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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of January 13, 1997, is made and entered into
between Quarterdeck Corporation, a Delaware corporation ("Quarterdeck") and
Xxxxxx X. Xxxxxxx (the "Employee").
1. EMPLOYMENT. Quarterdeck shall employ the Employee and the
Employee shall enter the employ of Quarterdeck. This Agreement shall have a
term of four years unless sooner terminated in accordance with Section 5 of
this Agreement; provided, however, that Quarterdeck may terminate this
Agreement and Employee's employment "at will" subject to Section 5(c) hereof.
2. POSITION AND DUTIES. During the term of employment, the
Employee shall be a full-time employee of Quarterdeck and shall devote all of
his business time and attention to the performance of his duties to
Quarterdeck. Employee shall serve as the Chief Executive Officer and President
of Quarterdeck and shall be appointed to the Board of Directors.
3. COMPENSATION AND RELATED MATTERS.
(a) Annual Base Salary. The Employee shall receive an
aggregate base salary ("Annual Base Salary") of Four Hundred Fifty Thousand
Dollars ($450,000) per annum.
(b) Bonus Compensation. Employee shall be eligible to
receive an annual target bonus in an amount of Two Hundred Fifty Thousand
Dollars ($250,000) ("Incentive Bonus Compensation") determined in accordance
with the terms of the Management by Objective Plan of Quarterdeck, or any
successor or replacement plan adopted by Quarterdeck and contingent upon
attainment of objectives established by the Board of Directors or the
Compensation Committee of the Board of Directors; provided, however, that
during the first four full fiscal quarters of employment the minimum amount of
Incentive Bonus Compensation that Employee shall be entitled to receive shall
be One Hundred Twenty-Five Thousand Dollars ($125,000).
(c) Benefits. On the first day of the month following 30
days of employment, Employee will be eligible for health, dental, vision, life
and long-term disability benefits subject to the terms, conditions, and
limitations contained in the applicable plan documents which may be modified by
Quarterdeck in the future. During the term of employment, the Employee shall
be entitled to participate in or receive benefits under any other employee
benefit plan generally made available by Quarterdeck to its executive officers,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans or arrangements for individuals at such level.
(d) Expenses. Quarterdeck shall reimburse the Employee
for all reasonable travel and other business expenses incurred by the Employee
in the performance of his duties under this Agreement upon Employee's submission
of appropriately itemized documentation thereof in accordance with Quarterdeck's
reimbursement policy. Quarterdeck shall reimburse
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Employee for his reasonable legal fees incurred in connection with
the negotiation of this Agreement up to $5,000.00.
(e) Options. Employee has been granted non-qualified
options to purchase 600,000 shares of the common stock of Quarterdeck under
Quarterdeck's Amended and Restated 1990 Stock Plan (the "Plan") and
non-qualified options to purchase an additional 750,000 shares of the common
stock of Quarterdeck outside of the Plan. All of the options have an exercise
price equal to the fair market value of the Quarterdeck common stock on the
date of grant and will expire upon the earlier of (i) ten years from the date
of grant or (ii) 90 days after termination of employment (or such longer period
provided for under the terms of the Plan as of the date hereof or this
Agreement). The options granted outside of the Plan are transferable to a
family trust. All of the options vest as follows: one-fourth of the total
options shall vest on the one year anniversary of the date of grant and
thereafter 1/48 of the total options shall vest on a monthly basis. The
options vest on an accelerated basis as set forth below if the closing price of
shares of common stock of Quarterdeck as of the close of each trading day
during a period of forty-five consecutive trading days equals or exceeds the
prices set forth below at a time prior to the time such options would have
vested as a result of the passage of time under the prior sentence:
STOCK PRICE PERCENTAGE OF TOTAL OPTIONS
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$10 25%
$15 50%
$20 75%
$25 100%
Notwithstanding the above, immediately prior to a Change in
Control (as defined below) fifty percent of Employee's unvested options shall
vest. In addition, all of Employee's unvested options shall vest upon the
occurrence of one of the events specified in (i) or (ii) below if a Change in
Control occurs and any of the following events occur at any time during the
term of this Agreement after Quarterdeck enters into a definitive agreement
with respect to such a Change in Control: (i) an event specified in Section
5(e)(x), (y) or (z) occurs (whether or not Employee elects to terminate his
employment) or (ii) Employee's employment is terminated by Quarterdeck or any
successor employer.
