Management Retention Agreement

Amendment to Management Retention Agreement

Second Amendment to Management Retention Agreement

 

 

 

 

 

 

EX-10.1 3 dex101.htm MANAGEMENT RETENTION AGREEMENT BETWEEN EPICOR SOFTWARE CORP. AND L. GEORGE KLAUS

Exhibit 10.1

EPICOR SOFTWARE CORPORATION

MANAGEMENT RETENTION AGREEMENT

This Management Retention Agreement (the “Agreement”) is made and entered into effective as of January 19, 2009 (the “Effective Date”), by and between L. George Klaus (the “Executive”) and Epicor Software Corporation (the “Company”). Certain capitalized terms used in this Agreement are defined herein.

RECITALS

WHEREAS, Executive served as the Executive Chairman of the Company’s Board of Directors (the “Board”) from February 19, 2008, through January 15, 2009;

WHEREAS, Executive’s Employment as the Executive Chairman of the Board terminated effective as of January 15, 2009 (the “Prior Termination”), and the parties agree that such termination constituted a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the final regulations and any guidance promulgated thereunder (“Section 409A”);

WHEREAS, subsequent to, and unrelated to, the Prior Termination, the Company’s chief executive officer terminated his employment with the Company, and the Board determined that it was in the best interests of the Company to appoint Executive as Chief Executive Officer, subject to his acceptance of the appointment;

WHEREAS, Executive has agreed to accept new employment with the Company as its Chief Executive Officer;

WHEREAS, Executive and the Company wish to commemorate the terms and conditions of Executive’s new employment as Company Chief Executive Officer in a written agreement;

WHEREAS, Executive and the Company further wish to reflect that, notwithstanding Executive’s new employment with the Company, Executive is entitled to certain benefits in connection with his Prior Termination in accordance with the terms and conditions of the Second Amended Management Retention Agreement entered into effective as of December 31, 2008, by and between Executive and the Company (the “Second Amended Agreement);

WHEREAS, the parties agree that, subject to Executive’s compliance with Section 12 of the Second Amended Agreement, including but not limited to Executive timely signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to the Company, Executive is entitled to continued participation in the Company’s group medical and dental plans and to the transfer to Executive of any and all rights, title, interest and claim that the Company may have in the Membership (as defined in the Second Amended Agreement) in accordance with the terms and conditions of Sections 7(i)(c) and 7(i)(d) of the Second Amended Agreement (the “Prior Termination Benefits”);

WHEREAS, the parties agree that, subject to Executive’s compliance with Section 12 of the Second Amended Agreement, Executive is entitled to the Prior Termination Benefits, notwithstanding Executive’s new employment with the Company and notwithstanding any voluntary or involuntary termination of Executive’s employment with the Company for any reason following the Effective Date;

NOW, THEREFORE, in consideration of the mutual covenants and promises set forth herein and for other good and valuable consideration, the receipt of and sufficiency of which are hereby acknowledged, Company and the Executive agree as follows:

1. Definitions. The following terms referred to in this Agreement shall have the following meanings:

(a) “Cause” means (i) any act of personal dishonesty taken by Executive in connection with his responsibilities as an employee which is intended to result in substantial personal enrichment of Executive; (ii) Executive’s conviction of a felony which the Board reasonably believes has had or will have a material detrimental effect on the Company’s reputation or business; (iii) a willful act by Executive which constitutes gross misconduct and is materially injurious to the Company; or (iv) continued willful violations by Executive of Executive’s obligations to the Company after there has been delivered to Executive a written demand for


performance from the Company which describes the basis for the Company’s belief that Executive has not substantially performed his duties and after Executive has been given at least 10 business days in which to cure the circumstances identified in such written demand.

(b) “CEO” means the Executive’s position with the Company as Chief Executive Officer or such other position approved by the Board and agreed to by Executive.

