Exhibit 10.81

 

SEPARATION AND

MUTUAL RELEASE AGREEMENT

 

This Separation and Mutual Release Agreement (the “Agreement”) is entered into
as of December 2, 2005, by and between Borland Software Corporation, a Delaware
corporation (the “Company”), and Scott J. Arnold (the “Executive”).

 

In consideration of the mutual covenants and agreements set forth below, the
parties hereto, intending to be legally bound hereby, agree as follows:

 

1. Executive’s last day of employment with the Company will be December 2, 2005
(the “Separation Date”). This Agreement will become effective upon the
expiration of any revocation period required in connection with the release of
claims set forth herein, or upon the Separation Date, whichever is later (the
“Effective Date”).

 

2. In exchange for the release of the claims provided for below, the Company
will provide Executive with a total severance payment of $765,000, less
applicable taxes and other withholdings as determined by the Company’s payroll
department to be paid as follows: (i) $450,000 shall be paid within five
(5) business days following the Effective Date, and (ii) $315,000 shall be paid
six (6) months following the Effective Date.

 

3. Upon the Effective Date of this Agreement, Executive shall also be entitled
to the following:

 

  (a) Executive shall be entitled to payment of COBRA premiums necessary to
continue the group health insurance coverages (medical, dental and vision, but
not disability or life) for Executive and his dependents through the earlier of
(i) December 2, 2006, if Executive elects to continue such coverage under
federal COBRA law (it being understood that such payments will be made to the
Company’s health insurance provider), or (ii) the date on which Executive and
his eligible dependents first becomes enrolled in a new group health insurance
program with another employer. Executive agrees to promptly notify the Borland
Benefits Department, in the event that he becomes enrolled in a new group health
insurance program;

 

  (b) retain, for his personal use, the possession of, and the Company hereby
transfers ownership of, the Company-issued laptop computer used by Executive
prior to the Separation Date together with the related loaded software,
accessories and power cords, provided, however, that the Company shall image the
laptop prior to such transfer and Executive shall remove all proprietary and
confidential information that exists on such computer;

 

  (c) retain, for his personal use, the possession of, and the Company hereby
transfers ownership of, a Borland watch previously provided to Executive;

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  (d) the Company agrees that it will pay Executive’s reasonable attorneys’ fees
up to a maximum of $5,000, and will pay those amounts directly to Fenwick & West
upon presentation of its invoice for services rendered to Executive.

 

4. Executive agrees that except for the amount described above, the Company has
paid to Executive on the Separation Date all compensation, including, but not
limited to, any and all wages, commissions and bonuses that Employee earned
during his employment with the Company until and including the Separation Date.
Except as set forth in this Agreement, the Executive shall not be entitled to
any further monetary payments or other benefits of any kind, including, but not
limited to, any equity-based compensation from the Company.

 

5. Executive, on behalf of himself and his successors, assigns, heirs and any
and all other persons claiming through the Executive, if any, and each of them,
shall and does hereby forever relieve, release, and discharge the Company and
its affiliates and their respective predecessors, successors, assigns,
representatives, affiliates, parent corporations, subsidiaries (whether or not
wholly-owned), divisions, and their officers, directors, agents and employees,
and each of them, in any and all capacities, from any and all claims, debts,
liabilities, demands, obligations, liens, promises, acts, agreements, costs and
expenses (including, but not limited to, attorneys’ fees), damages, actions and
causes of action, of whatever kind or nature, including, without limitation, any
statutory, civil or administrative claim, or any claim, arising out of acts or
omissions occurring before the execution of this Separation and Mutual Release
Agreement, whether known or unknown, suspected or unsuspected, fixed or
contingent, apparent or concealed (collectively referred to as “claims”),
including, but not limited to, any claims based on, arising out of, related to
or connected with the Executive’s employment or the termination thereof, and any
and all facts in any manner arising out of, related to or connected with the
Executive’s employment with, or termination of employment from, the Company and
its subsidiaries and affiliates, including, but not limited to, any claims
arising from rights under federal, state, and local laws prohibiting
discrimination on the basis of race, national origin, sex, religion, age,
marital status, pregnancy, handicap, ancestry, sexual orientation, or any other
form of discrimination, and any common law claims of any kind, including, but
not limited to, contract, tort, and property rights including, but not limited
to, breach of contract, breach of the implied covenant of good faith and fair
dealing, tortious interference with contract or current or prospective economic
advantage, fraud, deceit, misrepresentation, defamation, wrongful termination,
infliction of emotional distress, breach of fiduciary duty, and any other common
law claim of any kind whatever.

