Exhibit 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of 20th day of January, 2005.
BETWEEN:
COREL CORPORATION
(hereinafter referred to as the "Employer")
OF THE FIRST PART
- and -
XXXXXXXXXX X. XXXXXXXXX
(hereinafter referred to as the "Employee")
OF THE SECOND PART
WHEREAS the Employer and the Employee wish to enter into an agreement
pursuant to which the Employee will provide the Employee's services to
the Employer as hereinafter set forth, and the Employer will hire and
retain the services of the Employee as an employee of the Employer.
NOW THEREFORE in consideration of the premises and mutual covenants
and agreements hereinafter contained, the parties hereto hereby
mutually covenant and agree as follows:
1. EMPLOYMENT
a. The Employee is employed on a full-time basis as EXECUTIVE VICE
PRESIDENT GLOBAL PRODUCT MARKETING AND COMMUNICATIONS.
b. The Employee is employed on a full-time basis for the Employer and it
is understood that the hours of work involved will vary and may be
irregular. The Employee acknowledges that this clause constitutes
agreement to work such hours.
c. The Employee acknowledges and hereby agrees to carry out all lawful
instructions given to the Employee by the Employer.
d. The Employee acknowledges and hereby agrees to observe all policies of
the Employer as the Employer may in its absolute discretion create
from time to time and to perform all services associated with the
position herein.
e. The Employee acknowledges and agrees that during the currency of this
agreement, the Employee shall devote the Employee's full-time and
skill to the duties and responsibilities contemplated herein and shall
not be engaged in any other employment in any other capacity or any
other activity that interferes with the provision of the services
contemplated herein or that is for the benefit of any person,
corporation or enterprise whose business interests are either
competitive or in conflict with those of the Employer.
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2. EMPLOYMENT TERM
Subject to being terminated pursuant to the provisions of paragraph 5
hereof, the term of this agreement shall be indefinite commencing on
JANUARY 21, 2005.
3. SALARY AND BENEFITS
a. For all services rendered by the Employee in the course of the
employment hereunder, the Employee shall receive a gross annual salary
of CDN $300,00.00(subject to statutory withholdings and deductions).
The said salary is to be paid at such times and in such fashion as is
in keeping with the ordinary practices and policies of the Employer.
b. Employee will also be eligible for an incentive bonus component of
CDN $100,000.00 (subject to statutory withholdings and deductions)
based upon the successful realization of targets set on a periodic
basis by Employer. TO CLARIFY AND WITHOUT LIMITATION TO SECTION 11
HEREIN, THIS AMOUNT REPLACES ALL PROFIT SHARING COMMITMENTS REFERRED
TO IN THE OFFER LETTER DATED OCTOBER 25, 2004. All payments will be
made by bank credit transfer.
c. Employee shall be reimbursed, in accordance with Employer's policies
and procedures, up to CDN $3,500.00 per month for payments made by
Employee for house and car rental in Ottawa. Said rental payment
reimbursement shall continue until May 31, 2005 and thereafter cease.
The Employee shall be entitled to reimbursement of relocation expenses
for the moving of Employee's household to Ottawa to a maximum 25,000
US$
d. The Employee shall be entitled to participate in such additional
benefits as are enjoyed from time to time generally by Employees in
accordance with the established practices and policies of the Employer
as the Employer may in its absolute discretion create from time to
time. In this regard, the Employee acknowledges having received a
description of the benefits in force as of the date hereof.
e. Employee acknowledges that the granting of options is made only to
full time employees, solely at Employer's discretion and subject to
the terms and conditions of any grant and of Employer's stock option
plan in effect, from time to time.
f. The Employee acknowledges that except as hereinafter set out, there
are no further benefits and that changes may be made to the current
benefit program(s), from time to time, by the Employer, as the
Employer may in its absolute discretion decide without the necessity
of an amendment hereto.