4. COMPETITION.
(a) The Employee agrees that during his employment and
for a period of one year thereafter, he shall not, directly or indirectly, as
principal, agent, employee, employer, consultant, stockholder, partner or in
any other individual or representative capacity, engage in any business that
competes, directly or indirectly, with the business of Quarterdeck or any of
its subsidiaries. Notwithstanding anything to the contrary herein, Employee
may, without violating the provisions of this Section 4, purchase and hold up
to 1% of any entity whose shares are publicly traded on the Nasdaq National
Market or any U.S. stock exchange, whether or not such entity is engaged in a
competitive business. In addition, Employee agrees that for a period of one
year after the termination of his employment, Employee shall not recruit,
attempt to hire, solicit, or assist others, in recruiting or hiring, any person
who was an employee of or consultant to
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Quarterdeck or any of its subsidiaries at the time of termination of his
employment or during a period of three months prior thereto. Any provision of
this Section 4 that is deemed invalid or unenforceable in any jurisdiction
shall, as to that jurisdiction and subject to this paragraph, be ineffective to
the extent of such invalidity or unenforceability, without affecting in any way
the remaining provisions of this paragraph in such jurisdiction or rendering
that or any other provisions of this Agreement invalid or unenforceable in any
other jurisdiction. If any covenant should be deemed invalid or unenforceable
because of its scope, geographical area or duration, or any combination
thereof, such covenant shall be modified and reformed so that the scope,
geographic area and duration of the covenant is reduced only to the minimum
extent necessary to render the modified covenant valid and enforceable.
5. TERMINATION. The Employee's employment hereunder may be
terminated by Quarterdeck or the Employee, as applicable upon expiration of
this Agreement pursuant to Section 1 of this Agreement, and under the following
circumstances:
(a) Death. The Employee's employment hereunder shall
terminate upon his death. In the case of the Employee's death, Quarterdeck
shall pay to the Employee's beneficiaries or estate, as appropriate, (i)
promptly after the Employee's death, the unpaid Annual Base Salary to which he
is entitled pursuant to subsection 3(a) prorated through the date of
termination and (ii) as soon as practicable after the close of Quarterdeck's
fiscal quarter in which the Employee's death occurs, a prorated portion of any
unpaid Incentive Bonus Compensation. This subsection 5(a) shall not limit the
entitlement of the Employee's estate or beneficiaries to any death or other
benefits then available to the Employee under any benefit plan or policy which
is maintained by Quarterdeck for the Employee's benefit.
(b) Cause. Quarterdeck may terminate the Employee's
employment hereunder for Cause (as defined below). In the case of the
Employee's termination for Cause, Quarterdeck shall promptly pay to the
Employee the unpaid Annual Base Salary to which he is entitled pursuant to
subsection 3(a) prorated through the date the Employee is terminated and the
Employee shall be entitled to no other compensation. For purposes of this
Agreement, Quarterdeck shall have "Cause" to terminate the Employee's
employment hereunder upon a finding by the Board of Directors of Quarterdeck
(the "Board") that the Employee has (1) engaged in acts or omissions with
respect to Quarterdeck or any subsidiary of Quarterdeck which constitute
intentional misconduct, fraud or dishonesty; (2) breached any non-competition
covenant with Quarterdeck; (3) committed willful or intentional acts
constituting a material breech of this Agreement; (4) been convicted of a
felony or crime of moral turpitude; (5) committed other acts constituting
intentional misconduct or dishonesty that in the reasonable discretion of the
Board are likely to have a material adverse effect on Quarterdeck; (6)
consistently failed to perform at a level commensurate with his position and
compensation level or habitual neglect of duties; or (7) disregarded policies
of Quarterdeck that cause material loss or damage to Quarterdeck. With respect
to subparagraph (6) and (7), prior to termination, Employee shall be given
written notice of the violation thereof and a period of 45 days with respect to
(6) and 15 days with respect to (7) to cure such violation.
