Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
Effective June 17, 2005
(this "AGREEMENT")
BETWEEN:
COREL CORPORATION, a corporation existing under the laws of
the Province of Ontario
(the "CORPORATION")
- and -
XXXXX X. XXXXXX, an individual currently residing in the State
of Connecticut
(the "EXECUTIVE")
WHEREAS the Corporation wishes to employ the Executive and the Executive
wishes to become an employee of the Corporation;
AND WHEREAS the Corporation and the Executive agree that it is desirable
to enter into this Agreement to specify the terms and conditions of the
Executive's employment with the Corporation;
NOW THEREFORE in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Corporation and the Executive
agree as follows.
1. INTERPRETATION
1.1 DEFINITIONS. In this Agreement, the following capitalized terms have the
following meanings:
(a) "AFFILIATE" means an affiliated entity and as defined in Ontario
Securities Commission Rule 45-501 and "controlled" has the meaning
given in that Rule, as amended or replaced from time to time, and
"affiliated" has a corresponding meaning.
(b) "BASE GRANT" has the meaning set out in Section 3.4.
(c) "BOARD" means the board of directors of the Corporation.
(d) "CHANGE OF CONTROL" means:
(1) any transaction or series of transactions, whether by way of
consolidation, amalgamation, merger, reorganization or plan of
amalgamation involving the Corporation, with or into any other
person (other than Vector);
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(2) any transfer, conveyance, sale, lease, exchange or otherwise
of all or substantially all of the assets of the Corporation,
to any other person (other than Vector); and
(3) the lawful acquisition, directly or indirectly and by any
means whatsoever, by any person, or by a group of persons
acting jointly or in concert, of that number of voting shares
of the Corporation, which is 35% or more of the total voting
shares issued and outstanding immediately after such
acquisition, unless Vector continues to hold a number of
voting shares which represents a greater percentage than the
first-mentioned person or group of persons.
Provided that an initial public offering of the Corporation, whether
or not a Qualified IPO, shall not be a Change of Control.
(e) "COMPETING ENTITIES" has the meaning set out in Section 7.1.
(f) "EBITDA" has the meaning set out in Section 3.2.
(g) "GOOD REASON" means the occurrence of any of the following events
without the written consent of the Executive:
(1) a reduction by the Corporation in the Executive's salary;
(2) the taking of any action by the Corporation which would, in
the aggregate, materially adversely affect the Executive's
participation in or materially reduce the Executive's
incentive compensation, pension, life insurance, health,
accident, disability benefits or other benefits in plans in
which the Executive is participating;
(3) any breach by the Corporation of any of its material
obligations contained in this Agreement which remains uncured
for more than 10 days after the Executive provides written
notice of the breach to the Corporation; and;
(4) a material adverse reduction of the Executive's
responsibilities or reporting relationships.
(h) "IPO GRANT" has the meaning set out in Section 3.5.
(i) "IPO LOAN" has the meaning set out in Section 4.3.
(j) "LOAN" has the meaning set out in Section 4.3.
(k) "NON-IPO LOAN" has the meaning set out in Section 4.3.
(l) "PLAN" means the Corel Corporation Share Option and Phantom Share
Unit Plan dated December 1, 2003 as amended from time to time.
(m) "QUALIFIED IPO" has the meaning set out in Section 3.5.
(n) "REASONABLE NOTICE PERIOD" means:
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(1) if the Executive's employment is terminated prior to the first
anniversary of the Start Date, eighteen months; and
(2) if the Executive's employment is terminated on or after the
first anniversary of the Start Date, the greater of 12 months
or the period from the Termination Date to the date that is 18
months from the first anniversary of the Start Date.
(O) "SALARY" has the meaning set out in Section 3.1.
(p) "SHARES" means Class A common shares of the Corporation.
(q) "TERMINATION DATE" means the Executive's last day of active
employment and does not include any period of statutory or
reasonable notice or any period of deemed employment and "terminate"
and "terminated" have corresponding meanings.
(r) "VECTOR" means any entity or fund Affiliated with, or managed
directly or indirectly by, Vector Capital Corporation or its
Affiliates, or any other entity controlled, directly or indirectly,
by any such entities or funds.
1.2 HEADINGS, SECTIONS AND PLURAL. The inclusion of headings in this Agreement
is for convenience of reference only and shall not affect its construction
or interpretation. Throughout this Agreement, whenever required by
context, words importing the singular include the plural and vice versa.
In this Agreement, references to "Sections" or to "Schedules" are
references to sections in or schedules to this Agreement, unless expressly
stated otherwise.
