Employment Agreement - Elite Information Group Inc. and Christopher K. Poole
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is dated as of this 10th day of April, 2003
by and between Elite Information Group, Inc., a Delaware corporation, and the
successor thereto (the "Company"), and CHRISTOPHER K. POOLE, an individual
residing at 1819 Fairmount Avenue, La Canada, California 91011 (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is currently employed by the Company and is a
party to an employment agreement, dated June 1, 1999, with the Company (the
"Existing Employment Agreement"); and
WHEREAS, the Company desires to continue to employ the Employee in the
manner hereinafter specified and to make provision for payment of reasonable
compensation to the Employee for such services, and the Employee is willing to
continue to be employed by the Company to perform the duties incident to such
employment upon the terms and conditions hereinafter set forth; and
WHEREAS, the parties desire to enter into this Agreement, which shall
supersede in its entirety the Existing Employment Agreement, as of the Effective
Date (as hereinafter defined), setting forth the terms and conditions of the
employment relationship of the Employee with the Company during the Term (as
hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants, terms and conditions set forth herein, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. EMPLOYMENT AND DUTIES
(a) General. Effective as of the Effective Date, the Company shall
hereby employ the Employee as President and General Manager of the NAL Software
Business Unit of the Company, and the Employee agrees upon the terms and
conditions herein set forth to be employed by the Company. The Employee shall
diligently perform all of the duties accorded to such position, and shall report
directly to a senior executive officer (the "TLR Executive Officer") of Thomson
Legal and Regulatory ("TLR"), a wholly owned subsidiary of The Thomson
Corporation ("Thomson"), which is a party to an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of April 2, 2003, with Gulf Acquisition Corp.
and the Company.
(b) Services. During the Term, the Employee shall well and
faithfully serve the Company, and shall devote substantially all of his business
time and attention to the performance of the duties of such employment and the
advancement of the best interests of the Company and shall not, directly or
indirectly, render services to any other person or organization for which he
receives compensation without the prior written approval of the TLR Executive
Officer. The Employee hereby agrees to refrain from engaging in any activity
that does, shall or could reasonably be deemed to conflict with the best
interests of the Company.
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(c) Location of Employment. The Employee's place of employment
shall be at the office of the Company located in Los Angeles, California, but
the Employee shall travel to the extent and to the places necessary for the
performance of his duties to the Company.
2. TERM OF EMPLOYMENT
The term of the Employee's employment under this Agreement shall
commence as of the date upon which the Offer (as defined in the Merger
Agreement) is consummated (the "Effective Date") and continue until second
anniversary thereof (the "Term").
3. COMPENSATION AND OTHER BENEFITS
Subject to the provisions of this Agreement, including, without
limitation, the termination provisions contained in Section 4, the Company shall
pay and provide the following compensation and other benefits to the Employee
during the Term as compensation for all services rendered hereunder:
(a) Salary. The Company shall pay the Employee a base salary at
the rate of $325,000 per annum (the "Salary"), payable to the Employee in
accordance with the normal payroll practices of the Company as are in effect
from time to time. A performance based merit increase review of the Salary shall
be conducted annually by the TLR Executive Officer and the Salary may be
increased on the basis of such review and then-current market practices.
(b) Annual Management Incentive Bonus. During the Term, the
Employee shall be eligible to earn an annual cash bonus under TLR's Annual
Management Incentive Plan (the "MIP") upon satisfaction of the performance
objectives and pursuant to the terms and conditions set forth in the MIP, the
material terms of which are attached hereto as Exhibit A (the "Annual
Incentive"). The target amount of the Annual Incentive in respect of the 2003
plan year shall be an amount equal to 100% of his Salary and the maximum amount
shall not exceed an amount equal to 200% of his Salary. The Annual Incentive in
respect of the 2003 plan year that is earned and becomes payable shall be paid
in the first quarter of 2004.
(c) Retention Performance Award. The Employee shall be eligible to
earn a retention performance award under the Company's Retention Performance
Bonus Plan (the "Retention Performance Plan") over the measurement period
commencing on the Effective Date and ending on the last day of the 2004 plan
year upon satisfaction of the performance objectives and pursuant to the terms
and conditions set forth in the Retention Performance Plan, the material terms
of which are attached hereto as Exhibit B (the "Retention Performance Award").
The target amount of the Retention Performance Award shall be equal to $400,000
and the maximum amount of the Retention Performance Award shall not exceed
$800,000. The Retention Performance Award that is earned and becomes payable
shall be paid in the first quarter of 2005.
