLAIMS AND STATUTE OF LIMITATIONS. Employer and
Employee agree that the aggrieved party must give verbal notice of any claims to
the other party within forty-eight (48) hours of the occurrence giving rise to
the claim; otherwise, the claim shall be void and deemed waived even if there is
a federal or state statute of limitations which would
-7-
have given more time to pursue the claim. Employee shall give such verbal notice
to one of the persons designated for receipt of same in Employer's applicable
policy. Employee shall follow up such verbal notice with written notice within
five (5) days of the giving of verbal notice. The written notice shall identify
and describe the nature of all claims asserted and the facts upon which such
claims are based. If Employee is aware of the occurrence of an event which may
give rise to a claim by another employee, Employee shall give notice of the
occurrence to the appropriate persons in accordance with this paragraph.
d. REPRESENTATION. Any party may be represented by an attorney or other
representative selected by the party.
e. DISCOVERY. Each party shall have the right to take the deposition of
one individual and any expert witness designated by another party. Each party
also shall have the right to make requests for production of documents to any
party. The subpoena right specified below shall be applicable to discovery
pursuant to this paragraph. Additional discovery may be had only where the
Arbitrator selected pursuant to this Agreement so orders, upon a showing of
substantial need.
f. DESIGNATION OF WITNESSES. At least 30 days before the arbitration, the
parties must exchange lists of witnesses, including any expert, and copies of
all exhibits intended to be used at the arbitration.
g. SUBPOENAS. Each party shall have the right to subpoena witnesses and
documents for arbitration.
h. ARBITRATION PROCEDURES. Employer and Employee agree that, except as
provided in this Agreement, any arbitration shall be in accordance with the
then-current Employment Arbitration Rules of Judicial Arbitration & Mediation
Services, Inc. ("J-A-M-S") before an arbitrator who is licensed to practice law
in the state in which the arbitration is convened (the "Arbitrator"). If J-A-M-S
no longer exists, then the American Arbitration Association shall be substituted
therefor for purposes of this Section 20. The arbitration shall take place in or
near the city in which Employee is or was last employed by Employer.
The Arbitrator shall be selected as follows. J-A-M-S shall give each party
a list of 11 arbitrators drawn from its panel of labor and employment
arbitrators. Each party may strike all names on the list it deems unacceptable.
If only one common name remains on the lists of all parties, that individual
shall be designated as the Arbitrator. If more than one common name remains on
the lists of all parties, the parties shall strike names alternately until only
one remains. The party who did not initiate the claim shall strike first. If no
common name remains on the lists of all parties, J-A-M-S shall furnish an
additional list or lists until an Arbitrator is selected.
The Arbitrator shall apply the substantive law (and the law of remedies, if
applicable) of the State of Texas, or federal law, or both, as applicable to the
claim(s) asserted. The Texas Rules of Evidence shall apply. The Arbitrator, and
not any federal, state, or local court or agency, shall have exclusive authority
to resolve any dispute relating to the interpretation, applicability,
enforceability, or formation of this Agreement, including but not
-8-
limited to any claim that all or any part of this Agreement is void or voidable.
The arbitration shall be final and binding upon the parties, except as provided
in this Agreement.
The Arbitrator shall have jurisdiction to hear and rule on pre-hearing
disputes and is authorized to hold pre-hearing conferences by telephone or in
person as the Arbitrator deems necessary. The Arbitrator shall have the
authority to entertain a motion to dismiss and/or a motion for summary judgment
by any party and shall apply the standards governing such motions under the
Texas Rules of Civil Procedure.
Either party, at its expense, may arrange for and pay the cost of a
court reporter to provide a stenographic record of proceedings.
Either party, upon request at the close of hearing, shall be given
leave to file a post-hearing brief. The time for filing such a brief shall be
set by the Arbitrator.
Either party may bring an action in a court as provided in Section 20
of this Agreement to compel arbitration under this Agreement and to enforce an
arbitration award. Except as otherwise provided in this Agreement, both Employer
and Employee agree that neither shall initiate or prosecute any lawsuit or
administrative action (other than as required by applicable law) in any way
related to any claim covered by this Agreement.
The Arbitrator shall render an award and opinion in the form typically
rendered in labor arbitrations.
i. ARBITRATION FEES AND COSTS. Employer and Employee shall equally
share the fees and costs of the Arbitrator. Each party will deposit funds or
post other appropriate security for its share of the Arbitrator's fee, in an
amount and manner determined by the Arbitrator, 10 days before the first day of
hearing. However, the prevailing party shall be entitled to recover from the
non-prevailing party in accordance with Section 24 of this Agreement, and the
Arbitrator may award such fees.
j. JUDICIAL REVIEW. A party opposing enforcement of an award may not do so
in an enforcement proceeding, but must bring a separate action in a court as
provided in Section 20 of this Agreement to set aside the award, where the
standard of review will be the same as that applied by an appellate court
reviewing a decision of a trial court sitting without a jury.
k. INTERSTATE COMMERCE. Employee understands and agrees that Employer is
engaged in transactions involving interstate commerce and that Employee's
employment involves such commerce.
l. REQUIREMENTS FOR MODIFICATION OR REVOCATION. This Agreement to
arbitrate shall survive the termination of employment. It can only be revoked or
modified by a writing signed by the parties which specifically states an intent
to revoke or modify this Agreement.
21. CAPTIONS. The captions of this Agreement have been assigned thereto for
convenience only, and shall not be construed to limit, define or modify the
substantive terms hereof.
-9-
22. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement constitutes the entire
agreement between the parties hereto concerning the subject matter hereof, and
supersedes all prior agreements, memoranda, correspondence, conversations and
negotiations. This Agreement may be executed in several counterparts that
together shall constitute but one and the same Agreement.
23. COSTS OF ENFORCEMENT. In the event it is necessary for any party to
retain the services of an attorney or to initiate legal proceedings to enforce
the terms of this Agreement, the prevailing party shall be entitled to recover
from the non-prevailing party, in addition to all other remedies, all costs of
such enforcement, including reasonable attorneys' fees and costs and including
trial and appellate proceedings.
24. GENDER, ETC. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the
date first written above.
EMPLOYEE:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
Signature of Employee
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Print or Type Name of Employee
EMPLOYER:
MISSION CRITICAL SOFTWARE, INC.
a Delaware Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Title: President
----------------------------
-10-