exv10w1






Exhibit 10.1




AMENDED AND RESTATED

EMPLOYMENT AGREEMENT




          This Employment Agreement (the “Agreement”) dated May 2, 2006, as amended and restated
effective December 30, 2008, is made by and between Activant Group Inc., a Delaware corporation
(the “Company”), and Pervez Qureshi (the “Executive”).



          Whereas, the Company desires to employ Executive, and Executive is willing to serve
in the employ of the Company upon the terms and conditions provided in this Agreement;



          Whereas, in connection with the merger by and among the Company, Lone Star Merger
Corp. and Activant Solutions Holdings Inc., as detailed in that certain Agreement and Plan of
Merger dated March 12, 2006 (the “Merger Agreement”), Executive and the Company entered into this
Agreement effective as of the “Closing Date” (as defined in the Merger Agreement); and



          Whereas, the Company and Executive desire to amend and restate the Agreement in its
entirety to reflect certain amendments deemed necessary or desirable to comply with Section 409A of
the Code (as hereinafter defined).



          Now, Therefore, in consideration of the promises and mutual covenants herein and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:



          1. Term of Employment. Executive shall be employed by the Company for the period
commencing on the Closing Date and ending on the date of Executive’s termination of employment
(such period, the “Employment Term”) on the terms and subject to the conditions set forth in this
Agreement.



          2. Position.



               a. During the Employment Term, Executive shall serve as the Company’s President and Chief
Executive Officer. In such position, Executive shall have such duties and authority as shall be
determined from time to time by the Board of Directors of the Company (the “Board”). Prior to an
initial public offering of the Company’s common stock (an “IPO”), Executive shall serve as a member
of the Board so long as Executive remains the President and Chief Executive Officer of the
Company. Subsequent to an IPO, the Company shall nominate Executive for election to serve as
member of the Board as long as Executive continues to serve as the Company’s President and Chief
Executive Officer. All services as a member of the Board pursuant to this paragraph 2(a), and any
service as an officer and director of any Company subsidiary, shall be without additional
compensation to Executive.



               b. During the Employment Term, Executive will devote Executive’s full business time to the
performance of Executive’s duties hereunder and will not engage in any other business, profession
or occupation for compensation or otherwise which would conflict or interfere with the rendition of
such services either directly or indirectly, without the prior written consent of the Board;
provided that nothing herein shall preclude Executive from (i) accepting









 



 


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appointment to or continuing to serve on any board of directors or trustees of any charitable
or religious organization, (ii) otherwise participating in charitable or religious activities, or
(iii) managing his personal investments and affairs; provided in each case, and in the
aggregate, that such activities do not conflict or interfere with the performance of Executive’s
duties hereunder.




          3. Base Salary. During the Employment Term, the Company shall pay Executive a base
salary at the annual rate of $416,000, or such higher amount as may be approved by the Company’s
Compensation Committee (as defined herein) from time to time, payable in regular installments in
accordance with the Company’s usual payment practices. Executive’s base salary will be subject to
an annual review for increases by the compensation committee of the Board (the “Compensation
Committee”). Executive’s annual base salary, as in effect from time to time, is hereinafter
referred to as the “Base Salary.”



          4. Bonus Opportunity. With respect to each full fiscal year during the Employment
Term, Executive shall be eligible to earn an annual bonus under the Activant Solutions Inc. annual
incentive performance plan. For each full fiscal year during the Employment Term, Executive shall
be eligible to earn an annual bonus of one hundred percent (100%) of Executive’s Base Salary (the
“Target Bonus”) based upon the achievement of budgeted EBITDA and revenue based performance targets
established by the Board and the Compensation Committee, and Executive shall have a maximum annual
bonus opportunity equal to one hundred and seventy-five percent (175%), or such higher maximum
annual bonus opportunity as may be approved by the Company’s Compensation Committee from time to
time, of the Target Bonus. The Company and Executive intend that a portion of the annual bonus
payment (the “Bonus Payment”) will continue to be advanced on a quarterly basis to the extent
performance targets have been achieved in accordance with the terms of the annual incentive
performance plan. In all cases, any earned Bonus Payment will be paid to Executive prior to the
sixth day following the completion of the annual audit of the Company’s financial statements, but
in no event later than two and one-half (21/2) months after the end of the applicable fiscal year in
which it was earned (or such longer or shorter period as may be applicable pursuant to the
“short-term deferral” rules under Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and the regulations thereunder).



