Executive Non-Competition and Severance Agreement - Manhattan Associates Inc. and Jeffrey S. Mitchell
EXECUTIVE NON-COMPETITION AND SEVERANCE AGREEMENT
The purpose of this letter is to set forth certain terms by and between
Manhattan Associates, Inc, a Georgia corporation ("Company"), and Jeffrey S.
Mitchell ("Executive") with respect to the subject matter herein, and supercedes
any other terms relating to such subject matter. In the event of a conflict
between this agreement and any other, the terms herein shall control.
Capitalized terms not defined herein shall have the meanings ascribed to them in
the Agreement.
NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is
hereby acknowledged, and in consideration of the mutual promises and covenants
set forth in this agreement, the parties agree as follows:
1. Employment. Company has agreed to employ Executive as
Executive Vice President, Sales and Marketing in accordance
with the terms and conditions set forth herein and Executive
has accepted such employment.
2. Base Salary. Effective January 1, 2004, Company shall pay to
Executive a base salary ("Base Salary") of $20,833.33 per
month ($250,000.00 annualized), subject to all standard
employment deductions, which amount may be increased annually
at the discretion of the Chief Executive Officer, President or
Board of Directors.
3. Performance-Related Bonus. Executive shall be eligible to
receive a performance-related bonus of $390,000.00 per year
and subject to all standard employment deductions. The bonus
criteria shall be discussed with Executive, but determined in
the sole discretion of the Company. In addition to the above,
Executive shall receive a one-time bonus of $100,000 payable
in April 2004 and an additional bonus of $90,000.00 payable on
April 21, 2006. These bonuses are in lieu of any other bonuses
Executive may have been entitled to receive, including any
other bonus for fiscal year 2003. Thereafter, the bonus shall
be paid as determined by the Company. In the event Executive
is not an employee in good standing with Company on the date
of any bonus is payable, he shall not be entitled to receive
such payment.
4. Stock. Executive shall receive a grant of $100,000 of
restricted stock of Company based on the closing date of
February 5, 2004 which shall equal 3,630 shares, vesting in
Three (3) equal installments on January 1, 2005, January 1,
2006 and January 1, 2007.
5. Stock Options. The Executive has received the option (the
"Option") to purchase 100,000 shares of Company, at a price of
$26.64 vesting in Twelve (12) equal quarterly installments
beginning on March 31, 2004. All Options are granted pursuant
to the Manhattan Associates, Inc. Option Plan (the "Option
Plan"). The options will vest in accordance with the stock
option certificate given for each grant. Executive shall be
considered for additional annual awards of Options and any
such award shall be at the sole discretion of the Board of
Directors.
6. Severance. In the event of a termination or Constructive
Termination (as defined below) by the Company or its
successors, other than a termination for cause, Executive
shall receive a severance payment equal to Twelve (12) months
of Executive's then current base salary, subject to all
standard deductions, payable in Twelve (12) equal monthly
payments from date of termination, including COBRA payments
for Executive's family for medical and dental coverage.
Company's obligation to make the severance payment shall be
conditioned upon Executive's (i) execution of a release
agreement in a form reasonably acceptable to the Company, and
consistent with the terms of this agreement and any other
Agreements, whereby Executive releases the Company from any
and all liability and claims of any kind, and (ii) compliance
with the restrictive covenants and all post-termination
obligations contained in this agreement. Further, in the event
of a termination, other than a termination for cause,
Executive shall have thirty (30) days in which to exercise his
vested options. In the event of a voluntary termination, no
severance shall be due.
7. Cause. For purposes of this agreement, Cause shall include but
not be limited to an act or acts or an omission to act by the
Executive involving (i) willful and continual failure to
substantially perform his duties with the Company (other than
a failure resulting from the Executive's Disability) and such
failure continues after written notice to the Executive
providing a reasonable description of the basis for the
determination that the Executive has failed to perform his
duties, (ii) indictment for a criminal offense other than
misdemeanors not disclosable under the federal securities
laws, (iii) breach of this agreement in any material respect
and such breach is not susceptible to remedy or cure or has
not already materially damaged the Company, or is susceptible
to remedy or cure and no such damage has occurred, is not
cured or remedied reasonably promptly after written notice to
the Executive providing a reasonable description of the
breach, or (iv) conduct that the Board of Directors of the
Company has determined, in good faith, to be dishonest,
fraudulent, unlawful or grossly negligent or which is not in
compliance with the Company's Code of Conduct or similar
applicable set of standards or conduct and business practices
set forth in writing and provided to the Executive prior to
such conduct.
