Document:

Exhibit

Exhibit 10.1
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of December 21, 2015, (including any schedules hereto the “Agreement”), among Open Text Corporation, a corporation incorporated under the laws of Canada (the “Parent Corporation”), Open Text Inc., a wholly-owned subsidiary of the Parent Corporation incorporated under the laws of the State of Delaware (the “Corporation”), and Stephen F. Murphy (the “Executive”).
WHEREAS, the Corporation and the Executive mutually desire that the Executive serves the Corporation as President of the Parent Corporation on the terms and conditions set forth herein and the parties hereto shall contemporaneously execute the Restrictive Covenants Agreement (as defined below) set forth in Schedule “C”.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:
1. Position and Duties
(a) The Corporation hereby agrees to employ the Executive to act as President and the Executive hereby accepts such position and agrees to serve the Parent Corporation in such capacity during the Term, as defined in Section 3 hereof. The Executive shall have such duties and responsibilities as are consistent with the Executive’s position as set forth herein and as may be assigned by the Corporation or Parent Corporation from time to time in accordance with the terms hereof. The Executive shall be subject to, and shall act in accordance with, all reasonable instructions and directions of the Chief Executive Officer of the Parent Corporation (the “Reporting Manager”) and all policies and rules of the Corporation and the Parent Corporation applicable to executive officers.
(b) During the Term, excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote his full working time, energy and attention to the performance of his duties and responsibilities hereunder and shall diligently endeavor to promote the business and best interests of the Corporation and Parent Corporation. Notwithstanding the foregoing, to the extent that it does not interfere with the performance of Executive’s duties hereunder, Executive may (i) with the prior consent of the Board of Directors of the Parent Corporation (the “Board”), serve on the board of directors or equivalent body of up to one other company that is not a competitor of the Corporation or the Parent Corporation; (ii) serve on the boards of directors or equivalent bodies of trade associations and/or charitable organizations; (iii) engage in charitable activities and community affairs; and (iv) manage his personal, financial and legal affairs.
(c)  As President, the Executive will be responsible for all customer facing activity, as may be assigned to him from time to time by the Reporting Manager, including sales, marketing, and global technical services comprised of customer support and professional services.  You will be located in San Mateo, California. 
2. Compensation
(a) Base Salary
As compensation for the agreements made by the Executive herein and the performance by the Executive of his obligations hereunder, during the Term, the Corporation shall pay the Executive a base salary at the rate of US$600,000 per annum (the “Base Salary”), payable in accordance with the Corporation’s payroll practice as in effect from time to time, except to the extent that the Executive has 

previously elected to defer the receipt of such Base Salary pursuant to an arrangement that meets the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
(b) Variable Compensation
In addition to the Base Salary, with respect to each fiscal year of the Parent Corporation during the Term, the Executive shall be eligible to earn a bonus (the “Variable Compensation”), with an annual target amount of US$600,000 (the “Target Bonus”), which shall be payable in four quarterly instalments based on the achievement of Parent Corporation performance objectives established by the Board, subject to the Executive’s employment with the Corporation through the applicable payment date for any such Variable Compensation.  The achievement of the performance objectives shall be calculated on a quarterly basis and approved by the Compensation Committee (as defined below). With respect to fiscal year 2016 of the Parent Corporation, you shall be entitled to a guaranteed pro rata Variable Compensation payment at target for the period commencing on the Effective Date (as defined herein) and ending on June 30, 2016, payable in two quarterly instalments. 
Notwithstanding anything to the contrary herein, the Variable Compensation shall be paid no later than the 15th day of the third month following the close of the fiscal year to which the Variable Compensation relates, except to the extent that the Executive has previously elected to defer the receipt of such Variable Compensation pursuant to an arrangement that meets the requirements of Section 409A of the Code.
(c) Long Term Compensation
During the Term, the Executive will be eligible to participate in all Long Term Incentive Programs (“LTIP”) as and when approved by the Compensation Committee of the Board (the “Compensation Committee”).  The value of LTIP is generally determined at the beginning of the LTIP term, and consists of 50 percent performance stock units (“PSUs”), 25 percent restricted stock units (“RSUs”) and 25 percent stock options.  
The value target to be used for the three (3) year term of each LTIP and the mix of PSUs, RSUs and stock options of each LTIP shall be determined by the Committee and approved by the Board.  The target value for the Executive in respect of the LTIP 2018 Plan (for the performance period commencing July 1, 2015 and ending September 15, 2018) shall be USD$850,000.  All LTIP grants are subject to the approval of the Board.
In addition to the LTIP 2018 Plan, the Executive shall be granted 20,000 RSUs (the “Supplemental RSUs”).  The Supplemental RSUs shall vest as follows: 12,000 Supplemental RSUs shall vest on the first anniversary of the grant date, and an additional 8,000 Supplemental RSUs shall vest on the second anniversary of the grant date.  If the Executive is terminated during the vesting period in accordance with the terms of this Agreement, other than for Cause, the Supplemental RSUs shall automatically vest.  The Supplemental RSU grants are subject to the approval of the Board.
     (d) Equity Plans
The Corporation shall permit the Executive to participate in any share option plan, share purchase plan or similar plan offered by the Parent Corporation from time to time to its similarly situated executive officers in the manner and to the extent authorized by the Compensation Committee.
Executive shall be granted options to acquire 150,000 common shares of the Parent Corporation issuable under and subject to the terms of the Parent Corporation’s 2004 Stock Option Plan as Amended.  

