Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is effective as of July 6, 2012
(“Effective Date”), by and between Timothy Steele ("Employee”) and EdgeWave,
Inc., a Delaware corporation (“Employer” and/or “Company”), located at 15333
Avenue of Science, San Diego, CA 92128.

 

W I T N E S S E T H :

 

WHEREAS, Employer desires to retain the services of Employee and Employee
desires to be employed by Employer upon the terms and conditions hereinafter set
forth;

 

NOW, THEREFORE, In consideration of the premises and the agreements, provisions
and covenants herein contained, Employee and Employer agree as follows:

 

 

1)Services; Title. Employee shall be employed as SVP of Worldwide Sales (the
“Title”) and shall fully and faithfully perform such services as Employer shall
reasonably request to be performed (the "Services"). The position shall report
directly to the President. Employee's Title and responsibilities shall be
subject to change by Employer at any time.

 

2)Compensation, Benefits and Reviews. Subject to all the other terms of this
Agreement, in connection with Employee's performance of the Services, Employer
shall:

 

a.Pay Employee's salary by check or direct deposit twice per month in equal
installments in accordance with Employer's regular salary payment schedule,
which shall be paid at the rate of $7,916.67 (before deductions made at
Employee's request, if any, and for deductions required by federal, state and
local law) semi-monthly.

 

b.Pay Employee a monthly commission on sales based on the terms and conditions
set forth in a then current Sales Variable (Commission) Compensation plan (the
“Plan”) established by the board of directors or a committee of the board of
directors, as such Plan may be amended by the board of directors, or its
committee, from time to time. Attached hereto as Exhibit C is the current Plan
for Q3 2012- Q4 2013.

 

c.Subject to Employer’s board of directors’ approval, Employee will be granted
250,000 stock options (the “Grant”). The Grant will vest over a four (4) year
period with one quarter (1/4) vesting on the first anniversary of the date of
the grant and the remainder three quarters (3/4) vesting over the remaining
three (3) years on a monthly basis thereafter (such shares to vest on the first
day of each month thereafter until such shares are vested in full). The stock
options’ exercise price will be priced at the closing share price on the date of
grant and will be subject to Employee first signing Employer’s form stock option
agreement. The Grant shall be governed by EdgeWave’s 2010 Employee, Director and
Consultant Equity Incentive Plan, as may be amended from time to time (or at the
discretion of Employer, under a similar plan or outside of a stock option or
restricted share plan). In the event of a Change of Control (as defined below)
or resignation for “good reason (defined below) then subject to You signing a
general release of all claims agreement in substantially the same form attached
hereto as Exhibit B, any unvested options will accelerate by 50% and vest
immediately upon the later date of the Change of Control or your resignation for
“Good Reason” and the date the Release Agreement is signed and becomes
effective.
   

d.Grant Employee the option to participate in the benefit plans offered by
Employer to all of its employees from time to time, including without
limitation, insurance plans, 401(k) and other savings plans, short and long term
disability insurance, Section 125 (cafeteria) and similar pre-tax expense plans,
holidays, PTO- Personal Time Off, etc., which may be amended from time to time
in Employer’s discretion.

 

 

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e.Participate in health insurance for Employee and Employee’s dependents, and
such other benefits as Employer shall determine to provide to all of its
employees from time to time.

 

f.Reimburse Employee for all reasonable travel, meals, lodging, communications,
entertainment and other business expenses incurred by Employee in the normal
course of business in compliance with Employer’s policies in effect at the time.

 

g.Reimburse Employee for hotel, rental car, airfare, and other travel related
expenses incurred for travel to and from home for the first 90 days of
employment, not to exceed $5,500 per month. Reimbursement will be in compliance
with Employer’s policies in effect at the time. If Employee terminates within 12
months from the use of this monthly benefit the reimbursement will be
recoverable by EdgeWave.

 

h.Reimburse Employee for reasonable relocation expenses up to $25,000, for which
receipts must be provided. If Employee terminates within 12 months from the use
of this relocation expense (the date the Employee is reimbursed for the
relocation) the reimbursement will be 100% recoverable to EdgeWave from
Employee.

