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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT entered into as of the 16th day of
January, 1996 by and between QUARTERDECK CORPORATION, a Delaware Corporation
(hereinafter referred to as "Company"), and XXXXXXX X. XXXXXXXX (hereinafter
referred to as "Executive").
1. EMPLOYMENT
1.1 Company hereby employs Executive to render services
during the term of this Agreement as Senior Vice President, General Counsel and
Corporate Secretary of the Company and Executive hereby accepts such employment
and agrees to perform his obligations and agreements herein set forth. During
the term of this Agreement, Executive shall be a full-time employee of the
Company and shall devote all of his business time and attention to the
performance of his duties hereunder. Notwithstanding the foregoing, Executive
will be permitted to engage in other business activities and charitable
activities that do not materially interfere with his duties to the Company. In
addition, Executive will be permitted to wind down his affairs as a partner of
the law firm of Xxxxxx, Xxxx & Xxxxxxxx for a reasonable period of time.
1.2 Executive shall be the senior officer in the legal
department and shall report directly to the Chief Executive Officer of the
Company.
2. COMPENSATION
2.1 Company shall pay to Executive a base salary
("Salary") of $170,000 per annum. Salary shall be payable in equal bi-weekly
installments, less applicable withholdings and deductions, in accordance with
Company's normal payroll practice. At the end of each year there shall be a
good faith review of Salary and Company may, in its sole discretion, increase
(but not decrease) the Salary at that time.
2.2 In addition to the Salary, Executive shall be
entitled to a bonus ("Bonus") of $110,000 multiplied by a "Multiplier." The
Multiplier will be based upon achievement of certain reasonable individual and
department goals proposed by Executive and the Bonus shall be paid on a
quarterly basis. (The Salary and the Bonus shall be referred to as the "Base
Compensation"). Executive shall receive an annual cost of living increase with
respect to the Base Compensation.
3. TERM
3.1 This Agreement shall commence as of the date of this
Agreement set forth above and, unless earlier terminated or extended in
accordance with the terms hereof, shall expire on the Expiration Date. The
"Expiration Date" shall initially be January 16, 2000; provided, however, that
commencing (and including) January 16, 1998, the Expiration Date shall be
extended by one day for each day that expires under this Agreement.
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4. STOCK OPTIONS
4.1 Company shall grant to Executive as of the date of
this Agreement options (the "Options") to purchase 100,000 shares of common
stock of the Company, $.001 par value per share ("Common Stock").
4.2 Executive shall be eligible for additional option
grants in the future commensurate with Executive's status as a senior executive
officer of the Company at least comparable to grants made to other senior
executives of the Company. The amount of any future option grants shall be at
the discretion of the Board of Directors or the Compensation Committee thereof.
5. BENEFITS
5.1 Executive shall be entitled to participate in any
benefit plan generally available to executive officers including, by way of
example, medical and dental plans for Executive and his family, vacation, the
Company's 401(k) Plan and the like. Company agrees to use its best efforts to
provide adequate health insurance coverage to Executive and Executive's spouse
and children; provided, however, if the Company is unable to obtain such
coverage with respect to Executive's spouse due to the existence of a
pre-existing condition it shall promptly reimburse Executive, on an after tax
basis, for all medical costs (including, but not limited to, doctors' fees and
expenses, hospitalization, treatment, medication and the like) of Executive's
spouse.
5.2 Company agrees to pay or reimburse Executive for
reasonable business, travel and entertainment expenses in accordance with
Company policy for executive officers upon the presentation of itemized
statements of such expenses.
5.3 Company shall provide Executive a reasonable
allowance for legal books and publications, seminars, memberships in
organizations, bar dues and similar fees for Executive and persons in the legal
department designated by Executive.
6. RELOCATION ALLOWANCE
6.1 Executive shall receive, in order to offset the
anticipated increases in mortgage and property taxes associated with owning a
residence in the West Los Angeles County area, an annual cost of living
allowance of not to exceed 10% of his Base Compensation, up to a cumulative
total of $90,000 over three years (the "Cost of Living Allowance"). The Cost
of Living Allowance shall be paid quarterly, within 30 days after the end of
each fiscal quarter, for up to three years beginning with the first fiscal
quarter after relocation. The Cost of Living Allowance shall terminate upon
the earlier to occur of (1) payments totaling $90,000 being made to Executive
under this Section 6.1 or (2) the price of the Company's Common Stock reaching
$45.00 after at least 50% of the Options have vested at a time when Executive
is not prohibited from selling shares of Common Stock under the Company's
Xxxxxxx Xxxxxxx Policy, under "pooling restrictions" or otherwise under any
agreement or applicable law.
6.2 Executive shall be reimbursed for all reasonable and
actual moving costs associated with the relocation of Executive's personal
residence to the West Los Angeles County area and Executive's office to the
Company's facilities. To the extent the aforementioned reimbursements are not
excludable from Executives gross income or deductible by Executive as qualified
moving expense for federal income tax purposes, Executive shall be paid an
amount in cash equal to a gross up factor calculated by dividing
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the expenses includable in gross income and not deductible by Executive by 58%
(assumes a 42% personal income tax rate) and subtracting from the result the
reimbursed expenses.
6.3 Executive will be reimbursed for rent (up to $4,200
per month for up to six months) for a home in the West Los Angeles County area
and for a security deposit to up to $8,400). The Company will provide
Executive with a loan bearing interest at the applicable federal rate
determined under Section 1274(d) of the Internal Revenue Code for purposes of
making a down payment on a residence in the West Los Angeles County area.
