Exhibit 10.5
SEPARATION AGREEMENT
1. Christopher J. Koziol (“Executive”) has been employed by JDA Software Group,
Inc. (the “Company”) since July 1, 2005, and he is currently employed by the
Company as its Chief Operating Officer pursuant to that certain Executive
Employment Agreement, effective as of June 13, 2005, by and between the Company
and Executive (the “Employment Agreement”). Executive and the Company have
determined that they will terminate their employment relationship on July 31,
2009, and it is the Company’s desire to ensure that there is a smooth and
orderly transition of Executive’s duties, to provide Executive with certain
separation benefits that he would not otherwise be entitled to receive upon his
retirement, and to resolve any claims that the parties have or may have against
each other. Accordingly, Executive and the Company hereby agree to supersede and
replace the Employment Agreement in its entirety with this Agreement. This
Agreement will become effective on the eighth day after it is signed by
Executive (the “Effective Date”), provided that Executive has not revoked this
Agreement (by email notice to Michael Bridge at michael.bridge@jda.com) prior to
that date.
2. Executive and the Company hereby agree that his employment with the Company
will terminate effective August 3, 2009 (the “Termination Date”).
3. Executive and Company hereby agree that, subject to Executive’s strict
compliance with all the terms of this Agreement, and to his extension of the
release of claims in Paragraph 5 without revocation as described below and the
execution of the Confidential Separation and Release Agreement attached hereto
as Exhibit A (the “Release Agreement”), the Company will provide Executive with
the following:
          (a) a lump sum severance payment of $897,646, which shall be subject
to applicable withholding and paid to Executive on the day after the expiration
of the Revocation Period in the Release Agreement, provided Executive has not
revoked the Release Agreement, and shall be deemed to include (i) Executive’s
current base salary for two (2) years ($574,750); (ii) base salary for a 60-day
notice period ($47,896) and (iii) Executive’s cash bonus for 2009 of $275,000,
which amount has been determined as assuming satisfaction of all performance
based milestones at the 100% level by both the Company and Executive, without
regard to actual level of performance. In addition, Executive will be paid the
pro-rated portion of the 2009 bonus that has been earned based upon the year to
date EBITDA performance, but has been unpaid through the end of the second
quarter ($89,462). Executive will also be allowed to keep his laptop computer
and his blackberry cell phone.
          (b) upon the Termination Date, Executive will be paid all of his
accrued, unused paid time off that he earned during his employment with the
Company;
          (c) the immediate acceleration of all unvested equity awards granted
pursuant to the Company’s 2005 Performance Incentive Plan (“2005 Plan”) set
forth on Exhibit B hereto, which in no event shall include any performance
shares awards subject to the Company’s 2009 earnings before income tax,
depreciation and amortization and the Company shall take, prior to the Effective
Date, all action reasonably necessary to effect such acceleration under the 2005
Plan and applicable securities laws including Rule 16b-3(d) promulgated under
the Securities Exchange Act of 1934;
          (d) all of Executive’s stock options that have not otherwise
terminated shall be exercisable until one month following the Termination Date;
          (e) in the event that Executive timely elects to obtain continued
group health insurance coverage under COBRA following the Termination Date, the
Company will pay the premiums for such coverage through the earlier of (i) the
date that is 18 months following the Termination Date, or (ii) the first date on
which Executive becomes eligible for other group health insurance coverage
pursuant to Executive’s

1

--------------------------------------------------------------------------------

 