 

i.Grant Employee three (3) weeks PTO with pay for each twelve-month period, to
be taken at times agreed with Employer. Unused PTO shall accrue according to the
Employer’s PTO policy, as may be amended from time to time.

 

 

3)At-Will Employment and Termination.

 

a)    At-Will Employment. Employee’s employment shall be on an “at-will” basis
and not for any specific time period. “At will” employment means that Employee
may quit at any time for any reason. Likewise, Employer may terminate Employee’s
employment at any time for any reason. Employer does not guarantee or promise
any form of notice, warning, corrective action or progressive discipline before
termination. The “at will” nature of Employee’s employment with Employer may not
be changed except by a written contract signed by Employee and the Chief
Executive Officer of Employer.

 

b)    Definition of Resignation for “Good Reason”

 

Resignation for “Good Reason” means the occurrence, without the Employee’s
consent, of any of the events or circumstances set forth below in connection
with a Change of Control:

 

1.A material and continuing diminution of the Employee’s duties,
responsibilities, and level of authority of position as compared to such duties,
responsibilities, and level of authority on the Effective Date;  2.A material
reduction in the compensation set forth in Section 2 of this agreement;

3.A required relocation of farther than 50 miles from the current corporate
headquarters at the time of the Change of Control.

 

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c)Definition of Change of Control: For purposes of this agreement, means a
change in the ownership or control of the Company affected through any one of
the following transactions:

1.A merger or consolidation approved by the Company’s stockholders in which
securities possessing more than eighty percent (80%) of the Company’s
outstanding securities are transferred to a person or persons different from the
persons holding those securities immediately prior to such transaction;

2.Any stockholder-approved sale, transfer, or other disposition of all or
substantially all of the Company’s assets in a complete liquidation or
dissolution of the Company; or

3.The acquisition, directly or indirectly, by any person or related group of
persons (other than the Company or a person that directly or indirectly
controls, is controlled by or is under common control with the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Act of 1934, as amended) of securities possessing more than eighty
percent (80%) of the total combined voting power of the Company’s outstanding
securities pursuant to a tender or exchange offer made directly to the Company’s
Stockholders.

 

d)Conditions to Effectiveness. This Agreement shall become effective upon
receipt by Employer of all of the following, each in form and substance
satisfactory to Employer; (i) Employer and Employee shall have duly executed
this Agreement and delivered this Agreement to Employer, (ii) the successful
completion by Employer of background and credit checks, which Employee hereby
authorize, (iii) verification of Employee’s eligibility to work in the United
States, for which process Employee will be asked to complete an I-9 form and to
provide the identification documents required by that form, and (iv) the consent
by Employer’s Board of Directors’ of the terms of this Agreement.

 

4.Termination Certificate. Upon the termination of Employee's engagement under
this Agreement, for any reason whatsoever, Employee agrees to sign, date and
deliver to Employer a "Termination Certificate" in the form of Exhibit A, and to
deliver and take all other action necessary to transfer promptly to Employer all
records, materials, equipment, drawings, documents and data of any nature
pertaining to any invention, trade secret or confidential information of
Employer or to Employee's engagement, and Employee will not take with Employee
any documents containing or pertaining to any confidential information,
knowledge or data of Employer that Employee may produce or obtain during the
course of Employee's engagement under this Agreement. This Paragraph 4 shall
survive indefinitely any termination of this Agreement or Employee's employment.

 

5.Nondisclosure. Employee agrees to keep confidential and not to disclose or
make any use of (except for the benefit of Employer), at any time, either during
or after Employee’s engagement under this Agreement, any trade secrets,
confidential information, knowledge, data or other information of Employer
relating to products, processes, know-how, designs, formulas, test data,
customer lists, business plans, marketing plans and strategies, pricing
strategies or other subject matters pertaining to any business or future
business of Employer or any of its clients, customers, Employees, licensees or
affiliates, which Employee may produce, obtain or otherwise acquire or become
aware of during the course of Employee’s engagement under this Agreement.
Employee further agrees not to deliver, reproduce or in any way allow any such
trade secrets, confidential information, knowledge, data or other information,
or any documentation relating thereto, to be delivered or used by any third
party without specific direction or consent of a duly authorized officer of
Employer. This Paragraph 5 shall survive indefinitely any termination of this
Agreement or Employee's employment.