1.3 DEDUCTIONS AND WITHHOLDINGS. The payments to the Executive set out in this
Agreement are subject to applicable deductions and withholdings.
1.4 BENEFIT CONTRIBUTIONS AND PARTICIPATION. The Corporation's contributions
to, the Executive's participation in, and any conversion of, the group
benefit plans as set out in this Agreement are subject to the terms and
conditions of the benefit plans, and changes to or cancellations of such
plans over time, as may be made with such notice to the Executive as is
practical in the circumstances, and in the sole discretion of the
Corporation.
1.5 CURRENCY. Unless otherwise indicated, all dollar amounts referred to in
this Agreement are in Canadian currency.
1.6 PREVAILING AGREEMENT. In the event of any inconsistencies between this
Agreement and the Plan, the provisions in this Agreement supersede the
Plan to the extent of such inconsistencies.
2. TERM AND DUTIES
2.1 START DATE. The Corporation agrees to employ the Executive and the
Executive agrees to become employed with the Corporation on the terms and
conditions set out in this Agreement commencing on a date which is no
later than June 27, 2005 (the "START DATE"), The terms and conditions of
employment set out in this Agreement are conditional upon the Executive
starting work with the Corporation on the Start Date.
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2.2 POSITION. The Executive will serve in an executive capacity as the Chief
Executive Officer of the Corporation and in such other capacities as may
be agreed upon by the Corporation and the Executive from time to time. The
Executive will report to the Board.
2.3 DUTIES. The Executive will perform the duties customarily performed in his
position including, without limitation, regularly reporting his activities
and the results thereof to the Board. The Executive agrees to serve as a
director and/or officer of the Corporation and its Affiliates as requested
by the Corporation in good faith and without compensation other than as
set out in Section 3, The Executive will work primarily from the
Corporation's head office in Ottawa, Ontario, but understands and agrees
that he will be required to travel frequently throughout the world as the
business needs of the Corporation require.
2.4 GOOD FAITH. The Executive shall devote his full business time and
attention to the affairs of the Corporation and will use his best efforts,
skills and abilities to honestly, faithfully, diligently and in good faith
promote the Corporation's best interests, and he shall not have any
interests that conflict with those of the Corporation. The Executive shall
observe and abide by the policies of the Corporation in effect from time
to time.
2.5 THIRD PARTY OBLIGATIONS. The Executive represents and warrants that he
honestly and reasonably believes after proper enquiry, that his
obligations under this Agreement will not breach any obligations the
Executive owes to third parties, including any of the Executive's former
employers and that at the date hereof, he is not aware of any claims or
threatened claims that he has breached any such obligations in connection
with his obligations under this Agreement.
2.6 WORK STATUS. The Executive will be required to work in Canada and may be
requested by the Board to work in the United States and internationally,
as needed and determined by the Board. The Executive represents and
warrants that he is legally entitled to work in Canada.
3. COMPENSATION
3.1 BASE SALARY. The Corporation agrees to pay the Executive an annual base
salary of $415,000, payable in accordance with the Corporation's payroll
practices in effect from time to time, subject to annual review and to
increase as determined by the Board ("SALARY").
3.2 DISCRETIONARY BONUS. The Executive will be eligible to participate in the
Corporation's annual bonus plan with a target bonus of 100% of Salary for
the achievement of all targets. Any bonus payment is subject to
achievement by the Executive of the performance targets established by the
Board in consultation with the Executive before the start of each fiscal
year. Currently, the performance targets are based on a combination of
revenue targets and target earnings before interest, tax, depreciation and
amortization ("EBITDA"). The Executive's individual weighting of revenue
and EBITDA targets for 2005 are set out on Schedule "A". To be eligible
for the bonus payment, the Executive must have been actively employed
throughout the fiscal year in respect of which his performance was
assessed, unless provided otherwise in this Agreement. Notwithstanding the
above, the Executive will be eligible for a pro-rated bonus in his first
fiscal year of employment proportionate to his length of active employment
in that year, with a minimum guaranteed bonus for the Executive's first
part fiscal year of employment of $250,000.
3.3 SHARE BASED COMPENSATION PLAN PARTICIPATION. The Executive will be
eligible to participate in the Plan and such other share based incentive
plans or similar plans as may be
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established for senior executives by the Corporation. All options granted
to the Executive, including the Base Grant of options and the IPO Grant of
options are governed by the terms and conditions of the Plan, including
any restrictions on exercise of options and any requirements to agree to
conditions, restrictions or agreements set out in the Plan, except with
respect to the vesting terms, which are governed by this Agreement. Except
as expressly provided in Section 5.3 of this Agreement or pursuant to the
Plan, no share based compensation may vest on or after the Termination
Date.
