Exhibit 10.6
EMPLOYMENT AGREEMENT
This Employment Agreement (this
“ Agreement ”) is between Tyler Technologies,
Inc., a Delaware corporation (the “ Company ”),
and Dustin R. Womble (“ Executive ”). This
Agreement shall become effective as of February 26, 2008 (the
“ Effective Date ”).
WHEREAS, the Company desires to
employ Executive, and Executive desires employment as an employee
of the Company, under the terms and subject to the conditions set
forth in this Agreement.
WHEREAS, 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, Executive
and the Company 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 shall serve in the
capacity of Executive Vice President of the Company or such other
capacity as may be assigned to Executive by the Company’s
Chief Executive Officer, which capacity shall be commensurate with
the education, experience, and skills of Executive. In all such
capacities, Executive shall have all necessary power and authority
to discharge his responsibilities. Executive shall report to the
Company’s Chief Executive Officer.
(b) Executive shall 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 shall perform his
duties in a professional manner and shall 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 Company’s Chief
Executive Officer 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 three
(3) 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
shall pay Executive a minimum base salary at the rate of $333,333
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 Company’s Board of Directors
(the “ Compensation Committee ”) 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 ”). Executive’s Bonus shall be targeted
each year at 100% of Executive’s Base Salary (the “
Target Bonus ”) and shall be based upon the
achievement of pre-identified financial performance goals of the
Company. Executive’s Bonus for calendar year 2008 shall be
established and paid in accordance with the incentive compensation
plan set forth as Exhibit A . During the term of this
Agreement, the Compensation Committee shall establish the
performance objectives serving the basis of Executive’s Bonus
on an annual basis, which shall be attached to this Agreement as
the then current Exhibit A and shall replace the prior
year’s incentive compensation plan.
(c) Contingent Stock Option
Grant . In consideration of the mutual promises contained
herein, the Company shall grant Executive options to purchase
250,000 shares (the “ Option Grant ”) of Company
common stock. The Option Grant shall be subject to the
Company’s stockholders approving an amendment to increase the
number of shares available for grant under the Company’s
Restated Stock Option Plan (the “ Option Plan ”)
and shall be effective as of the date that the Option Plan is so
amended. The options shall vest in equal installments on the first,
second, third, fourth, and fifth anniversary of the date of grant
and shall be subject to the terms and conditions of the Option Plan
and the Company’s standard Option Agreement (the “
Option Agreement ”). The Option Grant shall be issued
at an exercise price equal to the closing market price of the
Company’s common stock as reported by the New York Stock
Exchange as of the effective date of grant.
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 as
set forth in the Company’s employee handbook, 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 written policies.
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7. Early Termination .
It is the desire and expectation of each party that the
employer-employee relationship shall continue for the full term as
set forth in Section 3 of this Agreement; however,
either party may terminate this Agreement prior to the expiration
of the term as provided in this Section 7 .
(a) Resignation by Executive .
Executive may voluntarily resign upon thirty (30) days written
notice to the Company. In such event, the Company shall pay
Executive the Accrued Compensation (as defined herein).
(b) Termination by Executive for
Good Reason . Executive may terminate this Agreement and
Executive’s employment hereunder for Good Reason (as defined
below). In such event, the Company shall pay Executive the
Severance Benefit, the Non-Compete Payment, and the Medical
Benefits.
(c) Termination by the Company
without Cause . The Company may terminate this Agreement and
Executive’s employment hereunder without Cause (as defined
below) by providing Executive with written notice of its intent to
terminate. In such event, the Company shall pay Executive the
Severance Payment, the Non-Compete Payment, and the Medical
Benefits.
(d) Termination by the Company for
Cause . The Company may terminate this Agreement and
Executive’s employment hereunder for Cause. In such event,
the Company shall pay Executive the Accrued Compensation.
(e) Termination Due to
Disability . The Company may terminate this Agreement and
Executive’s employment hereunder due to Executive’s
Disability (as defined below). In such event, the Company shall pay
Executive the Accrued Compensation.
(f) Death of Executive . This
Agreement and Executive’s employment hereunder shall
automatically terminate upon the death of Executive. In such event,
the Company shall pay Executive’s estate, executor, or other
legal representative, as the case may be, the Accrued
Compensation.
(g) Termination upon a Change in
Control . Executive may terminate this Agreement and his
employment hereunder upon the occurrence of a Change in Control (as
defined below) by providing the Company with written notice within
ten (10) business days of the Change in Control. In such
event, the Company shall pay Executive the Severance Payment, the
Non-Compete Payment, and the Medical Benefits.
(h) Treatment of Stock Options and
Other Equity Awards . In the event of any termination under
this Section 7 , all vested stock options or other
equity awards shall be exercisable in accordance with the terms of
the Option Plan, the applicable Option Agreements, or other
applicable governing documents. In the event of a termination under
Section 7(a) through (f) , any unvested stock
options or other equity awards shall terminate as of the date of
such resignation, termination, or death, as applicable. In the
event of a termination under Section 7(g) , any
unvested stock options or other equity awards that are outstanding
as of the date of such termination shall become fully vested and
exercisable in accordance with the terms of the Option Plan, the
applicable Option Agreements, or other applicable governing
documents.
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(h) Certain Definitions
.
(i) “ Accrued
Compensation ” shall mean any accrued and unpaid Base
Salary and Bonus through the date of termination, which shall be
paid in a lump sum payment and in accordance with applicable law,
but in any event within thirty (30) days of the event triggering
such payment.
(ii) “ Cause ”
shall mean a determination by the Company’s Chief Executive
Officer 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) willfully committed any act or
engaged in any conduct that is fraudulent or constitutes
malfeasance or a breach of fiduciary duties of Executive;
(iv) willfully committed any act of misconduct that is
severely detrimental to the Company, its employees, or its business
interests; (v) failed to abide by the corporate policies and
procedures as set forth in the Company’s employee handbook;
(vi) 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 (vii) 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), (v), (vi), and (vii) above, Exe
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