Exhibit 10.1 Severance agreement with Xxxx Xxxx
Severance Agreement
This severance agreement ("Agreement") is made between Stac Software, Inc., a
Delaware company and its subsidiaries ("Stac" or the "Company"), and Xxxx Xxxx,
an individual ("Xx. Xxxx" or the "Executive").
WHEREAS, Stac's Board of Directors believes it is in the best interests
of the Company, its shareholders and employees to separate the Company into two
publicly traded companies - Stac Software, a software company, and Hi/fn, a
semiconductor company (the "Spin-off"); and
WHEREAS, the Executive has, in his capacity as Chief Executive Officer,
worked to timely accomplish the Spin-off and to retain and develop executive
management teams suited to continue the management of each of Stac Software and
Hi/fn; and
WHEREAS, as a result of the Spin-off, the Executive's position with the
Company will become redundant; and
WHEREAS, upon receipt of the Executive's resignation, the Company
wishes to receive a covenant not to compete from with Xx. Xxxx for the one year
period following the Resignation Date and to perfect the assignment of any
Company related innovations or inventions from Xx. Xxxx to the Company (Exhibit
A attached hereto);
NOW THEREFORE, in consideration of the mutual promises made herein,
Company and Executive (sometimes collectively referred to herein as the
"parties") hereby agree as follows:
1. TERMINATION AND RESIGNATION. Xx. Xxxx'x employment by Stac, including all
positions Xx. Xxxx holds at Stac, but excluding his positions as an elected
Director and Chairman of the Board of Stac will terminate effective January
4, 1999, or such other mutually agreed upon date (the "Resignation Date").
2. CONSIDERATION. In consideration of the terms of this Agreement and
contingent upon receipt of a Notice of Resignation in the form attached
hereto as Exhibit B:
(a) Stac shall pay to Xx. Xxxx an amount equal to Xx. Xxxx'x base salary
for the immediately preceding 12 months less $48,000. Any payments to
Xx. Xxxx shall be subject to all ordinary and appropriate federal,
state, or local withholdings normally required for the payment of
wages.
(b) Stac shall pay for Xx. Xxxx'x COBRA healthcare benefits (as those
benefits exist on the Resignation Date) until one year from the
Resignation Date.
(c) In consideration for the agreement to not compete as specified in
section 6 below, Stac shall pay to Xx. Xxxx a monthly retainer of
$4,000 at the beginning of each of the twelve months starting the day
immediately following the Resignation Date.. Such payments shall be
gross and Xx. Xxxx shall be responsible for all federal, state, and
local taxes related thereon.
(d) Stac shall extend Xx. Xxxx'x right to exercise the Stac stock options
he is vested in as of the Resignation Date (Exhibit C attached
hereto), at any time, in whole or part, for one year beyond the normal
termination of exercise rights of such option(s), which such normal
termination shall be ninety (90) days following Xx. Xxxx'x departure
from the Stac Board of Directors, provided such extension does not
extend beyond the term of such option(s).
(e) Xx. Xxxx shall have all rights of indemnification (including
advancement of expenses) in connection with his service as a director,
officer or employee of Stac or any of its subsidiaries, that are in
effect as of the date this Agreement is executed by Xx. Xxxx.
(f) Stac shall maintain during each of the years through December 31, 2003
minimum directors and officers insurance of $10 million covering all
customarily insurable activities of Xx. Xxxx both as an officer and a
director.
3. GENERAL AND SPECIAL RELEASE. In consideration of the terms of this
Agreement, and subject to the indemnification and insurance provisions
above, Xx. Xxxx hereby releases, acquits, and forever discharges Stac, its
officers, directors, agents, servants, insurers, employees, shareholders,
partners, successors, assigns, affiliates, customers, and clients of and
from any and all claims, liabilities and demands, causes of action, costs,
expenses, attorneys' fees, damages, indemnities and obligations of every
kind and nature, in law, equity, or otherwise, know or unknown, suspected
and unsuspected, disclosed and undisclosed, arising out of or in any way
connected with Stac's employment of Xx. Xxxx, the termination of that
employment, and Stac's performance of its obligations as Xx. Xxxx'x former
employer; claims or demands related to salary, bonuses, commissions, stock,
stock options, vacation pay, fringe benefits, expense reimbursements, or
any form of compensation; claims pursuant to any federal, state or local
law cause of action including, but not limited to, the California Fair
Employment Practices Act; the federal Civil Right Act of 1964, as amended;
the federal Age Discrimination in Employment Act of 1967, as amended; the
Americans With Disabilities Act; wrongful discharge; discrimination; fraud;
defamation; emotional distress; and breach of the implied covenant of good
faith and fair dealing. The effective date of this release shall be the
eighth day after this Agreement is signed by Xx. Xxxx.