3.4 BASE GRANT OF OPTIONS. On the Start Date, the Corporation will grant to
the Executive options to acquire 3,718,258 Shares of the Corporation (the
"BASE GRANT"), subject to the terms and conditions set out in this
Agreement and the Plan. The Base Grant of options will have an exercise
price of 10 Cent in USD per Share. The Base Grant of options will be
exercisable as to 25% on and after the Start Date (the "VESTED BASE
GRANT") and as to additional 6.25% on and after the end of each quarter
commencing after the first anniversary of the Start Date and for 10 years
from the date of grant.
3.5 IPO GRANT OF OPTIONS. On the Start Date, the Corporation will grant to the
Executive options to acquire 929,565 Shares of the Corporation (the "IPO
GRANT"), subject to the terms and conditions set out in this Agreement and
the Plan. The IPO Grant of options will have an exercise price of 10 Cent
in USD per Share. The IPO Grant of options will be exercisable on the
Start Date and for 8 years after an initial public offering of the
Corporation that yields proceeds to the Corporation of not less than $75
million (a "QUALIFIED IPO").
3.6 VESTED BASE GRANT AND IPO GRANT. The Vested Base Grant of options and the
IPO Grant of options are subject to the following terms and conditions. If
the Executive's Termination Date, as defined in the Plan, occurs prior to
the first anniversary of the Start Date, the Corporation may, but is not
required to, repurchase any or all Shares issued to the Executive on the
exercise of the Vested Base Grant of options for an amount equal to 10
Cent in USD per Share and the unexercised portion of the Vested Base Grant
of options will immediately expire. If the Executive's Termination Date
occurs prior to a Qualified IPO or if a Qualified IPO is not completed on
or before the second anniversary of the Start Date, the Corporation may,
but is not required to, repurchase any or all Shares issued to the
Executive on the exercise of the IPO Grant of options for an amount equal
to 10 Cent in USD per Share and the unexercised portion of the IPO Grant
of options will immediately expire.
3.7 PAYMENTS FOR DISTRIBUTIONS ON BASE GRANT OF OPTIONS AND IPO GRANT OF
OPTIONS. If dividends or other distributions are paid on Shares of the
Corporation at a time when the Executive holds unexercised options under
the BASE Grant of options or the IPO Grant of options, the Corporation
will provide the Executive with a payment equivalent to distributions the
Executive would have been eligible to receive had the Base Grant of
options and the IPO Grant of options held by the Executive been fully
exercised, provided, however, that at any time after the IPO Grant of
options is forfeited, the Executive shall not be entitled to a payment in
respect of any dividends or other distributions in respect of the IPO
Grant of options.
4. EXPENSES, BENEFITS AND VACATION
4.1 GENERAL EXPENSES. THE Corporation will reimburse the Executive for his
reasonable and approved business expenses, including travel expenses,
incurred by him in connection with the performance of his duties under
this Agreement, upon providing appropriate receipts
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satisfactory to the Corporation and in accordance with the Corporation's
policies in effect from time to time.
4.2 RELOCATION EXPENSES. The Executive agrees to relocate to Canada and
thereafter to maintain his full-time residence in Canada for the duration
of his employment. The Corporation will reimburse the Executive for the
reasonable relocation expenses incurred by him to relocate himself and his
family to Canada, upon providing appropriate receipts satisfactory to the
Corporation and in accordance with the Corporation's policies, to a
maximum total of $40,000.
4.3 LOAN. The Corporation will make a loan to the Executive in the amount of
$562,500 with interest compounded annually at the prime rate of interest
provided by the Royal Bank of Canada to its customers and secured against
the Base Grant of options or any Shares issuable upon exercise thereof
(the "LOAN"). $312,500 of the Loan (the "IPO LOAN") and interest thereon
will be forgiven on the earlier of (1) the completion of a Qualified IPO
of the Corporation or (2) the first filing of a registration statement
with respect to a Qualified IPO of the Corporation. $250,000 of the Loan
(the "NON-IPO LOAN"), plus interest thereon shall be repaid by the
Executive on or before the earlier of (1) the completion of a Qualified
IPO of the Corporation or (2) the first filing of a registration statement
with respect to a Qualified IPO of the Corporation. Payments pursuant to
Section 3.7 shall be applied to repayment of the Non-IPO Loan, plus
interest thereon, until the Non-IPO Loan is repaid in full. In the event
any amount of the Non-IPO Loan and interest thereon, remains outstanding
on the date of a Qualified IPO, it shall be repaid in full in cash, at the
Executive's election, with any balance outstanding repaid by the
cancellation of vested Base Grant of options and/or IPO Grant of options
valued by subtracting the exercise price from the fair market value of a
Share at the relevant date. The whole outstanding amount of the Loan and
of the interest thereon is immediately due and payable on the Termination
Date and first by applying any payments to be made to the Executive
pursuant to Article 5 of this Agreement to repayment and second by the
cancellation of vested Base Grant of options and/or IPO Grant of options
valued by subtracting the exercise price from the fair market value of a
Share at the relevant date and third by cash payment by the Executive save
and except that in the event that the Executive's employment is terminated
by the Corporation without cause or by the Executive for Good Reason, any
amount outstanding of the IPO Loan shall be forgiven.