          5. Equity Arrangements. Executive was granted a non-statutory stock option to
purchase 2,166,667 shares of the Company’s common stock (the “Option”) pursuant to the terms of the
Company’s 2006 Stock Incentive Plan (the “Plan”) and the form of stock option award agreement (the
“Stock Option Agreement”) approved by the Board for use under the Plan. The Option vests as to
twenty percent (20%) of the total number of shares subject to the Option on the twelve (12) month
anniversary of the Closing Date, and as to five percent (5%) of the total number of shares subject
to the Option at the end of each full three (3) month period thereafter, so that the award will be
fully vested on the fifth anniversary of the Closing Date, subject to Executive’s continuous
employment during that time. In the event of a consummation of a “Change of Control” (as defined
below), all unvested Options that were not previously cancelled will accelerate and become
immediately vested and exercisable. For the purposes of this Agreement, the term “Change of
Control” shall mean (i) the sale or disposition, in one or a series of related transactions, of all
or substantially all of the assets of the Company to any “person” or “group” (as such terms are
defined in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange









 



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Act of 1934, as amended) other
than the “Initial Investors” (as defined below) or affiliates of the
Initial Investors, or (ii) (A) any person or group, other than the Initial Investors or
affiliates of the Initial Investors, is or becomes the “beneficial owner” (as defined in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of
more than 50% of the total voting power of the voting stock of the Company, including by way of
merger, consolidation or otherwise and (B) the Initial Investors or affiliates of the Initial
Investors cease to control the Board. For the purposes of this Agreement, “Initial Investors”
shall mean Hellman & Friedman Capital Partners V, L.P. and its affiliated funds, Thoma Cressey Fund
VII, L.P. and its affiliated funds, and JMI Equity Fund IV, L.P. and its affiliated funds.



          6. Employee Benefits. During the Employment Term, Executive shall be entitled to the
following benefits:



               a. Benefits. Executive shall be entitled to participate in the Company’s employee
benefit plans as in effect from time to time (collectively “Employee Benefits”), on the same basis
as those benefits are generally made available to other executive officers of the Company.



               b. Life Insurance. The Company shall acquire and maintain a life insurance policy on
the life of the Executive with a death benefit payable to Executive’s beneficiaries equal to two
million dollars ($2,000,000), provided that such a policy can be obtained at standard premium
rates. To the extent that proceeds payable upon Executive’s death exceed $2,000,000, the Company
shall be entitled to retain such excess proceeds without liability to Executive’s beneficiaries or
any other person or entity.



          7. Business Expenses. During the Employment Term, reasonable business expenses
incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the
Company in accordance with Company policies and practices as in effect from time to time.



          8. Termination. The Employment Term and Executive’s employment hereunder may be
terminated by either the Company or Executive at any time and for any reason; provided that
Executive will be required to give the Company at least 30 days advance written notice of any
resignation of Executive’s employment. Notwithstanding any other provision of this Agreement, the
provisions of this Section 8 shall exclusively govern Executive’s rights upon termination of
employment with the Company and its affiliates.



               a. Accrued Rights. In the event of a termination of Executive’s employment for any reason,
Executive shall be entitled to receive Accrued Rights. “Accrued Rights” shall mean:




	 	(i)	 	Base Salary through the date of termination of
employment;
	 
	 	(ii)	 	any Target Bonus earned, but unpaid, as of the
date of termination for the fiscal year immediately preceding the
fiscal year in which the termination occurs (the amount earned shall be
determined by the Company in good faith based on the achievement of the
relevant performance criteria for the entire applicable fiscal year);










 



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	 	(iii)	 	any quarterly bonus earned, but unpaid, as of
the date of termination for the fiscal quarter immediately preceding
the fiscal quarter in which the termination occurs (the amount earned
shall be determined by the Company in good faith based on the
achievement of the relevant performance criteria for the entire
applicable fiscal quarter);
	 
	 	(iv)	 	an amount representing any accrued but unused
vacation;
	 
	 	(v)	 	reimbursement for any unreimbursed business
expenses properly incurred by Executive in accordance with Company
policy on or prior to the date of Executive’s termination;
provided claims for such reimbursement (accompanied by
appropriate supporting documentation) are submitted to the Company
within 90 days following the date of Executive’s termination of
employment; and
	 
	 	(vi)	 	such Employee Benefits, if any, as to which
Executive may be entitled under the employee benefit plans of the
Company in accordance with their terms.





               b. Termination by the Company without Cause or Resignation by Executive for Good
Reason



               (i) If Executive’s employment is terminated by the Company without Cause (and other than by
reason of death or Disability) or if Executive resigns for Good Reason, Executive shall be entitled
to receive:




               (A) the Accrued Rights; and




               (B) subject to Executive’s (i) execution, delivery and non-revocation of a valid and
irrevocable general release of all claims against the Company, the Initial Investors and
their respective affiliates within forty-five (45) days following Executive’s receipt of
such release in a form that is reasonably acceptable to the Company, which release shall be
delivered by the Company within three (3) business days following the termination of
Executive’s employment (the effective date of such release is hereinafter referred to as the
“Release Date”; provided, that, if the termination of Executive’s employment occurs
within 45 days of the end of a calendar year and the release effective date would occur
before January 1 of the subsequent calendar year, the “Release Date” shall be deemed to be
January 1 of such subsequent calendar year), and (ii) continued compliance, in all material
respects, with the restrictive covenants set forth in Sections 9 and 10 below:




