EXHIBIT 10.1
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This Employment and Non-Competition Agreement (this "Agreement") is
between Tyler Technologies, Inc., a Delaware corporation (the "Company"), and
John S. Marr, Jr. ("Executive"). This Agreement will become effective upon the
date it is executed by Executive as evidenced on the signature page hereto (the
"Effective Date").
The Company desires to employ Executive under the terms and conditions
set forth in this Agreement, Executive hereby representing that he is free from
any other obligation of continuing employment with any other employer.
Executive desires employment as an employee of the Company under the
terms and subject to the conditions set forth in this Agreement.
The non-competition and confidentiality obligations of Executive as set
forth in this Agreement are a material inducement for the Company to enter into
this Agreement, and the Company would not enter into this Agreement absent such
covenants by Executive.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which all parties mutually acknowledge, the parties
agree as follows:
1. Employment. The Company hereby employs Executive, and
Executive hereby accepts such employment, on the terms and subject to the
conditions set forth in this Agreement.
2. Duties of Executive.
(a) Executive will serve in the capacity of Chief
Operating Officer of the Company or such other capacity as may be
assigned to Executive by the Board of Directors, which capacity will be
commensurate with the education, experience, and skills of Executive.
The Board of Directors will periodically review the duties of
Executive, which will occur not less than annually. In all such
capacities, Executive shall have all necessary power and authority to
discharge his responsibilities. Executive will report to the Chief
Executive Officer and the Board of Directors of the Company.
(b) Executive will devote his full business time and
effort to the performance of his duties and responsibilities as an
executive of the Company, excluding vacation and reasonable absence due
to illness.
(c) Executive will perform his duties in a professional
manner and will use his best efforts, skills, and abilities to promote,
enhance, and preserve the business of the Company and its affiliates
and the goodwill and relationships they have with their employees,
agents, representatives, customers, suppliers, and other persons having
business relations with any of them.
(d) Executive shall observe and comply with the written
rules and regulations of the Company with respect to its business and
shall carry out and perform the directives and policies of the Company
as the Board of Directors may from time to time state them to Executive
in writing.
3. Employment Term. This Agreement shall commence as of the
Effective Date and continue for a period of five (5) years; provided, however,
that at the end of such initial term the term shall automatically extend for an
additional year unless the Company provides, at least six (6) months prior to
the end of such initial term or subsequent anniversary of the end of such
initial term, written notice that it does not wish to extend the term.
Notwithstanding the foregoing, this Agreement may be earlier terminated in
accordance with Section 7 of this Agreement.
4. Compensation.
(a) Base Salary. For services performed by Executive
pursuant to this Agreement, the Company will pay Executive a minimum
base salary at the rate of (i) during the first year of this Agreement,
$275,000 per year and (ii) during the remainder of this Agreement,
$300,000 per year (the "Base Salary"), which shall be payable in
accordance with the Company's standard payroll practices but not less
than monthly. The Base Salary shall not be subject to reduction, but
may be increased at the discretion of the Compensation Committee of the
Board of Directors or the Board of Directors as a whole. Any
compensation that may be paid to Executive under any additional
compensation or incentive plan or which may be otherwise authorized
from time to time by the Board of Directors shall be in addition to the
Base Salary to which Executive is entitled under this Agreement.
(b) Annual Bonus. For each calendar year during the term
of this Agreement, Executive shall be eligible to receive an annual
performance bonus (the "Bonus"), which shall be established and paid in
accordance with the incentive compensation plan set forth as Exhibit A
(or as otherwise established by the Executive Committee and/or
Compensation Committee of the Tyler Board of Directors). The Bonus will
be paid in accordance with the Company's standard bonus payment
practices.
(c) Equity Grants. During the term of this Agreement,
Executive shall be eligible and participate, in an appropriate manner
relative to other senior executives of the Company and consistent with
competitive pay practices generally, in any equity-based incentive
compensation plan or program of the Company, including, without
limitation, any plan or program providing for the grant of (i) options
to purchase common stock of the Company, (ii) restricted stock of the
Company, or (iii) similar equity-based units or interests. In
consideration of the mutual promises contained herein, the Company
shall grant Executive upon the execution of this Agreement options to
purchase 500,000 shares of Company Common Stock, $.01 par value per
share, subject to the terms and conditions of the Company's Amended and
Restated Stock Option Plan and the Company's standard stock option
agreement.