(d) Integration Bonus. The Employee shall be entitled to a
one-time payment in the form of a cash lump sum amount equal to $75,000, payable
on the 90th day following the Effective Date, upon the successful completion of
the preliminary objectives of the integration of the Company's business and
operations with the business and operations of Thomson in
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connection with the transaction contemplated by the Merger Agreement, the
general description of which objectives is attached hereto as Exhibit C.
(e) Expenses. The Company shall pay or reimburse the Employee for
all reasonable out-of-pocket expenses incurred by him in connection with his
employment hereunder upon submission of appropriate documentation or receipts in
accordance with the policies and procedures of the Company as are in effect from
time to time. No expense payment or reimbursement under this Section 3(e) shall
be "grossed up" or increased to take into account any tax liability incurred by
the Employee as a result of such payment or reimbursement.
(f) Retirement, Welfare and Fringe Benefits. The Employee shall be
eligible to participate in the retirement, medical, disability, long-term care
and life insurance plans applicable to senior executives of the Company
generally in accordance with the terms of such plans as in effect from time to
time. Subject to Section 4(c)(ii), the foregoing shall not be construed to limit
the ability of the Company or any of its affiliates to amend, modify or
terminate any such benefit plans, policies or programs at any time and from time
to time.
(g) Vacation. The Employee shall be entitled to four weeks of
annual vacation in accordance with the Company's policies applicable to senior
executives of the Company generally as are in effect from time to time.
4. TERMINATION OF EMPLOYMENT
Subject to the notice and other provisions of this Section 4, the
Company shall have the right to terminate the Employee's employment hereunder,
and the Employee shall have the right to resign, at any time for any reason or
for no stated reason.
(a) Termination for Cause or Resignation. (i) If, prior to the
expiration of the Term, the Employee's employment is terminated by the Company
for "Cause" (as hereinafter defined) or if the Employee resigns from his
employment hereunder for any reason other than a "Good Reason Resignation" (as
hereinafter defined), the Employee shall be entitled to payment of (A) his
Salary accrued up to and including the date of termination or resignation, (B)
any Annual Incentive that is earned and payable with regard to a prior year but
unpaid as of the date of termination or resignation and (C) any unreimbursed
expenses. Except to the extent required by the terms of the benefits provided
under Section 3(f) or applicable law, the Employee shall have no right under
this Agreement or otherwise to receive any other compensation or to participate
in any other plan, program or arrangement after such termination or resignation
of employment with respect to the year of such termination or resignation and
later years.
(ii) Termination for "Cause" shall mean a termination of the
Employee's employment with the Company because of (A) the commission by the
Employee of a felony offense (other than a traffic violation); (B) the continued
or substantial failure to perform in any material respect the Employee's duties
under this Agreement; (C) an act of fraud, embezzlement, theft or a material
dishonest act by the Employee against the Company or its affiliates; (D) the
commission by the Employee of an act involving moral turpitude that brings the
Company or any of its affiliates into public disrepute or disgrace or causes
material harm to customer relations, operations or business prospects of the
Company or its affiliates; or (E) a material breach by the
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Employee of the terms and provisions of this Agreement, the Proprietary
Information and Inventions Agreement dated May 9, 1995 between the Employee and
the Company (the "Proprietary Information Agreement") or any other agreement to
which the Employee and the Company are party, or of any policy of the Company.
(iii) Termination of the Employee's employment for Cause shall be
communicated by delivery to the Employee of a written notice from the Company
stating that the Employee will be terminated for Cause, specifying the
particulars thereof and the effective date of such termination. In the case of
Section 4(a)(ii)(B) and 4(a)(ii)(E), the Employee shall have thirty (30) days
from the date of receipt of such notice to effect a cure of the actions
constituting Cause, or to effect a cure of the adverse effect such actions. Upon
cure or correction thereof by the Employee to the reasonable satisfaction of the
Company, such action shall no longer constitute Cause for purposes of this
Agreement. The date of a resignation by the Employee other than a Good Reason
Resignation shall be the date specified in a written notice of resignation from
the Employee to the Company. The Employee shall provide at least 30 days'
advance written notice of a resignation that is other than a Good Reason
Resignation.
(b) Termination without Cause.