          (1) a payment equal to one hundred and fifty percent (150%) of the Base
Salary then in effect, payable within three (3) business days following the
Release Date, and an additional termination payment of 150% of such Base
Salary paid in equal monthly installments over the nine month period
following the Release Date, with the first such payment being due on the
next regular payroll date that falls at least three (3)









 



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business days after the Release Date, and each subsequent payment being
due monthly thereafter;




          (2) a pro rata portion of any annual Target Bonus that Executive would
have earned in the fiscal year in which such termination of employment
occurs (the amount of the annual Target Bonus that Executive would have
earned shall be determined by the Company in good faith based on whether and
to what extent the applicable performance targets were achieved), payable
within three (3) business days following the Release Date;




          (3) continued participation for a period of eighteen (18) months
following termination of employment at the Company’s expense for Executive
and his then-eligible dependents in the Company’s group health plans
pursuant to the Consolidated Budget Omnibus Reconciliation Act of 1985, as
amended (“COBRA”); and




          (4) vesting of the Option shall be accelerated such that Executive will
be vested in, and the Option will be exercisable as to, that number
of shares that would have been vested and exercisable on the six (6) month
anniversary of the termination of Executive’s employment. Executive shall
have a period of 180 days following termination of employment to exercise
the vested portion of the Option and any other vested options to acquire the
Company’s common stock granted to Executive (provided that the term of
assumed options shall in no event be extended.




	 	(ii)	 	Notwithstanding the provisions of Sections
8(b)(i)(B)(1) and 8(b)(i)(B)(2), which provide that certain amounts
shall be payable within three (3) business days following the Release
Date, Executive and the Company agree that such amounts may be payable
at a later date to the extent required pursuant to the provisions of
Sections 8(f) and 12(f) of this Agreement.
	 
	 	(iii)	 	Except as set forth in this Section 8(b)(i),
following Executive’s termination of employment by the Company without
Cause (other than by reason of Executive’s death or Disability) or by
Executive’s resignation for Good Reason, Executive shall have no
further rights to any compensation or any other benefits under this
Agreement or other plans, programs or arrangements of the Company or
its affiliates.





               c. Termination by the Company for Cause, by Executive’s Resignation without Good Reason or
upon Executive’s Death or Disability.



               (i) If Executive’s employment is terminated by the Company for Cause, if Executive resigns
without Good Reason, or if Executive’s employment is terminated by









 



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reason of death or Disability, Executive shall have no further rights to any compensation or
any other benefits under this Agreement other than the Accrued Rights.



               (ii) In the event that Executive’s employment is terminated by the Company for Cause, the
Option and all other options to acquire the common stock of the Company issued to Executive,
whether vested or unvested, shall terminate on the date of Executive’s termination of employment by
the Company for Cause.



               d. Definitions. The following capitalized terms used in this Agreement have the
respective meanings set forth below:



               (i) “Cause” shall mean (i) dishonest or fraudulent statements or acts of Executive with
respect to the Company or any of its affiliates, (ii) Executive’s conviction of, or entry of a plea
of guilty or nolo contendere for, any crime that constitutes a felony or any misdemeanor (excluding
minor traffic violations) involving moral turpitude, deceit, dishonesty or fraud, (iii) gross
negligence or willful misconduct by Executive with respect to the Company or its subsidiaries, or
(iv) a material breach by Executive of this Agreement and any other agreement to which Executive
and the Company are now or hereafter parties.



               (ii) “Disability” shall mean a disability under Section 409A(a)(2)(C)(i) of the Code.



               (iii) “Good Reason” shall mean (i) the failure by the Company to comply with any material
provision of this Agreement, (ii) the assignment to Executive of any duties materially inconsistent
with Executive’s status as President and Chief Executive Officer of the Company or a reduction of
Executive’s authority or title, including, but not limited to, Executive’s assignment following a
Change of Control to a position where Executive is not Chief Executive Officer of the consolidated
group of which the Company is a part; provided, however, that “Good Reason” shall cease to exist
for an event described in this clause (ii) on the 60th day following such assignment or
reduction, unless Executive has given the Company written notice of his intention to resign prior
to such date, (iii) a reduction by the Company of Executive’s base salary or bonus opportunity, or
(iv) the transfer of Executive’s primary workplace to a location that is more than fifty (50) miles
from Livermore, CA; provided, however, that if Executive enters into a separate written agreement
to waive any of the clauses above, such agreement shall cause that clause not to constitute “Good
Reason”.



               e. No Mitigation or Offset. Notwithstanding anything herein to the contrary, the
amount of any payment or benefit provided for in Section 8 shall not be reduced, offset or subject
to recovery by the Company or any of its affiliates by reason of any compensation earned by
Executive as the result of employment by another employer after Executive’s employment with the
Company terminates.



               f. Section 4999.