4. VACATION
The Employee shall be entitled to vacation in accordance with the
Executive Vacation Plan, with the annual accrual beginning at 5 weeks
per year. The Employee shall take the Employee's vacation entitlement
in each 12 month period and shall not accrue more than one year's
vacation entitlement from one 12 month period to the next. Without in
any way limiting the generality of the foregoing, and subject to
compliance with the Employment Standards Act, S.0.2000, c. 41 as
amended, any vacation entitlement not taken in the appropriate 12
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month period or the year following shall be lost unless specific
arrangements are made between the parties, which arrangements are to
be confirmed in writing and signed by each of the parties hereto prior
to the expiration of the said period,
5. TERMINATION
This agreement and the employment of the Employee hereunder may be
terminated in the following manner:
A. TERMINATION BY THE EMPLOYER
i. This agreement may be terminated effective at any time for cause
by the Employer giving notice in writing of such termination to
the Employee. If this agreement and the employment of the
Employee hereunder is so terminated pursuant to this clause (i),
the Employee shall receive any statutory benefits to which the
Employee shall be entitled and shall continue to accrue and
receive the Employee's said annual salary and benefits through to
the date of termination indicated in the termination notice and
no more.
ii. Between February 3, 2005 and November 1, 2005, this agreement and
the employment of the Employee hereunder may be terminated at any
time by the Employer by providing the Employee a payment equal to
nine (9) months base salary or a payment of base salary that
would have been paid during the months not yet worked between
February 1, 2005 and November 1, 2005, whichever is greater. In
addition, the Employer will provide payment for the equivalent
number of months of pro rata bonus, as well as maintain the
Employee's benefits for said period. However, if maintaining
benefits is not possible, the Employer will pay to the Employee
an amount equal to the cost of such benefits, grossed up so that
the after tax value of the payments is equal to the cost of the
benefits. The Employee acknowledges that the foregoing provisions
are in satisfaction of and substitution for any and all statutory
and common law rights, including without limitation, any right to
reasonable notice of termination.
iii. After November 1, 2005, this agreement and the employment of the
Employee hereunder may be terminated at any time by the Employer
giving to the Employee such notice, or payment in lieu thereof,
equal to nine (9) months of base salary in lieu of notice, plus
one (1) month of salary for each completed year of employment, to
maximum payment of twelve (12) months salary. In addition, the
Employer will provide payment for the equivalent number of months
of pro rata bonus payout, as well as maintain the Employee's
benefits for said period. However, if maintaining benefits is not
possible, the Employer will pay to the Employee an amount equal
to the cost of such benefits, grossed up so that the after tax
value of the payments is equal to the cost of the benefits. The
Employee acknowledges that the foregoing provisions are in
satisfaction of and substitution for any and all statutory and
common law rights, including without limitation, any right to
reasonable notice of termination.
iv. For the purposes of (ii) and (iii) above, the "pro rata bonus'
payment to the Employee shall be the greater of (a) the pro rata
bonus calculated assuming the targets would have been achieved at
the 100% level; or (b) the pro rata bonus calculated at the
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actual percentage of target achieved as of the effective date of
termination.
b. TERMINATION BY THE EMPLOYEE
This agreement and the employment of the Employee hereunder may be
terminated at any time by the Employee giving to the Employer 1 weeks
notice. In the event the Employee terminates employment in accordance
with the foregoing and, in addition, both
(i) Good Reason exists for Employee terminating employment; and
(ii) cause does not exist for Employer to terminate Employee's
employment, then the Employee shall receive the termination the
payments as described in subsections 5 a (ii) or (iii) above, as the
case may be.