(c) “Change of Control” means the occurrence of any of the following (i) the sale, lease, conveyance or other disposition of all or substantially all of the Company’s assets as an entirety or substantially as an entirety to any person, entity or group of persons acting in concert, (ii) any transaction or series of transactions that results in, or that is in connection with, any person, entity or group acting in concert (other than existing affiliates of the Company), acquiring “beneficial ownership” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of such percentage of the aggregate voting power of all classes of voting equity stock of the Company as shall exceed fifty percent (50%) of such aggregate voting power, (iii) a merger or consolidation in which the Company is not the surviving entity, except for a transaction, the principal purpose of which is to change the state in which the Company is incorporated; or (iv) any reverse merger in which the Company is a surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such reverse merger; or (v) a liquidation of the Company.

(d) “Disability” means Executive’s inability due to any physical or mental condition to perform a substantial portion of his employment duties to the Company for twenty-four (24) or more consecutive weeks.

(e) “Involuntary Termination” means the Executive’s termination of employment as a result of the occurrence of any of the following, without Executive’s express written consent, (i) a significant reduction of Executive’s duties, position or responsibilities relative to Executive’s CEO duties, position or responsibilities in effect immediately prior to such reduction, or the removal of Executive from such position, duties and responsibilities, unless Executive is provided with comparable duties, position and responsibilities; (ii) a reduction by the Company of Executive’s CEO base salary as in effect immediately prior to such reduction unless such reduction is made pursuant to and proportionately with any Company policy applicable to similarly-situated Company executives; (iii) the relocation of Executive to a facility or a location more than one hundred (100) miles from his current location; (iv) any purported termination of Executive’s CEO title by the Company which is not effected for Cause or for which the grounds relied upon are not valid; (v) Executive’s death or Disability; or (vi) the failure of the Company to obtain the assumption of this Agreement by any successors contemplated in Section 14 below.

2. Term of Agreement. Executive hereby accepts employment with the Company for a period beginning on the Effective Date and ending on December 31, 2010 (“Employment Term”) on the terms and conditions set forth herein. The parties’ obligations under sections 8, 9, 10, 11, and 12 of this Agreement continue in certain respects after an Involuntary Termination without Cause.

3. At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and shall continue to be at-will, as defined under applicable law. If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be established under the Company’s then existing employee benefit plans or policies at the time of termination.

4. Base Salary. During the Employment Term, the Company will pay Executive a salary at an annualized rate of $736,403 as compensation for his services (the “Base Salary”). The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices and be subject to the usual, required withholdings. The Base Salary will not be increased during the Employment Term without the prior written approval of the Board.

5. Annual Incentive. Executive will be eligible to receive annual cash bonus payments under the Company’s cash bonus plan for Company Executive Management as in effect on the Effective Date and as amended from time to time. Executive’s on-target bonus will be 70% of Base Salary. The bonus will be paid on a fiscal year basis based on the terms of the performance plan agreed to between the Executive and the Board.


6. Equity Grants.

(a) Performance Based Restricted Stock Grant. Pursuant to the terms of the Agreement, Executive shall be granted a total of four hundred thousand (400,000) shares of restricted Company common stock, allocated equally (200,000) to each of the 2009 and 2010 fiscal years (the “Performance Based Restricted Stock Grant”). The Performance Base Restricted Stock Grant shall provide that the restrictions on the stock shall lift based on achievement of applicable Company performance goals during 2009 and 2010 as determined in accordance with the terms of the Company’s Performance Based Restricted Stock Program (the “Program”) approved by the Company’s Compensation Committee and subject to the Executive’s continued service to the Company through the 2009 and 2010 performance periods. The Performance Based Restricted Stock Grant will also be subject to the terms, definitions and provisions of the Company’s applicable stock incentive plan, as may be amended from time to time (the “Plan”) and the restricted stock agreement by and between Executive and the Company (the “Performance Based Restricted Stock Agreement”), both of which documents are incorporated herein by reference.

(b) Time Based Restricted Stock Grant. Pursuant to the terms of the Agreement, Executive shall be granted a total of three hundred thousand (300,000) shares of restricted Company common stock (the “Time Based Restricted Stock Grant”). The Time Based Restricted Stock Grant shall provide that the restrictions on the stock shall lift based on the passage of time over the Employment Term and subject to the Executive’s continued service to the Company through each vesting date. Specifically, the vesting commencement date of the Time Based Restricted Stock Grant shall be the date of grant and the shares shall be scheduled to vest over the Employment Term with one-half (150,000 shares) of the Time Based Restricted Stock Grant vesting on December 31, 2009 and the remaining one-half (150,000 shares) on December 31, 2010, subject to the Executive’s continued service to the Company through each vesting date. The Time Based Restricted Stock Grant will also be subject to the terms, definitions and provisions of the Company’s applicable stock incentive plan, as may be amended from time to time (the “Plan”) and the restricted stock agreement by and between Executive and the Company (the “Time Based Restricted Stock Agreement”), both of which documents are incorporated herein by reference.