4.4 BENEFIT PLANS. The Executive will be eligible to participate in the group
benefit plans available to employees of the Corporation from time to time,
subject to Section 1.4. To the extent permitted by the insurers, the
Corporation will request the waiver of the waiting periods and
pre-existing condition limitations for participating in the benefit plans.
4.5 VACATION. The Executive will be entitled to four weeks of vacation time
per year to be taken at times that are consistent with the business
interests of the Corporation, and in accordance with the Corporation's
vacation policies. The Executive may carry forward up to four weeks of
vacation time to subsequent vacation years, provided that in each vacation
year the Executive takes at least the minimum vacation time required under
the Ontario Employment Standards Act, 2000 as amended.
4.6 FEES. The Corporation will reimburse the Executive for legal advice in
connection with completing this Agreement to a maximum of $6,250 upon the
Executive providing appropriate receipts satisfactory to the Corporation.
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5. TERMINATION
5.1 TERMINATION BY EXECUTIVE. The Executive may terminate his employment with
the Corporation (other than for Good Reason) at any time by providing the
Corporation with two months of notice in writing. Whether or not, upon
receipt of the Executive's resignation, the Corporation terminates the
Executive's employment before the date the resignation was to be
effective, the Corporation will, in full satisfaction of its obligations
to the Executive: (a) pay the Executive's Salary and vacation pay accrued
until the date the resignation is or was to be effective; (b) reimburse
the outstanding expenses properly incurred by the Executive until the date
his employment ceases; (c) continue its contributions to the group benefit
plans until the date the resignation is or was to be effective, subject to
Section 1.4; and continue the vesting of the Base Grant of options to the
date the resignation is or was to be effective.
5.2 TERMINATION BY CORPORATION FOR CAUSE. The Corporation may terminate the
Executive's employment at any time with cause and without prior notice or
any further obligations by the Corporation, and the Executive will be
ineligible for any bonus or pro-rated bonus payment. On the termination of
the Executive's employment for cause, the Corporation will, in full
satisfaction of its obligations to the Executive, pay the Executive's
Salary and vacation pay accrued until the Termination Date and reimburse
the outstanding expenses properly incurred by the Executive until the
Termination Date.
5.3 TERMINATION BY CORPORATION WITHOUT CAUSE OR RESIGNATION BY THE EXECUTIVE
FOR GOOD REASON. The Corporation may terminate the Executive's employment
at any time, without cause and the Executive may resign for Good Reason,
on providing written notification. If the Corporation terminates the
Executive's employment without cause or the Executive resigns for Good
Reason and the Executive signs and delivers to the Corporation a full and
final release of the Corporation and its Affiliates and all directors
thereof, in the form attached to this Agreement as Schedule "B", the
Corporation will, in full satisfaction of its obligations to the Executive
and regardless of any other income that the Executive may earn in
mitigation:
(a) Pay the Executive's Salary and vacation pay accrued until the
Termination Date and reimburse the Executive's outstanding expenses
properly incurred until the Termination Date;
(b) Pay the Executive a bonus pursuant to Section 3.2 pro-rated for the
portion of the year prior to the Termination Date calculated at 100%
of target performance;
(c) Pay on-going Salary payments for the Reasonable Notice Period from
the Termination Date based on the Executive's Salary in effect at
the Termination Date, in accordance with the Corporation's payroll
practices;
(d) Continue to make contributions in respect of the Executive to the
Corporation's group benefit plans for the Reasonable Notice Period
from the Termination Date to the extent permitted by such plans,
provided that, to the extent such contributions may not be
continued, the Corporation shall pay to the Executive the cost to
the Corporation of such contributions as if the Executive remained
employed by the Corporation;
(e) Authorize the Executive to exercise the vested share based
compensation held by the Executive until 90 days after the
Termination Date, or for such longer period as is provided in the
Plan. All share based compensation that is not vested as at the
Termination Date shall be forfeited, except that if the Executive's
employment is
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terminated in accordance with this Section 5.3 prior to the first
anniversary of the Start Date, 464,738 of the Base Grant of options shall
be vested as of the Termination Date.
