Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is entered into effective October
21, 2004, by and between Mark H. Perry (the “Employee”) and Netopia, Inc. (the
“Company”), a Delaware corporation, headquartered at 6001 Shellmound Street, 4th
Floor, Emeryville, California 94608 (the “Company”).

 

1. Term of Employment.

 

(a) Basic Rule. The Company agrees to employ the Employee and the Employee
agrees to remain in employment with the Company, from October 21, 2004 until
April 30, 2005. After April 30, 2005, the Employee’s employment will continue
until it terminates pursuant to Subsections (b), (c) and (d) below.

 

(b) Termination by Company Without Cause. The Company may terminate the
Employee’s employment effective on or at any date after April 30, 2005 without
Cause and for any reason or no reason whatsoever by giving the Employee thirty
(30) days’ advance notice in writing.

 

(c) Termination by Company for Cause. The Company may terminate the Employee’s
employment at any time for Cause. For all purposes under this Agreement, “Cause”
shall mean:

 

(i) An intentional failure or omission of the Employee to substantially perform
his duties hereunder, other than as a result of the death or disability of the
Employee;

 

(ii) An intentional act by the Employee that constitutes gross misconduct or
fraud;

 

(iii) The Employee’s conviction of, or plea of “guilty” or “no contest” to, a
felony;

 

(iv) The Employee’s disobedience of orders and directives of the Chief Executive
Officer or the Chairman of the Audit Committee of the Board of Directors; or

 

(v) any material breach by the Employee of his obligations under any Code of
Ethics, Code of Business Conduct or lawful policies or procedures of the
Company.

 

(d) Resignation by Employee. The Employee may terminate his employment effective
on or at any date after April 30, 2005 for any reason or no reason whatsoever by
giving the Company thirty (30) days’ advance notice in writing.

 

(e) Termination of Agreement. This Agreement shall terminate when all
obligations of the parties hereunder have been satisfied.

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2. Duties and Scope of Employment.

 

(a) Position. The Company agrees to employ the Employee in an executive position
of Interim Senior Vice President and Chief Financial Officer. The Employee shall
report to the President and CEO of the Company. The Employee will update the
Audit Committee of the Board of Directors on a regular basis.

 

(b) Special Circumstances. It is understood that the Company is presently
involved in an internal review by the Audit Committee of the Company’s
accounting and reporting practices. In addition, the Company has been advised by
the Securities and Exchange Commission that it has commenced an informal inquiry
to determine whether the federal securities laws have been violated.
Furthermore, the Company and certain of its directors and current and former
officers have been named in various purported class action lawsuits and
purported derivative actions. As a consequence, it may take a longer period of
time than expected in the normal course of business, to complete the preparation
of the Company’s restated financial statements and to provide certification of
the accuracy of the Company’s financial statements and the adequacy of its
system of internal controls in compliance with generally accepted accounting
principles and the Sarbanes-Oxley Act of 2002.

 

3. Base Compensation.

 

During the term of his employment under this Agreement, the Company agrees to
pay the Employee as compensation for his services a base salary of Twenty
Thousand Dollars ($20,000) per month. Such salary shall be paid by the Company
on a bi-monthly basis on the same dates as it makes salary payments generally to
its employees based in the United States.

 

4. Employee Benefits and Stock Options.

 

During the term of his employment under this Agreement, the Employee shall be
eligible to participate in those employee benefit plans and programs as are
offered from time to time by the Company to executive officers based in the
United States in accordance with the terms of such plans and programs. The
Company will recommend to the Compensation Committee of the Board of Directors
that it grant to the Employee a stock option to purchase 30,000 shares of the
Company’s common stock, which will vest and become exercisable at the rate of
5,000 shares per month on the last day of each month of completed employment
commencing November 30, 2004, such that all 30,000 stock options will be vested
and exercisable on April 30, 2005, provided that vesting will cease in the event
that the Employee’s employment ceases. Such stock options will be granted at the
fair market value of the Company’s common stock on the date of grant and will be
subject to all terms and conditions of the Company’s stock option plan.

 

5. Business Expenses.

 

During the term of his employment under this Agreement, the Employee shall be
authorized to incur necessary and reasonable travel, entertainment and other
business expenses in connection with his duties hereunder in accordance with the
Company’s generally applicable policies related to such business expenses. The
Company also agrees to pay the Employee Two Hundred Dollars ($200) per month for
transportation expenses to the Company’s headquarters location from his home
without documentation, subject to applicable withholding taxes. The Company will
reimburse the Employee for a legal review of this Agreement in an amount not to
exceed $500.

 

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6. Indemnification.

 

The Company will indemnify and defend the Employee with respect to any claims
made or threatened against him which arises out of the performance of his duties
to the Company to the extent permitted by law. The Employee and the Company will
enter into an Indemnification Agreement in the same form as existing
indemnification agreements between the Company and its current directors and
officers.

 

7. Proprietary Information and Inventions Agreement.

 

Like all Company employees, the Employee will be required, as a condition of his
employment with the Company, to sign the Company’s standard Proprietary
Information and Inventions Agreement, a copy of which is attached hereto as
Exhibit A.

 

8. Withholding Taxes.

 

All forms of compensation referred to in this letter agreement are subject to
reduction to reflect applicable withholding and payroll taxes and other
deductions required by law.

 

9. Interpretation, Amendment and Enforcement.

 

This letter agreement and Exhibit A constitute the complete agreement between
the Employee and the Company, contain all of the terms of the Employee’s
employment with the Company and supersede any prior agreements, representations
or understandings (whether written, oral or implied) between Employee and the
Company. This letter agreement may not be amended or modified, except by an
express written agreement signed by both the Employee and a duly authorized
officer of the Company. The terms of this letter agreement and the resolution of
any disputes as to the meaning, effect, performance or validity of this letter
agreement or arising out of, related to, or in any way connected with, this
letter agreement, the Employee’s employment with the Company or any other
relationship between the Employee and the Company (the “Disputes”) will be
governed by California law, excluding law relating to conflicts or choice of
law.

 

As required by law, the Employee’s employment with the Company is contingent
upon Employee providing legal proof of his identity and authorization to work in
the United States.

 

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In Witness Whereof, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized President and Chief Executive Officer, as
of the date set forth below.

 

/s/ Mark H. Perry

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Mark H. Perry

Date: October 21, 2004

/s/ Alan B. Lefkof

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Alan B. Lefkof

President and CEO

Date: October 21, 2004