For the purposes of this subparagraph "Good Reason" means (i) the
material reduction or material modification of Employees's authority,
duties, title, salary, employee benefits or responsibilities without
Employee's prior written consent, or (ii) any requirement that
Employee move her principal place of employment from the Ottawa Area.
c. RENTAL ACCOMMODATION REIMBURSEMENT
In the event that: (i) the Employee enters into a 1 year lease in
respect of rental accommodations in Ottawa prior to May 31,2005; and
(ii)the Employee's employment is terminated by the Employer pursuant
to section 5(a)(ii) or (iii) above or is terminated by Employee for
Good Reason pursuant to section 5(b) above, during the first year of
said 1 year lease; and (iii) the Employee is unable to terminate or
otherwise mitigate Employee's obligations to pay rent for the period
between the effective date of termination and the end of the 1 year
lease, then, in such a case, (iv) the Employer shall reimburse the
Employee for the actual cost of rental payments made by the Employee
to a maximum of CDN$2085 per month for the balance of the first year
of the 1 year lease. Notwithstanding the foregoing, the Employee shall
take reasonable steps as directed by the Employer to mitigate any
obligations under the remainder of the lease by negotiating an early
termination of the lease with the lessor or by attempting to sublet
the premises, and, in either case, the Employer shall be entitled to
reduce its obligations under this section 5 (c) to the extent of any
mitigation obtained.
d. TERMINATION BY MUTUAL AGREEMENT
This agreement and the employment of the Employee hereunder may be
terminated by mutual agreement of the parties hereto in writing, in
which event the Employee shall continue to accrue and receive the
Employee's said annual salary and benefits through to the date of
termination reached pursuant to such mutual agreement.
e. TERMINATION BY DEATH
This agreement and the employment of the Employee hereunder shall be
automatically terminated by the death of the Employee. All
compensation to the Employee shall cease at the Employee's death.
F. EFFECT of TERMINATION ON STOCK OPTIONS
Upon termination all stock options shall be treated in accordance with
the provisions of
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the Employer's option plan, as same may be amended from time to time.
Employee acknowledges that for the purposes of said plan the effective
date of termination is the date specified in the notice (a and b
above), established by mutual agreement (c above) or the date of death
(d above) and shall not be affected by the subsequent decision of any
Court or other body that the termination was improper, unlawful,
unfair, without sufficient notice or otherwise deficient in any
respect. Notwithstanding the foregoing and the terms and conditions
of the option plan, if, prior to Employees one year anniversary of
employment:
(i) Employee is terminated without just cause or Employee
terminates employment with Good Reason (in accordance with
subsection 5 b above);
AND
(ii) the Employer completes a public offering, is acquired by
another entity or is merged with another entity such that
following said merger less than 50% of the shares of the merged
entity are owned by persons who previously owned the shares of
the Employer;
THEN upon the occurrence of the latter of (i) and (ii), the
Employer shall, at its option, either:
(iii) cause 25% of the initial grant of Employees options to
immediately vest;
OR
(iv) pay Employee the cash equivalent of the fair market value of
25% of the initial grant of Employees options (i.e. the fair
market value of the shares less the option price).
6. CONFIDENTIALITY, NON-DISCLOSURE AND NON-COMPETITION
a. The Employee agrees to hold in strict confidence the business and
affairs of the Employer and each of its customers/clients. The
Employee agrees that during the term of this agreement or any renewal
thereof or at any time thereafter, the Employee will not directly or
indirectly disclose to any third party or use for any purpose other
than that of the Employer without the prior written approval of the
Employer, the following:
i. Information disclosed to the Employer by or on behalf of a
customer/client prospective customer/client;
ii. Information respecting the identity of any customer/client of
the Employer;
iii. Information otherwise disclosed to the Employer on a
confidential basis by third parties, and
iv. Information otherwise identified to the Employee as
confidential information of the Employer including without
limitation any part of the Employer's computer systems, software
source code, system logic, systems, marketing plans, patents,
trade secrets, know-how, technical expertise, financial
information, product information, customer information,
remuneration packages and other information relating to the
business of the Employer, whether verbal or written, regardless
of the form or medium, with respect to the business of the
Employer, as well as all proprietary and other information of a
confidential nature which is provided to the Employer by third
parties.
