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EXHIBIT 10(z)
CHECKFREE CORPORATION
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 1st day of May, 1997, (the
"Agreement") between CheckFree Corporation ("CheckFree"), a Delaware
corporation, and Peter J. Kight (the "Executive").
RECITALS
A. Executive is currently employed as an executive of CheckFree
and its consolidated subsidiaries (individually the "Subsidiary" and
collectively the "Subsidiaries") (CheckFree and the Subsidiaries are
hereinafter collectively referred to as the "Company").
B. The parties desire to continue Executive's employment by
CheckFree and/or the Subsidiaries on the terms and conditions stated herein.
STATEMENT OF AGREEMENT
In consideration of the foregoing, and of Executive's continued
employment, the parties agree as follows:
1. Employment. The Company hereby employs Executive and
Executive accepts such employment upon the terms and conditions hereinafter set
forth to become effective on May 1, 1997 (the "Effective Time").
2. Duties.
(a) Executive shall be employed: (i) to serve as Chairman,
President, and Chief Executive Officer, and to serve in similar capacities for
each of the Subsidiaries, if so elected, subject to the authority and direction
of the Board of Directors of CheckFree or the Subsidiary, as the case may be;
and (ii) to perform such other duties and responsibilities similar to those
performed by Executive prior hereto and exercise such other authority, perform
such other or additional duties and responsibilities and have such other or
different title (or have no title) as the Board of Directors of CheckFree or
the Subsidiary may, from time to time, prescribe.
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(b) So long as employed under this Agreement, Executive
agrees to devote full time and efforts exclusively on behalf of the Company and
to competently, diligently and effectively discharge all duties of Executive
hereunder. Executive shall not be prohibited from engaging in such personal,
charitable, or other nonemployment activities as do not interfere with full time
employment hereunder and which do not violate the other provisions of this
Agreement. Executive further agrees to comply fully with all reasonable policies
of the Company as are from time to time in effect.
3. Compensation. As full compensation for all services rendered to the
Company pursuant to this Agreement, in whatever capacity rendered, the Company
shall pay to Executive during the term hereof a minimum base salary at the rate
of $300,000 per year (the "Basic Salary"), payable monthly or in other more
frequent installments, as determined by the Company. The Basic Salary shall
increase to $375,000 on July 1, 1997, and thereafter may be increased, but not
decreased, from time to time, by the Board of Directors. Additionally,
Executive shall receive a stock option to purchase 200,000 shares of the
Company's common stock under the Company's 1995 Stock Option Plan at a purchase
price per share of $14.75, the closing price per share of the Company's common
stock on the Nasdaq National Market on May 1, 1997, expiring on the tenth
anniversary of the Effective Time. Such option will vest 100% on May 1, 2003
subject to Executive's continued employment by the Company; provided, however,
if Executive's employment is terminated without cause pursuant to Section 6(b)
or in connection with a Change in Control (as defined below) pursuant to
Section 6(e), the option will vest 100% on the Termination Date; provided,
further, 20% of the option shares will vest and become exercisable for each
fiscal year from 1998 through 2002 for which the Company's net income is 80% or
more of the Company's budgeted net income for that fiscal year, or the
Company's net loss is 120% or less of the Company's budgeted net loss for that
fiscal year, as the case may be, such earlier vesting and exercisability to be
effective upon the date of the Company's public announcement of its net income
or net loss for each such fiscal year. Furthermore, Executive will be entitled
to receive incentive compensation pursuant to the terms of plans adopted by the
Board of Directors from time to time.
4. Business Expenses. The Company shall promptly pay directly, or
reimburse Executive for, all business expenses to the extent such expenses are
paid or incurred by Executive during the term of employment in accordance with
Company policy in effect from time to time and to the extent such expenses are
reasonable and necessary to the conduct by Executive of the Company's business
and properly substantiated.
5. Fringe Benefits. During the term of this Agreement and Executive's
employment hereunder, the Company shall provide to Executive such insurance,
vacation, sick leave and other like benefits as are provided from time to time.