 

6.

In addition to the release set forth above, the Executive hereby voluntarily and
knowingly waives all rights or claims arising under the Federal Age
Discrimination in Employment Act. This waiver is given only in exchange for
consideration in addition to anything of value to which the Executive would have
been entitled absent this Separation and Mutual Release Agreement. Such waiver
does not waive rights or claims which may arise after

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the date of execution of this Separation and Mutual Release Agreement. The
Executive acknowledges that: (i) this waiver is written in a manner calculated
to be understood by him; (ii) he has been advised to consult with an attorney
before executing this release; (iii) he was given a period of twenty-one days
within which to consider this release; and (iv) to the extent he executes this
release before the expiration of the twenty-one-day period, he does so knowingly
and voluntarily and only after consulting his attorney. The Executive shall have
the right to cancel and revoke this release during a period of seven days
following his execution of this release, and this release shall not become
effective, and no money or other benefits shall be paid to the Executive
pursuant to this Agreement or under his employment agreement with the Company
dated as of October 2, 2003 (the “Employment Agreement”), until the day after
the expiration of such seven-day period (the “Revocation Date”). The seven-day
period of revocation shall commence upon the date of execution of this
Separation and Mutual Release Agreement. In order to revoke this release, the
Executive shall deliver to the Company, prior to the expiration of said
seven-day period, a written notice of revocation. Upon such revocation, this
release shall be null and void and of no further force or effect.

 

7. Nothing herein shall be deemed to release the Company in respect of (i) the
Executive’s rights under his Employment Agreement or any other agreement with
the Company (including, but not limited to, any stock option agreements or stock
purchase agreements), (ii) any rights of the Executive to indemnification or
reimbursement under the Company’s by laws, articles of incorporation or
directors and officers liability insurance policies, or pursuant to applicable
law, (iii) any rights the Executive may have to vested benefits under any
Company employee benefit plan or program, and (iv) for the avoidance of doubt,
the applicable Director’s and Officers coverage (D&O Coverage) provided by the
Company on behalf of the Executive shall continue in full force and effect to
the fullest extent permitted by the terms and conditions of such D&O policy.

 

8. The Executive acknowledges that he has read section 1542 of the Civil Code of
the State of California, which states in full:

 

A general release does not extend to claims which the creditor does not know or
suspects to exist in his or her favor at the time of executing the release,
which if known by him or her must have materially affected his or her settlement
with the debtor.

 

9. The Executive waives any rights that he has or may have under section 1542 of
the Civil Code of the State of California to the full extent that he may
lawfully waive such rights pertaining to this release, and affirms that he is
releasing all known and unknown claims that he has or may have against any of
the parties referred to herein.

 

10.

The Company, on behalf of itself and its affiliates, their respective successors
and assigns, and any and all other persons claiming through any and each of
them, shall and does hereby forever relieve, release, and discharge the
Executive and his successors, assigns, and heirs, from any and all claims,
debts, liabilities, demands, obligations, liens,

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promises, acts, agreements, costs and expenses (including, but not limited to,
attorneys’ fees), damages, actions and causes of action, of whatever kind or
nature, including, without limitation, any statutory, civil or administrative
claim, or any claim, arising out of acts or omissions occurring before the
execution of this Separation and Mutual Release Agreement, whether known or
unknown, suspected or unsuspected, fixed or contingent, apparent or concealed
(collectively referred to as “claims”), including, but not limited to, any
claims based on, arising out of, related to or connected with the subject matter
of the Executive’s employment or the termination thereof, and any and all facts
in any manner arising out of, related to or connected with the Executive’s
employment with, or termination of employment from, the Company and its
subsidiaries and affiliates, including, but not limited to, statutory and common
law claims of any kind, including, but not limited to, contract, tort, and
property rights including, but not limited to, breach of contract, breach of the
implied covenant of good faith and fair dealing, tortious interference with
contract or current or prospective economic advantage, fraud, deceit,
misrepresentation, defamation, wrongful termination, infliction of emotional
distress, breach of fiduciary duty, and any other common law claim of any kind
whatever.