               (i) Prior to an IPO, in order to allow Executive to avoid the 20% excise tax imposed under
Section 4999 of the Code, Executive and the Company shall use commercially reasonable efforts to
obtain stockholder approval in accordance with the terms of Section 280G(b)(5) of the Code in
connection with any “change in the ownership or effective









 



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control” of the Company or any “change in the ownership of a substantial portion of the
assets” of the Company (each as defined under Section 280G of the Code).




               (ii) In the event that, despite the efforts taken pursuant to Section 8(f)(i), any amounts
payable under this Agreement or otherwise to Executive would (1) constitute “parachute payments”
within the meaning of Section 280G of the Code, or any comparable successor provisions, and (2) but
for this Section 8(f)(ii) would be subject to the excise tax imposed by Section 4999 of the Code,
or any comparable successor provisions (the “Excise Tax”), then such amounts payable to Executive
hereunder shall be either:




          (A) provided to Executive in full, or




          (B) provided to Executive as to such lesser extent that would result in no portion
of such benefits being subject to the Excise Tax,



          whichever of the foregoing amounts, when taking into account applicable federal, state, local
and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in
the receipt by Executive, on an after-tax basis, of the greatest amount of benefits,
notwithstanding that all or some portion of such benefits may be taxable under the Excise Tax.
Unless the Company and Executive otherwise agree in writing, any determination required under this
Section 8(f)(ii) shall be made in writing in good faith by a nationally recognized accounting firm
(the “Accountants”). [In the event of a reduction in benefits hereunder, the reduction of the
total payments shall apply as follows, unless otherwise agreed in writing and such agreement is in
compliance with Section 409A of the Code: (i) first, any cash severance payments due under the
Agreement shall be reduced, with the last such payment due first forfeited and reduced, and
sequentially thereafter working from the next last payment, and (ii) second, any acceleration of
vesting of any equity shall be deferred with the tranche that would vest last (without any such
acceleration) first deferred.] For purposes of making the calculations required by this Section
8(f)(ii), the Accountants may make reasonable assumptions and approximations concerning applicable
taxes and may rely on reasonable, good faith interpretations concerning the application of the Code
and other applicable legal authority. The Company and Executive shall furnish to the Accountants
such information and documents as the Accountants may reasonably request in order to make a
determination under this Section 8(f)(ii). The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this Section 8(f)(ii).



          If, notwithstanding any reduction described in this Section 8(f)(ii), the Internal Revenue
Service (“IRS”) determines that Executive is liable for the Excise Tax as a result of the receipt
of amounts payable under this Agreement or otherwise as described above, then Executive shall be
obligated to pay back to the Company, within thirty (30) days after a final IRS determination or in
the event that Executive challenges the final IRS determination, a final judicial determination, a
portion of such amounts equal to the “Repayment Amount”. The Repayment Amount with respect to the
payment of benefits shall be the smallest such amount, if any, as shall be required to be paid to
the Company so that Executive’s net after-tax proceeds with respect to any payment of benefits
(after taking into account the payment of the Excise Tax and all other applicable taxes imposed on
such payment) shall be maximized. The Repayment Amount with respect to the payment of benefits
shall be zero if a Repayment Amount of more









 



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than zero would not result in Executive’s net after-tax proceeds with respect to the payment
of such benefits being maximized. If the Excise Tax is not eliminated pursuant to this paragraph,
Executive shall pay the Excise Tax.



          Notwithstanding any other provision of this Section 8(f)(ii), if (1) there is a reduction in
the payment of benefits as described in this Section 8(f)(ii), (2) the IRS later determines that
Executive is liable for the Excise Tax, the payment of which would result in the maximization of
Executive’s net after-tax proceeds (calculated as if Executive’s benefits had not previously been
reduced), and (3) Executive pays the Excise Tax, then the Company shall pay to Executive those
benefits which were reduced pursuant to this Section 8(f)(ii) as soon as administratively possible
after Executive pays the Excise Tax so that Executive’s net after-tax proceeds with respect to the
payment of benefits are maximized.



               g. Board/Committee Resignation. Upon termination of Executive’s employment for any
reason, Executive agrees to resign, as of the date of such termination and to the extent
applicable, from all positions he holds with the Company, including any position on the Board (and
any committees thereof).