4. AGE DISCRIMINATION. Xx. Xxxx further acknowledges that he is knowingly and
voluntarily waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA"). Xx. Xxxx also
acknowledges the consideration given for the waiver and release in the
preceding paragraphs hereof is in addition to anything of value to which he
was already entitled. Xx. Xxxx hereby provides the further acknowledgment
that he is advised by this writing, as required by the Older Workers
Benefit Protection Act, that: (a) his waiver and release does not apply to
any rights or claims that may arise after the effective date of this
release; (b) he should consult with an attorney prior to executing his
release (although he may voluntarily choose not to do so); (c) he may have
at least twenty-one (21) days to consider this Agreement (although he may
by his own choice execute this release earlier); (d) he has seven (7) days
following the execution of this release to revoke the release; and (e) this
Agreement shall not be effective until the date upon which the revocation
period has expired, therefor making the effective date the eighth day after
this release is signed by Xx. Xxxx.
5. SECTION 1542 AND RELATED LAW. Xx. Xxxx hereby acknowledges that he has read
and understands Section 1542 of the Civil Code of the State of California
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."
Xx. Xxxx hereby expressly waives and relinquishes all rights and benefits
under that section and any similar law or common law principle of similar
effect of any state or territory of the United States with respect to the
claims released hereby.
6. COVENANT NOT TO COMPETE - In consideration of the retainer being paid to
Xx. Xxxx pursuant to this Agreement, Xx. Xxxx agrees that during the one
year period ending December 31, 1999, he will not directly or indirectly as
an individual proprietor, partner, corporation, stockholder, officer,
employee, consultant, director, joint venturer, investor, lender, or in any
other capacity (except as the holder of not more than one percent (1%) of
the total outstanding stock of a publicly held company), engage in any
business activity that involves development, production, marketing or
selling of products, processes, techniques or technology which are
identical to, substantially similar to or directly competitive with the
products of the Company.
7. NO ADMISSION OF LIABILITY OR OBLIGATION BY STAC. Xx. Xxxx hereby
acknowledges that this Agreement is a compromise settlement of potential
claims and that the promises in, and consideration of, this Agreement shall
not be construed to be an admission of any liability or obligation
whatsoever by Stac to Xx. Xxxx or to any person whomsoever.
8. CONFIDENTIALITY. Xx. Xxxx hereby agrees and acknowledges that he will keep
the terms, amount and fact of this Agreement completely confidential, and
that he will not hereafter disclose any such information to anyone other
than his immediate family and professional representatives unless required
to do so. Prior to any disclosure of the terms, amount or fact of this
agreement to any other person, Xx. Xxxx shall inform that person of the
existence of this confidentiality requirement, and obtain the agreement of
that person to be bound by this confidentiality clause.
9. ASSIGNMENT OR TRANSFER. Xx. Xxxx hereby represents to Stac that he has not
previously assigned or transferred any interest in any of the claims
released herein.
10. TRANSFER OF ASSETS IN POSSESSION. Stac shall assign all right, title and
interest in and to those Stac assets in his personal possession listed in
Exhibit D to Xx. Xxxx on the Resignation Date.
11. CALIFORNIA LAW. 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.
IN WITNESS WHEREOF, I have carefully read this Agreement, understand its
terms and conditions, and agree to be bound thereby.
-------------------------------------------- ---------------------------
Xxxxxxx Xxxxxxx Date
Chairman - Compensation Committee
-------------------------------------------- ---------------------------
Xxxx Xxxx Date
STAC, INC.
EXHIBIT A
PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
In consideration of this Severance Agreement, of which this is a part, I hereby
agree as follows:
1. RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. I will hold in strictest
confidence and will not disclose, use, lecture upon or publish any of the
Company's Proprietary Information (defined below). I hereby assign to the
Company any rights I may have or acquire in such Proprietary Information and
recognize that all Proprietary Information shall be the sole property of the
Company and its assigns and the Company and its assigns shall be the sole owner
of all trade secret rights, patent rights, copyrights, mask work rights and all
other rights throughout the world (collectively, "Proprietary Rights") in
connection therewith.