6. Term; Termination.
(a) The Company shall employ the Executive, and the Executive
accepts such employment, for an initial term commencing on the date of this
Agreement and ending on June 30, 2002. Thereafter, this Agreement shall be
extended automatically on each July 1 for an additional twelve-month period.
Executive's employment may be terminated at any time as provided in this
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Section 6. For purposes of this Section 6, "Termination Date" shall mean the
date on which any notice period required under this Section 6 expires or, if no
notice period is specified in this Section 6, the effective date of the
termination referenced in the notice.
(b) The Company may terminate Executive's employment without cause
upon giving 30 days' advance written notice to Executive. If Executive's
employment is terminated without cause under this Section 6(b), the Company will
pay Executive the earned but unpaid portion of Executive's Basic Salary through
the Termination Date, and will continue to pay Executive his Basic Salary and
any incentive compensation under and consistent with plans adopted by the
Company prior to the Termination Date until the later of June 30, 2002 or the
second anniversary of the Termination Date (the "Severance Period"), and the
Company will provide executive level outplacement services by a firm selected
and contracted by the Company for up to six months following the Termination
Date (the "Outplacement Services"); provided, however, if Executive accepts
other employment during the Severance Period, the Company shall pay Executive's
Basic Salary and any incentive compensation until the first to occur of the
expiration of the Severance Period or the commencement of the other employment.
(c) The Company may terminate Executive's employment upon a
determination by the Company that "good cause" exists for Executive's
termination and the Company serves written notice of such termination upon
Executive. As used in this Agreement, the term "good cause" shall refer only to
any one or more of the following grounds:
(i) commission of a material and substantive act of dishonesty,
including, but not limited to, misappropriation of funds or any
property of the Company;
(ii) engagement in activities or conduct clearly injurious to
the best interests or reputation of the Company which in fact result in
material and substantial injury to the Company;
(iii) refusal to perform his assigned duties and
responsibilities after receipt by Executive of written detailed notice
and reasonable opportunity to cure;
(iv) gross insubordination by Executive, which shall consist
only of a willful refusal to comply with a lawful written directive to
Executive issued pursuant to a duly authorized resolution adopted by
the Company;
(v) the clear violation of any of the material terms and
conditions of this Agreement or any written agreement or agreements
Executive may from time to time have with the Company (following
30-days' written notice from the Company specifying the violation and
Executive's failure to cure such violation within such 30-day period);
(vi) Executive's substantial dependence, as determined by the
Board of Directors of the Company, on alcohol or any narcotic drug or
other controlled or illegal
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substance which materially and substantially prevents Executive from
performing his duties hereunder; or
(vii) the final and unappealable conviction of Executive of a
crime which is a felony or a misdemeanor involving an act of moral
turpitude, or a misdemeanor committed in connection with his employment
by the Company, which causes the Company a substantial detriment.
In the event of a termination under this Section 6(c), the Company will pay
Executive the earned but unpaid portion of Executive's Basic Salary through the
Termination Date. If any determination of substantial dependence under Section
6(c)(vi) is disputed by the Executive, the parties hereto agree to abide by the
decision of a panel of three physicians appointed in the manner as specified in
Section 6(d) of this Agreement.
(d) Executive's employment shall terminate upon the death or
permanent disability of Executive. For purposes hereof, "permanent disability,"
shall mean the inability of the Executive, as determined by the Board of
Directors of CheckFree, by reason of physical or mental illness to perform the
duties required of him under this Agreement for more than 180 days in any one
year period. Successive periods of disability, illness or incapacity will be
considered separate periods unless the later period of disability, illness or
incapacity is due to the same or related cause and commences less than 180 days
from the ending of the previous period of disability. Upon a determination by
the Board of Directors of CheckFree that Executive's employment shall be
terminated under this Section 6(d), the Board of Directors shall give Executive
30 days' prior written notice of the termination. If a determination of the
Board of Directors under this Section 6(d) is disputed by Executive, the parties
agree to abide by the decision of a panel of three physicians. CheckFree will
select a physician, Executive will select a physician and the physicians
selected by CheckFree and Executive will select a third physician. Executive
agrees to make himself available for and submit to examinations by such
physicians as may be directed by the Company. Failure to submit to any
examination shall constitute a breach of a material part of this Agreement.
