exv10w18



 





Exhibit 10.18



Transition and Severance Agreement



Greg Petersen (“Petersen”) and LONE STAR MERGER CORP. (“Company”) agree as follows for
terms of employment to be effective immediately, without any further action required by
either party, upon the closing of the merger transaction between ACTIVANT SOLUTIONS
HOLDINGS and Lone Star Merger Corp.




	 	 	 
	Title:

	 	Executive Vice President & Chief Financial
Officer (title may be changed simply to
‘Executive Vice President’ upon hiring of
successor CFO)
	 
	 	 
	Reporting to:

	 	President & CEO
	 
	 	 
	Responsibilities:

	 	May be reduced by the CEO / Board with consent
of Petersen not to be unreasonably withheld. No
responsibilities will be added nor will Petersen
be required to serve on any Boards, or
Committees, without Petersen’s consent.
	 
	 	 
	Location:

	 	Duties will be carried out from the Company’s
Las Cimas facility in Austin, but certain travel
may be required in accordance with reasonable
demands considering Petersen’s responsibilities
as an Executive Vice President of the Company.
In no event will Petersen be asked to move.
	 
	 	 
	Term of Employment:

	 	Company shall employ Petersen commencing at the
close of the merger transaction referenced above
and ending on January 5, 2007. In the event that
the merger referenced above is not consummated,
this Transition and Severance Agreement shall be
void ab initio.
	 
	 	 
	Annual Base Salary:

	 	$290,000 paid to Petersen in accordance with
Company’s generally applicable payroll
practices.






 









 






	 	 	 
	Incentive Bonus:

	 	Petersen shall be paid bonuses reflecting
a $210,000 annualized target for fiscal
year 2006 and a $52,500 target for the
1st quarter of FY 2007 ending
on December 31, 2006, each to be
calculated and paid in accordance with
the same formula or methodology applied
to other senior executives (those having
the rank of senior vice president and
above), provided in the case of the FY
2006 bonus paid not later than December
31, 2006 and in the case of the
1st Quarter 2007 bonus paid
not later than February 15, 2007. Company
shall establish a formula and methodology
for the 1st quarter of FY 2007
similar in type and attainability as for
FY 2006; if Company does not do so the
bonus for the 1st quarter of
FY 2007 will be fixed at $52,500.
	 
	 	 
	Lump Sum Severance Payment:

	 	On January 5, 2007, company will pay
$500,000 in a lump sum; and will provide
12 months of company paid COBRA benefits.
	 
	 	 
	Interest in Company:

	 	Petersen will be paid for the interests
Petersen has in Company (whether stock,
option, restricted stock or other) in
accordance with the agreements and other
documents governing the merger
transaction referenced above or other
applicable agreements and documents.
	 
	 	 
	Early Termination:

	 	By Petersen: If Petersen voluntary
terminates employment prior to January 5,
2007 the Company will not pay the Lump
Sum Severance Payment. He will be
eligible for his base salary and bonuses
up to the date of voluntary termination
on the same basis as other senior
executives, as defined above, when they
voluntary terminate. Death or
“disability” (as defined under Section
22(e)(3) of the Internal Revenue Code of
1986, as amended) will not be considered
termination and all payments specified
herein will be paid to Petersen or to
Petersen’s estate or representative, as
appropriate, in the event of death or
disability on or before January 5, 2007.

	 
	 	 
	 

	 	
By the Company: If the Company chooses to
terminate Petersen prior to January 5,
2007 other than for Cause, Company will
pay (i) a lump sum equal to the January
severance payment plus the






 









 






	 	 	 
	 

	 	remaining base salary through January 5, 2007
in a lump sum within 5 days of termination,
plus (ii) if the termination is prior to
September 30, 2006, Petersen will be paid a
full FY 2006 bonus as if he had been employed
for the full FY 2006, and if the termination is
after September 30, 2006, Petersen will be paid
a full FY 2006 bonus plus a pro rata bonus for
the 1st quarter of FY 2007.
	 
	 	 
	 

	 	“Cause” is defined as any of the following:







	 	1.	 	Conviction of a felony or a crime
involving moral turpitude;
	 
	 	2.	 	Violation of any non-competition or
on-solicitation agreement, or material
violation of any confidentiality agreement;
	 
	 	3.	 	Material dishonesty or fraud in performing
responsibilities hereunder; and/or
	 
	 	4.	 	Gross negligence in performing
responsibilities hereunder.





	 	 	 
	Benefits:

	 	Petersen will continue to participate in the
company’s standard benefit programs at the same
level, including accruing vacation at the rate
of four weeks per year.
	 
	 	 
	D&O Coverage:

	 	Company will provide at its expense extended
(“tail”) coverage for Petersen for the same
term as provided to other officers or directors
but in any event not less than 6 years from the
closing of the merger transaction referenced
above
	 
	 	 
	Release/Restrictive Covenants:

	 	The payment of the Early Termination Benefits
described above and the Lump Sum Severance
Payment shall be subject to Petersen’s
execution of an effective release in the form
attached hereto. Petersen acknowledges that the
restrictive covenants provided for in the Employee Confidentiality, Non-disclosure,
Intellectual Property, Non-solicitation and
Non-competition Agreement dated September 13,
2001 between Petersen and the Company will
continue for 2 years from January 5, 2007.






 









 






	 	 	 	 	 
	AGREED:	 	 
	 
	 	 	 	 
	/s/ Greg Petersen	 	 
	 	 	 
	Greg Petersen	 	 
	 
	 	 	 	 
	Lone Star Merger Corp	 	 
	 
	 	 	 	 
	By:

	 	/s/ C Andrew Ballard	 	 
	 

	 	 	 	 
	 

	 	Name: C Andrew Ballard	 	 
	 

	 	Title: Vice President