The term "Proprietary Information" shall mean trade secrets, confidential
knowledge, data or any other proprietary information of the Company. By way of
illustration but not limitation, "Proprietary Information" includes (a) trade
secrets, inventions, mask works, ideas, processes, formulas, source and object
codes, data, programs, - other works of authorship, know-how, improvements,
discoveries, developments, designs and techniques (hereinafter collectively
referred to as "Inventions"); and (b) information regarding plans for research,
development, new products, marketing and selling, business plans, budgets and
unpublished financial statements, licenses, prices and costs, suppliers and
customers; and information regarding the skills and compensation of other
employees of the Company.
2. THIRD PARTY INFORMATION. I understand, in addition, that the Company has
received and in the future will receive from third parties confidential or
proprietary information ( Third Party Information") subject to a duty on the
Company's part to maintain the confidentiality of such information and to use it
only for certain limited purposes. I will hold such Third Party Information in
my possession in confidence and will not disclose (to anyone other than Company
personnel who need to know such information in connection with their work for
the Company) or use, Third Party Information unless expressly authorized by an
officer of the Company in writing.
3. ASSIGNMENT OF INVENTIONS.
A. ASSIGNMENT. I hereby assign to the Company all my right, title and
interest in and to any and all Inventions (and all Proprietary Rights with
respect thereto) whether or not patentable or registrable under copyright
or similar statutes, made or conceived or reduced to practice or learned by
me, either alone or jointly with others, during the period of my employment
with the Company. Inventions assigned to or as directed by the Company by
this paragraph 3 are hereinafter referred to as "Company Inventions." I
recognize that this Agreement does not require assignment of any invention
which qualifies fully for protection under Section 2870 of the California
Labor Code (hereinafter "Section 2870") (or any similar or comparable
statute or law in effect in the state I am employed), which provides as
follows:
1. 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
THAT THE EMPLOYEE DEVELOPED ENTIRELY ON HIS OR HER OWN TIME WITHOUT
USING THE EMPLOYER'S EQUIPMENT, SUPPLIES, FACILITIES, OR TRADE SECRET
INFORMATION EXCEPT FOR THOSE INVENTIONS THAT EITHER:
a) RELATE AT THE TIME OF CONCEPTION OR REDUCTION TO PRACTICE
OF THE INVENTION TO THE EMPLOYER'S BUSINESS, OR ACTUAL OR
DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT OF THE EMPLOYER.
b) RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE
EMPLOYER.
2. TO THE EXTENT A PROVISION IN AN EMPLOYMENT AGREEMENT PURPORTS
TO REQUIRE AN EMPLOYEE TO ASSIGN AN INVENTION OTHERWISE EXCLUDED FROM
BEING REQUIRED TO BE `ASSIGNED UNDER SUBDIVISION (i), THE PROVISION IS
AGAINST THE PUBLIC POLICY OF THIS STATE AND IS UNENFORCEABLE.
B. GOVERNMENT. I also assign to or as directed by the Company all my
right, title and interest in and to any and all Inventions, full title to
which is required to be in the United States by a contract between the
Company and the United States or any of its agencies.
C. WORKS FOR HIRE. I acknowledge that all original works of authorship
which are made by me (solely or jointly with others) within the scope of my
employment and which are protectable by copyright are "works made for
hire," as that term is defined in the United States Copyright Act (17
U.S.C., Section 101).
4. ENFORCEMENT OF PROPRIETARY RIGHTS. I will assist the Company in every
proper way to obtain and from time to time enforce United States and foreign
Proprietary Rights relating to Company Inventions in any and all countries. To
that end I will execute, verify and deliver such documents and perform such
other acts as the Company may reasonably request for use in applying for,
obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary
Rights and the assignment thereof. In addition, I will execute, verify and
deliver assignments of such Proprietary Rights to the Company or its designee.
My obligation to assist the Company with respect to Proprietary Rights relating
to such Company Inventions in any and all countries shall continue beyond the
termination of my employment, but the Company shall compensate me at .a
reasonable rate after my termination for the time actually spent by me at the
Company's request on such assistance.