7. Other. Upon Commencement as CEO, Executive shall be eligible to participate in the Company’s health plan, including the Exec-U-Care plan. After meeting eligibility requirements, Executive will be able to participate in various company benefit programs including the Company’s 401(k) savings program, Employee Stock Purchase Plan, Section 125 Reimbursement Account, Deferred Compensation Program and the Confidential Employee Assistance Program (EAP).

8. Severance Benefits Upon Involuntary Termination.

Section 8(i) below governs severance benefits to be received by Executive upon the occurrence of an Involuntary Termination at any time during the Employment Term which Involuntary Termination does not occur within twelve months following a Change of Control. Section 8(ii) below governs severance benefits to be received by Executive upon the occurrence of an Involuntary Termination at any time during the Employment Term which Involuntary Termination does occur within twelve months following a Change of Control. For purposes of clarity, notwithstanding the reason for Executive’s termination and whether such termination is an Involuntary Termination, Executive will, subject to Executive’s compliance with Section 12 of the Second Amended Agreement, including but not limited to Executive timely signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to the Company, continue to be entitled to receive the Prior Termination Benefits (provided that Executive will continue to be entitled to receive the Prior Termination Benefits attributable to the Membership only to the extent that such benefits have not been fully provided in accordance with Section 7(i)(d) of the Second Amended Agreement prior to the Executive’s termination following the Effective Date).

(i) Upon the occurrence of an Involuntary Termination at any time during the Employment Term which Involuntary Termination does not occur within twelve months following a Change of Control, Executive shall be entitled to only the following benefits:

(a) An amount equal to twelve (12) months of Executive’s Base Salary as in effect as of the date of the Involuntary Termination, to be paid periodically in accordance with the Company’s normal payroll policies; and


(b) An amount equal to 100% of the Executive’s target annual bonus as calculated from the Executive’s bonus plan in effect at the time of the Executive’s Involuntary Termination.

(ii) Upon the occurrence of an Involuntary Termination at any time during the Employment Term and which Involuntary Termination occurs within twelve (12) months following a Change of Control, Executive shall be entitled to only the following benefits:

(a) An amount equal to eighteen (18) months of Executive’s Base Salary as in effect as of the date of the Involuntary Termination, to be paid periodically in accordance with the Company’s normal payroll policies; and

(b) An amount equal to 150% of the Executive’s target annual bonus as calculated from the Executive’s bonus plan in effect at the time of the Executive’s Involuntary Termination.

9. Other Termination. If the Executive’s employment as CEO with the Company terminates at any time, for any reason, including Executive’s death, other than as a result of an Involuntary Termination (in which case he shall be entitled to the benefits set forth above in Sections 8(i) or 8(ii), as applicable), then the Executive shall only be entitled to continue to receive the Prior Termination Benefits, subject to Executive’s compliance with Section 12 of the Second Amended Agreement (provided that Executive will continue to be entitled to receive the Prior Termination Benefits attributable to the Membership only to the extent that such benefits have not been fully provided in accordance with Section 7(i)(d) of the Second Amended Agreement prior to the Executive’s termination following the Effective Date). However, Executive may also be eligible for those benefits (if any) as may then be established under the Company’s then existing severance and benefits plans and policies at the time of such termination; provided, however, that any such severance benefits will be paid or provided at the same time and in the same form as similar severance benefits would be paid or provided under Section 8(i) or (ii) in connection with Executive’s Involuntary Termination.