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(c) At Will. Quarterdeck may terminate the Employee's
employment hereunder "at will" at any time, provided, however, that if such
termination is prior to the expiration of the term of this Agreement and is not
for Cause, Quarterdeck shall (i) promptly pay to Employee the unpaid Annual
Base Salary to which he is entitled pursuant to subsection 3(a) prorated
through the date of termination, (ii) pay to Employee as soon as practicable
after the close of Quarterdeck's fiscal quarter in which such termination
occurs, a prorated portion of any unpaid Incentive Bonus Compensation to which
he would have been entitled to, (iii) subject to continued compliance with
Section 4 and the other terms of this Agreement that by their terms remain
applicable after termination of employment and execution of a release in a form
reasonably satisfactory to Quarterdeck, pay to Employee eighteen months' (the
"Severance Period") Annual Base Salary (at Employee's then current level)
payable over an eighteen-month period in accordance with Quarterdeck's normal
payroll policy. During the Severance Period, Employee shall be entitled to
retain his medical and other benefits (to the extent permitted under such
benefit plans and unless and until Employee is entitled to such benefits from a
successor employer). During a transition period of six months after a
termination hereunder, Employee shall be available to provide limited
consulting services to Quarterdeck and Employee's options granted under Section
3(e) hereof will continue to vest in accordance with their terms (but will not
be subject to accelerated vesting based on achievement of stock price triggers
or otherwise).
(d) Disability.
(i) If Quarterdeck determines in good faith,
after considering all relevant medical evidence, that the Employee has incurred
a Disability (as defined below) during the term of employment, Quarterdeck
shall give the Employee written notice of termination of the Employee's
employment. In such event, the Employee's employment with Quarterdeck shall
terminate effective upon receipt of such notice by the Employee. Quarterdeck
shall (i) pay to the Employee, upon the Employee's termination, the unpaid
Annual Base Salary to which he is entitled pursuant to subsection 3(a) prorated
through the Employee's termination and (ii) as soon as practicable after the
close of Quarterdeck's fiscal quarter in which such termination occurs, a
prorated portion of any unpaid Incentive Bonus Compensation. This subsection
5(c) shall not limit the entitlement of the Employee to any disability or other
benefits then available to the Employee under any benefit plan or policy which
is maintained by Quarterdeck for the Employee's benefit.
(ii) For the purpose of this Section, "Disability"
shall mean the Employee's failure to perform his duties to Quarterdeck on a
full-time basis for a total of six months during any twelve-month period as a
result of incapacity due to a mental or physical illness or injury which is
determined by a physician selected by the Board and acceptable to the Employee
or the Employee's legal representative (such agreement as to acceptability not
to be withheld, delayed or conditioned unreasonably).
(e) Change in Control. Employee may terminate his
employment hereunder at any time within one year after a Change in Control (as
defined below) upon 45 days' prior written notice if there is (x) a material
diminution of his duties and responsibilities from those prior to such Change
in Control, (y) a reduction in compensation or significant reduction in the
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benefits paid to Employee from those provided for in this Agreement, or (z) a
non-voluntary relocation of Employee from the Southern California area. Upon
such a termination or if Quarterdeck terminates Employee's employment within
one year after a Change in Control, Quarterdeck shall (i) promptly pay to
Employee the unpaid Annual Base Salary to which he is entitled pursuant to
subsection 3(a) prorated through the date of termination, (ii) pay to Employee
as soon as practicable after the close of Quarterdeck's fiscal quarter in which
such termination occurs, a prorated portion of any unpaid Incentive Bonus
Compensation to which he would have been entitled, and (iii) subject to
continued compliance with Section 4 and the other terms of this Agreement that
by their terms remain applicable after termination of employment and execution
of a release in a form reasonably satisfactory to Quarterdeck, pay to Employee
upon such termination a lump sum equal to eighteen months' Annual Base Salary
(at Employee's then current level). For purposes of this Agreement, a Change
in Control shall mean any consolidation or merger of Quarterdeck with or into
any other corporation or corporations in which the stockholders of Quarterdeck
immediately prior to the consolidation or merger do not retain a majority of
the voting power of the surviving corporation or a sale of all or substantially
all of the assets of Quarterdeck.