(e) If a "Change in Control" shall have occurred, Executive shall be
entitled to the benefits described below if his employment is terminated
following a Change in Control for other than good cause as specified in Section
6(c), or Executive terminates his employment upon making a good faith
determination that, following the Change in Control, Executive's employment
status or employment responsibilities have been materially and adversely
affected thereby:
(i) Executive shall be entitled to the unpaid portion of his
Basic Salary plus credit for any vacation accrued but not taken and the
amount of any unpaid but earned incentive compensation or any other
benefit to which he is entitled under this Agreement through the date
of the termination as a result of a Change in Control, plus the greater
of two times Executive's "Average Annual Compensation" or an amount
equal to Executive's Basic Salary and incentive compensation at the
100% targeted level from the Termination Date until June 30, 2002. For
this purpose "Average Annual Compensation" shall mean the average
annual compensation from the Company includible in Executive's gross
income for
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the period consisting of Executive's most recent five taxable years
ending before the date on which the Change in Control occurs,
exclusive of income attributable to the exercise of stock options.
(ii) At Executive's option, the amount payable under Section
6(e)(i) shall be paid to him in one lump sum within 30 days after
termination of employment following a Change in Control or in 24 equal
consecutive monthly payments commencing on the first day of the month
after termination of employment following a Change in Control.
(iii) The Company shall maintain for Executive's benefit until
the earlier of (y) 24 months after termination of employment following
a Change in Control, or (z) Executive's commencement of full-time
employment with a new employer, all life insurance, medical, health and
accident, and disability plans or programs in which Executive shall
have been entitled to participate prior to termination of employment
following a Change in Control, provided Executive's continued
participation is permitted under the general terms of such plans and
programs after the Change in Control. In the event Executive's
participation in any such plan or program is not permitted, the Company
will provide directly the benefits to which Executive would be entitled
under such plans and programs.
(iv) All outstanding stock options issued to Executive shall
become 100% vested and exercisable in accordance with such governing
stock option agreements and plans.
(f) Executive's benefits under Section 6(e) above shall be payable
to him as severance pay in consideration of his past service and of his
continued services from the date hereof. Executive shall have no duty to
mitigate his damages by seeking other employment, and the Company shall not be
entitled to set off against amounts payable hereunder any compensation which
Executive may receive from future employment.
(g) For purposes of Section 6(e), a "Change in Control" of the
Company shall be deemed to have occurred as of the first day that any one or
more of the following conditions shall have been satisfied:
(i) Any Person (other than a Person in control of the Company as
of the Effective Date, or other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or a
company owned directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of voting
securities of the Company) becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing a majority of the
combined voting power of the Company's then outstanding securities;
(ii) The stockholders of the Company approve: (x) a plan of
complete liquidation of the Company; or (y) an agreement for the sale
or disposition of all or substantially all the Company's assets; or (z)
a merger, consolidation, or reorganization of the Company with or
involving any other corporation, other than a merger, consolidation,
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or reorganization that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least a majority of the
combined voting power of the voting securities of the Company (or such
surviving entity) outstanding immediately after such merger,
consolidation, or reorganization; or
(iii) during any period of two consecutive years during the term
of this Agreement, individuals who at the beginning of such period
constitute the Board of Directors of CheckFree cease for any reason to
constitute at least a majority thereof, unless the election of each
director who was not a director at the beginning of such period has
been approved in advance by directors representing at least two-thirds
of the directors then in office who were directors at the beginning of
the period.
However, in no event shall a "Change in Control" be deemed to have
occurred, with respect to Executive, if Executive is part of a purchasing group
which consummates the Change in Control transaction. Executive shall be deemed
"part of a purchasing group" for purposes of the preceding sentence if
Executive is an equity participant or has been identified as a potential equity
participant in the purchasing company or group except for: (i) passive
ownership of less than three percent (3%) of the stock of the purchasing
company; or (ii) ownership of equity participation in the purchasing company or
group which is otherwise not significant, as determined prior to the Change in
Control by a majority of the nonemployee continuing directors.