          9. Non-Competition/Non-Solicit.



               a. Executive acknowledges and recognizes the highly competitive nature of the businesses of
the Company and its affiliates and accordingly agrees as follows:




          (1) During the Employment Term and for a period of eighteen (18) months
following the date Executive ceases to be employed by the Company for any reason
(other than death) (the “Restricted Period”), Executive will not, whether on
Executive’s own behalf or on behalf of or in conjunction with any person, firm,
partnership, joint venture, association, corporation or other business organization,
entity or enterprise whatsoever (“Person”), directly or indirectly solicit or assist
in soliciting in competition with the Company the business of any client or
prospective client of the Company or any of its subsidiaries.




          (2) During the Restricted Period, Executive will not directly or indirectly:




               (i) engage in any business that competes with the business of the Company or
its subsidiaries (the “Competitive Group”), as the Competitive Group existed during
the Employment Term or at the time Executive ceases to be employed by the Company,
or with any business that the Competitive Group had specific plans to conduct during
the Employment Term or at the time Executive ceases to be employed by the Company
(so long as such plans were documented in an actual business plan of the Competitive
Group) (a “Competitive Business”), in any geographical area that is within 100 miles
of any geographical area where the Competitive Group manufactures, produces, sells,
leases, rents, licenses or otherwise provides its products or services;




               (ii) enter the employ of, or render any services to, any Person (or any
division or controlled or controlling affiliate of any Person) who or









 



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which engages in a Competitive Business;




               (iii) acquire a financial interest in, or otherwise become actively involved
with, any Competitive Business, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or consultant; or




               (iv) interfere with, or attempt to interfere with, business relationships
(whether formed before, on or after the date of this Agreement) between the
Competitive Group and business partners, customers, clients or suppliers of the
Competitive Group or induce or attempt to induce such business partners, customers,
clients or suppliers to reduce or cease their relationship with the Competitive
Group.



          (3) Notwithstanding any provision of Section 9.a.(1), Section 9.a.(2)(i) or Section
9.a.(2)(ii) of this Agreement to the contrary, Executive will not be deemed to be competing or
interfering with the Competitive Group if, after termination of employment, Executive is employed
by an entity with multiple business units or divisions, some of which engage in a Competitive
Business, so long as Executive is employed by a subsidiary, division or other business unit that
does not engage in a Competitive Business and Executive does not directly or indirectly provide any
services, information or assistance to the subsidiary, division or other business unit that engages
in a Competitive Business.



          (4) Notwithstanding anything to the contrary in this Agreement, Executive may, directly or
indirectly own, solely as an investment, securities of any Person engaged in the business of the
Company or its affiliates which are publicly traded on a national or regional stock exchange or on
the over-the-counter market if Executive (i) is not a controlling person of, or a member of a group
which controls, such person and (ii) does not, directly or indirectly, own 5% or more of any class
of securities of such Person.



          (5) During the Restricted Period, Executive will not, whether on Executive’s own behalf or on
behalf of or in conjunction with any Person, directly or indirectly solicit, induce or encourage
any employee of the Company or its affiliates, or any person who was an employee of the Company or
any affiliate of the Company at any time during the twelve (12) month period immediately prior to
the termination of the Executive’s employment with the Company, to leave the employment of the
Company or its affiliates.



          (6) During the Restricted Period, Executive will not, whether on Executive’s own behalf or on
behalf of or in conjunction with any Person, directly or indirectly, solicit, induce or encourage
any consultant, contractor or similar person under contract with the Company or its affiliates, or
any person who was a consultant, contractor or similar person of the Company or any affiliate of
the Company at any time during the twelve (12) month period immediately prior to the termination of
the Executive’s employment with the Company, to cease to work with the Company or its affiliates.



               b. It is expressly understood and agreed that although Executive and the Company consider the
restrictions contained in this Section 9 to be reasonable, if a final









 



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judicial determination is made by a court of competent jurisdiction that the time or territory
or any other restriction contained in this Agreement is an unenforceable restriction against
Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended
to apply as to such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court of competent
jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.



               c. Executive acknowledges that the promises and restrictive covenants that Executive is
providing under this Section 9 are reasonable and necessary to the protection of the business to be
acquired by the Initial Investors pursuant to the Merger Agreement. Executive acknowledges that
Executive sold equity interests in Activant Solutions Holdings Inc. in connection with the
transactions contemplated by the Merger Agreement and that the goodwill of Activant Solutions
Holdings Inc. was a material consideration in the Initial Investors’ decision to enter into the
transactions contemplated by the Merger Agreement. Executive further acknowledges that if
Executive were to engage in the restricted activities described in this Section 9 during the
Restricted Period, such competition could materially and adversely affect the value of the business
acquired by the Initial Investors in the transactions contemplated by the Merger Agreement.
Executive and the Company agree that each of the Initial Investors are express third party
beneficiaries of the provisions set forth in this Section 9.



          10. Confidentiality; Intellectual Property.



               a. Confidentiality.