(i) If, prior to the expiration of the Term, the Company
terminates the Employee's employment for any reason other than Disability or
Cause (such termination being hereinafter referred to as a "Termination without
Cause"), the Employee shall be entitled to (A) payment of his Salary accrued up
to and including the date of the Termination without Cause, (B) payment of any
Annual Incentive that is earned and payable with regard to a prior year but
unpaid as of the date of termination or resignation, (C) payment of any
unreimbursed expenses and (D) severance, subject to the Employee's execution and
delivery to the Company of a standard release of employment related claims
against the Company, of (1) a lump sum payment in cash equal to the sum of (W)
the product of his Salary, at the rate in effect on the date of the Termination
without Cause, multiplied by 1.5, plus (X) an amount equal to the portion of the
medical, dental and vision benefits that the Company would have paid on behalf
of the Employee and the number of dependants with respect to which the Employee
was receiving benefits under these plans as of the date of the Termination
without Cause had the Employee continued to participate in the benefit plans of
the Company for a period of 18 months immediately following the date of the Good
Reason Resignation, plus (Y) the unpaid portion of the target amount of the
Annual Incentive applicable to the plan year in which the Termination without
Cause occurs, prorated to reflect the number of days the Employee served as an
employee of the Company during the plan year on which the Termination without
Cause occurs, plus (Z) the greater of (a) four hundred thousand dollars
($400,000) or (b) the unpaid portion of the Retention Performance Award earned
as of the date of the Employee's termination determined based on the Company's
financial performance through the last day of the month immediately preceding
Employee's termination (with any annual performance goals under the Retention
Performance Bonus Plan to be prorated as applicable for purposes of such
calculation), and (2) outplacement assistance for a maximum of 12 months in a
maximum aggregate amount of $20,000.
(ii) The effective date of a Termination without Cause shall be the
date specified in a written notice of termination to the Employee.
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(c) Resignation for Good Reason. (i) If, prior to the expiration
of the Term, the Employee resigns from his employment hereunder for Good Reason
(a "Good Reason Resignation"), the Employee shall be entitled to (A) payment of
his Salary accrued up to and including the date of the Good Reason Resignation,
(B) payment of any Annual Incentive that is earned and payable but unpaid as of
the date of termination or resignation, (C) payment of any unreimbursed
expenses, and (D) severance, subject to the Employee's execution and delivery to
the Company of a standard release of employment related claims against the
Company , of (1) a lump sum payment in cash equal to the sum of (X) the product
of his Salary, at the highest rate in effect during the Term, multiplied by 1.5,
(Y) an amount equal to the portion of the medical, dental and vision benefits
that the Company would have paid on behalf of the Employee and the number of
dependants with respect to which the Employee was receiving benefits under these
plans as of the date of the Good Reason Resignation had the Employee continued
to participate in the benefit plans of the Company for a period of 18 months
immediately following the date of the Good Reason Resignation, plus (Z) the
unpaid portion of the target amount of the Annual Incentive applicable to the
year on which the Good Reason Resignation occurs, prorated to reflect the number
of days that the Employee served as an employee during the plan year on which
the Good Reason Resignation occurs and (2) outplacement assistance for a maximum
of 12 months in a maximum aggregate amount of $20,000.
(ii) Resignation for "Good Reason" shall mean the resignation by
the Employee from employment with the Company because of (A) a material
reduction in his duties or responsibilities, (B) a material reduction in his
Salary, target amount of the Annual Incentive or Retention Performance Award, or
the level of employee benefits, in the aggregate, provided pursuant to Section
3(f), (C) a change in the Employee's direct reporting relationship to any person
not at the level of President of Thomson West or above, or (D) the requirement
that the Employee relocate his place of employment to a location that is more
than 40 miles from the location of employment set forth in Section 1(c).
(iii) A Good Reason Resignation shall be communicated by delivery to
the Company of a written notice from the Employee stating that the Employee will
resign for Good Reason, specifying the particulars thereof and the effective
date of such resignation. The Company shall have thirty (30) days from the date
of receipt of such notice to effect a cure of the actions constituting Good
Reason, or to effect a cure of the adverse effect such actions. Upon cure or
correction thereof by the Company to the reasonable satisfaction of the
Employee, such action shall no longer constitute Good Reason for purposes of
this Agreement.
(d) Termination Due to Disability. In the event of the Employee's
Disability, the Company shall be entitled to terminate his employment. In the
case that the Company terminates the Employee's employment due to Disability,
the Employee shall be entitled to his Salary up to and including the date of
termination as well as any unpaid expense reimbursements. As used in this
Section 4(d), the term "Disability" shall mean that the Company determines that
due to physical or mental illness or incapacity, whether total or partial, the
Employee is substantially unable to perform his duties hereunder for a period of
90 consecutive days or shorter periods aggregating 90 days during any period of
180 consecutive days.