In the event the Company is unable for any reason, after reasonable effort, to
secure my signature on any document needed in connection with the actions
specified in the preceding paragraph, I
hereby irrevocably designate and appoint the Company and its duly authorized
officers and agents as my agent and attorney in fact, which appointment is
coupled with an interest, to act for and in my behalf to execute, verify and
file any such documents and to do all other lawfully permitted acts to further
the purposes of the preceding paragraph with the same legal force and effect as
if executed by me. I hereby waive and quitclaim to the Company any and all
claims, of any nature whatsoever, which I now or may hereafter have for
infringement of any Proprietary Rights assigned hereunder to the Company.
5. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I
will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company Inventions,
Third Party Information or Proprietary Information of the Company. I further
agree that any property situated on the Company's premises and owned by the
Company, including disks and other storage media, filing cabinets or other work
areas, is subject to inspection by Company personnel at any time with or without
notice. Prior to leaving, I will cooperate with the Company in completing and
signing the Company's current termination statement for technical and management
personnel.
6. NOTICES. Any notices required or permitted hereunder shall be given to
the appropriate party at the address specified below or at such other address as
the party shall specify in writing. Such notice shall be deemed given upon
personal delivery to the appropriate address or if sent by certified or
registered mail, three (3) days after the date of mailing.
7. GENERAL PROVISIONS.
A. GOVERNING LAW. This Agreement will be governed by and construed
according to the laws of the State of California.
B. ENTIRE AGREEMENT. This Agreement is the final, complete and
exclusive agreement of the parties with respect to the subject matter
hereof and supersedes and merges all prior discussions between us. No
modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, will be effective unless in writing and signed
by the party to be charged. Any subsequent change or changes in my duties,
salary or compensation will not affect the validity or scope of this
Agreement. As used in this Agreement, the period of my employment includes
any time during which I may be retained by the Company as a consultant.
C. SEVERABILITY. If one or more of the provisions in this Agreement
are deemed unenforceable by law, then such provision will be deemed
stricken from this Agreement and the remaining provisions will continue in
full force and effect.
D. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will
be for the benefit of the Company, its successors, and its assigns.
E. SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the
Company to any successor in interest or other assignee.
F. WAIVER. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of
any other right. The Company shall not be required to give notice to
enforce strict adherence to all terms of this Agreement.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.
Dated: 12/23/98 /s/ Xxxx X. Xxxx
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Signature
Xxxx X. Xxxx
---------------------------
(Printed Name)
STAC, INC.
EXHIBIT B
NOTICE OF RESIGNATION
To: The Board of Directors of Stac, Inc.
I hereby tender my resignation as Chief Executive Officer of Stac, Inc.
Pursuant to the terms and conditions of the Severance Agreement between Stac and
me, this resignation becomes effective as of the date below.
/s/ Xxxx X. Xxxx 12/23/98
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Xxxx X. Xxxx Date
STAC, INC.
EXHIBIT C
STOCK OPTIONS OUTSTANDING
CLOSING STATEMENT STAC
ID: 953825313
00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xx 00000
(000) 000-0000
TERMINATION DATE 1/4/99
--------------------------------------------------------------------------------
XXXX XXXX ID: 000-00-000
--------------------------------------------------------------------------------
EXERCISABLE OPTIONS
Vesting Late
Option Option Plan/ Option Shares Shares Stop Shares Date to
Number Date Type Price Granted Exercised Date Exercisable Total Price Exercise
-------- -------- -------- ------- --------- --------- ------- ----------- ------------- --------
000015 7/27/89 1989/ISO $0.0700 844,200 844,200 1/4/99 0 $0.00
000135 10/22/93 1992/NQ $0.6500 675,360 105,525 1/4/99 569,835 $370,392.75
000921 10/ 1/96 1992/ISO $1.9000 263,813 0 1/4/99 158,287 $300,745.30
000922 10/ 1/96 1992/NQ $1.9000 918,068 0 1/4/99 506,519 $962,386.10
----------- -------------
TOTALS 1,234,641 $1,633,524.15
STAC, INC.
EXHIBIT D
TRANSFERRED ASSETS IN XX. XXXX'X POSSESSION
Dell Latitude Laptop PC
Serial #: 7147346BYK8850A