               (i) Executive will not at any time (whether during or after Executive’s employment with the
Company) (x) retain or use for the benefit, purposes or account of Executive or any other Person;
or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person
outside the Company (other than its professional advisers who are bound by confidentiality
obligations), any non-public, proprietary or confidential information —including without
limitation trade secrets, know-how, research and development, software, databases, inventions,
processes, formulae, technology, designs and other intellectual property, information concerning
finances, investments, profits, pricing, costs, products, services, vendors, customers, clients,
partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing,
promotions, government and regulatory activities and approvals — concerning the past, current or
future business, activities and operations of the Company, its subsidiaries or affiliates and/or
any third party that has disclosed or provided any of same to the Company on a confidential basis
(“Confidential Information”) without the prior written authorization of the Board.



               (ii) “Confidential Information” shall not include any information that is (a) generally known
to the industry or the public other than as a result of Executive’s breach of this covenant or any
breach of other confidentiality obligations by third parties; (b) made legitimately available to
Executive by a third party without breach of any confidentiality obligation; or (c) required by law
to be disclosed; provided that Executive shall give prompt written notice to the Company of
such requirement, disclose no more information than is so









 



11



required, and cooperate with any attempts by the Company to obtain a protective order or
similar treatment.



               (iii) Except as required by law, Executive will not disclose to anyone, other than Executive’s
immediate family and legal or financial advisors, the existence or contents of this Agreement;
provided that Executive may disclose to any prospective future employer the provisions of
Sections 9 and 10 of this Agreement if such prospective employer agrees to maintain the
confidentiality of such terms.



               (iv) Upon termination of Executive’s employment with the Company for any reason, Executive
shall (x) cease and not thereafter commence use of any Confidential Information or intellectual
property (including without limitation, any patent, invention, copyright, trade secret, trademark,
trade name, logo, domain name or other source indicator) owned or used by the Company, its
subsidiaries or affiliates; (y) immediately destroy, delete, or return to the Company, at the
Company’s option, all originals and copies in any form or medium (including memoranda, books,
papers, plans, computer files, letters and other data) in Executive’s possession or control
(including any of the foregoing stored or located in Executive’s office, home, laptop or other
computer, whether or not Company property) that contain Confidential Information or otherwise
relate to the business of the Company, its affiliates and subsidiaries, except that Executive may
retain only those portions of any personal notes, notebooks and diaries that do not contain any
Confidential Information; and (z) notify and fully cooperate with the Company regarding the
delivery or destruction of any other Confidential Information of which Executive is or becomes
aware.



               b. Intellectual Property.



               (i) If Executive has created, invented, designed, developed, contributed to or improved any
works of authorship, inventions, intellectual property, materials, documents or other work product
(including without limitation, research, reports, software, databases, systems, applications,
presentations, textual works, content, or audiovisual materials) (“Works”), either alone or with
third parties, prior to Executive’s employment by the Company, that are relevant to or implicated
by such employment (“Prior Works”), Executive hereby grants the Company a perpetual, non-exclusive,
royalty-free, worldwide, assignable, sublicensable license under all rights and intellectual
property rights (including rights under patent, industrial property, copyright, trademark, trade
secret, unfair competition and related laws) therein for all purposes in connection with the
Company’s current and future business. A list of all such Works as of the date hereof is attached
hereto as Exhibit A.



               (ii) If Executive creates, invents, designs, develops, contributes to or improves any Works,
either alone or with third parties, at any time during Executive’s employment by the Company and
within the scope of such employment and/or with the use of any the Company resources (“Company
Works”), Executive shall promptly and fully disclose same to the Company and hereby irrevocably
assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and
intellectual property rights therein (including rights under patent, industrial property,
copyright, trademark, trade secret, unfair competition and related laws) to the Company to the
extent ownership of any such rights does not vest originally in the Company.









 



12


               (iii) Executive agrees to keep and maintain adequate and current written records (in the form
of notes, sketches, drawings, and any other form or media requested by the Company) of all Company
Works. The records will be available to and remain the sole property and intellectual property of
the Company at all times.



               (iv) Executive shall take all requested actions and execute all requested documents (including
any licenses or assignments required by a government contract) at the Company’s expense (but
without further remuneration) to assist the Company in validating, maintaining, protecting,
enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Prior
Works and Company Works. If the Company is unable for any other reason to secure Executive’s
signature on any document for this purpose, then Executive hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney
in fact, to act for and in Executive’s behalf and stead to execute any documents and to do all
other lawfully permitted acts in connection with the foregoing.