 

6.Work for Hire; Ownership of Intellectual Property. Employee understands and
agrees that all of Employee’s work and the results there arising out of or in
connection with the work performed for Employer, whether made solely by Employee
or jointly with others, during the period of Employee's employment by Employer,
that relate in any manner to the actual or anticipated business, work,
activities, research or development of Employer or its affiliates, or that
result from or are suggested by any task assigned to Employee or any activity
performed by Employee on behalf of Employer, shall be the sole property of the
Employer, and, to the extent necessary to ensure that all such property shall
belong solely to the Employer, Employee by Employee’s execution of this
Agreement transfers to the Employer any and all right and interest Employee may
possess in such intellectual property and other assets created in connection
with Employee’s employment by Employer, and that may be acquired by Employee
during the term of this Agreement from any source that relates, directly or
indirectly, to Employer's business and future business. Employee also agrees to
take any and all actions requested by Employer to preserve Employer's rights
with respect to any of the foregoing. This Paragraph 6 shall survive
indefinitely any termination of this Agreement or Employee's employment.

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7.No Partnership; Not Assignable by Employee. This Agreement is between Employee
and Employer, as at-will employer, and shall not form or be deemed to form a
partnership or joint venture. Employer’s rights, benefits, duties and
obligations under this Agreement shall inure to its successors and assigns.
Employee's rights, obligations and duties under this Agreement are personal to
Employee and may not be assigned.

 

8.Trade Secrets of Others: Employee represents that Employee’s performance of
all the terms of this Agreement and as the Employer’s Employee does not, and
will not breach any agreement to keep in confidence any proprietary information,
knowledge or data acquired by Employee in confidence or in trust before
Employee’s engagement under this Agreement, and Employee will not disclose to
Employer or induce Employer to use any confidential or proprietary information
or material belonging to any other person or entity. Employee agrees not to
enter into any agreement, either written or oral, in conflict with this
Paragraph 8.

 

9.Employee's Representations and Warranties. Employee represents, promises,
understands and agrees that: (i) Employee is free to enter into this Agreement;
(ii) Employee is not obligated or a party to any engagement, commitment or
agreement with any person or entity that will, does, or could conflict with or
interfere with Employee's full and faithful performance of this Agreement, nor
does Employee have any commitment, engagement or agreement of any kind requiring
Employee to render services or preventing or restricting Employee from rendering
services or respecting the disposition of any rights or assets that Employee has
or may hereafter acquire or create in connection with his/her employment with
Employer; (iii) Employee shall not use any material or content of any kind in
connection with Employer's products, software or website that is copyrighted or
owned or licensed by a party other than Employer or that would or could infringe
the rights of any other party; (iv) Employee shall not use in the course of
Employee’s performance under this Agreement, and shall not disclose to Employer,
any confidential information belonging, in part or in whole, to any third party;
(vi) EMPLOYEE UNDERSTANDS ALL OF THE TERMS OF THIS “AT WILL” EMPLOYMENT
AGREEMENT, AND HAS REVIEWED THIS AGREEMENT IN DETAIL BEFORE AGREEING TO EACH AND
ALL OF THE PROVISIONS; was allowed adequate opportunity to seek legal counsel
before signing this Agreement; and (vii) no statement, representation, promise,
or inducement has been made to Employee, in connection with the terms of this
Agreement, except as expressly set forth in this Agreement.