 

11. The Company waives any rights that it may have under section 1542 of the
Civil Code of the State of California to the full extent that it may lawfully
waive such rights pertaining to this release, and affirms that it is releasing
all known and unknown claims that it has or may have against the Executive and
his successors, assigns and heirs.

 

12. Nothing herein shall be deemed to release the Executive in respect of the
Company’s rights under the Employee Confidentiality and Assignment of Inventions
Agreement attached hereto as Exhibit A and incorporated by reference therein,
and any rights the Company has under the Employment Agreement.

 

13. All materials that the Executive is required to turn over to the Company
upon termination of his employment with the Company, pursuant to paragraph 7 of
the Employee Confidentiality and Assignment of Inventions Agreement shall be
turned over to the Company not later than December 9, 2005.

 

14. This Agreement is binding on and may be enforced by the Company and its
successors and assigns and is binding on and may be enforced by the Executive
and his heirs and legal representatives. Any successor to the Company or any
purchaser of substantially all of its business (whether by purchase, merger,
consolidation or otherwise) will be bound by all of the Company’s obligations
under this Agreement, including, without limitation, the provision of the
severance benefits payable pursuant to Section 2 hereof and the provision of
COBRA premiums pursuant to Section 3(a) hereof.

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15. This Agreement represents the full and complete understanding and agreement
between the Company and the Executive regarding his separation from the Company,
and supersedes all other agreements or understandings, including any provisions
regarding separation contained in the Employment Agreement. This Agreement may
only be waived or amended in writing, signed by both the Company and the
Executive.

 

Dated: December 2, 2005

 

/s/ Scott J. Arnold

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    SCOTT J. ARNOLD

Dated: December 2, 2005

  BORLAND SOFTWARE CORPORATION     By:  

/s/ Kenneth Hahn

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    Its:   Chief Financial Officer

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Exhibit A

 

Employee Confidentiality and Assignment of Inventions Agreement

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LOGO [g54217img01.jpg]  

Employee Confidentiality

And Assignment of Inventions Agreement

 

 

You are being hired and paid to perform services as an employee of Borland
Software Corporation (“Borland”) in a capacity in which you may have access to,
or contribute to, the production of highly sensitive and valuable information
and material. This information and material has been developed or obtained by
Borland by the investment of significant time, effort, and expense, and provides
Borland with a significant competitive advantage in its business. Borland’s
relationship with its employees is based on trust, and each individual who works
for Borland is expected to maintain a high degree of loyalty to Borland and
professionalism in carrying out their responsibilities for the company. We are
in a highly competitive business and we want to succeed by the rules, “fair and
square.” For these reasons, we ask that you carefully read, initial where
indicated, sign, and adhere to the following agreement:

 

1. Please read the attached definition of “Borland Confidential Information” in
Exhibit A.

 

In consideration for your employment and the compensation to be paid to you for
your services, you agree to keep Borland Confidential Information in strict
confidence during the term of your employment and for three (3) years after such
term of employment. SJA (initial)

 

This means that you agree not to reveal, report, publish, disclose, transfer or
use, directly or indirectly, for any purposes whatsoever, any Borland
Confidential Information, except in the course of your work for Borland. This
obligation of confidentiality commences on your first day of employment and
continues for three years after your employment with Borland has ended.

 

2. Borland is interested in employing you because of your skills and abilities —
not because of any trade secrets or confidential information you may have
learned elsewhere. Thus, it is Borland’s policy to avoid situations where
information or materials might come into our hands that are considered
proprietary by individuals or companies other than Borland. It is important that
you take care not to bring, even inadvertently, any books, drawings, notes,
materials, etc., except your own personal effects, that you may have in your
possession relating to any of your former employers.

 

You agree not to disclose to Borland any confidential or proprietary information
belonging to any previous employer or others. SJA (initial)

 

3. If you know of any obligations or information that may conflict with your
work for Borland, let us know.

 

You agree to inform Borland of any apparent conflict between your work for
Borland and (i) any obligations you may have to preserve the confidentiality of
another’s proprietary information or materials, (ii) any rights you claim to any
patent, copyrights, trade secrets, or other inventions or ideas, or (iii) any
patent, copyrights, trade secrets, inventions or ideas of any person or company
not connected with Borland before performing that work. SJA (initial)

 

Without such notice, Borland may conclude that no such conflict exists. To the
extent the conflict relates to your personal rights and you fail to notify
Borland thereof, you agree thereafter to make no claim against Borland with
respect thereto. Borland shall receive all such disclosures in confidence.