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b. The Employee's obligations of confidence described above include,
without limiting the generality of the foregoing:
i. Refraining from copying the Employer's confidential information
without the Employer's prior written permission or as required by
the Employee's duties.
ii. Refraining from removing the Employer's confidential information
from the Employer's premises without the written permission of
the Employer.
iii. Immediately returning upon request the confidential information
of the Employer in the possession or control of the Employee.
iv. Taking every reasonable step to prevent third parties from
examining and/or making copies of any documents or papers
(whether in electronic or hard copy form) prepared by the
Employee or that come into the Employee's possession or under the
Employee's control by reason of the Employee's employment
hereunder;
v. Using the Employee's best efforts to follow all security policies
of the Employer, and
vi. Upon termination of this agreement, turning over to the Employer
all documents or papers (whether in electronic or hard copy form)
and any other materials in the Employee's possession or under the
Employee's control that relate to the business of the Employer or
its customers/clients.
c. The Employee's obligations of confidence described above do not apply
to information which is
i. available to the public other than by breach of obligations of
confidence owed by the employee;
ii. rightfully received by the Employee, outside of the course of the
Employee's employment, from a third party without confidentiality
limitations;
iii. independently developed by the Employee without recourse to any
confidential information of the Employer or its
customers/clients; or
iv. known to the Employee prior to first receipt of the same in the
course of the Employee's employment.
The mingling of confidential information with information that falls
within one or more of the exceptions above shall not impair the status
of, or obligations of confidence and non-use respecting, the
confidential parts.
d. The Employee agrees to promptly advise the Employer of any information
known to the Employee prior to the Employee's employment with the
Employer which could be
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considered confidential information but which the Employee considers
to be excluded from the provisions of this agreement. The Employee
further agrees to disclose any information which the Employee believes
is qualified by this paragraph before acting upon it.
e. The Employee acknowledges that the Employee has a fiduciary obligation
to the Employer and the Employee agrees that the Employee will not
during the Employee's employment with the Employer or within 12 months
thereafter, directly or indirectly:
i. hire or attempt to obtain the withdrawal from the Employer or its
affiliates of any of their respective Employees or consultants;
ii. approach, solicit, service or deal with any customer/client,
potential customer/client or maturing business opportunity of the
Employer or its affiliates in order to attempt to direct any such
customer/client, potential customer/client or maturing business
opportunity away from the Employer or its affiliates;
iii. solicit or divert any business away from the Employer or its
affiliates;
iv. induce or persuade any customer/client, potential
customer/client, supplier, agent or other person under contract
or otherwise associated or doing business with the Employer or
its affiliates to reduce or alter any such association or
business with the Employer or its affiliates; or
v. otherwise interfere or attempt to interfere with any of the
contractual, business or economic relationships of the Employer
or its affiliates with other parties.
f. The Employee agrees that the Employee will not either:
i. during the Employee's employment with the Employer; or
ii. within 6 months thereafter
serve as an executive, officer, director, employee or in any advisory
capacity with any competitor, in whole or in part, of the Employer, or
either individually or in partnership or jointly or in conjunction
with any person or person's firm, trust, partnership, association,
syndicate or corporation, as principal, agent, shareholder, trustee or
in any other matter whatsoever otherwise carry on or be engaged in or
be concerned with any person or persons, firm, trust, partnership,
association, syndicate or corporation which is a competitor, in whole
or in part, of the Employer, except as a shareholder holding less than
two percent of the outstanding shares or securities of any such
corporation whose shares or securities are listed and posted for
trading on a stock exchange recognized for such purpose by the Ontario
Securities Commission. Notwithstanding the foregoing, if such
competitor has two or more divisions located at different addresses
then this paragraph will not prohibit the Employee from becoming
engaged in a division that neither develops nor markets software
competitive with the software owned or marketed by the Employer nor
provides services that are competitive with the services provided by
the Employer provided further that in such case all other obligations
of the Employee under this agreement shall continue to apply.