 

10.Governing Law; Arbitration. This Agreement shall be subject to and construed
in accordance with the laws of the State of California, and without giving
effect to conflicts of laws principles. In the event of any dispute in
connection with the Services, Employee’s employment or termination thereof,
relationship with the Employer, or this Agreement (or any other agreement) that
cannot be resolved privately between the parties, resolution shall be through
binding arbitration conducted in the County of San Diego, California. Any
arbitration shall be conducted in accordance with the provisions of the
California Code of Civil Procedure, Part 3, Title 9 (commencing with Section
1280). Employer will pay the cost of arbitration. The arbitration process shall
be in compliance with any laws or rules then in effect for employment
arbitration agreements at the time of a demand for arbitration. The parties may
obtain discovery in aid of the arbitration in accordance with California Code of
Civil Procedure Section 1283.05. Nothing contained in this paragraph 10 shall
limit either party’s right to seek temporary restraining orders or injunctive or
other equitable relief in the Superior Court of California in connection with
this Agreement. EMPLOYEE UNDERSTANDS THAT BY AGREEING TO ARBITRATION IN THE
EVENT OF A DISPUTE BETWEEN EMPLOYER AND EMPLOYEE, EMPLOYEE AND EMPLOYER BOTH
EXPRESSLY WAIVE THEIR RIGHT TO REQUEST A TRIAL BY JURY IN A COURT OF LAW. This
Paragraph 10 shall survive indefinitely any termination of this Agreement or
Employee's employment.

 

 

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11.Entire Agreement; Modification; Waiver; Construction Generally. This
Agreement constitutes the entire agreement between Employer and Employee
relating to Employee’s employment with Employer, and supersedes all previous
agreements, whether oral or written. No provision of this Agreement shall be
construed strictly against any party, including, without limitation, the
drafter. Neither this Agreement nor any provision may be amended, waived or
modified in any way other than by a writing executed by the party against whom
such amendment, waiver or modification would be enforced. No failure to
exercise, and no delay in exercising with respect to any right shall operate as
a waiver. A waiver by any party of a breach of any provision shall not be deemed
a waiver of any later breach. The exercise of any right or remedy by either
party (or by its successor), whether pursuant to this Agreement, to any other
agreement, or to law, shall not preclude or waive its right to exercise any or
all other rights and remedies. The headings or titles of the several paragraphs
of this Agreement are inserted solely for convenience and shall not be used in
the construction of any provision of this Agreement. Words in the singular shall
include the plural, and vice versa. All references to the masculine or feminine
shall mean all genders.

 

12.Assignment. Employee acknowledges and agrees that this Agreement, and
Employee’s rights and obligations hereunder, may be assigned by Employer to any
affiliate, subsidiary or parent company of Employer.

 

 

 

EMPLOYER:

 

EdgeWave, Inc., a Delaware corporation

 

By: /s/ David D. Maquera

 

Print Name: David D. Maquera

 

Its: (title) President

 

Date: July 6, 2012

 

 

EMPLOYEE:

 

By: /s/ Timothy Steele

 

Print Name: Timothy Steele

 

Date: July 3, 2012

 

 

 

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Exhibit A

 

TERMINATION CERTIFICATE

 

 

This is to certify that undersigned does not have in the undersigned’s
possession, nor has undersigned failed to return, any customer information,
records, files, programs, documents, data, specifications, drawings, blueprints,
reproductions, sketches, notes, reports, proposals, or copies of them, or other
documents or materials, equipment, or other property or asset belonging to
EdgeWave, Inc. (“Employer”), its successors and assigns.

 

Undersigned further certifies that undersigned has fully complied with, and will
continue to comply with, all the terms of the Employment Agreement dated as of
July __, 2012 between Employer and the undersigned (the “Agreement").

 

Undersigned further agrees that, in compliance with the Agreement, undersigned
will preserve as confidential any and all trade secrets, confidential
information, knowledge, data or other information of Employer relating to
products, processes, know-how, designs, formulas, test data, customer lists,
business plans, marketing plans and strategies, pricing strategies or other
subject matters pertaining to any business of Employer or any of its clients,
customers, Employees, licensees or affiliates, that Employee produced, obtained
or otherwise acquired or became aware of during the course of Employee’s
engagement under the Agreement.

 

 

EMPLOYEE:

 

 

 

_______________________________

Timothy Steele

 

 

 

Date: __________________________

 

 

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Exhibit B

GENERAL RELEASE OF ALL CLAIMS

 

 

This General Release of All Claims Agreement (“Agreement”) is entered into
between Timothy Steele (“Employee”) and EdgeWave, Inc., and all related holding,
parent or subsidiary entities and their affiliates, directors, officers,
representatives, agents, principals, partners and employees, stockholders,
predecessors and successors and/or assigns, insurers, and attorneys (all
collectively referred to as “Employer”). (Employee and Employer are hereinafter
collectively referred to as “the Parties”).