10. Accrued Wages and Vacation; Expenses. Without regard to the reason for, or the timing of, Executive’s termination of employment: (i) the Company shall pay Executive any unpaid base salary due for periods prior to any termination of employment; (ii) the Company shall pay Executive all of his accrued and unused vacation, if any, through any termination of employment, as well as all earned but as-yet unpaid bonuses; and (iii) following submission of proper expense reports by Executive, the Company shall reimburse Executive for all expenses reasonably and necessarily incurred by Executive in connection with the business of the Company prior to any termination of employment. Executive acknowledges that as of the Effective Date, he does not have any accrued vacation as mandated by established Company policy. These payments shall be made promptly upon termination and within the period of time mandated by law.

11. Golden Parachute Excise Tax Gross-Up. In the event that the severance and other benefits provided for in this Agreement constitute “parachute payments” within the meaning of Section 280G of the Code and will be subject to the excise tax imposed by Section 4999 of the Code, then Executive shall receive (i) a payment from the Company sufficient to pay such excise tax, and (ii) an additional payment from the Company sufficient to pay the excise tax and federal and state income taxes arising from the payments made by the Company to Executive pursuant to this sentence. Unless the Company and Executive otherwise agree in writing, the determination of Executive’s excise tax liability and the amount required to be paid under this Section shall be made in writing by the Company’s independent accountants (the “Auditors”). In the event that the excise tax incurred by Executive is determined by the Internal Revenue Service to be greater or lesser than the amount so determined by the Auditors, the Company and Executive agree to promptly make such additional payment, including interest and any tax penalties, to the other party as the Auditors reasonably determine is appropriate to ensure that the net economic effect to Executive under this Section, on an after-tax basis, is as if the Code Section 4999 excise tax did not apply to Executive. Any payments required to be made by the Company to Executive in accordance with this Section 11 shall be referred to herein as “Gross-Up Payments.” For purposes of making the calculations required by this Section, the Auditors may make reasonable assumptions and approximations concerning applicable taxes and may rely on interpretations of the Code for which there is a “substantial authority” tax reporting position. The Company and Executive shall furnish to the Auditors such information and documents as the Auditors may reasonably request in order to make a determination under this Section. The Company shall bear all costs the Auditors may reasonably incur in connection with any calculations contemplated by this Section. Any Gross-Up Payment will be paid to Executive, or for his benefit, within thirty (30) days following receipt by the Company of the report of the Auditors setting forth its determination, but in no event later than the time permitted under Section 1.409A-3(i)(1)(v) of the


Treasury Regulations under Code Section 409A. Notwithstanding the foregoing, if Executive is a “specified employee” (as described in Section 13 below) on the date of Executive’s “separation from service” other than due to death (as described in Section 13 below) and a Gross-Up Payment would not have been required under this Section 11 in the absence of the benefits provided for in this Agreement, any Gross-Up Payment otherwise due to Executive on or within the six (6) month period following Executive’s separation from service will accrue during such six (6) month period and will become payable in a lump sum payment (less any applicable withholding taxes) on the date six (6) months and one (1) day following the date of Executive’s separation from service.

12. Conditions to Receipt of Severance.

(a) Separation Agreement and Release of Claims. The receipt of any severance pursuant to Section 8 or Section 9 will be subject to Executive signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to the Company and within the period required by the release but in no event later than sixty (60) days following Executive’s termination of employment, inclusive of any revocation period set forth in the release. The Company shall provide an initial draft of the separation agreement and release of claims within ten (10) business days after Executive’s termination of employment. No severance will be paid or provided until the separation agreement and release agreement becomes effective. Subject to the Section 13, if Executive’s employment ends on or before October 15 of a calendar year, the Deferred Compensation Separation Benefits (as defined in Section 13) to which Executive is entitled shall be paid by the Company to Executive (less applicable tax withholdings) as soon as administratively practicable following the date of Executive’s separation from service, or, if later, on the date the separation agreement and release of claims required by this Section 12(a) becomes effective, but in no event later than December 31 of that calendar year. If Executive’s employment ends after October 15 of a calendar year, the Deferred Compensation Separation Benefits to which Executive is entitled shall be paid by the Company to Executive on the later of (a) the second payroll date in the calendar year next following the calendar year in which Executive’s employment has ended or (b) the first payroll date following the date Executive’s separation agreement and release of claims becomes effective, subject to the Section 13.