6. CONFIDENTIAL INFORMATION.
6.1 Disclosure. Employee may have knowledge of, and
during the term of this Agreement Quarterdeck or its subsidiaries may supply to
Employee, certain trade secrets and Confidential Information (as hereinafter
defined). Employee agrees to limit his use of such material to what is
necessary to perform the services under this Agreement and to abide by all
restrictions imposed by Quarterdeck or its subsidiaries on the use of such
material including the restrictions contained in this Agreement. Employee
shall not, directly or indirectly, communicate, divulge, disclose, reveal,
report, publish or transfer to any person or entity, or use to the detriment of
Quarterdeck or use for the benefit of Employee or any other person or entity,
or misuse in any way, any Confidential Information or trade secrets of
Quarterdeck or its subsidiaries, without the prior written consent of the board
of directors and the general counsel of Quarterdeck. Employee shall take such
precautions as shall be reasonably calculated to keep strictly confidential
such Confidential Information and trade secrets and to prevent the unauthorized
disclosure thereof, provided, however, that Employee shall be entitled to
disclose such Confidential Information, if necessary, in order to defend any
claim under federal or state laws, rules or regulations or pursuant to an order
of a court or government agency, provided, however, further that in the case of
any such disclosure, the disclosure shall be limited to the greatest extent
reasonably possible under the circumstances and Employee shall use his best
efforts to provide Quarterdeck with sufficient advance notice prior to the
disclosure to permit Quarterdeck to seek a protective order or other order
protecting the Confidential Information from public disclosure. Employee
agrees that all Confidential Information shall be the sole property of
Quarterdeck (or, as applicable, its subsidiaries). After termination of this
Agreement, Employee shall not utilize or divulge in any way such Confidential
Information and trade secrets, except as permitted above to comply with any
legal requirements. Employee's obligations under this Section 6.1 shall
continue beyond the termination of this Agreement for any reason. Employee's
obligations hereunder are in addition to Employee's obligation under any other
confidentiality agreement entered into between Quarterdeck and Employee.
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6.2 Confidential Information. For the purposes of this
Agreement, the term "Confidential Information" shall mean information or
material proprietary to Quarterdeck or any related or affiliated person or
entity or any information or material designated as Confidential Information by
Quarterdeck or any related or affiliated person or entity, whether or not owned
or developed by Quarterdeck, which Employee develops or which Employee may
obtain knowledge of or access to, through or as a result of, Employee's prior
or present relationship with Quarterdeck or any related or affiliated person or
entity (including information conceived, originated, discovered or developed in
whole or in part by Employee while acting hereunder). Without limiting the
generality of the foregoing, Confidential Information shall include, but is not
limited to, the following types of information and other information of a
similar nature (whether or not reduced to writing or still in development):
information that has been created, discovered, developed, or otherwise has
become known to Quarterdeck or its subsidiaries and/or in which property rights
have been assigned or otherwise conveyed to Quarterdeck or its subsidiaries,
which has commercial value in the businesses in which Quarterdeck is engaged
including, without limitation, works of authorship, trade secrets, processes,
software and firmware (including any operating programs, whether in object
code, source code or any other form, whether or not embedded in a physical
medium), magnetic media, prototypes, formulae, machines, components,
inventions, creations, systems, designs, methods, materials, assembly
techniques, structures, pending patent applications, compositions,
improvements, ideas, specifications or arts relating to products and services,
or to the manufacture, assembly, testing, sale and service of products and
services, as well as financial projections, financing plans, marketing plans,
strategies, forecasts, customer lists, and other business information related
to present or prospective business activities of Quarterdeck or its
subsidiaries, and documents, records, notebooks, drawings, photographs and
similar repositories or representations of such information. The term
"Confidential Information" shall not include information which (i) is or
becomes generally available to the public other than as a result of a
disclosure by the Employee in violation of this Agreement, (ii) is or becomes
available to the Employee on a non-confidential basis from a source other than
Quarterdeck, provided that such source is not known by the Employee to be
furnishing such information to the Employee in violation of a confidentiality
agreement with or other obligation of secrecy to Quarterdeck, or (iii) is
derived from information that is not Confidential Information pursuant to any
of the foregoing clauses and does not contain any Confidential Information.
6.3 Delivery Upon Termination. Upon the termination for
whatever reason of this Agreement, Employee shall deliver to Quarterdeck all
drawings, blueprints, computer disks, computer programs, notes, memoranda,
specifications, designs, devices, documents, data, programs and other material
of any nature containing or disclosing any Confidential Information in whatever
form or media, and any reproduction of any of the foregoing.