 

1. Termination of Employment. Employee’s employment with Employer is terminated
effective ___________ (“ the termination date”).

 

2. Severance. In consideration of and in return for the promises contained in
this Agreement, and as full and final compensation to Employee for all services
as an employee:

 

a. any unvested options will accelerate by 50% and vest immediately upon the
date of the Change of Control or the date of Your resignation for Good Reason.

 

b. Employer warrants and Employee acknowledges that the agreements described
under this Paragraph 2 constitute full compensation of any and all claims of
every nature and kind arising out of or relating in any way to Employee’s
employment by Employer or the termination thereof, benefits owed, or any other
claims as outlined below.

 

3. Employee’s Release of All Claims Against Employer.

 

a. In consideration of the above described acceleration of vesting, and for
other good and valuable consideration, Employee agrees that employment with
Employer has terminated as of the termination date, and that Employee has
received full payment of all wages, vacation accrued but not used, and any and
all other sums due as a result of such employment by Employer. In further
consideration of and in return for the promises and covenants undertaken herein,
Employee does hereby unconditionally, irrevocably and absolutely release and
discharge Employer and all related holding, parent or subsidiary entities and
their affiliates, directors, officers, representatives, agents, principals,
partners and employees, stockholders, predecessors and successors and/or
assigns, insurers, and attorneys from any and all liability, claims, demands,
causes of action, or suits of any type, whether in law and/or in equity, known
or unknown, related directly or indirectly or in any way connected with any
transaction, affairs or occurrences between them to date, including, but not
limited to, Employee’s employment with Employer and the termination of said
Employment. This Agreement shall include but not be limited to a release of
claims arising under any state or federal statute or common law regulating or
affecting employment, including Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Equal Pay Act, Age Discrimination in
Employment Act, the Fair Labor Standards Act, federal and state wage and hour
laws including, without limitation, the California Labor Code, California
Government Code Sections 12940 et seq., any applicable California Industrial
Wage Orders, all as amended, all claims for breach of contract, employment
discrimination, sexual harassment, wages, severance, overtime compensation,
vacation, torts, fraud, and/or claims any other local, state or federal law,
rule, or regulation relating to or affecting Employee’s employment by Employer,
except any claim for unemployment insurance or worker’s compensation.

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b. In further consideration of the above described acceleration of vesting, and
for other good and valuable consideration, Employee irrevocably and absolutely
agrees that he will not prosecute nor allow to be prosecuted on her behalf in
any administrative agency, whether federal or state, or in any court, whether
federal or state, any claim or demand of any type related to the matters
released above. It is the intention of the Parties that, with the execution of
this Agreement, Employer and all related holding, parent or subsidiary entities
and their affiliates, directors, officers, representatives, agents, principals,
partners and employees, stockholders, predecessors and successors and/or
assigns, insurers, and attorneys will be absolutely, unconditionally and forever
discharged of and from all obligations to or on behalf of Employee related in
any way to the matters released. Employee represents that he has not filed any
complaint, charges or lawsuits against Employer and all related holding, parent
or subsidiary corporations (including their affiliates, officers, directors, and
employees) with any governmental agency or any court.

 

4. Left Intentionally Blank.

 

5. Unknown Claims. Employee understands and agrees that this Agreement extends
to all claims of every nature, known or unknown, suspected or unsuspected, past
or present, and that any and all rights granted to Employee under Section 1542
of the California Civil Code or any analogous federal law or regulation are
hereby expressly waived. Section 1542 provides:

 

“A general release does not extend to claims which the creditor does not know of
or suspect 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 settlement with
the debtor.”

 

Employee certifies that he has read this release, the quoted Civil Code section
and that he fully understands this release.

 

6. Binding Effect. This Agreement and all promises and agreements set forth in
this Agreement shall be binding upon and shall inure to the benefit of the
respective parties, their legal successors, heirs, assigns, partners,
representatives, agents, attorneys, officers, directors and shareholders.

