This Employment Agreement involves
Title: EMPLOYMENT AGREEMENT
Governing Law: Texas Date: 8/15/2016
Industry: Software and Programming Sector: Technology
This Employment Agreement (this “ Agreement ”) is made effective on August 22, 2016 (“ Effective Date ”), by and between Q2 Software, Inc., a Delaware corporation (“ Company ”), and Odus (“Boogie”) Wittenburg Jr. (“ Executive ”).
The parties agree as follows:
1. Employment . Company agrees to continue to employ Executive, and Executive agrees to accept such continuing employment on the terms and conditions set forth herein.
2. Duties .
2.1 Position . Executive is employed as Company’s President and shall have the duties and responsibilities assigned by Company’s Chief Executive Officer. Executive shall perform faithfully and diligently all duties assigned to Executive. Company reserves the right to modify Executive’s position and duties at any time in its sole and absolute discretion.
2.2 Best Efforts/Full-time . During this Agreement, Executive will (A) expend Executive’s best efforts on behalf of Company, and will abide by all policies and decisions made by Company, as well as all applicable federal, state and local laws, regulations or ordinances; (B) act in the best interest of Company at all times; and (C) devote Executive’s full business time and efforts to the performance of Executive’s assigned duties for Company.
3.1 Base Salary . As compensation for Executive’s performance of Executive’s duties hereunder, Company shall pay to Executive an initial Base Salary of $35,833.33 per month (which equates to $430,000 over a full year), to be paid in accordance with Company’s regular payroll cycle, less required deductions for federal withholding tax, social security and all other employment taxes and payroll deductions. Executive will be eligible for increases in base salary as determined from time to time by the Company’s Board or compensation committee thereof in their respective sole discretion. In the event Executive’s employment under this Agreement is terminated by either party, for any reason, Executive will earn the Base Salary prorated to the date of termination.
3.2 Incentive Compensation . Executive may be eligible to receive an annual cash incentive bonus of $370,000 at target, on such terms and subject to such conditions as may be decided from time to time by the Company, less required deductions for federal withholding tax, social security and all other employment taxes and payroll deductions. Notwithstanding the foregoing, for the fiscal year ending December 31, 2016, Executive shall receive a pro-rated cash incentive bonus representing the target bonus amount multiplied by a fraction, (i) the numerator of which is the actual number of days of 2016 occurring on or after Executive’s start date and (ii) the denominator of which is 365. Executive must be employed by the Company at the time any annual cash incentive bonus is paid in order to be eligible such bonus, subject to Section 7.1 hereof . Executive will be eligible for increases in incentive compensation as determined from time to time by the Company’s Board or compensation committee thereof in their respective sole discretion. The Company reserves the right to vary or terminate any bonus scheme in place from time to time, on a prospective basis. Company shall pay out the annual cash incentive bonus, if any, within 60 days following the end of the year in which the bonus is earned.
3.3 Equity Compensation . Subject to the approval of Company’s Board of Directors (the “ Board ”) or the Compensation Committee thereof, Executive shall receive restricted stock units representing 85,000 shares of the Company’s Common Stock and options to purchase 212,500 shares of the Company’s Common Stock. Such restricted stock units shall vest annually over a four (4) year period on the anniversary of the grant date, with the first vesting date occurring one year immediately following the grant date. Such stock options shall vest over the same four (4) year period, with 1/4th of such stock options vesting on the one-year anniversary of the grant date and the remaining stock options vesting monthly over the subsequent 36 months. Executive will be eligible for additional equity grants as determined from time to time by the Company’s Board or compensation committee thereof in their respective sole discretion. All equity awards described herein and the terms and conditions thereof shall be subject to the approval of the Board or the Compensation Committee, the terms and conditions of Company’s 2014 Equity Incentive Plan (the “ Stock Plan ”) and the forms of award agreements approved by the Board thereunder, which Executive shall be required to execute as a condition to receiving such awards.