(b) Nondisparagement. During the Employment Term and while the Executive is receiving the Base Salary under Section 8 or the continued medical benefits under Section 7(i)(c) of the Second Amended Agreement (“Severance Period”), Executive will not knowingly disparage, criticize, or otherwise make any derogatory statements regarding the Company, its directors, or its officers. The Company will instruct its officers and directors to not knowingly disparage, criticize, or otherwise make any derogatory statements regarding the Executive during the Employment Term and Severance Period. Notwithstanding the foregoing, nothing contained in this agreement will be deemed to restrict the Executive, the Company or any of the Company’s current or former officers and/or directors from providing information to any governmental or regulatory agency (or in any way limit the content of any such information) to the extent they are requested or required to provide such information pursuant to applicable law or regulation.

(c) Other Requirements. Executive’s receipt of continued severance payments will be subject to Executive continuing to comply with the terms of the Company’s Confidential/Proprietary Information Agreement and the provisions of this Section 12.

13. Code Section 409A.

(a) Six-Month Delay. Notwithstanding anything to the contrary in this Agreement, no Deferred Compensation Separation Benefits (as defined below) will be considered due or payable until Executive has a “separation from service” within the meaning of Section 409A. In addition, if Executive is a “specified employee” within the meaning of Section 409A at the time of his separation from service (other than due to death), then the severance benefits payable to Executive under this Agreement, if any, and any other severance payments or separation benefits that may be considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”) otherwise due to Executive on or within the six (6) month period following his separation from service will accrue during such six (6) month period and will become payable in a lump sum payment (less applicable withholding taxes) on the date six (6) months and one (1) day following the date of Executive’s separation from service. All subsequent payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following his separation from service but prior to the six (6)


month anniversary of his date of separation, then any payments delayed in accordance with this paragraph will be payable in a lump sum (less applicable withholding taxes) to Executive’s estate as soon as administratively practicable after the date of his death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.

(b) Amendments to this Agreement to Comply with Section 409A. For purposes of Section 409A, each salary continuation payment under Sections 8(i)(a) and 8(ii)(a) is, and the lump sum target bonus payments under Sections 8(i)(b) and 8(ii)(b) each are, hereby designated as a separate payment. It is the intent of this Agreement to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder (to the extent such payments and benefits are not exempt from Section 409A) will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. Executive and the Company agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition under Section 409A prior to actual payment to Executive.

14. Successors.

(a) Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the Company’s obligations under this Agreement and agree expressly to perform the Company’s obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this subsection or which becomes bound by the terms of this Agreement by operation of law.

(b) Executive’s Successors. Without the written consent of the Company, Executive shall not assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

15. Notices.

(a) General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices shall be addressed to him at the home address that he most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

(b) Notice of Termination. Any termination by the Company for Cause or by Executive as a result of a voluntary resignation or Involuntary Termination shall be communicated by a notice of termination to the other party hereto given in accordance with this Section. Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than 30 days after the giving of such notice). The failure by Executive to include in the notice any fact or circumstance which contributes to a showing of Involuntary Termination shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder.

16. Arbitration.

(a) Any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by binding arbitration to be held in Orange County, California in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be


final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction.

(b) The arbitrator(s) shall apply California law to the merits of any dispute or claim, without reference to conflicts of law rules. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law. Executive hereby consents to the personal jurisdiction of the state and federal courts located in California for any action or proceeding arising from or relating to this Agreement or relating to any arbitration in which the parties are participants.

(c) Executive understands that nothing in this Section modifies Executive’s at-will employment status. Either Executive or the Company can terminate the employment relationship at any time, with or without Cause.

(d) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:

(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.

(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et seq;

(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

17. Miscellaneous Provisions.

(a) No Duty to Mitigate. Executive shall not be required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by earnings that Executive may receive from any other source, except with respect to the suspension of any post-termination medical coverage while Executive or any Covered Persons (as defined in the Second Amended Agreement) has alternative coverage as described in Section 7(i)(c) of the Second Amended Agreement.