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(e) Death. Except as provided in this Section 4(e), no Salary or
benefits shall be payable under this Agreement following the date of the
Employee's death. In the event of the Employee's death, any Salary earned by the
Employee up to the date of death, as well as any unreimbursed expenses, shall be
paid to the Employee's estate or Employee's named beneficiary within a
reasonable period following his death.
5. PROTECTION OF THE COMPANY'S INTEREST
(a) Confidential Information and Work Product Assignment. The
Employee hereby acknowledges and agrees to abide by his continuing obligations
under the Proprietary Information Agreement.
(b) Protection of Trade Secrets and Third-Party Goodwill.
(i) The Employee acknowledges that in the course of his employment
with the Company, he has and will in the course of his continued employment with
the Company become familiar with the trade secrets of the Company and its
affiliates and with other Confidential Information concerning the business of
the Company and its affiliates. The Employee also acknowledges that all third
parties that the Employee services or proposes to service while employed by the
Company are doing business with the Company and not with the Employee
personally, and that, in the course of dealing with such third parties, the
Company establishes goodwill with respect to each such third party that is
created and maintained at the Company's expense ("Third-Party Goodwill"). The
Employee also acknowledges that, by virtue of his employment with the Company,
he has gained or will gain knowledge of the business needs of, and other
information concerning, third parties, and that the Employee will inevitably
have to draw on such information were the Employee to solicit or service any of
the third parties on his own behalf or on behalf of a business that competes
with the Company.
(ii) The Employee acknowledges that the business of the Company and
its affiliates is operated in the United States, Canada and in the United
Kingdom, that their products and services are marketed throughout the entire
United States, Canada and in the United Kingdom, that the Company and its
affiliates compete in nearly all of their business activities with other
individuals or entities that are, or could be, located in nearly any part of the
United States, Canada and the United Kingdom and that the nature of the
Employee's services, position, and expertise are such that the Employee is
capable of competing with the Company and its affiliates from nearly any
location in the United States. Accordingly, in order to protect the Company's
confidential and proprietary information, including trade secrets of the
Company, and Third-Party Goodwill, the Employee acknowledges and agrees that
during the period beginning on the Effective Date and ending on the first
anniversary of the date of termination of the Employee's employment for any
reason whatsoever (the "Restricted Period"), the Employee shall not, without the
Company's express written consent, directly or indirectly, own, control, manage,
operate, participate in, be employed by or act for or on behalf of, any business
located anywhere within the geographic boundaries of the United States, Canada
and the United Kingdom engaged in competition in any manner with any business
then engaged by the Company or by any of its affiliates, including, without
limitation, any person, entity or business that is then in the business of
developing or marketing software to law firms.
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(c) Non-Solicitation.
(i) During the Restricted Period, the Employee shall not, without
the prior written approval of the Company, directly or indirectly, solicit,
induce or attempt to induce any employees, agents or consultants of the Company
or any of its affiliates to do anything from which the Employee is restricted by
reason of this Agreement nor shall the Employee solicit, induce or aid others to
solicit or induce any employees, agents or consultants of the Company or any of
its affiliates to terminate their employment with the Company or any of its
affiliates or to enter into an employment, agency or consultancy relationship
with the Employee or any other person or entity with whom the Employee is
affiliated.
(ii) During the Restricted Period, the Employee shall not, directly
or indirectly, without the prior written approval of the Company, solicit or
contact any customer or potential customer of the Company or any of its
affiliates for the purpose of: (A) any commercial pursuit which is in
competition with the Company or any of its affiliates, (B) providing such
customer or potential customer products or services that are the same as or
substantially similar to those provided or offered to be provided by the Company
or any of its affiliates or (C) taking away or interfering or attempting to
interfere with any custom, trade, business or patronage of the Company or any of
its affiliates.
(d) Non-Disparagement. The Employee agrees that at any time during
his employment with the Company the Employee shall not make, or cause or assist
any other person to make, any statement or other communication which impugns or
attacks, or is otherwise critical of, the reputation, business or character of
the Company, any subsidiary or any of their respective officers, directors,
employees, products or services.
(e) Enforcement. The Employee hereby acknowledges that he has
carefully reviewed the provisions of this Agreement and agrees that the
provisions are fair and equitable, and that they are necessary and reasonable in
order to protect the Company and its affiliates in the conduct of their
business. However, in light of the possibility of differing interpretations of
law and change in circumstances, the parties hereto agree that if any one or
more of the provisions of this Section 5 is determined by a court or other
tribunal of competent jurisdiction to be invalid, void or unenforceable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographical area reasonable or enforceable under such circumstances
shall be substituted for the stated period, scope or area.
