Document:

ex10_2.htm

 Exhibit 10.2

 

Executive Termination Policy

 

Scope

 

This policy is designed to cover a limited number of QAD Inc. (Company) Executives (Executives) whose positions and titles are defined as Company President, Chief Executive Officer, Chief Financial Officer, and Executive Vice President; and for those Vice Presidents and other individuals as are specifically approved by the Compensation Committee of the Board (Compensation Committee) as eligible for inclusion under this policy.  Only those Executives who are specifically selected by the Compensation Committee shall be eligible for benefits under this policy.

 

All Executive terminations will follow the conditions set forth in this Policy, except for terms and conditions in individually negotiated, written agreements as approved by the Board.

 

For newly hired Executives, there is a six (6) month waiting period from date of hire to receive benefits under this policy.

 

Purpose

 

The Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Company’s Executives, notwithstanding the possibility, threat or occurrence of Termination of Employment (Termination) for reasons other than for Cause or Change in Control.  Therefore, this policy is intended to provide a structured and predefined approach to the treatment of a limited number of Executives in connection with the Termination of an Executive.

 

Key Objectives

 

	
  

	
·

	
Keep the Executive Management team focused on the business rather than on their personal financial security

	
  

	
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Bridge the unemployment gap

 

Requirements

 

Participation in the Termination Benefits (Benefits) of this Policy is strictly regulated by approval of the Executive’s inclusion under this Policy, as noted within Compensation Committee minutes.

 

Benefits become payable to an Executive after an Executive is Terminated and Company receives, not later than 45 days following such Termination, a signed Separation Agreement and Release of All Claims (Agreement) by the Executive Terminated from Company employment.

 

  

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Definitions:

 

“Agreement” - Separation Agreement and Release of All Claims

 

Shall mean a formal document approved by QAD’s General Counsel.  The Agreement shall be approved and signed by the Vice President of Human Resources or designated Company Officer.

 

Termination of Employment

 

Shall mean any termination or purported termination of the employment of Executive that is initiated by the Company which is not effected according to the requirements of a Notice of Termination for “Cause” and does not occur within 18 months following a “Change in Control” as defined for purposes of the Company’s Change in Control Policy.  For purposes of this Policy, the effective date of any Termination (as defined herein) shall be the date on which the Executive has a “separation from service” as defined for purposes of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (“Section 409A”).

 

Terminated for “Cause”

 

“Cause” shall mean (a) the Executive is convicted of a felony involving property of the Company, or (b) the Executive, in carrying out the Executive’s duties under any and all Company Policies, is guilty of willful refusal to perform, or willful neglect of, the Executive’s duties.  In the event that Executive’s employment with the Company is terminated for Cause, Executive shall receive Executive’s full base salary as earned through the Date of Termination at the rate in effect at the time Notice of Termination is given.  Following payment of the salary amount, the Company shall have no further obligations to Executive.

 

Two (2) Tiered Benefits Structure for Executive Termination

 

The Company will make a lump sum payment based on the Compensation Base as defined below, to Executive 60 days after the date of Termination, provided that the Company has timely received a signed Agreement within 45 days of the Executive’s date of Termination.

 

	
  

	
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Compensation Base is defined as an Executive’s highest fiscal year base salary in effect within two years prior to the Executive’s Termination

 

Tier #1 Benefits Structure:

 

	
  

	
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Participation: Included in this Tier are the following Company Executives

 

	
  

	
1.

	
Chief Executive Officer

	
  

	
2.

	
President

	
  

	
3.

	
Chief Financial Officer

	
  

	
4.

	
Executives with Position Title of Executive Vice President

 

	
  

	
·

	
Benefits:

 

	
  

	
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Six (6) months of Compensation Base

	
  

	
·

	
Six (6) months of COBRA payments or similar regional heath coverage

 

  

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Tier #2 Benefits Structure:

 

	
  

	
·

	
Participation: All employees not identified and included in the Tier 1 structure above, must be expressly approved by the Compensation Committee in order to receive Benefits under this Policy, as noted within Compensation Committee minutes.