Executive will (if permitted by the senior lender) grant to the Company a
second lien on such residence to secure the loan.
6.4 Company shall reimburse Executive for all commissions
(including standard real estate brokerage commissions) and other costs and fees
incurred in connection with the lease and/or sale of his current residence.
7. TERMINATION
7.1 Executive's employment shall be deemed to have
terminated upon (i) Executive's death or Disability, (ii) Executive's
termination by the Company for Cause, or (iii) after one year from the date
hereof upon 30 days written notice of Executive's election to terminate his
employment. "Disability" for purpose of this paragraph 7.1 shall mean
Executive's inability to perform the essential functions of his position, with
reasonable accommodation, due to physical or mental disability, resulting in
Executive's absence from his duties hereunder on a full time basis for
twenty-six (26) consecutive weeks. "Cause" for purposes of this paragraph
shall mean a termination on the grounds of the Executive's personal gross
neglect of duties, willful misconduct or willful violation of any law which
subjects Employer or Executive to a felony conviction. Employer has the right
to terminate for Cause at any time. In the event of termination pursuant to
this paragraph 7.1, Base Compensation and other benefits due Executive
hereunder shall be prorated so that only that portion due for services rendered
prior to termination shall be payable hereunder.
7.2 In the event (i) Xxxxxx Xxxxxxxxx ceases to be the
Chief Executive Officer of the Company and within 60 days of such event
Executive gives written notice of election to terminate this Agreement, or (ii)
a majority of the stock of the Company is acquired by another person or entity
or the Company is merged with another entity, or substantially all of the
assets of the Company are sold to another entity or a "Change in Control" (as
defined in the Company's 1990 Stock Option Plan) occurs, and within 60 days of
such event Executive gives written notice of election to terminate this
Agreement, Executive shall be entitled to the following benefits:
(i) Twelve months Salary plus an amount
equal to the maximum Bonus Executive could receive for such 12 month
period, payable in bi-weekly installments without offset or duty to
mitigate;
(ii) COBRA insurance coverage for
eighteen months, payments for such coverage to be made by the Company
monthly; and
(iii) A lump sum payment equal to the
amount by which $90,000 exceeds the cumulative Cost of Living
Allowance actually paid as of termination date; provided that if the
price of the Company's stock is in excess of
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$45.00 at such time and Executive is not then prohibited from selling
shares of Common Stock under the Company's Xxxxxxx Xxxxxxx Policy,
under "pooling restrictions" or otherwise under any agreement or
applicable law, no amount shall be payable pursuant to this
subparagraph (iii).
(iv) Executive shall be immediately
vested in 50% of Executive's unvested stock options outstanding on the
date of termination.
7.3 In the event Company terminates Executive without
Cause or Executive terminates his employment for Good Reason, Executive shall
be entitled to, in addition to all remedies under applicable law, all
compensation and benefits provided under this Agreement for the full term
hereof, without offset or duty to mitigate. "Good Reason" shall mean (i) the
Company relocates outside of the Los Angeles area, (ii) the Company materially
breaches this Agreement, or (iii) Executive is assigned duties by the Company
which constitutes a substantial diminution of his duties hereunder.
8. GENERAL PROVISIONS
8.1 Executive shall execute and deliver with this
Agreement, the Company's Standard Executive Confidentiality Agreement.
8.2 All notices and demands shall be in writing and shall
be served personally, telegraphically or via facsimile or by certified mail.
Service shall be deemed conclusively made at the time of service if personally
served, at the time the telegraph agency confirms to the sender delivery
thereof to the addressee if served telegraphically, at time of confirmation of
receipt if via facsimile, and twenty-four hours after deposit thereof properly
addressed and postage prepaid in the United States mail, if served by certified
mail. All notices or demands shall be given at the respective addresses of the
parties hereto as set forth in this Agreement. Any party may, by written
notice in compliance with this paragraph, alter or change the address or the
identity of the person to whom notice, or copy thereof, is to be sent.
8.3 A waiver in writing by either party of any of the
terms and conditions of this Agreement in any one instance shall not be deemed
or construed to be a
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waiver of such term or condition for the future, or of any subsequent breach
hereof. All remedies, rights, undertakings, obligations and agreements
contained in this Agreement shall be cumulative and none of them shall be in
limitation of any other remedy, right, undertaking, obligation or agreement of
either party.
8.4 All provisions of this Agreement which either
expressly or by implication survive any termination or expiration hereof shall
continue in full force and effect subsequent to said termination or expiration.
8.5 This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
entered into and fully to be performed therein.
8.6 The parties shall execute the Company's form of
Indemnification Agreement for officers and directors.
8.7 If any provision of this Agreement, as applied to any
party or to any circumstance, shall be adjudged by a court to be void, invalid
or unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of any such provision in any other circumstance, or
the validity or enforceability of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
QUARTERDECK CORPORATION
By:/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
Chief Executive Officer
00000 Xxxxxxxx Xxx, 0xx Xxxxx
Xxxxxx xxx Xxx, Xxxxxxxxxx 00000
EXECUTIVE
By:/s/ Xxxxxxx X. Xxxxxxxx
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000 Xxxxxxxx Xxxxx
Xx Xxxxxx, Xxxxxxxxxx 00000
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