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EXHIBIT 10.1
April 23, 1998
Xx. Xxxxxx X. Xxxxxx
35 Grand Miramar
Xxxxxxxxx, XX 00000
Dear Xxx:
This letter sets forth the agreement between DataWorks Corporation (together
with each of its subsidiaries, the "Company") and you (the "Agreement") relating
to your mutually agreed to separation as an officer, employee and member of the
Board of Directors of the Company. You and the Company agree that this Agreement
shall supercede and replace the letter agreement entitled "Employment Terms"
dated November 29, 1997 (the "Employment Agreement") between you and the
Company. The terms of the new Agreement between you and the Company are as
follows:
1. SEPARATION. You will resign as an officer, employee and member of the
Board of Directors of the Company effective as of April 24, 1998 (the
"Separation Date").
2. ACCRUED SALARY AND PAID TIME OFF. On the Separation Date, the Company
will pay you all accrued salary, and all accrued and unused vacation
earned through the Separation Date, subject to standard payroll
deductions and withholdings. You are entitled to these payments upon the
Separation Date regardless of whether or not you sign this Agreement.
3. CONSULTING PERIOD. In exchange for the promises and covenants herein,
the parties agree that you shall serve as an outside consultant to the
Company for the period from the Separation Date through March 31, 2001
(the "Consulting Period"). During the Consulting Period, you agree that
from time to time, you will render consulting services upon reasonable
request, at mutually agreed upon times and upon reasonable notice.
You shall receive a fee for services, during the course of the
Consulting Period, subject to certain obligations referenced herein (the
"Consulting Payment"), and to be paid as follows: (i) $37,500 per
quarter paid in seven (7) equal consecutive installments commencing on
July 15, 1998 and continuing until January 15, 2000, each installment to
be paid on the 15th day of the first month of the quarter in which
services are being rendered; and (ii) $31,250 per quarter paid in four
(4) equal consecutive installments commencing on April 15, 2000 and
continuing until January 15, 2001, each installment to be paid on the
15th day of the first month of the quarter in which services are being
rendered. You agree that you shall be solely responsible for the payment
of any taxes imposed on account of any payments made to you and you
shall indemnify and hold the Company harmless for any and all
liabilities, loss, damages and/or judgements incurred by the Company
arising from or related to your failure to make appropriate tax
payments.
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4. OPTIONS. Each outstanding option to purchase Common Stock of the Company
which is held by you as of the Separation Date will continue to be
governed by the terms of the option agreement pursuant to which such
option was granted (each referred to as an "Option Agreement").
5. HEALTH INSURANCE. To the extent provided by the federal COBRA law or, if
applicable, state insurance laws, and by the Company's current group
health insurance policies, you will be eligible to continue your group
health insurance benefits. Later, you may be able to convert to an
individual policy through the provider of the Company's health
insurance, if you wish. If you elect continued coverage under COBRA, the
Company, as part of this Agreement, will pay your COBRA premiums (the
"COBRA Benefit") through the earlier of (i) eighteen (18) months
following the Separation Date ("the COBRA Period"), or (ii) the date in
which you begin full-time employment with another company or business
entity wherein comparable health benefits are offered. In addition, for
eighteen (18) months following the COBRA Period, the Company will
provide you with a monthly payment in an amount equal to the last
monthly premium paid by the Company under your COBRA Benefit. The
Company will adjust the COBRA Benefit amount from time to time as
appropriate, to make it equal in amount to the per month premium charged
by the Company's then-current group health insurance provider for the
level of coverage you were receiving on the last day of the COBRA
Period.
6. OTHER COMPENSATION OR BENEFITS. You acknowledge that, except as
expressly provided in this Agreement, you will not receive any
compensation, severance, benefits, shares of stock or stock options,
notwithstanding any prior agreement to the contrary, after the
Separation Date.
7. EXPENSE REIMBURSEMENTS. You agree that, within ten (10) business days of
the Separation Date, you will submit your final documented expense
reimbursement statement reflecting all business expenses you incurred
through the Separation Date, if any, for which you seek reimbursement.
The Company will reimburse you for these expenses pursuant to its
regular business practice. You agree and understand that you will not be
entitled to any expense reimbursements during the Consulting Period
unless such expenses are approved in advance and in writing by an
officer of the Company.