 

	
  

	
·

	
Benefits:

 

	
  

	
·

	
Six (6) months of Compensation Base

	
  

	
·

	
Six (6) months of COBRA payments or similar regional heath coverage

 

Compliance with Section 409A

 

	
  

	
·

	
It is intended that lump sum payments to be made under this Policy will, be paid within the “short-term deferral period” (as defined for purposes of Section 409A), and each such payment shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A.  It is intended that COBRA payments and other health coverage provided under this Policy qualify as separation pay plan medical benefits within the meaning of Treasury Regulation Section 1.409A-1(b)(9)(v)(B), and this Policy shall be interpreted and administered accordingly. 

 

	
  

	
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If a payment under this policy is made to an Executive upon his or her separation from service while he or she is a “specified employee” (as defined under Section 409A of the Code and determined in good faith by the Compensation Committee), any payment of “deferred compensation” (as defined under Treasury Regulation Section 1.409A-1(b)(1) after giving effect to the exemptions in Treasury Regulation Sections 1.409A-1(b)(3) through (b)(12 that is scheduled to be paid within six (6) months after such separation from service shall accrue with interest and shall be paid within 30 days after the end of the six-month period beginning on the date of such separation from service or, if earlier, within 30 days after the appointment of the personal representative or executor of the Executive’s estate following his death.  During the 6-month delay period, interest shall accrue at the prime rate of interest published in the northeast edition of The Wall Street Journal on the date of Executive’s separation from service.  Accordingly, subject to the requirements of Section 409A of the Code, an Executive may not receive his or her Change in Control Benefits payment until 6 months after separation from service.

  

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This Policy is intended to comply with the provisions of Section 409A, and, to the extent practicable, this Policy shall be construed in accordance therewith. However, the Company does not guarantee any particular tax effect to Executive.  The Company shall not be liable to Executive for any payment made under this Agreement that is determined to result in an additional tax, penalty, or interest under Section 409A of the Code, nor for reporting in good faith any payment made under this Agreement as an amount includible in gross income under Section 409A of the Code.

 

Right to Terminate Employment

 

Nothing in this Policy shall confer upon Executive any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge Executive at any time for any reason whatsoever with or without Cause.  

 

 

4ex10_3.htm

Exhibit 10.3

ACKNOWLEDGEMENT AND CLARIFICATION

QAD Inc., a Delaware corporation, with its principal offices located at 100 Innovation Place, Santa Barbara, California 93108 ("QAD"), and Daniel Lender, residing at XXXX ("Employee"), hereby acknowledge and agree that all severance benefits, as described in Employee's offer letter of October 10, 2008, are provided under and are subject to the terms and conditions of the Executive Termination Policy as approved by QAD Inc.'s Board of Directors and in effect as of December 18, 2008 (the "Policy"), but that any benefits provided to Employee pursuant to such Policy shall be for a period of twelve (12) months instead of six (6) months.

 

 

	
/s/ Daniel Lender

	 	
/s/ Murray Ray 

	
Daniel Lender 

	 	
Murray Ray

	
 

	 	
CPO & EVP, Human Resources

	 	 	QAD Inc.
	 	 	 
	 Dated:  December 18, 2008  	 	Dated:  December 18, 2008ex10_4.htm

Exhibit 10.4

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

This THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of June 9, 2011, is entered into by and between QAD INC., a Delaware corporation (the “Borrower”), and BANK OF AMERICA, N.A. (the “Lender”).

 

RECITALS

 

A.            The Borrower and the Lender are party to that certain Credit Agreement dated as of April 10, 2008, as amended by that certain (i) Amendment and Waiver to Credit Agreement dated as of April 10, 2009 and (ii) Second Amendment to Credit Agreement dated as of April 11, 2011 (as so amended and as further amended, restated, extended, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lender has extended certain credit facilities to the Borrower.

 

B.            The Borrower has requested that the Lender agree to certain amendments with respect to the Credit Agreement, and the Lender has agreed to such request, subject to the terms and conditions of this Amendment.

 

NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.             Defined Terms.  Unless otherwise defined herein, capitalized terms used herein shall have the meanings, if any, assigned to such terms in the Credit Agreement.

 

2.             Amendment to Credit Agreement.  Subject to the terms and conditions hereof and with effect from and after the Effective Date, the Credit Agreement shall be amended as follows:

 

(a)           Section 1.01 of the Credit Agreement shall be amended at the definition of “Maturity Date” by amending and restating such definition as follows:

 

“Maturity Date” means July 9, 2011.