For purposes of this definition of Change in Control, "Person" shall
have the meaning ascribed to such term in Section 3(a)(9) of the 1934 Act, and
used in Section 13(d) and 14(d) thereof, including a "group" as defined in
Section 13(d) thereof, and "Beneficial Owner" shall have the meaning ascribed
to such term in Rule 13d-3 of the General Rules and Regulations under the 1934
Act.
(h) Upon any termination or expiration of this Agreement or any
cessation of Executive's employment hereunder, the Company shall have no further
obligations under this Agreement and no further payments shall be payable by the
Company to Executive, except as provided in Sections 6(b), 6(c) and 6(e) above
and except as required under any benefit plans or arrangements maintained by the
Company and applicable to Executive at the time of such termination, expiration
or cessation of Executive's employment, including, without limitation thereto,
salary, incentive compensation, sick leave, and vacation pay.
(i) After June 30, 2002, if the payments and benefits provided under
this Agreement to Executive, either alone or with other payments and benefits,
would constitute "excess parachute payments" as defined in Section 280G of the
Internal Revenue Code of 1986, as amended ("Code"), then the payments and other
benefits under this Agreement shall be reduced to the extent necessary so that
no portion thereof shall be subject to the excise tax imposed by Section 4999 of
the Code. Either the Company or Executive may request a determination as to
whether the payments or benefits would constitute an excess parachute payment
and, if requested, such determination shall be made by independent tax counsel
selected by the Company and approved by Executive. At
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Executive's election and to the extent not otherwise paid, Executive may
determine the amount of cash and/or elements of non-cash fringe benefits to
reduce so that such payments and benefits will not constitute excess parachute
payments.
7. Non-Competition.
(a) Executive hereby acknowledges that, during and solely as a
result of his employment by the Company, he has received and shall continue to
receive unique training and experience with respect to the design, operation and
marketing of electronic commerce software, systems and processing, financial
software products, systems, and services, and other related matters, and access
to confidential information and business and professional contacts. In
consideration of the special and unique opportunities afforded to Executive by
the Company as a result of Executive's employment, as outlined in the previous
sentence, and in consideration of the Company's other promises contained in this
Agreement, Executive hereby agrees that he will not during the term of this
Agreement, any extension hereof, and for a period of one year after termination
of employment with the Company, whether voluntary or involuntary or with or
without cause:
(i) engage or participate, directly or indirectly, either as
principal, agent, employee, employer, consultant, stockholder, or in
any other individual or representative capacity whatsoever, in the
operation, management or ownership of any business, firm, corporation,
association, or other entity engaged in the design, operation or
marketing of electronic commerce software, systems and processing,
financial software products, systems, and services, or any other
business engaged in by the Company at any time during the one-year
period prior to the Termination Date, within the United States and any
other country in which the Company conducts substantial business at
such time or during such period; and,
(ii) directly or indirectly, for himself or in conjunction with
or on behalf of any other individual or entity, solicit, divert, take
away or endeavor to take away from the Company any customer, account or
employee of the Company at any time during the term of this Agreement,
as of the date of Executive's termination of employment with the
Company, or during the one-year period prior to the dates thereof.
(b) The period of time during which Executive is subject to the
prohibitions contained in this Section 7 shall be extended by any length of time
during which Executive is in violation of such prohibitions.
(c) The restrictions of this Section 7 shall not be violated by the
ownership by Executive of no more than 2% of the outstanding securities of any
company whose stock is traded on a national securities exchange or is quoted in
the Automated Quotation System of the National Association of Securities Dealers
(NASDAQ).
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8. Confidential Information; Assignment of Inventions.
(a) As used herein, the term "Confidential Information" includes,
but is not limited to, all information and materials belonging to, used by, or
in the possession of the Company (i) which have been disclosed or made known to,
or have come into the possession of Executive as a consequence of or through
Executive's relationship with the Company prior to or after the date hereof,
(ii) which are related to the Company's customers, potential customers,
suppliers, distributors, alliance partners, business strategies or policies,
financial or sales results, sales and management techniques, marketing plans,
research or development, reports, records, software, systems, source or object
code, software documentation or instruction or user manuals, and (iii) which
have not generally been made available to the public (not including customers)
by the Company pursuant to a specific authorization in the ordinary course of
business by the Company of the release of such information to the public or
otherwise published and released by the Company to the general public.