8. RETURN OF COMPANY PROPERTY. You agree that, within ten (10) business
days of the Separation Date, you will return to the Company all Company
documents (and all copies thereof) and other Company property which you
have had in your possession at any time, including, but not limited to,
Company files, notes, drawings, records, business plans and forecasts,
financial information, specifications, computer-recorded information,
tangible property (including, but not limited to, computers), credit
cards, entry cards, identification badges and keys; and, any materials
of any kind which contain or embody any proprietary or confidential
information of the Company (and all reproductions thereof).
9. PROPRIETARY INFORMATION OBLIGATIONS. Both during and after your
employment you will refrain from any use or disclosure of the Company's
proprietary or confidential information or materials without prior
written authorization from a duly authorized
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representative of the Company. The Proprietary Information and
Inventions Agreement which you have executed, a copy of which is
attached hereto as Exhibit B (the "Proprietary Information and
Inventions Agreement") will continue to apply pursuant to its terms
following the Separation Date.
10. CONFIDENTIALITY. The provisions of this Agreement shall be held in
strictest confidence by you and the Company and shall not be publicized
or disclosed in any manner whatsoever; provided, however, that: (a) you
may disclose this Agreement to your immediate family; (b) the parties
may disclose this Agreement in confidence to their respective attorneys,
accountants, auditors, tax preparers, and financial advisors; (c) the
Company may disclose this Agreement as necessary to fulfill standard or
legally required corporate reporting or disclosure requirements; and (d)
the parties may disclose this Agreement insofar as such disclosure may
be necessary to enforce its terms or as otherwise required by law.
11. NONDISPARAGEMENT. Both you and the Company agree not to disparage the
other party, and/or the other party's officers, directors, employees,
shareholders and agents, in any manner likely to be harmful to them or
their business, business reputation or personal reputation; provided
that both you and the Company shall respond accurately and fully to any
question, inquiry or request for information when required by legal
process.
12. RELEASE. In exchange for the payments and other consideration under this
Agreement, you agree to execute the Employee Agreement and Release
attached hereto as Exhibit A. In addition, both the Company and you
hereby release the other party, and the other party's officers,
directors, employees, shareholders and agents, from all past, present
and future disputes, claims, damages, controversies, demands, rights,
obligations, liabilities, actions and causes of action of every kind and
nature, in equity or otherwise, whether known, unknown, suspected,
unsuspected, disclosed or undisclosed, and that have arisen or arise
directly or indirectly out of, or relate directly or indirectly to, any
circumstance, agreement, activity, action, omission, event or matter
occurring or existing on or prior to the date of this Agreement and
which arise out of or relate to the Employment Agreement or any other
prior association between you and the Company (excluding such party's
continuing rights as expressly set forth herein and such party's rights
under the Noncompetition Agreement dated September 29, 1997 between you
and the Company (the "Noncompetition Agreement"), the Proprietary
Information and Inventions Agreement and any Option Agreement).
13. MISCELLANEOUS. This Agreement, including Exhibit A and Exhibit B,
constitutes the complete, final and exclusive embodiment of the entire
agreement between you and the Company with regard to this subject
matter. It is entered into without reliance on any promise or
representation, written or oral, other than those expressly contained
herein, and it supersedes any other such promises, warranties or
representations. Notwithstanding the foregoing or anything else
contained herein, the Noncompetition Agreement, the Proprietary
Information and Inventions Agreement and each Option Agreement shall
continue in full force and effect in accordance with their respective
terms. This Agreement may not be modified or amended except in a writing
signed by both you and a duly authorized officer of the Company. This
Agreement shall bind the
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heirs, personal representatives, successors and assigns of both you and
the Company, and inure to the benefit of both you and the Company, their
heirs, successors and assigns. If any provision of this Agreement is
determined to be invalid or unenforceable, in whole or in part, this
determination will not affect any other provision of this Agreement and
the provision in question shall be modified by the court so as to be
rendered enforceable. This Agreement shall be deemed to have been
entered into and shall be construed and enforced in accordance with the
laws of the State of California as applied to contracts made and to be
performed entirely within California.
If the forgoing accurately sets forth our agreement, please sign below and on
the attached Employee Agreement and Release, which is part of this Agreement,
and return the originals of both to me.