3.4 Customary Fringe Benefits . Executive will be eligible for all customary and usual fringe benefits generally available to Executives of Company, subject to the terms and conditions of Company’s benefit plan documents and policies. Executive shall be entitled to Paid Time Off benefits (“ PTO ”) subject to the terms and conditions of the Company’s PTO policy as in effect from time to time.
4. At-Will Employment. Executive’s employment with Company is at-will and not for any specified period and may be terminated at any time, with or without Cause (as defined below) or advance notice, by either Executive or Company, although subject to the provisions of Sections 5 through 7 below. No representative of Company, other than the Board, has the authority to alter the at-will employment relationship. Any change to the at-will employment relationship must be by specific, written agreement signed by Executive and the Board. Nothing in this Agreement is intended to or should be construed to contradict, modify or alter this at-will relationship.
5. Termination. The termination provisions of this Agreement regarding the parties' respective obligations in the event Executive's engagement is terminated are intended to be exclusive and in lieu of any other rights to which Executive may otherwise be entitled by law, in equity, or otherwise. This Agreement, and Executive's engagement hereunder, may be terminated at any time after the Effective Date, as follows:
5.1 Termination by Mutual Consent . This Agreement may be terminated at any time by the written mutual consent of Company and Executive.
5.2 Termination by Company For Cause . This Agreement may be terminated by Company at any time for Cause. For purposes of this Agreement, “ Cause ” is defined as: (a) acts or omissions constituting gross negligence, recklessness or willful misconduct on the part of Executive with respect to Executive’s obligations or otherwise relating to the business of Company; (b) Executive’s material breach of this Agreement or Company’s Executive Proprietary Information and Inventions Agreement (the “ PRIA ”); (c) Executive’s conviction or entry of a plea of nolo contendere for fraud, misappropriation or embezzlement, or any felony or crime of moral turpitude; (d) Executive’s willful neglect of duties as determined in the sole and exclusive discretion of Company; (e) Executive is cited by Company’s Chief Executive Officer, in writing, at least two (2) times during any 12-month period for unsatisfactory performance; (f) Executive’s failure to perform the essential functions of Executive’s position, with or without reasonable accommodation, due to a mental or physical disability; or (g) Executive’s death.
5.3 Termination by Company Without Cause . This Agreement may be terminated by Company, without Cause, with or without notice, by the delivery to Executive of written notice of termination.
5.4 Resignation by Executive . Executive shall have the right to terminate his employment hereunder by providing the Company with a notice of termination at least thirty (30) days prior to such termination.
6. Payments Upon Termination . Upon termination of employment for any reason, Executive shall receive payment of his then unpaid Base Salary, pro-rated to the date of termination, as well as any other accrued, but unpaid benefits (collectively the “ Accrued Compensation ”). Accrued Compensation will be paid in a lump sum on the date required under applicable law. Except as expressly stated in this Agreement, all other employment related obligations of Company to Executive shall be automatically terminated and completely extinguished with the termination of Executive’s employment.
7.1 Severance Payment. In the event Company terminates Executive’s employment without Cause, Company shall provide Executive with a “Severance Payment,” equivalent to (a) twelve (12) months of Executive’s then Base Salary and (b) an amount equal to Executive’s cash incentive performance bonus (assuming the performance metrics were achieved at the targeted levels) pro-rated through the date of Executive’s termination. Such Severance Payment shall be payable in equal installments over a twelve month period, with the first installment payment made on the first payday occurring 30 days after the termination date and the remaining installments made on the following Company paydays. The Company’s obligation to pay and Executive’s right to receive the Severance Payment shall cease in the event of Executive’s breach of any of his obligations under this Agreement or the PRIA. The Company’s obligation to provide Executive with the Severance Payment is conditioned precedent upon Executive’s execution of a full general release in a form acceptable to the Company and such release has become effective in accordance with its terms prior to the 30th day following the termination date. For the sake of clarity, Executive shall not be eligible to receive severance in connection with any other form of termination, other than a termination without Cause.
7.2 Acceleration of Equity Awards in the Event of a Termination wi