5.4 DEATH OF THE EXECUTIVE. Upon the death of the Executive, this Agreement
automatically terminates without notice or any further obligations by the
Corporation. Upon the death of the Executive, the Corporation will, in
full satisfaction of its obligations: (a) pay the outstanding accrued
Salary and vacation pay accrued until the date of the Executive's death;
(b) reimburse the expenses properly incurred by the Executive up to the
date of his death; (c) pay the Executive a bonus pursuant to Section 3.2,
pro-rated for the portion of the year prior to the Executive's date of
death assigning target performance was achieved; and (d) if the
Executive's death occurs prior to the second anniversary of the Start
Date, the Base Grant of Options will continue to vest until the second
anniversary of the Start Date.
5.5 CONSEQUENCES OF TERMINATION. The termination of the Executive's employment
for any reason, including resignation and termination with cause and
without cause, terminates any officer positions the Executive may hold
with the Corporation or any of its Affiliates and the Executive agrees to
immediately resign as a director of the Corporation and any of its
Affiliates and to sign any documentation necessary to give effect to this
Section 5.5.
5.6 CONVERSION OF BENEFITS ON TERMINATION. On the earlier of the termination
of Executive's participation in the group benefit plans or the cessation
of his employment for any reason, the Executive may be eligible to convert
the group insured benefits to private coverage within 30 days, without
evidence of insurability. The Executive is responsible for promptly
arranging for any conversion options he may have or obtaining alternate
benefits if he chooses to do so.
5.7 COMPLIANCE WITH LAWS. The Executive's entitlements under this Section 5
are provided in full satisfaction of the Executive's entitlements to
notice of termination, pay in lieu of notice, and severance pay, if any,
under the Ontario Employment Standards Act, 2000, under this Agreement, at
common law or otherwise.
5.8 CHANGE OF CONTROL. In the event that there is a Change of Control and not
less than 6 months following the Change of Control, the Executive's
employment is terminated for any reason other than for cause, he resigns
for Good Reason or he resigns for any reason the share based compensation
awarded to the Executive shall become fully exercisable on the earlier of
the Date of Termination and the date that is 6 months after the Change of
Control and shall otherwise be governed by the terms of the Plan.
6. CONFIDENTIAL INFORMATION AND RETURN OF PROPERTY
6.1 CONFIDENTIALITY OBLIGATION. The Executive covenants and agrees that he
shall not, at any time during his employment with the Corporation or any
time thereafter, without the prior written consent of the Corporation,
directly or indirectly, communicate, reveal or disclose, in any manner, to
anyone, or use for any purpose other than in carrying out his duties under
this Agreement in furtherance of the Corporation's business interests, any
confidential or proprietary information concerning, or learned as a result
of his employment with, the Corporation or its predecessors, successors,
Affiliates or related companies including, without limitation, information
concerning their assets, businesses, affairs, pricing, costs, technical
information, financial information, plans or opportunities, manufacturing,
processes, sales and distribution, marketing, research and development,
customers, suppliers or employees.
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6.2 RETURN OF PROPERTY. Upon ceasing to be employed by the Corporation or upon
request of the Corporation at any time, the Executive shall return to the
Corporation all property belonging to the Corporation or its predecessors,
successors, Affiliates or related companies including, without limitation,
all documents in any format whatsoever including electronic format, that
is in his possession or control, and the Executive agrees not to retain
any copies of such property in any format whatsoever including electronic
format.
7. NON-COMPETITION
7.1 COMPETING ENTITIES. In this Agreement, "COMPETING ENTITIES" means
Microsoft, the Star Office Division of Sun Microsystems, Adobe,
Macromedia, Quark, Intervideo, Pinnacle Systems, Sonic Solutions,
Autodesk, the Lotus Division of IBM, ULEAD, Sigmaflow or ACD Systems or
any of their successors, and, on notice to the Executive, other entities
that the Corporation may add to this definition, from time to time before
the termination of the Executive's employment, acting in good faith after
consultation with the Executive, whose business consists of developing or
marketing word processing, spreadsheet, presentation, process management,
flowcharting, digital imaging or graphics software, which the Corporation
determines is in competition with its business.