Notwithstanding the foregoing, Executive may release Confidential Information,
in each case only with prior notice to the Company, if (1) required by law, (2)
necessary to establish a lawful claim or defense against the Company, (3)
necessary to establish a lawful claim or defense against a person or entity
other than the Company, but only with the permission, which shall not be
unreasonably withheld, of the Company, or (4) necessary to respond to process or
appropriate governmental inquiry.
(b) Executive agrees:
(i) that Executive will promptly disclose and grant and does
hereby grant to the Company his entire right, title and interest in and
to all customer lists, discoveries, developments, designs,
improvements, inventions, formulae, software, documentation, processes,
techniques, know-how, patents, trade secrets and trademarks, copyrights
and all other data conceived, developed or acquired by him during the
period of Executive's employment with the Company, both prior to and
after the execution of this Agreement, whether or not patentable or
registrable under copyright or similar statutes, made or conceived or
reduced to practice or learned by Executive, either alone or jointly
with others, that result from or are conceived during the performance
of tasks assigned to Executive by the Company or result from use of
property, equipment, or premises owned, leased or contracted for by the
Company ("Inventions"). Executive agrees to execute and deliver, from
time to time, such documents as may be necessary or convenient to
effectuate the transfer of such Confidential Information to the Company
and shall cooperate with and assist the Company in every proper way (at
the expense of the Company) in obtaining and from time to time
enforcing patents, copyrights, trade secrets, other proprietary rights
and protections relating to Inventions in any and all countries;
(ii) that Executive will during the term of this Agreement and
thereafter safeguard all Confidential Information and, except as
specifically permitted below, Executive will never disclose or use for
any purpose or benefit (other than for the purpose or benefit of the
Company) any Confidential Information;
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(iii) that, except in connection with the ordinary course of the
Company's business, Executive will not, either during the term of this
Agreement or thereafter directly or indirectly, disclose, disseminate
or otherwise make known or provide any Confidential Information,
whether in original form or in duplicated or copied form or extracts
therefrom, and whether orally or in writing, to any individual,
partnership, company or other entity, unless the Company has given its
prior written consent thereto;
(iv) that, except in connection with the ordinary course of the
Company's business, Executive will not, either during the term of this
Agreement or thereafter, remove any Confidential Information from the
premises of the Company either in original form or in duplicated or
copied form or extracts therefrom; and that upon any termination of
Executive's employment by the Company, Executive will immediately
surrender to the Company, without request, all Confidential
Information, whether in original or duplicated or copied form or
extracts therefrom.
9. No Conflicts. Executive represents that the performance by
Executive of all the terms of this Agreement, as a former or continuing
employee of the Company, does not and will not breach any agreement as to which
Executive or the Company is or was a party and which requires Executive to keep
any information in confidence or in trust. Executive has not entered into, and
will not enter into, any agreement either written or oral in conflict herewith.
10. Reasonableness of Restrictions. It is understood by and between
the parties hereto that Executive's covenants set forth in Sections 7, 8 and 9
are essential elements of this Agreement, and that, but for the agreement of
Executive to comply with such covenants, the Company would not have agreed to
enter into this Agreement. Executive acknowledges that the restrictions
contained in this Agreement are reasonable but should any provisions of this
Agreement be determined to be invalid, illegal or otherwise unenforceable to
its full extent, or if any such restriction is found by a court of competent
jurisdiction to be unreasonable under applicable law, then the restriction
shall be enforced to the maximum extent permitted by law, and the parties
hereto hereby consent and agree that such scope of protection, time or
geographic area (or any one of them, as the case may be) shall be modified
accordingly in any proceeding brought to enforce such restriction. Executive
acknowledges that the validity, legality and enforceability of the other
provisions of this Agreement shall not be affected thereby, and that the
existence of any claim or cause of action of Executive against the Company,
whether predicated on this Agreement, or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants.