 

7. Entire Agreement. Employee further declares and represents that no promise or
representation not contained in this Agreement has been made to him and
acknowledges and represents that this Agreement contains the entire
understanding between the parties and contains all terms and conditions
pertaining to the compromise and settlement of the subjects referenced in this
Agreement. However, any proprietary or trade secrets agreement or any agreement
regarding ownership of intellectual property by Employer entered into previously
shall remain in full force and effect. Employee further acknowledges that the
terms of this Agreement are contractual and not a mere recital.

 

8. Left intentionally blank

 

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9. Confidential Information and Trade Secrets. Employee acknowledges that all
confidential materials, records and documents concerning Employer that have come
into Employee’s possession during his/her employment with Employer have been
returned to Employer. Employee agrees not to disclose to any person or entity,
including any competitor of Employer and any future employer, any of Employer’s
trade secrets or other confidential information. Employee acknowledges all
Employer’s property obtained during the course of her employment with Employer
has been returned to Employer. To the extent that Employee has entered into any
Confidentiality, Proprietary or Trade Secrets agreement or any agreement
regarding ownership of intellectual property of Employer, if such Agreements
provide greater protection to Employer than this Agreement, such other
Agreements shall take precedence over this Agreement.

 

10. Interpretation and Severability. The validity, interpretation, and
performance of this Agreement shall be construed and interpreted according to
the laws of the State of California. This Agreement shall not be interpreted for
or against either party hereto on the ground that such party drafted or caused
this Agreement to be drafted. If any provision of this Agreement, or part
thereof, is held invalid, void or voidable as against public policy or
otherwise, the invalidity shall not affect other provisions, or parts thereof,
which may be given effect without the invalid provision or part. To this extent,
the provisions, and parts thereof, of this Agreement are declared to be
severable.

 

11. Arbitration of Disputes. Any dispute arising out of this Agreement or
Employee’s employment or termination shall be resolved by binding arbitration in
San Diego, California, pursuant to the terms of the Offer Letter, and the
findings of the arbitrator shall be final and binding upon the parties.

 

12. Attorneys’ Fees. In any dispute involving this Agreement, the prevailing
party shall be entitled to attorneys’ fees and costs.

 

  13.   IF EMPLOYEE IS UNDER THE AGE OF 40, A SIGNATURE ON THIS RELEASE WILL BE
IMMEDIATELY EFFECTIVE. IF EMPLOYEE IS OVER THE AGE OF 40, THE FOLLOWING
PROVISIONS APPLY:

 

Age Discrimination in Employment Act Release.

 

A. Employee acknowledges Employer hereby has advised Employee in writing to
discuss this Agreement with an attorney before executing it and that Employer
has provided Employee at least twenty-one (21) days within which to review and
consider this Agreement before signing it.

 

B. The Parties acknowledge and agree that Employee may revoke this Agreement for
up to seven (7) calendar days following the execution of this Agreement, and
that it shall not become effective or enforceable until the revocation period
has expired. The Parties further acknowledge and agree that such a revocation
must be in writing, addressed to Michel Urich, Esq., at 7668 El Camino Real,
Suite 104-238, Carlsbad, CA 92009 and received not later than 5:00 p.m. on the
seventh (7th) day following execution of this Agreement by Employee. If Employee
revokes this Agreement, it shall not be effective or enforceable and Employee
will not receive the monies and benefits described above.

 

C. If Employee does not revoke this Agreement in the time frame specified in
this Paragraph 20, the Agreement shall become effective at 12:01 a.m. on the
eighth (8th) day after it is signed by Employee.

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I have read the foregoing General Release of All Claims Agreement and I accept
and agree to the provisions contained in this Agreement and execute it
voluntarily and with full understanding of its consequences.

 

PLEASE READ CAREFULLY, THIS AGREEMENT CONTAINS A GENERAL RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS.