(b) Waiver. No provision of this Agreement may be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c) Integration. This Agreement, the terms and conditions of Sections 7(i)(c), 7(i)(d) and Section 12 of the Second Amended Agreement (as such provisions apply to the Prior Termination Benefits) and any outstanding stock option agreements and restricted stock agreements referenced herein represent the entire agreement and understanding between the parties as to the subject matter herein and supersede all prior or contemporaneous agreements, whether written or oral, with respect to this Agreement, including but not limited to any stock option agreement, restricted stock purchase agreement, restricted stock agreement or severance agreement. Executive agrees and acknowledges that in the event of any conflict, redundancy or


discrepancy between the terms and conditions of this Agreement and any other agreement regarding the subject matter herein, the terms and conditions of this Agreement shall govern.

(d) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules, of the State of California.

(e) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(f) Employment Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable income and employment taxes.

(g) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

 

 

 

 

 

 

 

 

 

 

COMPANY:

 

 

 

EPICOR SOFTWARE CORPORATION

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ John D. Ireland

 

 

 

 

 

 

Title:

 

Sr. Vice President and General Counsel

 

 

 

EXECUTIVE:

 

 

 

/s/ L. George Klaus

 

 

 

 

 

 

Signature

 

 

 

 

 

 

 

 

 

 

L. George Klaus

 

 

 

 

 

 

Printed Name

 

 

 

EX-10.1 2 dex101.htm AMENDMENT TO MANAGEMENT RETENTION AGREEMENT DATED JUNE 21, 2010

Exhibit 10.1

EPICOR SOFTWARE CORPORATION

AMENDMENT TO MANAGEMENT RETENTION AGREEMENT

This Amendment to the Management Retention Agreement (the “Amendment”) is made as of June 21st, 2010, by and between L. George Klaus (the “Executive”) and Epicor Software Corporation (the “Company”).

RECITALS

WHEREAS, the Company and Executive have entered into that certain Management Retention Agreement as of January 19, 2009 (the “Agreement”).

WHEREAS, the Company and Executive desire to amend the Agreement to reflect certain changes in Executive’s compensation and to extend the term of the Agreement by one year.

NOW, THEREFORE, the Company and Executive agree that in consideration of the foregoing and the promises and covenants contained herein, the parties agree as follows:

AGREEMENT

1. Term. Section 2 of the Agreement entitled “Term of Agreement” is hereby amended by deleting the date “December 31, 2010” in the first sentence thereof and replacing it with “December 31, 2011.”

2. Performance Share Grant. Section 6(a) of the Agreement, entitled “Performance Based Restricted Stock Grant” is hereby amended to read in its entirety as follows:

“(a) Performance Based Restricted Stock Grant. Pursuant to the terms of the Agreement, Executive has been granted a total of four hundred thousand (400,000) shares of restricted Company common stock, allocated equally (200,000) to each of the 2009 and 2010 fiscal years. The shares related to the 2009 Performance Year have been paid out by the Company pursuant to the terms of the Company’s Performance Based Restricted Stock Program (the “Program”). Pursuant to the terms of this Agreement, Executive shall also receive a grant of two hundred thousand (200,000) shares of restricted Company common stock, allocated to the 2011 fiscal year (hereinafter, the remaining 2010 and 2011 stock grants are referred to as the “Performance Based Restricted Stock Grant”). The Performance Base Restricted Stock Grant provides that the restrictions on the stock shall lift based on achievement of applicable Company performance goals during 2010 and 2011 as determined in accordance with the terms of the Program approved by the Company’s Compensation Committee and subject to the Executive’s continued service to the Company through the 2010 and 2011 performance


periods. The Performance Based Restricted Stock Grant is subject to the terms, definitions and provisions of the Program as well as the Company’s applicable stock incentive plan, as may be amended from time to time (the “Plan”) and the restricted stock agreement by and between Executive and the Company (the “Performance Based Restricted Stock Agreement”), both of which documents are incorporated herein by reference.”