8. Constructive Termination. For purposes of this Agreement,
Constructive Termination shall mean a situation where (A) (i)
the Executive is
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no longer serving as Executive Vice President of the Company,
the Executive is directed to report to someone other than the
Chief Executive Officer or President, the Executive is not
timely paid his compensation under this Agreement or the
assignment to the Executive of any duties or responsibilities
which are inconsistent with the status, title, position or
responsibilities of such positions (which assignment is not
rescinded after the Company receives written notice from the
Executive providing a reasonable description of such
inconsistency); (ii) after a Change of Control, the Company's
headquarters being outside of the greater Atlanta area or the
Company requiring the Executive to be based at any place
outside a 30-mile radius from the principal location from
which the Executive served as an employee of the Company
immediately prior to the Change of Control; (iii) after a
Change of Control, the failure by the Company to provide the
Executive with compensation and benefits substantially
comparable, in the aggregate, to those provided for under the
employee benefit plans, programs and practices in effect
immediately prior to the Change of Control (other than stock
option and other equity based compensation plans); (iv) after
a Change of Control, the insolvency or the filing (by any
party including the Company) of a petition for bankruptcy of
the Company; or (v) after a Change of Control, the failure of
the Company to obtain an agreement from any successor or
assignee of the Company to assume and agree to perform this
Agreement unless such successor or assignee is bound to the
performance of this Agreement as a matter of law; provided
however, that the aforementioned situations will not be deemed
to be a Constructive Termination hereunder until such time as
the Executive has given written notice to the Chief Executive
Officer or President of the situation constituting a
"Constructive Termination" hereunder, and the Chief Executive
Officer or President has failed to cure such situation within
thirty (30) days following receipt of such written notice, and
(B) the Executive terminates his employment with the Company.
9. Change of Control. In the event of a Change of Control of the
Company, as defined below, all Options granted under this
agreement, whether vested or non-vested shall vest as of the
date of the Change of Control. "Change of Control" shall mean
the happening of an event that shall be deemed to have
occurred upon the earliest to occur of the following events:
(i) the date the stockholders of the Company (or the Board, if
stockholder action is not required) approve a plan or other
arrangement pursuant to which the Company will be dissolved or
liquidated; (ii) the date the stockholders of the Company (or
the Board, if stockholder action is not required) approve a
definitive agreement to sell or otherwise dispose of all or
substantially all of the assets of the Company; or (iii) the
date the stockholders of the Company (or the Board, if
stockholder action is not required) and the stockholders of
the other constituent corporations (or their respective boards
of directors, if and to the extent that stockholder action is
not required) have approved a definitive agreement to merge or
consolidate the Company with or into another corporation,
other than, in either case, a merger or consolidation of the
Company in which holders of shares of the Company's voting
capital stock immediately prior to the merger or consolidation
will have at least fifty percent (50%) of the ownership of
voting capital stock of the surviving corporation immediately
after the merger or consolidation (on a fully diluted basis),
which voting capital stock is to be held by each such holder
in the same or substantially similar proportion (on a fully
diluted basis) as such holder's ownership of voting capital
stock of the Company immediately before the merger or
consolidation.
10. Non-Competition. As a condition to any payment based on a
termination, Executive agrees that he will not work for any of
the direct competitors to Company listed in Schedule A for a
period of Twelve (12) months from the date of termination
without written consent of Employer. Further, Executive agrees
that he will not recruit or hire, another employee of Employer
for a period of Twelve (12) months from the date of
termination or cause another employee of Employer to be hired
by any competitor of Employer for a period of Twelve (12)
months from the date of termination.
11. Effect of violations by Executive. Executive agrees and
understands that any action by him in violation of this
agreement shall void Employer's payment to the Executive of
all bonuses, severance monies and benefits provided for herein
and shall require immediate repayment by the Executive of the
value of all consideration paid to Executive by Employer
pursuant to this agreement, and shall further require
Executive to pay all reasonable costs and attorneys' fees in
defending any action Executive brings, plus any other damages
to which the Employer may be entitled.
12. Severability. If any provision, or portion thereof, of this
agreement is held invalid or unenforceable under applicable
statute or rule of law, only that provision shall be deemed
omitted from this agreement, and only to the extent to which
it is held invalid and the remainder of this agreement shall
remain in full force and effect.
13. This Second Modification shall be governed under the laws of
the United States.
[SIGNATURES ON NEXT PAGE]
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I have read this Second Modification, I understand its contents, and I
willingly, voluntarily, and knowingly accept and agree to the terms and
conditions of this agreement. I acknowledge and represent that I received a copy
of this agreement on June 22, 2004.
EXECUTIVE:
/s/ Jeffrey S. Mitchell 6/22/04
-------------------------------------------- -------
Jeffrey S. Mitchell Date
EMPLOYER:
/s/ Peter F. Sinisgalli 6/22/04
-------------------------------------------- -------
Peter F. Sinisgalli Date
President and Chief Operating Officer
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