 

4. Borland Confidential Information, and whatever you create while working at
Borland, including all ideas, procedures, processes, designs, inventions,
discoveries, technologies, know-how, show-how, documents and works of
authorship, is owned by Borland. In part, that is what we’re paying you for.

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You agree that, upon creation, all right, title, and interest in any such
developments, including Borland Confidential Information, is and shall remain
the exclusive property of Borland. To the extent that it is required to ensure
compliance with the foregoing sentence, you assign all right title and interest
in and to any patents, copyrights, or trademarks or other intellectual property
rights in any such developments to Borland. An assignment of copyright hereunder
shall include, but is not limited to, all rights of paternity, integrity,
disclosure and withdrawal that may be known as or referred to as “moral rights”
(collectively “Moral Rights”). To the extent such Moral Rights cannot be
assigned under applicable law and to the extent the following is allowed by the
laws in the various countries where Moral Rights exist, I hereby waive such
Moral Rights and consent to any action of the Company that would violate such
Moral Rights in the absence of such consent. I will confirm any such waivers and
consents from time to time as requested by Borland. Any copyrightable material
created as a result of any work you do for Borland during the term of your
employment shall be considered a “work made for hire” of Borland under the U.S.
Copyright Act, 17 U.S.C. 101. You agree that you will sign any papers necessary
with respect to patents, copyrights, or trademarks to confirm and protect the
interest of Borland in such developments and Confidential Information. Further
you agree not to file for or obtain in your name any patent, copyright or
trademark registration covering any developments made during your employment
with Borland, unless Borland approves such filing in writing in advance. You
hereby irrevocably transfer all ownership of such developments (including any
and all patent rights, copyrights, trade secret rights, and other proprietary
rights therein) to Borland. You agree immediately to disclose to Borland all
protectable developments, including Borland Confidential Information, developed
in whole or in part by you during the term of your employment with Borland. If
Borland is unable for any reason whatsoever, including your mental or physical
incapacity, to secure your signature on a document to apply for or pursue
patent, trademark or copyright registrations or any document transferring
ownership thereof, resulting from your work for Borland, you hereby irrevocably
designate and appoint Borland and its duly authorized officers and agents, as
your agents and attorneys-in-fact to act for and in behalf of you, and instead
of you, to execute and file any documents and to do all other lawful acts to
further the above purposes with the same legal force and effect as if executed
by you. This appointment is coupled with an interest in and to the relevant
inventions and works of authorship and shall survive your death or disability.
SJA (initial)

 

5. But we do not own everything you do while you are employed by Borland. The
foregoing shall not apply to any invention, work of authorship, protectable
development or other thing or idea whatsoever for which no equipment, supplies,
facilities, or Borland Confidential Information was used, which was developed
entirely on your own time, and which does not in any material way (i) relate to
the business of Borland, (ii) relate to Borland’s actual or demonstrable
anticipated research or development, or (iii) result from any work performed by
you for Borland. This confirms that we recognize your rights under Section 2870
of the California Labor Code (or similar rights if you work for us in another
state).

 

You agree that you have provided a complete list in Exhibit B of all patents,
patent applications or inventions that you believe to be patentable and which
are owned by you or by others, conceived or made by you prior to your employment
by Borland or during your employment with Borland which meet the criteria set
forth in the preceding paragraph. With respect to patent applications or
inventions of others that you are required to maintain in confidence, the
listing should be general, e.g., by title, so that no confidential information
of others is disclosed to Borland. If no such list is attached in Exhibit B, you
represent that you have not made, conceived or reduced to practice any such
patent rights or patentable ideas, and you agree that Borland shall have a
royalty-free license under such inventions and related patents or other rights
to make, use and sell any product covered thereby. SJA (initial)

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6. You and Borland’s other employees are extremely important to us. Because of
the nature of our business and the intangible nature of our trade secrets, it is
necessary to afford Borland fair protection from the loss of our employees.

 

You agree, for a period ending one (1) year after the termination of your
employment with Borland, not to solicit, or attempt to solicit, directly or
indirectly, any individual who is an employee of Borland, whether for or on
behalf of you or for any entity in which you have a direct or indirect interest
whether as a proprietor, partner, stockholder, employee, agent, representative,
or otherwise. SJA (initial)

 

7. Should you leave Borland, we would expect you, and any future employer of
yours, to demonstrate the same professionalism that we now expect from you and
our own employees and we also agree to demonstrate a high degree of
professionalism.