7.2 COMPETITIVE ACTIVITIES. The Executive covenants and agrees that, while
employed with the Corporation and for 24 months thereafter, the Executive
shall not, directly or indirectly, in any manner whatsoever including,
without limitation, either individually, or in partnership, jointly or in
conjunction with any other person, or as employee, principal, agent,
consultant, director, shareholder, lender or otherwise:
(a) be engaged in or by any Competing Entities in order to provide
products or services similar to the products and services provided
by the Corporation;
(b) have any financial or other interest including, without limitation,
an interest by way of royalty or other compensation arrangements, in
or in respect of any Competing Entities, excluding the ownership of
not more than 1 % of the issued shares of a corporation, the shares
of which are listed on a recognized stock exchange or traded in the
over-the-counter market in Canada or the United States, which
carries on a business that competes with the Corporation or its
Affiliates; or
(c) advise, lend money to or guarantee the debts or obligations of any
Competing Entities.
8. NON-SOLICITATION
8.1 EMPLOYEE AND CONTRACTOR NON-SOLICITATION. The Executive covenants and
agrees that, while employed with the Corporation and for 24 months
thereafter, the Executive shall not induce or solicit or attempt to induce
or solicit, or assist any person to induce or solicit any employee of the
Corporation or its Affiliates or any contractor who regularly provides
services to the Corporation or its Affiliates, or assist or encourage any
employee of the Corporation or its Affiliates or any contractor who
regular who regularly provides services to the Corporation or its
Affiliates to accept employment or engagement elsewhere that competes with
the business of the Corporation or its Affiliates.
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9. PROPRIETARY AND MORAL RIGHTS
9.1 PROPRIETARY RIGHTS. The Executive recognizes the Corporation's proprietary
rights in the tangible and intangible property of the Corporation and
acknowledges that Executive has not obtained or acquired and shall not
obtain or acquire any rights, title or interest, in any of the property of
the Corporation or its predecessors, successors, Affiliates or related
companies including, without limitation, any writing, communications,
manuals, documents, instruments, contracts, agreements, files, literature,
data, technical information, know-how, secrets, formulas, products,
methods, procedures, processes, devices, apparatuses, trademarks, trade
names, trade styles, service marks, logos, copyrights, patents,
inventions, discoveries, whether or not protected by patent or copyright,
which the Executive may have conceived or made, or may conceive or make,
either alone or in conjunction with others, and related to the business of
the Corporation or its predecessors, successors, Affiliates or related
companies (collectively, the "MATERIALS"). The Executive agrees that
during his employment with the Corporation and any time afterwards all
Materials shall be the sole and exclusive property of the Corporation.
9.2 WAIVER OF MORAL RIGHTS. The Executive irrevocably waives to the greatest
extent permitted by law, for the benefit of and in favour of the
Corporation, all the Executive's moral rights whatsoever in the Materials
including, without limitation, any right to the integrity of any
Materials, any right to be associated with any Materials and any right to
restrict or prevent the modification or use of any Materials in any way
whatsoever. The Executive irrevocably transfers to the Corporation all
rights to restrict any violations of moral rights in any of the Materials
including, without limitation, any distortion, mutilation or other
modification.
9.3 ASSIGNMENT OF RIGHTS. If the Executive has acquired or does acquire,
however, any right, title or interest in any of the Materials or in any
intellectual property rights relating to the Materials, the Executive
irrevocably assigns all such right, title and interest throughout the
world exclusively to the Corporation including, without limitation, any
renewals, extensions or reversions relating thereto and any right to bring
an action or to collect compensation for past infringements.
9.4 REGISTRATIONS. The Corporation will have the exclusive right to obtain
copyright registrations, letters patent, industrial design registrations,
trade-xxxx registrations or any other protection in respect of the
Materials and the intellectual property rights relating to the Materials
anywhere in the world. At the expense and request of the Corporation, the
Executive shall, both during and after the Executive's employment with the
Corporation, execute all documents and do all other acts necessary in
order to enable the Corporation to protect its rights in any of the
Materials and the intellectual property rights relating to the Materials.
10. REMEDIES
10.1 DEFENCES. The Executive agrees that all restrictions in Sections 6, 7, 8
and 9 are necessary and fundamental to the protection of the business
carried on by the Corporation and that all such restrictions are
reasonable and valid, and the Executive waives all defences of the
Executive to the strict enforcement thereof by the Corporation.
10.2 INJUNCTIVE RELIEF. The Executive acknowledges that a breach by the
Executive of any of his obligations in Sections 6, 7, 8 and 9 will result
in the Corporation suffering irreparable harm, which cannot be calculated
or fully or adequately compensated by recovery of damages alone.