I wish you luck in your future endeavors.
Sincerely,
DATAWORKS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
and Chief Financial Officer
Exhibit A - Employee Agreement and Release
Exhibit B - Proprietary Information and Inventions Agreement
Agreed to and accepted this __ day of April, 1998:
/s/ Xxxxxx X. Xxxxxx
---------------------
Xxxxxx X. Xxxxxx
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EXHIBIT A
EMPLOYMENT AGREEMENT AND RELEASE
Except as otherwise set forth in this Agreement, I hereby release,
acquit and forever discharge the Company, its parents and subsidiaries, and
their officers, directors, agents, servants, employees, attorneys, shareholders,
successors, assigns and affiliates, of and from any and all claims, liabilities,
demands, causes of action, costs, expenses, attorneys fees, damages, indemnities
and obligations of every kind and nature, in law, equity, or otherwise, known
and unknown, suspected and unsuspected, disclosed and undisclosed, arising out
of or in any way related to agreements, events, acts or conduct at any time
prior to and including the execution date of this Agreement, including but not
limited to: all such claims and demands directly or indirectly arising out of or
in any way connected with my employment with the Company or the termination of
that employment; claims or demands related to salary, bonuses, commissions,
stock, stock options, or any other ownership interests in the Company, vacation
pay, fringe benefits, expense reimbursements, severance pay, or any other form
of compensation; claims pursuant to any federal, state or local law, statute, or
cause of action including, but not limited to, the federal Civil Rights Act of
1964, as amended; the federal Americans with Disabilities Act of 1990; the
federal Age Discrimination in Employment Act of 1967, as amended ("ADEA"); the
California Fair Employment and Housing Act, as amended; tort law; contract law;
wrongful discharge; discrimination; harassment; fraud; defamation; emotional
distress; and breach of the implied covenant of good faith and fair dealing.
I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (a) my waiver and release do not apply to any rights or claims that may
arise after the execution date of this Agreement; (b) I have been advised hereby
that I have the right to consult with an attorney prior to executing this
Agreement; (c) I have twenty-one (21) days to consider this Agreement (although
I may choose to voluntarily execute this Agreement earlier); (d) I have seven
(7) days following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement shall not be effective until the date upon
which the revocation period has expired, which shall be the eighth day after
this Agreement is executed by me, provided that the Company has also executed
this Agreement by that date ("Effective Date").
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In giving this release, which includes claims which may be unknown to me
at present. I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of any claims I may
have against the Company.
By:
-------------------------------------
Xxxxxx X. Xxxxxx
Date:
------------------------------------
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EXHIBIT B
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
DATAWORKS CORPORATION
CONFIDENTIALITY, NON-DISCLOSURE,
ASSIGNMENT OF INTELLECTUAL PROPERTY AND
ASSOCIATION AGREEMENT
I. PREAMBLE:
A. The parties to this agreement are:
1. DataWorks Corporation, Inc., its subsidiaries and affiliates
(hereinafter "DataWorks");
2. Xxxxxx X. Xxxxxx, a potential/current employee of, or current
independent contractor with DataWorks (hereinafter "ASSOCIATE").