subsequent employment; thereafter, Executive may elect to purchase continued
group health insurance coverage under COBRA at his own expense;
          (f) outplacement assistance at the Company’s expense and reimbursement
of outplacement and job search expenses (including, without limitation, travel
expenses, recruiter fees, outplacement consultant fees, administrative expenses,
etc.), provided, that the cost to the Company of such assistance and
reimbursement of such expenses shall not exceed $10,000;
          (g) Section 7.5 of the Employment Agreement, Federal Excise Tax under
Section 4999 of the Code, shall survive and continue to be effective, to the
extent applicable, to payments to Executive under this Agreement. For the
avoidance of doubt, this subsection (h) shall not imply that this Agreement is
related to a change in control.
In the event of any material breach by Executive of any of the provisions of
this Agreement, Executive shall not be entitled to receive any payments or
benefits under this Paragraph 3, and his failure to receive any of these
payments and/or benefits as a result of his material breach shall not affect or
impair the validity of the remainder of this Agreement, including, but not
limited to, Paragraphs 4 through 10. Executive acknowledges and agrees that he
shall not be entitled to any payments or benefits from the Company other than
those expressly set forth in this Paragraph 3 or as otherwise provided pursuant
to the terms of any applicable employee benefit plan or indemnification
agreement.
4. In consideration of the payments and benefits described in Paragraph 3,
Executive has executed the Release Agreement. Notwithstanding the executed
Release Agreement, it is expressly understood that this release does not apply
to, and shall not be construed as, a waiver or release of any claims or rights
that cannot lawfully be released by private agreement, including any applicable
statutory indemnity rights under Delaware law.
5. As further consideration of the payments and benefits described in
Paragraph 3, Executive agrees for the two-year period following the Effective
Date (the “Covenant Period”) on the following:
          (a) Executive will not directly or indirectly, whether as an owner,
director, officer, manager, consultant, agent or employee work for any of the
following companies or any entity that succeeds to any part of the business of
any of the following companies that is in competition with the Company: i2
Technologies, Logility, Inc., Manhattan Associates, Inc., Oracle Corporation,
SAP AG, or SAS. Executive acknowledges that this non-competition prohibition is
reasonable in scope and duration. If a court of competent jurisdiction
determines the scope or duration is unenforceable, the non-compete shall be
reformed and modified to the extent required to render them valid and
enforceable.
          (b) Executive will not, either directly or indirectly, separately or
in association with others, interfere with, impair, disrupt or damage Company’s
relationship with any of its customers or customer prospects by soliciting or
encouraging others to solicit any of them for the purpose of diverting or taking
away business from Company.
          (c) Executive will not, either directly or indirectly, separately or
in association with others, interfere with, impair, disrupt or damage Company’s
business by soliciting, encouraging, hiring or attempting to hire any of the
Company’s employees or causing others to solicit or encourage any of the
Company’s employees to discontinue their employment with Company.
Notwithstanding the previous sentence, Executive may give references for
employees and tell headhunters the names of employees of Company, in either
event, where the Executive is aware that the employee has been identified by
Company as not being part of its long-term plans after a change of control of
the Company.

2

--------------------------------------------------------------------------------

 

6. Executive acknowledges and agrees that he shall continue to be bound by and
comply with the terms of the Proprietary Information and Inventions Agreement.
On or before the Termination Date, Executive will return to the Company, in good
working condition, all Company property and equipment that is in Executive’s
possession or control, including, but not limited to, any files, records, credit
cards, keys, programs, manuals, business plans, financial records, and all
electronic or paper documents (and any copies thereof) that Executive prepared
or received in the course of his employment with the Company.
     Executive acknowledges and agrees that Executive has continuing
non-disclosure obligations under the Proprietary Information and Inventions
Agreement. Executive acknowledges and reaffirms Executive’s obligation to
continue to abide fully and completely with all post-employment provisions of
the Proprietary Information and Inventions Agreement and agrees that nothing in
this Agreement shall operate to excuse or otherwise relieve Executive of such
obligations.
7. Each of Executive and the Company agree not to make any statements, written
or verbal, or cause or encourage others to make any statements, written or
verbal, that defame, disparage or in any way criticize the personal or business
reputation, practices or conduct of the other including, in the case of the
Company, its employees and directors. Furthermore, the Company agrees that any
announcement of Executive’s departure shall be subject to Executive’s reasonable
approval. The Company shall respond to any inquiries regarding Executive’s
employment by providing only information as to Executive’s job title, dates of
employment, and salary.
8. If any provision of this Agreement is deemed invalid, illegal, or
unenforceable, that provision will be modified so as to make it valid, legal,
and enforceable, or if it cannot be so modified, it will be stricken from this
Agreement, and the validity, legality, and enforceability of the remainder of
the Agreement shall not in any way be affected. In the event of any legal action
relating to or arising out of this Agreement, the prevailing party shall be
entitled to recover from the losing party its attorneys’ fees and costs incurred
in that action.
9. The Company intends that income provided to the Executive pursuant to this
Agreement will not be subject to taxation under Section 409A of the Internal
Revenue Code (“Section 409A”). The provisions of this Agreement shall be
interpreted and construed in favor of satisfying any applicable requirements of
Section 409A of the Code. However, the Company does not guarantee any particular
tax effect for income provided to the Executive pursuant to this Agreement. In
any event, except for the Company’s responsibility to withhold applicable income
and employment taxes from compensation paid or provided to the Executive, the
Company shall not be responsible for the payment of any applicable taxes
incurred by the Executive on compensation paid or provided to the Executive
pursuant to this Agreement. In the event that any compensation to be paid or
provided to Executive pursuant to this Agreement may be subject to the excise
tax described in Section 409A, the Company may delay such payment for the
minimum period required in order to avoid the imposition of such excise tax.
10. This Agreement, together with the Release Agreement attached hereto as
Exhibit A, and the Proprietary Information and Inventions Agreement, constitute
the entire agreement between the parties with respect to the subject matter
hereof and supersede all prior negotiations and agreements between the parties,
whether written or oral, with the exception of any stock option or other equity
agreements between the parties. Notwithstanding the foregoing, the Company
confirms that the Agreement, dated July 1, 2005 by and between the Company and
Executive regarding, inter alia, indemnification rights of Executive, remains in
full force and effect. This Agreement may not be modified or amended except by a
document signed by an authorized officer of the Company and Executive.