Accordingly, the Executive agrees that the Corporation shall be entitled
to interim and
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permanent injunctive relief without proof of actual damages, specific
performance and other equitable remedies, in addition to any other relief
to which the Corporation may become entitled.
11. OBLIGATIONS NOT EXHAUSTIVE
11.1 FIDUCIARY. THE Executive acknowledges that the obligations contained in
Sections 6, 7, 8 and 9 are in addition to any obligations that the
Executive may now or hereafter owe to the Corporation, at law, in equity
or otherwise. Nothing contained in this Agreement is a waiver, release or
reduction of any fiduciary obligations that the Executive owes to the
Corporation.
12. GENERAL
12.1 SURVIVAL. Sections 6, 7, 8, 9, 10, 11 and this Section 12.1 survive the
termination of this Agreement and the Executive's employment for any
reason whatsoever.
12.2 SEVERABILITY. If any provision of this Agreement is declared void or
unenforceable, such provision shall be deemed severed from this Agreement
to the extent of the particular circumstances giving rise to such
declaration, and such provision as it applies to other persons and
circumstances and the remaining terms and conditions of this Agreement
shall remain in full force and effect.
12.3 ENTIRE AGREEMENT. This Agreement, including the attached Schedules and the
documents referenced therein, constitutes the entire agreement between the
Corporation and the Executive on the subject-matter herein and it
supersedes all prior agreements and understandings, whether written or
oral. There are no representations, warranties or collateral agreements on
the subject-matter herein that exist outside of this Agreement.
12.4 AMENDMENTS. This Agreement may only be amended by written agreement
executed by the Corporation and the Executive. However, changes to the
Executive's position, duties, vacation, benefits and compensation, over
the course of time, do not affect the validity or enforceability of
Sections 5, 6, 7, 8 and 9.
12.5 GOVERNING LAW. This Agreement shall be governed by, and construed and
interpreted in accordance with the laws of the Province of Ontario and the
laws of Canada applicable therein. The Corporation and the Executive each
irrevocably attorns to the exclusive jurisdiction of the courts of Ontario
and the courts of Ontario shall have the sole and exclusive jurisdiction
to entertain any action arising under this Agreement.
12.6 ASSIGNMENT THE Corporation may assign this Agreement, and it enures to the
benefit of the Corporation, its successors or assigns.
12.7 INDEPENDENT LEGAL ADVICE. The Executive acknowledges that he has been
encouraged to obtain independent legal advice regarding the execution of
this Agreement, and that he has either obtained such advice or voluntarily
chosen not to do so, and hereby waives any objections or claims he may
make resulting from any failure on his part to obtain such advice.
12.8 WAIVER. No waiver of any of the provisions of this Agreement shall be
effective or binding, unless made in writing and signed by the party
purporting to give the same. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other
Corel Corporation Executive Employment Agreement Page 12 of 15
provisions, whether or not similar, nor shall such waiver constitute a
continuing waiver, unless expressly stated otherwise.
12.9 EFFECTIVE DATE. This Agreement is effective the date it is made.
IN WITNESS WHEREOF this executive employment agreement has been executed
by the Corporation and the Executive effective on the date first written above.
COREL CORPORATION
/s/ Xxxxx Xxxxx
--------------------------------
PER: XXXXX XXXXX
/s/ Xxxxx X. Xxxxxx
--------------------------------
XXXXX X. XXXXXX
Corel Corporation Executive Employment Agreement Page 13 of 15
SCHEDULE "A"
EBITDA TARGETS FOR 2005
The Fiscal Year 2005 target would be a combination of Revenue (40%) and
EBITDA (60%). The targets and associated payouts (full year) are as follows:
REVENUE - 40% of 2005 Target Bonus
TARGET USD ACCOMPLISHMENT
------------ --------------
$ 90,000,000 60% No incentive below
$120,000,000 80% 50%
$150,000,000 100% 100%
$165,000,000 110% 135%
$180,000,000 120% 170%
EBITDA - 60% OF 2005 TARGET BONUS
TARGET USD ACCOMPLISHMENT
----------- --------------
$31,860,000 60% No incentive below
$42,480,000 80% 100%
$53,100,000 100% 150%
$64,080,000 120% 200%
Corel Corporation Executive Employment Agreement Page 14 of 15
SCHEDULE "B"
FULL AND FINAL RELEASE
I, XXXXX X. XXXXXX, on my own behalf and that of my heirs, executors
and assigns, in consideration of the terms and conditions set out in my
Agreement with Corel Corporation ("COREL") dated June __, 2005, payments made to
me pursuant to those terms and conditions and other good and valuable
consideration, the sufficiency of which is hereby acknowledged, do hereby
release and forever discharge Corel, its subsidiaries, parents, predecessors,
successors, related companies, affiliates, divisions and their present and
former directors, officers, representatives, shareholders, owners, employees,
administrators, agents and lawyers (collectively, the "RELEASEES") jointly and
severally, from any and all actions, causes of action, covenants, contracts,
claims, demands, complaints, proceedings, grievances, damages, costs or loss of
any nature or kind, past, present or future arising out of or in any way
relating to or connected with my hiring, my employment with Corel or the
termination of my employment, stock options or other share based incentive plans
and benefit plans.