For the purposes of this clause 6 f., a competitor is Microsoft and/or
Adobe product lines
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that compete directly with the Employer's products.
g. The Employee acknowledges that a breach of any of the foregoing
provisions will give rise to irreparable harm and injury
non-compensable in damages. Accordingly, the Employer or such other
party may seek and obtain injunctive relief against the breach or
threatened breach of the foregoing provisions, in addition to any
other legal remedies which may be available. The Employee further
acknowledges and agrees that the enforcement of a remedy hereunder by
way of injunction will not prevent the Employee from earning a
reasonable livelihood. The Employee further acknowledges and agrees
that the covenants contained herein are necessary for the protection
of the Employer's legitimate business interests and are reasonable in
scope and content. The Employee further agrees to notify the Employer
immediately of any breach of the Employee's obligations under this
agreement which comes to the attention of the Employee.
h. The provisions of this paragraph shall survive the termination of the
employment relationship herein and shall be enforceable not
withstanding the existence of any claim or cause of action of the
Employee against the Employer whether predicated upon this agreement
or otherwise.
7. OWNERSHIP OF PROPERTY
a. The Employee agrees that during the term of his employment with the
Employer and thereafter any and all equipment, devices or other
property provided to the Employee by the Employer shall remain the
property of the Employer. The foregoing shall include all property
(whether in electronic or hard copy form) including without limitation
computers, peripherals, software, cellular phones and any other
equipment;
b. Upon termination of this agreement, the Employee shall immediately
return to the Employer any and all of the foregoing property and shall
return to the Employer any other property which has been leased or
rented by the Employer for use by the Employee.
8. INVENTIONS, DISCOVERIES, INDUSTRIAL DESIGNS, ETC.
a. If, during the term of this agreement or any renewal hereof, the
Employee should:
i. Conceive or make any invention or discovery, whether patentable
or not;
ii. Become the author of any design capable of being protected as an
industrial design, design patent or other design protection;
iii. Become the author of any work in which copyright may exist;
iv. Develop any confidential information which may be capable or
being protected as a trade secret;
and if such invention, discovery, design, work or confidential
information relates in any way
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to the business of the Employer or any affiliated entity, such
invention, discovery, industrial design, work or confidential
information shall be the sole and exclusive property of the Employer
or any affiliated entity. The Employee agrees during the term of his
employment with the Employer and thereafter to promptly disclose to
the Employer all details and information related thereto and to
execute on demand any applications, transfers, assignments, moral
rights waivers and other documents as the Employer may consider
necessary or advisable for the purpose of vesting in the Employer or
its designate full title to and enjoyment of such invention,
discovery, industrial design, work or confidential information, and to
assist in every way possible in the prosecution of applications for
the registration of intellectual property rights relating thereto.
b. The foregoing shall apply to all improvements, inventions, know-how
and discoveries, technology, patents, copyrightable materials,
computer programs, designs, documentation, processes, techniques or
procedures in any way related to the Employer's business which are
developed, invented, or written by the Employee alone or together with
others, including all derivative works during the course of the
Employee's employment with the Employer, or at any time using the
Employer's confidential information.
c. The Employee acknowledges that from time to time, the Employer uses
the image, likeliness, voice or other representation of its Employee's
in connection with the production of corporate reports, advertising
and promotional materials and training videos. The Employee hereby
agrees that if, during the course of the Employee's employment with
the Employer, the Employee participates in such productions, the
Employer may use the Employee's image, likeness, voice or other
representation in perpetuity, in all media and in all territories for
the purposes described above without further compensation to the
Employee.