6.4 Proprietary Information of Others. Employee
represents that the performance by Employee of the terms of this Agreement do
not, to the best of Employee's present knowledge and belief, and will not
breach any confidential disclosure agreement with or duty owed to another
person or
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entity. Further, Employee represents that he will not bring to Quarterdeck or
use pursuant to this Agreement the proprietary information of another person or
entity without first obtaining written authorization for the possession and use
of such proprietary information from the owner thereof.
7. ASSIGNMENT OF WORKS MADE FOR HIRE. Employee hereby agrees
that any ideas or original works of authorship, in whole or in part conceived
or made by Employee during or after the term of his relationship with
Quarterdeck, which are made through the use of any Confidential Information,
which relate to the Company's business or which result from any work performed
by Employee for Quarterdeck shall be deemed to be "works made for hire" and
that the Company shall be deemed the author thereof under the U.S. Copyright
Act (Title 17 of the U.S. Code); provided, however, that in the event and to
the extent such works are determined not to constitute "works made for hire" as
a matter of law, Employee hereby irrevocably assigns and transfers to
Quarterdeck all right, title and interest in such works, including but not
limited to copyrights.
8. INJUNCTIVE RELIEF. Employee acknowledges that disclosure of
any Confidential Information by Employee will give rise to irreparable injury
to Quarterdeck, inadequately compensable in damages. Accordingly, in the event
of an actual or threatened breach by Employee of the provisions of this
Agreement, Quarterdeck shall be entitled to injunctive relief restraining
Employee from such breach or threatened breach. Nothing herein shall be
construed as prohibiting Quarterdeck from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of damages
from Employee. Employee acknowledges and agrees that the covenants contained
herein are necessary for the protection of Quarterdeck's legitimate business
interests and are reasonable in scope and content.
9. BINDING ON SUCCESSORS. This Agreement shall be binding upon
and inure to the benefit of Quarterdeck, the Employee and their respective
successors, assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as applicable.
10. GOVERNING LAW. This Agreement is being made and executed in
and is intended to be performed in the State of California and shall be
governed, construed, interpreted and enforced in accordance with the
substantive laws of the State of California, without regard to the conflict of
laws principles thereof.
11. VALIDITY. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.
12. NOTICES. Any notice, request, claim, demand, document and
other communication hereunder to any party shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or sent by
telex, telecopy, or certified or registered mail, postage prepaid, as follows:
(a) If to Quarterdeck, addressed to the principal offices
of Quarterdeck to the attention of the General Counsel;
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(b) If to the Employee, to him at the address set forth
below under his signature;
or at any other address as any party shall have specified by notice in writing
to the other parties.
13. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
14. ENTIRE AGREEMENT. The terms of this Agreement are intended by
the parties to be the final expression of their agreement with respect to the
employment of the Employee by Quarterdeck and may not be contradicted by
evidence of any prior or contemporaneous agreement. The parties further intend
that this Agreement shall constitute the complete and exclusive statement of
its terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative or other legal proceeding to vary the terms of this
Agreement.
15. AMENDMENTS; WAIVERS. This Agreement may not be modified,
amended, or terminated except by an instrument in writing, signed by the
Employee and Quarterdeck. By an instrument in writing similarly executed, the
Employee or Quarterdeck may waive compliance by the other party or parties with
any provision of this Agreement that such other party was or is obligated to
comply with or perform; provided, however, that such waiver shall not operate
as a waiver of, or estoppel with respect to, any other or subsequent failure.
No failure to exercise and no delay in exercising any right, remedy or power
hereunder shall preclude any other or further exercise of any other right,
remedy or power provided herein or by law or in equity.
16. CUMULATIVE REMEDIES. Each and all of the several rights and
remedies provided in this Agreement, or by law or in equity, shall be
cumulative, and no one of them shall be exclusive of any other right or remedy,
and the exercise of any one of such rights or remedies shall not be deemed a
waiver of, or an election to exercise, any other such right or remedy. No
waiver of any term or condition of this Agreement shall be construed as a
waiver of any other term or condition; nor shall any waiver of any default
hereunder be construed as a waiver of any other default hereunder.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
EMPLOYEE:
________________________________________
Xxxxxx X. Xxxxxxx
Address: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
QUARTERDECK CORPORATION,
a Delaware corporation
By:_____________________________________
Name:___________________________________
Title:__________________________________
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