               (v) Executive shall not improperly use for the benefit of, bring to any premises of, divulge,
disclose, communicate, reveal, transfer or provide access to, or share with the Company any
confidential, proprietary or non-public information or intellectual property relating to a former
employer or other third party without the prior written permission of such third party. Executive
hereby indemnifies, holds harmless and agrees to defend the Company and its officers, directors,
partners, employees, agents and representatives from any breach of the foregoing covenant.
Executive shall comply with all relevant policies and guidelines of the Company, including
regarding the protection of confidential information and intellectual property and potential
conflicts of interest. Executive acknowledges that the Company may amend any such policies and
guidelines from time to time, and that Executive remains at all times bound by their most current
version.



               (vi) Notwithstanding the foregoing, this Section 10(b) is subject to the provisions of
California Labor Code Sections 2870, 2871 and 2872. In accordance with Section 2870 of the
California Labor Code, Executive’s obligation to assign Executive’s right, title and interest
throughout the world in and to all Works does not apply to any Works that Executive developed
entirely on his own time without using the Competitive Group’s equipment, supplies, facilities, or
Confidential Information except for those Works that either: (i) relate to either (A) the business
of the Competitive Group at the time of conception or reduction to practice of the Work, or actual
or demonstrably anticipated research or development of the Competitive Group; or (ii) result from
any work performed by Executive for the Competitive Group. A copy of California Labor Code
Sections 2870, 2871 and 2872 is attached to this Agreement as Exhibit B. Executive shall
disclose all Works to the Company, even if Executive does not believe that Executive is required
under this Agreement, or pursuant to California Labor Code Section 2870, to assign his interest in
such Works to the Company. If the Company and Executive disagree as to whether or not any Works
are included within the terms of this Agreement, it will be Executive’s responsibility to prove
that they are not included.



               (vii) The provisions of Section 10 shall survive the termination of Executive’s employment for
any reason.









 



13


          11. Specific Performance. Executive acknowledges and agrees that the Company’s remedies at
law for a breach or threatened breach of any of the provisions of Section 9 or Section 10 would be
inadequate and the Company would suffer irreparable damages as a result of such breach or
threatened breach. In recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the Company, without posting any
bond, shall be entitled to cease making any payments or providing any benefit otherwise required by
this Agreement and obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable remedy which may then
be available.



          12. Miscellaneous.



               a. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to conflicts of laws principles
thereof. Any and all disputes between the parties which may arise pursuant to this Agreement will
be heard and determined before an appropriate state court in Santa Clara, California. The parties
acknowledge that such courts have jurisdiction to interpret and enforce the provisions of this
Agreement, and the parties consent to, and waive any and all objections that they may have as to,
personal jurisdiction and/or venue in such courts.



               b. Entire Agreement; Amendments. This Agreement contains the entire understanding of
the parties with respect to the employment of Executive by the Company. There are no restrictions,
agreements, promises, warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein. This Agreement may not be
altered, modified, or amended except by written instrument signed by the parties hereto. In the
event that the Closing fails to occur, this Agreement shall be void ab initio.



               c. No Waiver. The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive
such party of the right thereafter to insist upon strict adherence to that term or any other term
of this Agreement.



               d. Assignment. This Agreement, and all of Executive’s rights and duties hereunder,
shall not be assignable or delegable by Executive except to the extent permitted by the Company in
writing. Any purported assignment or delegation by Executive in violation of the foregoing shall
be null and void ab initio and of no force and effect. This Agreement may be assigned by the
Company to a person or entity which is a successor in interest to substantially all of the business
operations of the Company. Upon such assignment, the rights and obligations of the Company
hereunder shall become the rights and obligations of such successor person or entity.



               e. Set Off. The Company’s obligation to pay Executive the amounts provided for in
Section 8 hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by
Executive to the Company or its affiliates, except to the extent any such set off, counterclaim or
recoupment would violate, or result in the imposition of tax under, Section 409A of the Code, in
which case such right shall be null and void to the extent of the violation.









 



14


               f. Compliance with IRC Section 409A. Notwithstanding anything herein to the contrary,
(i) if at the time of Executive’s termination of employment with the Company, the Company has
determined that Executive is a “specified employee” as defined in Section 409A of the Code and the
deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of
such termination of employment is necessary in order to prevent any accelerated or additional tax
under Section 409A of the Code, then the Company will defer the commencement of the payment of any
such payments or benefits hereunder (without any reduction in such payments or benefits ultimately
paid or provided to Executive) until the date that is six months following Executive’s termination
of employment with the Company (or the earliest date as is permitted under Section 409A of the
Code) and (ii) if any other payments of money or other benefits due to Executive hereunder could
cause the application of an accelerated or additional tax under Section 409A of the Code, such
payments or other benefits shall be deferred if deferral will make such payment or other benefits
compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be
restructured, to the extent possible, in a manner, determined by the Board, that does not cause
such an accelerated or additional tax. The Board shall consult with Executive in good faith
regarding the implementation of the provisions of this Section 12(f); provided that neither the
Company and its affiliates, nor any of their employees or representatives, shall have any liability
to Executive with respect thereto. For purposes of Section 409A of the Code, each payment made
under this Agreement shall be designated as a “separate payment” within the meaning of the Section
409A of the Code, and references herein to Executive’s “termination of employment” shall refer to
Executive’s separation from service with the Company within the meaning of Section 409A of the
Code. Notwithstanding anything herein to the contrary, except to the extent any expense,
reimbursement or in-kind benefit provided pursuant to this Agreement does not constitute a
“deferral of compensation” within the meaning of Section 409A of the Code: (i) the amount of
expenses eligible for reimbursement or in-kind benefits provided to Executive during any calendar
year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided
to Executive in any other calendar year, (ii) the reimbursements for expenses for which Executive
is entitled to be reimbursed shall be made on or before the last day of the calendar year following
the calendar year in which the applicable expense is incurred and (iii) the right to payment or
reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other
benefit.