B. Consideration:
ASSOCIATE is an employee, a prospective employee or independent
contractor working for DataWorks. This agreement is intended to
formalize in writing certain understandings and procedures which have
been in effect since the time the ASSOCIATE was initially employed or
engaged by DataWorks. In consideration of the ASSOCIATE's original
and continuing employment with, or work for DataWorks in a capacity
in which he or she may receive, or contribute to the production of,
Confidential Information or Intellectual Property (as defined below),
ASSOCIATE hereby confirms his or her understanding and agreement as
follow:
II. DEFINITIONS:
C. For purposes of this agreement, "Confidential Information" shall
mean information or material proprietary to DataWorks or
designated as Confidential Information by DataWorks and not
generally known by non-DataWorks personnel, which the ASSOCIATE
develops, or of which ASSOCIATE obtains knowledge, or to which
the ASSOCIATE may obtain access, through or as a result of, the
ASSOCIATE's relationship with DataWorks (including information
conceived, originated, discovered or developed in whole or in
part by the ASSOCIATE). Confidential Information includes, but
is not limited to the following types of information and other
information of a similar nature (whether or not reduced to
writing): discoveries, ideas, concepts, software in various
stages of development, designs, drawings, specifications,
techniques, models, data, source code, object code, data
structures, instruction sets, documentation, diagrams, flow
charts, research, development, training methods, training
manuals, processes, procedures, "know-how", marketing techniques
and materials,
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marketing and development plans, customer names
and other information related to customers, price lists, pricing
policies and financial information. Confidential information
also includes any information described above which DataWorks
obtains from other entities and which DataWorks treats as
proprietary or designates as Confidential Information, whether
or not owned or developed by DataWorks. INFORMATION PUBLICLY
KNOWN THAT IS GENERALLY EMPLOYED BY THE TRADE AT OR AFTER THE
TIME ASSOCIATE FIRST LEARNS OF SUCH INFORMATION, OR GENERIC
INFORMATION OR KNOWLEDGE WHICH ASSOCIATE WOULD HAVE LEARNED IN
THE COURSE OF SIMILAR EMPLOYMENT OR WORK ELSEWHERE IN THE TRADE,
SHALL NOT BE DEEMED PART OF THE CONFIDENTIAL INFORMATION.
D. For purposes of this agreement, "DataWorks' Business" shall mean
the design, manufacture, fabrication, development, testing,
marketing, advertising, servicing, authorship, sales, and
licensing of: computers, computer hardware, computer software,
services, services related to the support of data processing
services, computer firmware and computer manuals as well as the
training and education of computer users.
E. For purposes of this agreement "Intellectual Property," shall
mean those forms of authorship (as understood from Title 17 of
the United States Code), invention (as understood by Title 35 of
the United States Code) and identification (as understood from
Title 15 of the United States Code Section 1051 et seq,
trademarks and servicemarks) and such other forms of property
rights in ideas, "know how", inventions, discoveries, or in
their physical embodiments as shall be authorized by state,
local, territorial, federal or international law.
III. ASSOCIATE AGREES:
F. ASSOCIATE agrees during his or her employment by DataWorks and
for two years thereafter to hold in confidence and not to
directly or indirectly reveal, report, publish, copy, disclose
or transfer any Confidential Information to any person or entity
or utilize any Confidential Information for any purpose except
in the course of ASSOCIATE's work for DataWorks.
G. ASSOCIATE agrees to promptly disclose to DataWorks, all
Intellectual Property conceived during the term of his or her
employment.
H. ASSOCIATE agrees that all Intellectual Property meeting the
conditions of California Labor Code, Section 2870, is the
exclusive property of DataWorks.
I. ASSOCIATE agrees to assign to DataWorks all right, title and
interest in any Intellectual Property belonging to DataWorks
under Section 2870 of the California Labor Code.
J. ASSOCIATE agrees to promptly execute all papers and otherwise
cooperate as is necessary to obtain and enforce U.S. and foreign
patents, copyrights, trademark,
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servicemark and trade secret protection on Intellectual Property
belonging to DataWorks.
K. ASSOCIATE agrees that all works of authorship prepared by
ASSOCIATE in the course of his or her employment, including
computer programs and other software, as well as manuals
describing the operation of said programs and software, or
manuals prepared for training, constitute works for hire under
17 U.S.C. Section 101 and 201(b).
L. ASSOCIATE agrees that all notes, data, reference materials.
schedules, drawings, memoranda, documentation and records in any
way incorporating or reflecting any Confidential Information
shall belong exclusively to DataWorks and ASSOCIATE agrees to
turn over all copies of such materials, in the ASSOCIATE's
control to DataWorks upon request or upon termination of the
ASSOCIATE's relationship with DataWorks.
M. ASSOCIATE agrees that tangible embodiments of Confidential
Information are not to be removed from DataWorks' premises
without DataWorks' prior written consent.
N. ASSOCIATE agrees to cooperate with DataWorks in the protection
of DataWorks' Confidential Information for five (5) years after
ASSOCIATE's termination, provided DataWorks covers ASSOCIATE's
expenses and tenders a per diem allowance equivalent to
ASSOCIATE's then current salary.