9. DISCLOSURE
a. The Employee acknowledges that the Employee is not a party to any
prior agreements which have created, or which could create in any
third party rights which are or could become inconsistent with the
Employee's obligations herein, and the Employee agrees that the
Employee will fully disclose to the Employer at the Employee's
earliest opportunity any such prior agreements as well as any claims
made or notices provided by a third party which allege any such
agreement or interest.
b. The Employee undertakes and agrees that after the termination of the
Employee's employment hereunder and prior to entering into any
contractual relationship with any other party to serve as an officer,
director, employee, partner, advisor, joint-venturer or in any other
capacity with any other business, undertaking, association,
partnership, firm, enterprise or venture, the Employee shall disclose
to such other party the terms of this Agreement,
10. APPLICABLE LAW
This agreement and the rights and obligations of the parties hereunder
shall be construed and governed in accordance with the laws of the
Province of Ontario.
11. ENTIRE AGREEMENT
This agreement contains the entire understanding and agreement between
the parties hereto with respect to the employment of the Employee and
the subject matter hereof and any and
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all previous agreements and representations, written or oral, express
or implied, between the parties hereto or on their behalf, relating to
the employment of the Employee by the Employer and the subject matter
hereof, are hereby terminated and cancelled and each of the parties
hereto hereby releases and forever discharges the other of and from
all manner of actions, causes of action, claims and demands whatsoever
under or in respect of any such prior agreements and representations.
Except as provided herein, no amendment or variation of any of the
provisions of this agreement shall be valid unless made in writing and
signed by each of the parties hereto.
12. SEVERABILITY
In the event that any provision herein or part thereof shall be deemed
void, invalid, illegal or unenforceable by a court or other lawful
authority of competent jurisdiction, this agreement shall continue in
force with respect to the enforceable provisions and all rights
accrued under the enforceable provisions shall survive any such
declaration, and any non-enforceable provision shall, to the extent
permitted by law, be replaced by a provision which, being valid, comes
closest to the intention underlying the invalid, illegal or
unenforceable provision.
13. NOTICES
Any consent, approval, notice, request, or demand required or
permitted to be given by one party to the other shall be in writing
(including, without limitation, telex or telecopy communications) to
be effective and shall be deemed to have been given on the earlier of
receipt or the fifth day after mailing by registered mail as follows:
a) If to the Employer, to it at:
Corel Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
b) If to the Employee, at:
XXXXXXXXXX XXXXXXXXX
R.R. #1
BOX 4211
XXXXXXXX, XXXXXXX
X0X 0X0
or such other address as may have been designated by written notice.
Any consent, approval, notice, request or demand aforesaid if
delivered, telexed or telecopied shall be deemed to have been given on
the date of such delivery, telex or telecopy transmission. Any such
delivery shall be sufficient, inter alia, if left with an adult person
at the above address of the Employee in the case of the Employee, and
if left with the receptionist at the above address of the Employer in
the case of the Employer. The Employer or the Employee may change its
or the Employee's address for service, from time to time, by notice
given in accordance with the foregoing.
14. NON WAIVER
The parties acknowledge and agree that a failure by either party to
enforce any particular
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provision of this agreement shall not be considered a waiver of any of
its rights and will not release the other party of any responsibility
for performance under this agreement.
15. INDEPENDENT LEGAL ADVICE
The Employee acknowledges that the Employee is aware that the Employee
has the right to obtain independent legal advice before signing this
agreement. The Employee hereby acknowledges and agrees that either
such advice has been obtained or that the Employee does not wish to
seek or obtain such independent legal advice. The Employee further
acknowledges and agrees that the Employee has read this agreement and
fully understands the terms of this agreement, and further agrees that
all such terms are reasonable and that the Employee signs this
agreement freely, voluntarily and without duress.
IN WITNESS WHEREOF the parties hereto have duly executed this
agreement as of the date first above written.
) COREL CORPORATION
)
) Per: /s/ Xxxxx Xxxxx
) -----------------------------------
) Xxxxx Xxxxx, CEO
)
)
/s/ Xxxx Xxxxx ) /s/ Xxxxxxxxxx X. Xxxxxxxxx
------------------------------------ ----------------------------------------
Xxxx Xxxxx, VP - Human Resources Xxxxxxxxxx X. Xxxxxxxxx