 

You agree, upon the termination of your employment with Borland, to turn over to
Borland all notes, data, diskettes, tapes, reference items, sketches, drawings,
memoranda, records, and other materials in your possession or control which in
any way relate to any of the Borland Confidential Information, and not to make
any further use of such material. SJA (initial)

 

8. In view of the fact that the principal office of Borland is located in the
State of California, it is understood and agreed that the construction and
interpretation of this agreement shall at all times and in all respects be
governed by the substantive laws of the State of California without regard to
conflicts or choice of law rules thereof or of any other jurisdiction. Nothing
contained in this Agreement shall restrict the right of Borland to terminate
your employment or position at any time, with or without notice and with or
without cause. By your execution of this Agreement you acknowledge and agree
that your employment is “at will.” The term “at will” means that both you and
Borland have the right to terminate employment any time with or without advanced
notice, and with or without cause. This “at will” employment relationship can be
varied only in a writing that is signed by the Senior Vice President of
Corporate Services, or a similarly situated executive, of Borland. From time to
time it may be necessary to have you execute documents confirming Borland’s
ownership of the results of your work for Borland and you agree to execute such
documents as Borland may request from time to time whether during your
employment or thereafter.

 

You agree that the breach or alleged breach by Borland of (i) any term or
condition contained in another agreement (if any) between you and Borland or
(ii) any obligation owed to you by Borland, shall not affect the validity or
enforceability of the terms of this Agreement. This Agreement, together with any
accepted offer letter for your employment and any other agreements referred to
therein, constitutes the full and complete understanding between you and Borland
with respect to the subject matter hereof and supersedes all prior and
contemporaneous representations and understandings, whether written or oral,
relating to the subject matter hereof, all of which are hereby cancelled to the
extent they are not specifically merged into this Agreement. There are no other
promises, agreements, or representations, oral or written, relating to the
subject matter hereof, upon which you have relied in entering into employment
with Borland. SJA (initial)

 

I have carefully read and considered the provisions of this agreement. I
understand and acknowledge that the terms and conditions set forth herein are
fair and appear reasonably required for the protection of Borland and its
business. SJA (initial)

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I acknowledge receipt of a copy of this agreement.

 

SCOTT J. ARNOLD

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Print Name

11-07-03

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Date Signed

/s/ Scott J. Arnold

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Signature

[omitted]

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Social Security Number

[omitted]

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Mailing Address

[omitted]

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City, State and Zip Code

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Exhibit A

Definition of Borland Confidential Information

 

For purposes of this Confidentiality Agreement, “Borland Confidential
Information” shall mean and include the following types of information (whether
or not reduced to writing or placed in any tangible medium of expression, and
whether or not patentable or protectable by copyright) owned or developed by
Borland:

 

•   information or material proprietary to Borland or treated as confidential by
Borland and not generally known by non-Borland personnel, which you develop or
which you may obtain knowledge of or access to, through or as a result of your
relationship with Borland (including information conceived, originated,
discovered, or developed in whole or in part by you);

 

•   discoveries, ideas, inventions, concepts, software in various stages of
development, source code, object code, designs, drawings, specifications,
techniques, models, data, documentation, diagrams, flow charts, research,
development, processes, procedures, “know-how;”

 

•   marketing techniques and materials, marketing and development plans;

 

•   product development and distribution; plans for future development and
distribution;

 

•   operational methods, technical processes and other business affairs and
methods;

 

•   customer names, licensing and royalty arrangements, and other information
related to customers;

 

•   price lists, pricing policies, profits, sales, financial information;

 

•   and employee information.

 

Borland Confidential Information also includes any information or materials
obtained by Borland from third parties in confidence (or subject to
nondisclosure or similar agreements), whether or not owned or developed by
Borland.

 

Failure to mark any of the Borland Confidential Information as confidential or
proprietary shall not affect its status as being part of the Borland
Confidential Information. Information that is publicly known or generally
employed by the trade at or after the time you first learn of such information,
or generic information or knowledge which you would have learned in the course
of similar employment or work elsewhere in the trade, shall not be deemed part
of the Borland Confidential Information.

 

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Exhibit B

 

List of Prior Patents and Inventions