3. 2010 Share Grant. Section 6 of the Agreement, entitled “Equity Grants” is hereby amended by adding a new subparagraph (c) thereto as follows:

“(c) 2010 Restricted Stock Grant. Pursuant to the terms of the Agreement, Executive shall be granted an additional total of one hundred and fifty thousand (150,000) shares of restricted Company common stock (the “2010 Restricted Stock Grant”). The 2010 Restricted Stock Grant shall provide that the restrictions on the stock shall lift based on the passage of time over the Employment Term and subject to the Executive’s continued service to the Company through each vesting date. Specifically, the vesting commencement date of the 2010 Restricted Stock Grant shall be the date of grant and the shares shall be scheduled to vest over the 2011 year on an equal quarterly (90 day) basis with 37,500 shares vesting on March 31, June 30, September 30 and December 31, 2011, respectively, and subject to the Executive’s continued service to the Company through each vesting date. The 2010 Restricted Stock Grant will also be subject to the terms, definitions and provisions of the Company’s applicable stock incentive plan, as may be amended from time to time (the “Plan”) and the restricted stock agreement by and between Executive and the Company (the “2010 Restricted Stock Grant Agreement”), both of which documents are incorporated herein by reference.”

4. Full Force and Effect. To the extent not expressly amended hereby, the Agreement shall remain in full force and effect.

5. Entire Agreement. This Amendment and the Agreement constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

6. Successors and Assigns. This Amendment and the rights and obligations of the parties hereunder shall inure to the benefit of, and be binding upon, their respective successors, assigns, and legal representatives.

7. Counterparts. This Amendment may be executed in counterparts, all of which together shall constitute one instrument, and each of which may be executed by less than all of the parties to this Amendment.

8. Governing Law. This Amendment shall be governed in all respects by the internal laws of California, without regard to principles of conflicts of law.

9. Amendment. Any provision of this Amendment may be amended, waived or terminated by a written instrument signed by the Company and the Executive.


IN WITNESS WHEREOF, the undersigned parties have caused this Amendment to be executed as of the date first set forth above.

 

L. GEORGE KLAUS

 

 

EPICOR SOFTWARE CORPORATION

/s/ L. George Klaus

 

 

/s/ John D. Ireland

Signature

 

 

Signature

L. George Klaus

 

 

John D. Ireland

Printed Name

 

 

Print Name

 

 

 

General Counsel/Sr. Vice-president

 

 

Print Title

(Signature page to Amendment to L. George Klaus Management Retention Agreement)

 

 

 

EX-10.1 2 dex101.htm SECOND AMENDMENT TO MANAGEMENT RETENTION AGREEMENT

Exhibit 10.1

EPICOR SOFTWARE CORPORATION

SECOND AMENDMENT TO

MANAGEMENT RETENTION AGREEMENT

This Second Amendment to the Management Retention Agreement (the “Second Amendment”) is made as of February 10, 2011 by and between L. George Klaus (the “Executive”) and Epicor Software Corporation (the “Company”).

RECITALS

WHEREAS, the Company and Executive have entered into that certain Management Retention Agreement as of January 19, 2009 as amended as of June 21, 2010 (collectively the “Agreement”).

WHEREAS, the Company and Executive desire to amend the Agreement for a second time to reflect certain changes in Executive’s compensation and duties and to extend the term of the Agreement by one year.

NOW, THEREFORE, the Company and Executive agree that in consideration of the foregoing and the promises and covenants contained herein, the parties agree as follows:

AGREEMENT

1. Term. Section 2 of the Agreement entitled “Term of Agreement” is hereby amended to read in its entirety as follows:

“2. Term of Agreement; Succession Obligations. Executive hereby accepts employment with the Company for a period beginning on the Effective Date and ending on December 31, 2012 (the “Employment Term”) on the terms and conditions set forth herein. The parties’ obligations under sections 8, 9, 10, 11 and 12 of this Agreement continue in certain respects after an Involuntary Termination without Cause. During the Employment Term and in addition to Executive’s other duties under this Agreement, Executive agrees that upon request, he will assist the Board with its search for a successor to the position of Chief Executive Officer and to ensure an orderly and complete transition of his duties as Chief Executive Officer of the Company to any such successor appointed by the Board. If the Board appoints another individual as Chief Executive Officer while Executive is employed by the Company hereunder, Executive agrees, if requested, to (a) relinquish his duties as the Chief Executive Officer of the Company and to serve for the remainder of the Employment Term in the position of Executive Chairman of the Board and (b) negotiate in good faith with Company on a mutually agreeable market-based adjustment to Executive’s cash compensation for his services as Executive Chairman of the Board. Executive agrees that such change in title, position and compensation will not qualify as grounds for Involuntary Termination for purposes of this Agreement.”