11. Remedies; Venue; Process.
(a) Executive hereby acknowledges and agrees that the Confidential
Information disclosed to Executive prior to and during the term of this
Agreement is of a special, unique and extraordinary character, and that any
breach of this Agreement will cause the Company irreparable injury and damage,
and consequently the Company shall be entitled, in addition to all other
remedies available to it, to injunctive and equitable relief to prevent or cease
a breach of Sections 7, 8 or 9 of this Agreement without further proof of harm
and entitlement; that the terms of this
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Agreement, if enforced by the Company, will not unduly impair Executive's
ability to earn a living or pursue his vocation; and further, that the Company
may withhold compensation and benefits if Executive fails to comply with this
Agreement, without restricting the Company from other legal and equitable
remedies. The parties agree that the prevailing party shall be entitled to all
costs and expenses (including reasonable legal fees and expenses) which it
incurs in successfully enforcing this Agreement and in prosecuting or defending
any litigation (including appellate proceedings) arising out of this Agreement.
(b) The parties agree that jurisdiction and venue in any action
brought pursuant to this Agreement to enforce its terms or otherwise with
respect to the relationships between the parties shall properly lie in the
Superior Court of Fulton County, Georgia, or in the United States District Court
for the Northern District of Georgia. Such jurisdiction and venue is exclusive,
except that the Company may bring suit in any jurisdiction and venue where
jurisdiction and venue would otherwise be proper if Executive has breached
Sections 7, 8 or 9 of this Agreement. The parties agree that they will not
object that any action commenced in the foregoing jurisdictions is commenced in
a forum non conveniens. The parties further agree that the mailing by certified
or registered mail, return receipt requested, of any process required by any
such court shall constitute valid and lawful service of process against them,
without the necessity for service by any other means provided by statute or rule
of court.
12. Withholding. The Company may withhold from any payments to be made
hereunder such amounts as it may be required to withhold under applicable
federal, state or other law, and transmit such withheld amounts to the
appropriate taxing authority.
13. Indemnity.
(a) Subject only to the exclusions set forth in Section 13(b)
hereof, the Company hereby agrees to hold harmless and indemnify Executive
against any and all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by Executive in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (excluding an action by
or in the right of the Company) to which Executive is, was or at any time
becomes a party, or is threatened to be made a party, by reason of the fact that
Executive is, was or at any time becomes a director, officer, employee or agent
of the Company, or is or was serving or at any time serves at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
(b) No indemnity pursuant to Section 13(a) hereof shall be paid by
the Company:
(i) except to the extent the aggregate losses to be indemnified
hereunder exceed the amount of such losses for which Executive is
indemnified pursuant to any directors and officers liability insurance
purchased and maintained by the Company;
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(ii) in respect to remuneration paid to Executive if it shall
be determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(iii) on account of any suit in which judgment is rendered
against Executive for an accounting of profits made from the purchase
or sale by Executive of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto or similar provisions of any federal, state or local
statutory law;
(iv) on account of Executive's breach of any provision of this
Agreement;
(v) on account of Executive's act or omission being finally
adjudged to have been not in good faith or involving intentional
misconduct, a knowing violation of law, or grossly negligent conduct;
or
(vii) if a final decision by a Court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
(c) All agreements and obligations of the Company contained herein
shall continue during the period Executive is a director, officer, employee or
agent of the Company (or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise) and shall continue thereafter so long as
Executive shall be subject to any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal or investigative,
by reason of the fact that Executive was an officer or director of the Company
or serving in any other capacity referred to herein; provided, however, that
following the Termination Date, the Company shall have no further obligation
under this Section 13 in the event of a breach by Executive of any of his
continuing obligations under Sections 7 or 8 of this Agreement.
(d) Promptly after receipt by Executive of notice of the
commencement of any action, suit or proceeding, Executive will, if a claim in
respect thereof is to be made against the Company under this Section 13, notify
the Company of the commencement thereof; but the omission so to notify the
Company will not relieve it from any liability which it may have to Executive
otherwise than under this Section 13. With respect to any such action, suit or
proceeding as to which Executive notifies the Company under this Section 13(d):
(i) The Company will be entitled to participate therein at its
own expense.