3

--------------------------------------------------------------------------------

 

EXECUTIVE UNDERSTANDS THAT HE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING
THIS AGREEMENT AND THAT HE IS GIVING UP ANY LEGAL CLAIMS (AS DESCRIBED ABOVE IN
THE RELEASE AGREEMENT) HE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS
AGREEMENT. EXECUTIVE FURTHER UNDERSTANDS THAT HE MAY HAVE UP TO 21 DAYS TO
CONSIDER THIS AGREEMENT, THAT HE MAY REVOKE IT AT ANY TIME DURING THE 7 DAYS
AFTER HE SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT 7-DAY
PERIOD HAS PASSED. EXECUTIVE ACKNOWLEDGES THAT HE IS SIGNING THIS AGREEMENT
KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND
BENEFITS DESCRIBED IN PARAGRAPH 3, WHICH COMPENSATION AND BENEFITS HE WOULD NOT
OTHERWISE BE ENTITLED TO RECEIVE.

         
Dated: August 6, 2009
  /s/ Christopher J. Koziol
 
Christopher J. Koziol    

              Dated: August 6, 2009   JDA SOFTWARE GROUP, INC.    
 
           
 
  By:   /s/ Hamish N. Brewer
 
Hamish N. Brewer    
 
      President and Chief Executive Officer    

4

--------------------------------------------------------------------------------

 

EXHIBIT A
FORM OF
CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT
     This Confidential Separation and Release Agreement (“Agreement”) is between
Christopher J. Koziol (“Executive”) and JDA Software Group, Inc. (the “Company”)
(hereinafter the “parties”), and is entered into as of August ___, 2009. This
Agreement will not become effective until the expiration of seven (7) days from
Executive’s execution of this Agreement (the “Effective Date”).
     WHEREAS, Executive has been employed by the Company as Chief Operating
Officer:
     WHEREAS, the Company and Executive are entering into a Confidential
Separation Agreement (the “Separation Agreement”) dated on the date hereof,
which provides for, among other things, certain severance benefits and for
Executive’s employment with the Company to cease as of the date set forth
therein (the “Termination Date”);
     WHEREAS, the Company and Executive desire to avoid disputes and/or
litigation regarding Executive’s termination from employment or any events or
circumstances preceding or coincident with the termination from employment;
     WHEREAS, the Company and Executive have agreed upon the terms on which
Executive is willing, for sufficient and lawful consideration, to compromise any
claims known and unknown which Executive may have against the Company and on
which the Company is willing, for sufficient and lawful consideration, to
compromise any claims known and unknown which the Company may have against
Executive; and
     WHEREAS, the parties desire to settle fully and finally, in the manner set
forth herein, all differences between them which have arisen, or which may
arise, prior to, or at the time of, the execution of this Agreement, including,
but in no way limited to, any and all claims and controversies arising out of
the employment relationship between Executive and the Company, and the
termination thereof.
     NOW, THEREFORE, in consideration of these recitals and the promises and
agreements set forth in this Agreement, Executive’s employment with the Company
will terminate upon the following terms:
     1. General Release: Executive for himself and his assigns hereby
IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS AND FOREVER DISCHARGES the
Company and any current or former stockholders, directors, parent, subsidiary,
affiliated, and related corporations, firms, associations, partnerships, and
entities, and their successors and assigns (the “Company Parties”), and the
Company for itself and the Company Parties hereby IRREVOCABLY AND
UNCONDITIONALLY RELEASES, ACQUITS AND FOREVER DISCHARGES Executive and his
assigns, from any and all claims and causes of action whatsoever, whether known
or unknown or whether connected with Executive’s employment by the Company or
not, which may have arisen, or which may arise, prior to, or at the time of, the
execution of this Agreement, including, but not limited to, any claim or cause
of action arising out of any contract, express or implied, any covenant of good
faith and fair dealing, express or implied, any tort (whether intentional or
released in this agreement), or under Title VII of the Civil Rights Act of 1964,
the Age Discrimination in Employment Act, the Americans with Disabilities Act,
the Worker Adjustment and Retraining Notification (WARN) Act, the Older Workers
Benefit Protection Act, or any other municipal, local, state, or federal law,
common or statutory.