 

3.             Representations and Warranties.  The Borrower hereby represents and warrants to the Lender as follows:

 

(a)           No Default or Event of Default has occurred and is continuing.

 

(b)           All representations and warranties of the Borrower contained in Article V of the Credit Agreement are true and correct on and as of the Effective Date after giving effect to this Amendment, except to the extent that any such representation and warranty specifically relates to an earlier date, in which case they shall be true and correct as of such earlier date after giving effect to this Amendment.

 

  

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4.             Effective Date.  This Amendment will become effective on the date (the “Effective Date”) when the Lender shall have received from the Borrower a duly executed original (or executed facsimile or electronic copy) counterpart to this Amendment.

 

5.             Reservation of Rights.  The Borrower acknowledges and agrees that neither the execution nor the delivery by the Lender of this Amendment shall (a) be deemed to create a course of dealing or otherwise obligate the Lender to execute similar amendments, consents or waivers under the same or similar circumstances in the future or (b) be deemed to create any implied waiver of any right or remedy of the Lender with respect to any term or provision of any Loan Document.

 

6.             Miscellaneous.

 

(a)           Except as expressly amended or modified hereby, all terms, covenants and provisions of the Credit Agreement are and shall remain in full force and effect and all references therein to such Credit Agreement shall henceforth refer to the Credit Agreement as modified by this Amendment.  This Amendment shall be deemed incorporated into, and a part of, the Credit Agreement.

 

(b)           This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  No third party beneficiaries are intended in connection with this Amendment.

 

(c)           THIS AMENDMENT IS SUBJECT TO THE PROVISIONS OF SECTION 9.14 AND SECTION 9.15 OF THE CREDIT AGREEMENT RELATING TO, INTER ALIA, GOVERNING LAW, SUBMISSION TO JURISDICTION, VENUE AND WAIVER OF THE RIGHT TO TRIAL BY JURY, THE PROVISIONS OF WHICH SECTIONS ARE BY THIS REFERENCE INCORPORATED HEREIN IN FULL.

 

(d)           This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.  Each of the parties hereto understands and agrees that this document (and any other document required herein) may be delivered by any party hereto or thereto either in the form of an executed original or an executed original sent by facsimile transmission to be followed promptly by mailing of a hard copy original, and the receipt by the Lender of a facsimile transmitted document purportedly bearing the signature of the Borrower or one of the other parties hereto, as applicable, shall bind the Borrower or such other party, respectively, with the same force and effect as the delivery of a hard copy original.  Any failure by the Lender to receive the hard copy executed original of such document shall not diminish the binding effect of receipt of the facsimile transmitted executed original of such document of the party whose hard copy page was not received by the Lender.

 

(e)           This Amendment contains the entire and exclusive agreement of the parties hereto with reference to the matters discussed herein.  This Amendment supersedes all prior drafts and communications with respect thereto.  This Amendment may not be amended except by a written agreement executed by the Borrower and the Lender.

 

  

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(f)            If any term or provision of this Amendment shall be deemed prohibited by or invalid under any applicable law, such provision shall be invalidated without affecting the remaining provisions of this Amendment or the Credit Agreement, respectively.

 

(g)           The Borrower covenants to pay to or reimburse the Lender, upon demand, for all reasonable and documented costs and expenses (including allocated costs of in-house counsel) incurred in connection with the development, preparation, negotiation, execution and delivery, and enforcement of this Amendment.

 

(h)           This Amendment shall constitute a “Loan Document” under and as defined in the Credit Agreement.

 

[Remainder of this page intentionally left blank]

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

 

 

	 	QAD INC., as the Borrower
	 	 	 
	 	 	 
	
 

	
By: 

	/s/  DANIEL LENDER
	 	 	 
	 	Name:	Daniel Lender
	 	 	 
	 	Title: 	Chief Financial Officer

 

Signature Page 1 to Third Amendment to Credit Agreement

 

  

  

  

 

	 	
BANK OF AMERICA, N.A., as the Lender

	 	 	 
	 	 	 
	
 

	
By: 

	/s/ SUGEET MANCHANDA MADAN
	 	 
	 	Name:	Sugeet Manchanda Madan
	 	 
	 	Title:	Director

 

Signature Page 2 to Third Amendment to Credit Agreement

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