I do hereby declare and acknowledge that the consideration set out
above satisfies all obligations of the Releasees, arising from or out of my
hiring, my employment with Corel or the termination of my employment, stock
options or other share based incentive plans and benefit plans including,
without limitation, any obligations under the Ontario Employment Standards Act,
2000, as amended, the Ontario Human Rights Code, as amended and the Ontario
Workplace Safety and Insurance Act, 1997, as amended, or any similar legislation
in any other jurisdiction . I covenant and undertake that I will not file or
advance any claims or complaints under the Ontario Employment Standards Act,
2000, as amended including claims in respect of pay in lieu of notice and
severance pay, the Ontario Human Rights Code, as amended, and the Ontario
Workplace Safety and Insurance Act, 1997, as amended, or any similar legislation
in any other jurisdiction, arising out of my hiring, my employment with Corel or
the termination of my employment, stock options or other share based incentive
plans and benefit plans.
And for the said consideration, I further agree not to make any
claim or take any other proceedings against any person, entity, corporation,
partnership or Crown in which any claim could or does arise with respect to any
matters which may have arisen between the parties to this release up to the
present time, concerning and relating to any action I may have as against any
other party as a result of my hiring, my employment with Corel or termination of
my employment, stock options or other share based incentive plans and benefit
plans.
Notwithstanding the foregoing, I do not release my rights and
entitlements set out in Section 5 of the Agreement or any right or entitlement I
may have to indemnity or to enforce any indemnity as a director or officer of
Corel or its affiliates or to benefits under any policy of directors and
officers insurance.
And for said consideration I further agree to save harmless and
indemnify the Releasees from and against any and all claims, charges, taxes,
penalties or demands made by the Canada Revenue Agency, its predecessors or
successors, or any similar governmental authority in any other jurisdiction,
requiring any of the Releasees to pay any amounts under the Income Tax Act
(Canada) and other duly recognized federal, provincial and local taxing
authorities in respect of income tax payable by me in excess of the income tax
previously withheld, and from and against any and all claims, charges, taxes or
penalties and demands made on behalf of or related to Employment Insurance or
Canada Pension Plan under the applicable statutes and regulations, or any other
similar
Corel Corporation Executive Employment Agreement Page 15 of 15
legislation in any other jurisdiction, with respect to any amounts which may, in
the future, be found to be payable by any of the Releasees with respect to the
payment of the consideration referred to above.
It is understood and agreed that the giving of the consideration set
out above is deemed to be no admission of liability whatsoever on the part of
the Releasees and, in fact, any liability is expressly denied.
I will not say, publish or do any act or thing that disparages or
casts the Releasees in any unfavourable light, or which could result in injury
to their reputation. Except to the extent required by applicable law, I will
make no public statements or announcements regarding my past employment with
Corel or any of the matters set forth herein without first consulting with Corel
and obtaining its prior written approval as to the timing and content of the
proposed statements or announcements. Notwithstanding the foregoing, I
understand that I may disclose particulars of my past employment with Corel and
my termination therefrom in a bona fide job search or application for
government employment insurance benefits.
And I hereby declare that I have read and fully understand this
release. I have had the opportunity to seek independent legal advice. I
understand that this release contains a full and final release of any claims,
which I have or may have relating to my hiring, my employment with Corel and the
termination of my employment, stock options or other share based incentive plans
and benefit plans. I voluntarily accept the said consideration for the purpose
of making full and final compromise, adjustment and settlement of all claims as
set out above.
IN WITNESS WHEREOF, I, XXXXX X. XXXXXX set my hand and seal hereto
this _________________________ day of ________________________________, 200_.
SIGNED, SEALED AMD DELIVERED )
in the presence of )
)
__________________________________ ) _________________________________
Witness Signature ) XXXXX X. XXXXXX
)
__________________________________ )
Witness Name )