(ii) Except as otherwise provided below, to the extent that it
may wish, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume the defense thereof, with
counsel selected by the Company. After notice from the Company to
Executive of its election so to assume the defense thereof, the Company
will not be liable to Executive under this Section 13 for any legal or
other expenses subsequently incurred by Executive in connection with
the defense thereof other than reasonable costs of investigation or as
otherwise provided below. Executive shall have the right to employ his
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counsel in such action, suit or proceeding but the fees and expenses
of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of
Executive, unless (A) the employment of counsel by Executive has been
authorized by the Company, or (B) the Company shall not in fact have
employed counsel to assume the defense of such action, in each of
which cases the fees and expenses of counsel shall be at the expense
of the Company. The Company shall not be entitled to assume the
defense of any action, suit or proceeding brought by or on behalf of
the Company.
(iii) The Company shall not be liable to indemnify Executive
under this Agreement for any amounts paid in settlement of any action
or claim effected without its written consent. The Company shall not
settle in any manner which would impose any penalty or limitation on
Executive without Executive's written consent. Neither the Company nor
Executive will unreasonably withhold their consent to any proposed
settlement.
(e) Executive agrees that Executive will reimburse the Company for
all reasonable expenses paid by the Company in defending any civil or criminal
action, suit or proceeding against Executive in the event and only to the extent
that it shall be ultimately determined that Executive is not entitled to be
indemnified by the Company for such expenses under the provisions of Section 145
of the Delaware General Corporation Law (the "Delaware Statute"), the Company's
By-laws, this Agreement or otherwise.
14. Assignment. This Agreement is personal to Executive and Executive
may not assign or delegate any of his rights or obligations hereunder. Subject
to the foregoing, this Agreement shall be binding upon and inure to the benefit
of the respective parties hereto, their heirs, executors, administrators,
successors and assigns.
15. Waiver. The waiver by either party hereto of any breach or
violation of any provision of this Agreement by the other party shall not
operate as or be construed to be a waiver of any subsequent breach by such
waiving party.
16. Notices. Any and all notices required or permitted to be given
under this Agreement will be sufficient and deemed effective three (3) days
following deposit in the United States mail if furnished in writing and sent by
certified mail to Executive at:
Peter J. Kight
9300 Chandler Bluff
Alpharetta, Georgia 30022
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and to the Company at:
CheckFree Corporation
4411 East Jones Bridge Road
Norcross, Georgia 30092
Attention: General Counsel
with a copy to:
Curtis A. Loveland, Esq.
Porter, Wright, Morris & Arthur
41 South High Street
Columbus, Ohio 43215
17. Governing Law. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Georgia applicable to contracts
made and to be wholly performed within such state, except that the provisions
of Section 13 hereof shall be interpreted, construed and governed according to
the Delaware Statute.
18. Amendment. This Agreement may be amended in any and every respect
by agreement in writing executed by both parties hereto.
19. Section Headings. Section headings contained in this Agreement are
for convenience only and shall not be considered in construing any provision
hereof.
20. Entire Agreement. This Agreement terminates, cancels and
supersedes all previous employment or other agreements relating to the
employment of Executive with the Company or any predecessor, written or oral,
and this Agreement contains the entire understanding of the parties with
respect to the subject matter of this Agreement. This Agreement was fully
reviewed and negotiated on behalf of each party and shall not be construed
against the interest of either party as the drafter of this Agreement.
EXECUTIVE ACKNOWLEDGES THAT, BEFORE SIGNING THIS AGREEMENT, HE HAS READ THE
ENTIRE AGREEMENT AND HAS THIS DAY RECEIVED A COPY HEREOF.
21. Severability. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement or parts thereof.
22. Survival. Sections 6 through 14 of this Agreement and this Section
22 shall survive any termination or expiration of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
EXECUTIVE:
/s/ Peter J. Kight
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Peter J. Kight
CHECKFREE CORPORATION
By: /s/ Peter F. Sinisgalli
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Its: Chief Operating Officer
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