Exhibit 10.12
AMENDED EMPLOYMENT AGREEMENT
This Employment Agreement (as amended, the "Agreement"), is made and entered
into, effective as of June 24, 2002, by and among PEREGRINE SYSTEMS, INC., a
Delaware Corporation (the "Company" or "Peregrine"), and KENNETH A. SEXTON (the
"Employee").
Recitals
A.
The Company provides software products and services for
infrastructure management.
B.
The Company desires to employ the Employee, and the Employee
desires to work for the Company, upon the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
Agreements
SECTION 1.
EMPLOYMENT.
THE COMPANY HEREBY EMPLOYS THE EMPLOYEE AS
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER OF PEREGRINE TO PERFORM
SUCH DUTIES AS ARE CUSTOMARILY PERFORMED BY THE EXECUTIVE VICE PRESIDENT AND THE
CHIEF FINANCIAL OFFICER OF A COMPANY.
SECTION 2.
TERM.
THE TERM OF THIS AGREEMENT COMMENCED ON JUNE 24,
2002, AND SHALL CONTINUE UNTIL MAY 31, 2005, UNLESS TERMINATED SOONER PURSUANT
TO THE TERMS OF THIS AGREEMENT (THE "TERM").
THE TERM WILL BE AUTOMATICALLY
EXTENDED FOR A ONE YEAR PERIOD EFFECTIVE JUNE 1, 2005, AND EVERY JUNE 1
THEREAFTER (THE "ANNIVERSARY DATE"), UNLESS THE COMPANY PROVIDES WRITTEN NOTICE
TO THE EMPLOYEE OF THE COMPANY'S INTENT NOT TO EXTEND THE TERM MORE THAN 90 DAYS
BEFORE THE ANNIVERSARY DATE.
SECTION 3.
COMPENSATION/BENEFITS.
(A)
BASE SALARY
DURING THE TERM, THE EMPLOYEE SHALL BE ENTITLED TO A
MINIMUM BASE SALARY AT THE ANNUAL RATE OF $275,000, PAYABLE IN INSTALLMENTS,
LESS REQUIRED LEGAL DEDUCTIONS, IN ACCORDANCE, WITH THE COMPANY'S POLICY
GOVERNING SALARY PAYMENTS TO EMPLOYEES GENERALLY, AS IT MAY BE AMENDED FROM TIME
TO TIME BY THE COMPANY ("BASE SALARY").
THE BASE SALARY WILL BE REVIEWED ON AN
ANNUAL BASIS AND MAY BE INCREASED FROM TIME TO TIME DURING THE TERM AT THE
DISCRETION OF PEREGRINE'S BOARD OF DIRECTORS.
(B)
BONUSES
(I)
MICP/PERFORMANCE BONUS.
THE EMPLOYEE SHALL BE ENTITLED TO
RECEIVE A BONUS FOR ACHIEVING CERTAIN RESULTS (THE "PERFORMANCE BONUS") IN THE
PENDING CHAPTER 11 BANKRUPTCY CASES OF THE COMPANY AND ITS DEBTOR AFFILIATE
PEREGRINE REMEDY, INC. (CASE NO. 02-12740 (JKF) (JOINTLY ADMINISTERED)) (THE
"CHAPTER 11 CASES"), THE AMOUNT OF
SUCH BONUS TO BE A MINIMUM OF $125,000 PAYABLE IN ACCORDANCE WITH
SECTION 3(B)(1) BELOW ("EARNED PERFORMANCE BONUS") AND ADDITIONAL AMOUNT(S), IF
ANY, PAYABLE IN ACCORDANCE WITH SECTION 3(B)(2) BELOW ("VARIABLE PERFORMANCE
BONUS").
THE AGGREGATE AMOUNT OF THE PERFORMANCE BONUS SHALL BE DETERMINED IN
ACCORDANCE WITH THE FOLLOWING FORMULA:
(UNSECURED CREDITOR RECOVERY)2 X [NINE
(9) / NUMBER OF MONTHS IN BANKRUPTCY] X $1,250,000.
IN NO EVENT SHALL THE
EMPLOYEE BE ENTITLED TO A PERFORMANCE BONUS OF LESS THAN THE EARNED PERFORMANCE
BONUS.
EXAMPLE:
FOR PURPOSES OF ILLUSTRATION ONLY, THE EMPLOYEE WOULD BE
ENTITLED TO A PERFORMANCE BONUS IN THE AGGREGATE AMOUNT OF $200,000 IN THE EVENT
THAT A PLAN OF REORGANIZATION FOR THE COMPANY IS CONFIRMED AND BECOMES EFFECTIVE
AS OF JUNE 28, 2003 (270 DAYS AFTER THE PETITION DATE)