5. Executive Benefits. During the term of this Agreement, the
Company shall provide Executive with all benefits made available from time to
time by the Company to its senior executives and to its employees generally,
including, without limitation, participation in medical and dental benefit plans
and programs, disability and death insurance, 401-K plans, paid vacation, and
other fringe benefits.
6. Reimbursement of Expenses. The Company shall reimburse
Executive for all expenses actually and reasonably incurred by Executive in the
business interests of the Company. Such reimbursement shall be made to Executive
upon appropriate documentation of such expenditures in accordance with the
Company's policies.
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7. Early Termination.
(a) It is the desire and expectation of each party that
the employer-employee relationship will continue for the full term as
set forth in Section 3 of this Agreement. The Company shall, however,
be entitled to terminate Executive's employment at any time with or
without Cause (as defined below), subject to the restrictions contained
in this Section 7.
(b) If Executive's employment is terminated by the
Company without Cause prior to the expiration of this Agreement, the
Company shall pay Executive a lump sum amount equal to Executive's Base
Salary (i) still due for the remainder of the term of this Agreement or
(ii) for a period of twenty-four (24) months, whichever is greater.
Executive shall also be entitled to receive the benefits set forth in
Section 5 for a period equal to the greater of twelve (12) months or
the number of months then remaining on the term of this Agreement. A
Change of Control (as defined below) shall be deemed to be a
termination without Cause, unless otherwise agreed in writing by
Executive.
(c) If Executive dies, is unable to perform his duties
and responsibilities as a result of a disability that continues for one
hundred and eighty (180) consecutive days or more, voluntarily resigns
from the Company, or is terminated by the Company for Cause (as defined
below), the Company shall pay Executive (or his estate, executor, or
legal representative, as the case may be) any accrued and unpaid Base
Salary and finally determined and unpaid Bonus to the date employment
ceases, and the Company's obligations to pay additional salary, cash
compensation, or benefits shall terminate as of such date. In addition,
if the Company terminates Executive due to disability, the Company will
continue to pay the benefits outlined in Section 5 to Executive and
Executive's dependents for a period equal to the greater of twelve (12)
months or the number of months then remaining on the term of this
Agreement.
(d) For purposes of this Agreement, "Cause" means a
determination by the Board of Directors of the Company that Executive
has: (i) failed or been unable for any reason to devote substantially
all of his time during normal business hours to the business of the
Company and its affiliates (except for vacations and absence due to
illness); (ii) been convicted of any felony; (iii) committed any act or
engaged in any conduct that is fraudulent or constitutes malfeasance or
a breach of fiduciary duties of Executive; (iv) persistently failed to
abide by the corporate policies and procedures as set forth in the
Company's employee handbook; (v) persistently failed to execute the
reasonable and lawful instructions of the Company's Board of Directors
relating to the operation of the Company's business; or (vi) committed
any material or continuing breach of any of the terms of, or has
materially or continually failed to perform any covenant contained in,
this Agreement to be performed by Executive. With respect to (i), (iv),
(v), and (vi) above, Executive may not be terminated for Cause unless
Executive fails to cure such breach or failure of performance within
thirty (30) days after written notice of such breach or failure.
(e) For purposes of this Agreement, "Change of Control"
means approval by the shareholders of the Company of a merger or
consolidation of the Company into an unaffiliated entity, the
dissolution or liquidation of the Company, the sale of all or
substantially all of the assets of the Company, the acquisition by any
person, entity, or group of more than 50% of the voting stock of the
Company, or a change in
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a majority of the Company's Board of Directors that was not approved by
the then existing Board of Directors.
8. Confidential Information.
(a) Executive acknowledges that the Company and its
affiliates are continuously developing or receiving Confidential
Information (as defined below), and that during Executive's employment,
Executive will receive Confidential Information from the Company and
its affiliates and will receive special training relating to the
Company's and its affiliates' business methodologies. Executive further
acknowledges and agrees that Executive's employment by the Company
creates a relationship of confidence and trust between Executive, the
Company and its affiliates that extends to all Confidential Information
that becomes known to Executive. Accordingly, Executive will not
disclose or use any Confidential Information, except in connection with
the good faith performance of his duties as an officer and employee,
and will take reasonable precautions against the unauthorized
disclosure or use of Confidential Information. Upon the Company's
request, Executive will execute and comply with a third party's
agreement to protect its confidential and proprietary information. In
addition, Executive will not solicit or induce the unauthorized
disclosure or use of a third party's confidential or proprietary
information for the benefit of the Company or its affiliates.