O. ASSOCIATE agrees to participate in a termination interview
immediately (within two (2) working days) upon leaving
DataWorks. Said interview will include requiring:
1. ASSOCIATE to certify that all Confidential Information
of DataWorks has been returned; and
2. ASSOCIATE shall certify what non-DataWorks Confidential
Information or Intellectual Property ASSOCIATE has
created while employed at DataWorks.
P. ASSOCIATE acknowledges that future promotions or participation
in ownership may be contingent on execution of a more stringent
secrecy and non-use agreement.
IV. DATAWORKS AGREES:
Q. To pay any costs of obtaining and maintaining U.S. and foreign
protection an any Intellectual Property belonging to DataWorks.
R. DataWorks agrees to pay the salary, benefits and/or fees for
ASSOCIATE as previously agreed.
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S. Nothing contained in this agreement obligates DataWorks to apply
for any patent, copyright, trademark or servicemark protection.
V. LEGAL IMPLICATIONS:
T. Because of the unique nature of the Confidential Information,
ASSOCIATE understands and agrees that DataWorks will suffer
irreparable harm in the event that ASSOCIATE fails to comply
with any of his or her obligations under this agreement and that
monetary damages will be inadequate to compensate DataWorks for
such breach. Accordingly, ASSOCIATE agrees that DataWorks will,
in addition to any other remedies available to it, at law or in
equity, be entitled to injunctive relief to enforce the terms of
this agreement.
U. This agreement shall be governed by the California law
applicable to contracts between residents of California which
are wholly executed and performed in California.
V. In the event of legal action brought by either party, the
prevailing party shall be entitled to reimbursement of full
legal fees and costs as set by the court.
W. ASSOCIATE agrees to jurisdiction and venue exclusively in the
Courts of San Diego County, California.
X. ASSOCIATE acknowledges that DataWorks has made no
representations as to any right of ASSOCIATE to continued
employment and ASSOCIATE hereby acknowledges that his or her
employment is "AT WLL".
1. ASSOCIATE acknowledges that no modification of this "AT
WILL" employment is effective unless made to ASSOCIATE
in writing by the President of DataWorks.
Y. This agreement contains the full and complete understanding of
the parties with respect to the subject matter hereof and
supersedes all prior representations and understandings whether
oral or in writing.
Z. This agreement can only be modified in writing. Any modification
of this agreement must be executed by the President of DataWorks
to be enforceable against DataWorks.
VI. EXCEPTIONS FROM AGREEMENT:
AA. The parties agree that any invention embodied in an issued
patent or disclosed in a patent application filed prior to the
commencement of ASSOCIATE's relationship with DataWorks shall
not be subject to the terms of this agreement.
BB. The parties agree that any Intellectual Property set forth in
Exhibit "A" attached to this agreement shall not be subject to
the terms of this agreement.
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CC. The parties agree that any Intellectual Property not belonging
to DataWorks under California Labor Code Section 2870 -
Section 2872 (reprint attached hereto as Exhibit W) shall not be
subject to the terms of this agreement.
1. Exhibit "A" attached:[ ]
2. No exclusions requiring an Exhibit "A" exist:[ ]
VII. EXECUTION:
I agree to the above terms and acknowledge receipt of a copy of this
agreement
DATED: 12/15/97
/s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
ASSOCIATE (Signature)
Xxxxxx X. Xxxxxx
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Name (Printed)
-------------------------------------------------
Social Security Number
35 Grand Miramar, Xxxxxxxxx XX 00000
-------------------------------------------------
Mailing Address
DATED: _________________
-------------------------------------------------
DataWorks Corporation
President
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EXHIBIT B
ARTICLE 3.5
INVENTIONS MADE BY AN EMPLOYEE
Section 2870. Employment Agreements; Assignment or Rights
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 for which no equipment,
supplies, facility, or trade secret information of the employer was used and
which was developed entirely on the employee's own time, and (a) which does not
relate (1) to the business of the employer or (2) to the employer's actual or
demonstrably anticipated research or development, or (b) which does not result
from any work performed by the employee for the employer. Any provision which
purports to apply to such an invention is to that extent against the public
policy of this state and is to that extent void and unenforceable.
Section 2871. CONDITION OF EMPLOYMENT OR CONTINUED EMPLOYMENT;
DISCLOSURE OF INVENTION
No employer shall require a provision make 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. Notice to Employee; Burden of Proof
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.