               g. Successors; Binding Agreement. This Agreement shall inure to the benefit of and be
binding upon personal or legal representatives, executors, administrators, successors, assigns,
agents, affiliates, heirs, distributees, devisees and legatees.



               h. Notice. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered by hand or overnight courier or three days after it has been mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the respective addresses
set forth below in this Agreement, or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.









 



15


If to the Company:



Activant Group Inc.

c/o Activant Solutions Inc.

7683 Southfront Road

Livermore, CA 94551

Attention: General Counsel



With a copy to:



Hellman & Friedman LLC

One Maritime Plaza, 12th Floor

San Francisco, CA 94111

Attention: David R. Tunnell

                 C. Andrew Ballard



If to Executive:





To the most recent address of Executive set forth in the personnel records
of the Company.



               i. Executive Representation. Executive hereby represents to the Company that the
execution and delivery of this Agreement by Executive and the performance by Executive of
Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms
of any employment agreement or other agreement or policy to which Executive is a party or otherwise
bound.



               j. Prior Agreements. This Agreement supersedes all prior agreements and
understandings (including verbal agreements) between Executive and the Company and/or its
affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its
affiliates.



               k. Cooperation. Executive shall provide Executive’s reasonable cooperation in
connection with any action or proceeding (or any appeal from any action or proceeding) which
relates to events occurring during Executive’s employment with the Company or its affiliates. This
provision shall survive any termination of this Agreement.



               l. Expenses. In the event of any dispute between the Company and Executive as to the
interpretation, terms, validity or enforceability of (including any dispute about the amount of any
payment pursuant to) this Agreement, the prevailing party shall be entitled to recover from the
non-prevailing party any and all of such prevailing party’s costs and expenses incurred in
connection with any such dispute, including reasonable attorneys’ fees.



               m. Withholding Taxes. The Company may withhold from any amounts payable under this
Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation.



               n. Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.









 



16




          IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.



	 	 	 	 	 
	ACTIVANT GROUP INC.

	 	PERVEZ QURESHI	 	 
	 
	 	 	 	 
	/s/ Robert B. Henske

	 	/s/ Pervez Qureshi	 	 
	 

By:    Robert B. Henske

	 	 

	 	 
	Title: Chairman
	 	 	 	 












 



 


EXHIBIT A




WORKS



None.










 



 




EXHIBIT B




California Labor Code Sections 2870, 2871 and 2872




SECTION 2870



(a) Any provision in an employment agreement which provides that an employee shall assign, or offer
to assign, any of his or her rights in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time without using the employer’s
equipment, supplies, facilities, or trade secret information except for those inventions that
either:





	 	(1)	 	Relate at the time of conception or reduction to practice of the invention to the
employer’s business, or actual or demonstrably anticipated research or development of the
employer; or
	 
	 	(2)	 	Result from any work performed by the employee for the employer.




(b) To the extent a provision in an employment agreement purports to require an employee to assign
an invention otherwise excluded from being required to be assigned under subdivision (a), the
provision is against the public policy of this state and is unenforceable.




SECTION 2871



No employer shall require a provision made void and unenforceable by Section 2870 as a condition of
employment or continued employment. Nothing in this article shall be construed to forbid or
restrict the right of an employer to provide in contracts of employment for disclosure, provided
that any such disclosures be received in confidence, of all of the employee’s inventions made
solely or jointly with others during the term of his or her employment, a review process by the
employer to determine such issues as may arise, and for full title to certain patents and
inventions to be in the United States, as required by contracts between the employer and the United
States or any of its agencies.




SECTION 2872



If an employment agreement entered into after January 1, 1980 contains a provision requiring the
employee to assign or offer to assign any of his or her rights in any invention to his or her
employer, the employer must also, at the time the agreement is made, provide a written notification
to the employee that the agreement does not apply to an invention which qualifies fully under the
provisions of Section 2870. In any suit or action arising thereunder, the burden of proof shall be
on the employee claiming the benefits of its provisions.