(b) For purposes of this Agreement, "Confidential
Information" means all written, machine-reproducible, oral and visual
data, information, and material, including, without limitation,
business, financial, and technical information, computer programs,
documents, and records (including those that Executive develops in the
scope of his employment) that (i) the Company and its affiliates, or
any of their respective customers or suppliers treats as confidential
or proprietary through markings or otherwise, (ii) relates to the
Company and its affiliates, or any of their respective customers or
suppliers or any of their respective business activities, products, or
services (including software programs and techniques) and is
competitively sensitive or not generally known in the relevant trade or
industry, or (iii) derives independent economic value from not being
known to, and is not generally ascertainable by proper means by, other
persons who can obtain economic value from its disclosure or use.
Confidential Information shall not include information or material
that: (A) was in the public domain prior to the date of this Agreement
or subsequently came into the public domain through no fault of
Executive; (B) was lawfully received by Executive from a third party
free of any obligation of confidentiality; (C) is approved by the
Company for unrestricted public disclosure; or (D) is required to be
disclosed in a judicial or administrative proceeding or by a
governmental or regulatory authority, domestic or foreign.
9. Non Compete; No Solicitation.
(a) Executive understands that, during the course of his
employment by the Company, Executive will have access to and receive
the benefit of Confidential Information (as defined in Section 8) and
special training, as well as come into contact with customers and
potential customers of the Company and its affiliates, which
Confidential Information, training, knowledge, and contacts would
provide invaluable benefits to competitors and potential competitors of
the Company and its affiliates. To protect such entities' interest in
this information and in these contacts and relationships, and in
consideration for the Company entering into this Agreement, Executive
agrees and covenants that for a period beginning on the
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Effective Date of this Agreement and continuing until (i) if Executive
voluntarily resigns or is terminated for Cause, the then remaining term
of this Agreement, or (ii) if Executive is terminated without Cause
pursuant to Section 7(b), the greater of one year or the then remaining
term of this Agreement, Executive will not (without the prior written
consent of the Company), directly or indirectly, (A) engage in any
business that provides the same or competitive products or services as
those provided by the Company and its affiliates in the State of Maine
or in any other state in which the Company or its affiliates is
conducting or conducts such business during the term of this Agreement
or at the time of termination of Executive's employment hereunder, or
(B) solicit or encourage or assist other persons or entities to solicit
or encourage any customers of the Company or its affiliates to
terminate or materially alter their relationship with the Company or
its affiliates or to become a customer of any other person or entity
competing with the Company or its affiliates, or (C) recruit, solicit
or hire, or encourage or assist other persons or entities to recruit,
solicit or hire, any employees of the Company or its affiliates.
(b) Executive understands and agrees that the foregoing
covenant is reasonable as to time, area, and scope and is necessary to
protect the legitimate business interests of the Company and its
affiliates. It is further agreed that such covenant will be regarded as
divisible and will be operative as to time, area, and scope to the
extent it may be so operative, and if any part of such covenant is
declared invalid, unenforceable, or void as to time, area, or scope,
the validity and enforceability of the remainder will not be affected.
(c) Executive understands and acknowledges that the
determination of damages in the event of a breach of any provision of
this Section 9 would be difficult. Executive agrees that the Company or
its affiliates, in addition to all other remedies it or any of them may
have at law or in equity (and notwithstanding Section 19), will have
the right to injunctive relief if there is a breach without the
necessity of proving the inadequacy or unavailability of damages as an
effective remedy.
10. Proprietary Rights.
(a) Executive will disclose to the Company all works of
authorship and inventions that Executive produces while employed by the
Company, working alone or jointly with others, including all computer
programs, documents, and records, together with all related ideas,
know-how, and techniques. These disclosures will be considered
Confidential Information. All copyrights, patent rights, and other
intellectual property rights in and to works of authorship and
inventions that Executive produces while employed by the Company,
working alone or jointly with others, are intended to be and will be
owned exclusively by the Company, except for such rights, interests,
and works that are not assigned to the Company pursuant to Section
10(b).
(b) Executive assigns to the Company all of his rights in
and to all works of authorship and inventions that Executive produces
while employed by the Company, working alone or jointly with others,
and waives all rights therein. Executive agrees to sign, without
additional compensation, all necessary documents and otherwise assist
the Company, at its expense, to register and enforce all copyrights,
patents, and other intellectual property rights. Executive appoints the
Company as his attorney-in-fact for the sole purpose of executing all
necessary documents relating to the registration or enforcement of any
copyrights, patents, and other intellectual property rights produced
while employed by the Company and
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assigned to the Company in accordance with, and subject to the
restrictions contained in, this Section 10. Notwithstanding the
foregoing, Executive does not assign works of authorship or inventions
which (i) Executive developed on his own time without using the
Company's equipment, facilities, supplies, or Confidential Information,
or (ii) do not relate to either (A) the Company's or its affiliates'
business, (B) the Company's or its affiliates' actual or demonstrably
anticipated research or development, or (C) work done by Executive for
the Company.