5

--------------------------------------------------------------------------------

 

     2. Covenant Not to Sue: The parties also COVENANT NOT TO SUE, OR OTHERWISE
PARTICIPATE IN ANY ACTION OR CLASS ACTION against the other party or any of the
released parties based upon any of the claims released in this Agreement.
     3. Right to Revoke: Either party may revoke this Agreement by notice to the
other party, in writing, received within seven (7) days of the date of its
execution by Executive (the “Revocation Period”). Executive agrees that
Executive will not receive the benefits provided by the Separation Agreement if
Executive revokes this Agreement. Executive also acknowledges and agrees that if
the Company has not received from Executive notice of Executive’s revocation of
this Agreement prior to the expiration of the Revocation Period, Executive will
have forever waived Executive’s right to revoke this Agreement, and this
Agreement shall thereafter be enforceable and have full force and effect.
     4. Acknowledgement: Executive acknowledges and agrees that: (A) except as
provided by this Agreement and the Separation Agreement, no additional
consideration, including salary, wages, bonuses or stock options, is to be paid
to his by the Company in connection with this Agreement and the Separation
Agreement; (B) except as provided by this Agreement and the Separation
Agreement, Executive has no contractual right or claim to the severance payments
described herein and therein; and, (C) payments pursuant to this Agreement and
the Separation Agreement shall terminate immediately if Executive breaches any
of the provisions of this Agreement or the Separation Agreement.
     5. Non-Admissions: The parties acknowledge that by entering into this
Agreement, the other party does not admit, and does specifically deny, any
violation of any local, state, or federal law.
     6. Severability: If any provision of this Agreement is held to be illegal,
invalid, or unenforceable, such provision shall be fully severable and/or
construed in remaining part to the full extent allowed by law, with the
remaining provisions of this Agreement continuing in full force and effect.
     7. Entire Agreement: This Agreement, along with the Proprietary Information
and Inventions Agreement and the Separation Agreement constitute the entire
agreement between the Executive and the Company, and supersede all prior and
contemporaneous negotiations and agreements, oral or written. This Agreement
cannot be changed or terminated except pursuant to a written agreement executed
by the parties.
     8. Governing Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, except where preempted by
federal law.
     9. Statement of Understanding: By executing this Agreement, Executive
acknowledges that (a) Executive has had at least twenty-one (21) days to
consider the terms of this Agreement and has considered its terms for such a
period of time or has knowingly and voluntarily waived Executive’s right to do
so by executing this Agreement and returning it to the Company; (b) Executive
has been advised by the Company to consult with an attorney regarding the terms
of this Agreement; (c) Executive has consulted with, or has had sufficient
opportunity to consult with, an attorney of Executive’s own choosing regarding
the terms of this Agreement; (d) any and all questions regarding the terms of
this Agreement have been asked and answered to Executive’s complete
satisfaction; (e) Executive has read this Agreement and fully understands its
terms and their import; (f) except as provided by this Agreement and the
Separation Agreement, Executive has no contractual right or claim to the
benefits and payments described herein and therein; (g) the consideration
provided for herein is good and valuable; and (h) Executive is entering into
this Agreement voluntarily, of Executive’s own free will, and without any
coercion, undue influence, threat, or intimidation of any kind or type
whatsoever.

6

--------------------------------------------------------------------------------

 

EXECUTED in                                         , this day of August ___,
2009.

         
 
 
 
Christopher J. Koziol    

EXECUTED in                                         , this day of August ___,
2009.

                  JDA SOFTWARE GROUP, INC.    
 
           
 
  By:    
 
Hamish N. Brewer    
 
      President and Chief Executive Officer    

7

--------------------------------------------------------------------------------

 

EXHIBIT B
EQUITY AWARDS PURSUANT TO THE COMPANY’S
2005 PERFORMANCE INCENTIVE PLAN SUBJECT TO VESTING ACCELERATION

                                              Unvested Shares                  
  Subject to Award                     Automatically             Shares Subject
to   Vesting as of the
Type of Award
  Date of Grant   Award   Effective Date
Restricted Stock Units
    3/13/07       45,788       5,722  
Restricted Stock Units
    5/14/07       6,058       761  
Performance Shares
    2/7/08       20,945       7,856  

8