2. Performance Share Grant. Section 6(a) of the Agreement, entitled “Performance Based Restricted Stock Grant” is hereby amended to read in its entirety as follows:

“(a) Performance Based Restricted Stock Grant. Pursuant to the terms of the Agreement, Executive has been granted a total of six hundred thousand (600,000) shares of restricted Company common stock, allocated equally (200,000) to each of the 2009, 2010 and 2011 fiscal years. The shares related to the 2009 and 2010 Performance Years have been paid out by the Company pursuant to the terms of the Company’s Performance Based Restricted Stock Program (the “Program”). Pursuant to the terms of this Agreement, Executive shall also receive a grant of one hundred and thirty three thousand three hundred and thirty three (133,333) shares of On Target restricted Company common stock, allocated to the 2012 fiscal year (hereinafter, the 2011 and 2012 stock grants are referred to as the “Performance Based Restricted Stock Grant”). The Performance Base Restricted Stock Grant provides that the restrictions on the stock shall lift based on achievement of applicable Company performance goals during 2011 and 2012 as determined in accordance with the terms of the Program approved by the Company’s Compensation Committee and subject to the Executive’s continued service to the Company through the 2011 and 2012 performance periods. The Performance Based Restricted Stock Grant is subject to the terms, definitions and provisions of the Program as well as the Company’s applicable stock incentive plan, as may be amended from time to time (the “Plan”) and the restricted stock agreement by and between Executive and the Company (the “Performance Based Restricted Stock Agreement”), both of which documents are incorporated herein by reference.”

3. 2011 Share Grant. Section 6 of the Agreement, entitled “Equity Grants” is hereby amended by adding a new subparagraph (d) thereto as follows:

“(d) 2011 Restricted Stock Grant. Pursuant to the terms of the Agreement, Executive shall be granted an additional total of one hundred and fifty thousand (150,000) shares of restricted Company common stock (the “2011 Restricted Stock Grant”). The 2011 Restricted Stock Grant shall provide that the restrictions on the stock shall lift based on the passage of time over the Employment Term and subject to the Executive’s continued service to the Company through each vesting date. Specifically, the vesting commencement date of the 2011 Restricted Stock Grant shall be the date of grant and the shares shall be scheduled to vest over the 2012 year on an equal quarterly (90 day) basis with 37,500 shares vesting on March 31, June 30, September 30 and December 31, 2012, respectively, and subject to the Executive’s continued service to the Company through each vesting date. The 2011 Restricted Stock Grant will also be subject to the terms, definitions and provisions of the Company’s applicable stock incentive plan, as may be amended from time to time (the “Plan”) and the restricted stock agreement by and between Executive and the Company (the “2011 Restricted Stock Grant Agreement”), both of which documents are incorporated herein by reference.”

4. Full Force and Effect. To the extent not expressly amended hereby, the Agreement shall remain in full force and effect.


5. Entire Agreement. This Second Amendment and the Agreement constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

6. Successors and Assigns. This Second Amendment and the rights and obligations of the parties hereunder shall inure to the benefit of, and be binding upon, their respective successors, assigns, and legal representatives.

7. Counterparts. This Second Amendment may be executed in counterparts, all of which together shall constitute one instrument, and each of which may be executed by less than all of the parties to this Second Amendment.

8. Governing Law. This Second Amendment shall be governed in all respects by the internal laws of California, without regard to principles of conflicts of law.

9. Amendment. Any provision of this Second Amendment may be amended, waived or terminated by a written instrument signed by the Company and the Executive.

IN WITNESS WHEREOF, the undersigned parties have caused this Second Amendment to be executed as of the date first set forth above.

 

L. GEORGE KLAUS

 

 

EPICOR SOFTWARE CORPORATION

/s/ L. George Klaus

 

 

/s/ John Ireland

Signature

 

 

Signature

L. George Klaus

 

 

John Ireland

Printed Name

 

 

Print Name

 

 

General Counsel/Sr. VP

 

 

Print Title

(Signature page to Second Amendment to L. George Klaus

Management Retention Agreement)