(c) The Company can waive the rights in any work of
authorship or invention only through a written instrument signed by an
officer of the Company after Executive has fully and completely
disclosed in writing the existence and nature of that work or
authorship or invention.
11. End of Employment
(a) Executive agrees that all documents of any nature
pertaining to the activities of the Company or its affiliates, or that
include Confidential Information, in his possession now or at any time
during the term of his employment, including, without limitation,
memoranda, notebooks, notes, data sheets, records, and computer
programs, are and shall be the property of the Company and that all
copies thereof shall be surrendered to the appropriate entity upon
termination of employment.
(b) Executive authorizes the Company to offset any
liquidated amounts payable or reimbursable to the Company by Executive
against, and to withhold such amounts from, any amounts payable or
reimbursable to Executive by the Company, including, without
limitation, any base salary, bonus, other incentive compensation, and
expense reimbursements to the maximum extent permitted by law.
12. Specific Performance. The parties hereby acknowledge and agree
that the failure of either party to perform the agreements and covenants set
forth in Section 8, Section 9, Section 10, and Section 11 of this Agreement will
cause irreparable injury to the other party for which damages, even if
available, may not be an adequate remedy. Accordingly, each party hereby
consents, notwithstanding Section 19, to the issuance of injunctive relief by
any court of competent jurisdiction to compel performance of such party's
obligations and to the granting by any court of the remedy of specific
performance of such obligations.
13. Continuing Obligations. Executive acknowledges and agrees that
the provisions of Section 8, Section 9, Section 10, and Section 11 will survive
the termination or expiration of this Agreement.
14. Notices. Any notice, consent, demand, or request, or other
communication to be given under this Agreement must be in writing and shall be
deemed given or made when delivered in person or within three (3) days upon
being sent certified mail, postage prepaid with return receipt requested, to the
following addresses:
If to the Company: Tyler Technologies, Inc.
5949 Sherry Lane, Suite 1400
Dallas, Texas 75225
If to Executive: Home address of Executive,
as shown on current records of the Company
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15. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the specific subject matter
hereof and supersedes all prior agreements, whether written or oral, between the
parties with respect to the terms and conditions of employment of Executive by
the Company.
16. Modification. Any change or modification of this Agreement
shall not be valid or binding upon the parties, nor will any waiver of any term
or condition in the future be binding, unless the change or modification or
waiver is in writing and signed by all parties hereto.
17. Waiver of Breach. The waiver by the Company of a breach of any
provision of this Agreement by Executive will not operate or be construed as a
waiver of any subsequent breach by Executive.
18. Governing Law. This Agreement is governed by, and will be
construed in accordance with, the substantive laws of the State of Texas,
without giving effect to any conflicts-of-law, rule, or principle that might
require the application of the laws of another jurisdiction.
19. Arbitration. Any controversy, dispute, or claim arising under
this Agreement will be finally settled by arbitration conducted in accordance
with the American Arbitration Association Rules then in effect; provided,
however, that the parties will be obligated to negotiate in good faith for a
period of thirty (30) days to resolve such controversy, dispute, or claim prior
to submitting the same to arbitration. Any such arbitration proceeding will take
place in the City of Dallas, Texas, and the arbitrator will apply the laws of
the State of Texas. Any decision rendered by the arbitrator will be final and
binding and judgment thereon may be entered in any court having jurisdiction or
application thereon may be made to such court for an order of enforcement as the
case may require. The parties intend that this agreement to arbitrate be
irrevocable. If arbitration is invoked in accordance with the provisions of this
Agreement, the prevailing party will be entitled to receive from the other all
costs, fees, and expenses pertaining to or attributable to such arbitration,
including reasonable attorneys' fees.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will constitute one document.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
effective as of July 1, 2003.
TYLER TECHNOLOGIES, INC.,
a Delaware corporation
By: _____________________________
Name: John M. Yeaman
Title: President and Chief Executive Officer
EXECUTIVE
By: ______________________________
Name: John S. Marr, Jr.
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EMPLOYMENT AND NON-COMPETITION AGREEMENT
EXHIBIT A
INCENTIVE COMPENSATION PLAN
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