(f) Remedies. The Employee acknowledges that the Company has a
compelling business interest in preventing unfair competition stemming from the
intentional or inadvertent use or disclosure of the Company's confidential and
proprietary information, including trade secrets of the Company. The Employee
further acknowledges and agrees that damages for a breach or threatened breach
of any of the covenants set forth in this Section 5 will be difficult to
determine and will not afford a full and adequate remedy, and therefore agrees
that the Company, in addition to seeking actual damages in connection therewith
and the termination of the Company's obligations in Section 4(b), may seek
specific enforcement of any such covenant in any court of competent
jurisdiction, including, without limitation, by the issuance of a temporary or
permanent injunction without the necessity of showing any actual damages or
posting any bond or furnishing any other security, and that the specific
enforcement of the
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provisions of this Agreement will not diminish the Employee's ability to earn a
livelihood or create or impose upon the Employee any undue hardship. The
Employee also agrees that any request for such relief by the Company shall be in
addition to, and without prejudice to, any claim for monetary damages that the
Company may elect to assert.
6. GENERAL PROVISIONS
(a) No Other Severance Benefits. Except as specifically set forth
in this Agreement, the Employee covenants and agrees that he shall not be
entitled to any other form of severance benefits from the Company, including,
without limitation, benefits otherwise payable under the Company's regular
severance policies, if any, in the event his employment hereunder ends for any
reason and, except with respect to obligations of the Company expressly provided
for herein, the Employee unconditionally releases the Company and its
subsidiaries and affiliates, and their respective directors, officers, employees
and stockholders, or any of them, from any and all claims, liabilities or
obligations under any severance or termination arrangements of the Company or
any of its subsidiaries or affiliates.
(b) Tax Withholding. All amounts paid to Employee hereunder shall
be subject to all applicable federal, state and local wage withholding.
(c) Notices. Any notice hereunder by either party to the other
shall be given in writing by personal delivery, or certified mail, return
receipt requested, or (if to the Company) by facsimile, in any case delivered to
the applicable address set forth below:
(i) To the Company: Thomson Legal and Regulatory
610 Opperman Drive
Eagan, MN 55123
Facsimile No: (651) 687-1498
Attn: Senior Vice President of
Human Resources
With a copy to: Thomson Corporation
Metro Center
One Station Place
Stamford, CT 06902
Facsimile No: (203) 357-9762
Attn: TLR General Counsel
(ii) To the Employee: Christopher K. Poole
1819 Fairmount Avenue
La Canada
California 91011
Facsimile No: (323) 292-3975
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or to such other persons or other addresses as either party may specify to the
other in writing.
(d) Assignment; Assumption of Agreement. No right, benefit or
interest hereunder shall be subject to assignment, encumbrance, charge, pledge,
hypothecation or setoff by the Employee in respect of any claim, debt,
obligation or similar process. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to assume expressly
and to agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place.
(e) Amendment. No provision of this Agreement may be amended,
modified, waived or discharged unless such amendment, modification, waiver or
discharge is agreed to in writing and signed by the parties. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
(f) Severability. If any term or provision hereof is determined to
be invalid or unenforceable in a final court or arbitration proceeding, (i) the
remaining terms and provisions hereof shall be unimpaired and (ii) the invalid
or unenforceable term or provision shall be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California (determined
without regard to the choice of law provisions thereof).
(h) Entire Agreement. This Agreement and the Proprietary
Information Agreement contain the entire agreement of the Employee, the Company
and any predecessors or affiliates thereof with respect to the subject matter
hereof and all prior agreements and negotiations, including, without limitation,
the Existing Employment Agreement, are superseded hereby as of the Effective
Date.
(i) Counterparts. This Agreement may be executed by the parties
hereto in counterparts, each of which shall be deemed an original, but both such
counterparts shall together constitute one and the same document.
(j) Survival. The provisions of Section 5 shall survive the
termination of this Agreement.
(k) Expenses. The Company shall either pay directly at the
Employee's request or reimburse the Employee for his reasonably incurred legal
expenses directly related to the negotiation of this Agreement, in an amount
that in no event shall exceed $5,000.
[Signature Page on Following Page]
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IN WITNESS WHEREOF, the parties have executed this Agreement, effective
as of the day and year first written above.
ELITE INFORMATION GROUP, INC.
By: /s/ Steven O. Todd
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Name: Steven O. Todd
Title: Vice President
EMPLOYEE
/s/ Christopher K. Poole
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CHRISTOPHER K. POOLE