 

Dated: ________________, 20__   _____________________________     Timothy Steele

 

 

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Exhibit C

2012/2013 Sales Variable (Commission) Compensation Plan

Sales Variable (Commission) Compensation

The following describes the variable (commission) compensation plan for Timothy
Steele. Variable (commission) compensation will be measured, earned and paid
monthly based on the following:

 

New/Upsell/Cross   Q4 Q1 Q2 Q3 Q4 Operating Plan Billing Targets (per Board
approved target)    $ TQ4  $ TQ1  $  TQ2  $ TQ3  $     TQ4              
Variable OTE    $      35,625  $       35,625  $       35,625  $ 35,625  $ 
35,625                             Minimum Hurdle for Quarter 80%  N/A 0.80xTQ1
0.80xTQ2  0.80xTQ3   0.80xTQ4                 Quarterly Accelerator            
>= 100% additional commission on sales above plan 1% 1% 1% 1% 1% >= 105%
additional commission on sales above plan 2% 2% 2% 2% 2% >= 110% additional
commission on sales above plan 5% 5% 5% 5% 5%                            
Qualified Billings: New/Upsell/Cross                                            
      Renewals   Q4 Q1 Q2 Q3 Q4 Operating Plan Billing Targets (per Board
approved target)    $ TQ4  $ TQ1  $  TQ2  $ TQ3  $     TQ4              
Variable OTE    $      11,875  $       11,875  $       11,875  $ 11,875  $ 
11,875                             Minimum Hurdle for Quarter 80%  N/A 0.80xTQ1
0.80xTQ2  0.80xTQ3   0.80xTQ4                                                  
                                            Qualified Billings: Renewals        

 

 

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Variable (Commission) Compensation Payment

 * No variable (commission) compensation for a Qualified Billings category
   (New/Upsell/Cross or Renewal) will be paid if “net billing” for the category
   is below 80% of the target (except for Q3 of 2012). Variable (commission)
   compensation for target of between 80% to 99.9% will be paid at that
   percentage rate against Variable OTE. By way of Example, if actual is 85% of
   target, then variable (commission) compensation will be 85% of Variable OTE.
 * Recoverable Draw: You will receive a recoverable draw from your variable OTE
   for the months of July (pro-rated at 50% as long as start date does not occur
   after July 18, 2012), August, and September 2012 ($15,833 per month). This
   recoverable draw will only be recovered by Employer if Employee terminates
   for any reason (other than for “Good Cause” as described in the Agreement)
   within 12 months from start date. If this termination should occur prior to
   12 months from start date, the amount of the draw recovered by Employer will
   be less actual commissions earned from subsequent quarter(s) after Q3 2012
   and will be deducted from final wages owed which may include deductions from
   base pay or variable OTE earned through date of termination.
 * Except for OEM sales, Variable (commission) compensation for “net billing”
   will be earned and paid monthly.
 * For all OEM sales, variable (commission) compensation will be paid in the
   month that the OEM partner is invoiced.
 * Variable compensation will not exceed 200% of quarterly variable OTE. If
   billings exceed 200% for quarter, Variable compensation is capped at $95,000.
 * Variable (commission) compensation for “net billings” that exceed the 2012
   annual billing plan will be earned and paid in January 2013.
 * Variable OTE shown are before deductions made at Employee's request, if any,
   and for deductions required by federal, state and local law.
 * Termination - In the event your employment with the Company is terminated
   either voluntarily or involuntarily, variable compensation will be paid based
   on recognized billings through the termination date and no future variable
   compensation will be paid. EdgeWave will also reserve the right to seek
   repayment of any charge-backs that occur within an up to 60 days from your
   termination date.

 

Employment At Will

Eligibility and participation in this variable compensation plan in no way
implies or reflects any guarantee or contract of employment since the company
operates on an employment-at-will basis. Participation in this Plan does not
confer any right to continued employment with the company or limit the right of
the company to terminate the Participant at any time, with or without cause.

 

Changes to the Plan

The Company reserves the right to amend, modify, make exceptions to, or
terminate this Plan at any time, but such change will be made in writing by
either the CEO or President to you as far in advance as possible of the
effective date of such change.

 

 

____________________________________________   _______________________________
Signature of Acknowledgement of Plan   Date

 

 

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