All stock option grants are subject to approval by the Board.
     (e) Stock Ownership
The Executive agrees to comply with the Equity Ownership Guidelines as set out in accordance with Schedule “A.”
(f) Reimbursement of Expenses
During the Term, the Corporation shall reimburse the Executive for all business expenses incurred by the Executive in performing his duties and responsibilities under this Agreement (“Business Expenses”), in accordance and to the extent consistent with the Corporation’s policies or practices for reimbursement of business expenses incurred by other Corporation executive officers.
(g) Other Benefits
During the Term, for so long as the Executive meets the eligibility requirements of the applicable plan, practice, policy or program, and except as specifically provided herein: (i) the Executive shall be entitled to participate in all savings and retirement plans, practices, policies and programs of the Parent Corporation which are made available generally to similar situated executive officers of the Corporation; (ii) the Executive and/or the Executive’s family, as the case may be, shall be entitled to participate in, and shall receive all benefits under, all perquisite and welfare benefit plans, practices, policies and programs (including the Parent Corporation’s health insurance and disability plans) provided by the Parent Corporation which are made available to similarly situated executive officers of the Parent Corporation (for the avoidance of doubt, such plans, practices, policies or programs shall not include any plan, practice, policy or program which provides benefits in the nature of severance or continuation pay), including those benefits set forth in Schedule “B”, as amended from time to time; and (iii) the Executive shall be entitled to 20 days paid vacation per fiscal year of the Parent Corporation at a time approved in advance by the Reporting Manager, which approval shall not be unreasonably withheld but shall take into account the staffing requirements of the Corporation and Parent Corporation and the need for the timely performance of the Executive’s responsibilities, subject to the Corporation’s policy respecting same in effect from time to time.
(h) Annual Compensation Review
Other than as herein provided, there shall be no cost-of-living increase or merit increase in the Base Salary or increases in any bonuses payable to the Executive unless approved by the Board or the Compensation Committee. The Board and Compensation Committee shall review annually the Base Salary and all other compensation to be received by the Executive under this Agreement.
3. Term
The Executive shall serve, pursuant to this Agreement, as President commencing on January 4, 2016 (the “Effective Date”) and expiring on the first anniversary of the Effective Date (such period, the “Term”); provided that, on the first anniversary of the Effective Date and on each anniversary thereafter, the Term shall be extended automatically for an additional one-year period unless either party provides the other party with notice of non-renewal at least three (3) months before any such anniversary. Notwithstanding the foregoing, the Executive’s employment hereunder may be terminated prior to the end of the Term upon his “Separation from Service” with the Corporation (as hereinafter defined) in connection with the earliest to occur of any of the events described in Section 4 hereof, in which case the Term shall be terminated as of the date of the Executive’s Separation from Service. For purposes of this 

Agreement, the Executive’s Separation from Service shall be deemed to occur when the level of services performed by the Executive for the Corporation decreases to a level equal to 20% or less of the average level of services performed by the Executive for the Corporation during the immediately preceding 36-month period (or, if shorter, during the period from the Effective Date to the date of the relevant determination) and Executive’s employment with the Corporation terminates (within the meaning of Treas. Regs. Section 1.409A-1(h)(ii)), and the date of the Executive’s Separation from Service (the “Date of Separation from Service”) shall be the date determined in accordance with Sections 5(b) and (as applicable) 5(c) hereof.
4. Separation from Service
(a) Death
The Executive shall separate from service with the Corporation, and the Term shall terminate, upon the Executive’s death.
(b) Disability
The Corporation shall be entitled to terminate the Executive’s employment for “Disability,” and the Executive shall separate from service with the Corporation, if, as a result of the Executive’s incapacity due to physical or mental illness or injury, the Executive (i) shall become eligible to receive a benefit under the Corporation’s long-term disability plan applicable to the Executive, or (ii) has been unable, due to physical or mental illness or incapacity, to perform the essential duties of his employment with reasonable accommodation for a continuous period of one hundred twenty (120) days or, during any period of twelve (12) consecutive months during the Term, an aggregate of one hundred-eighty (180) days, whether consecutive or not.
(c) Cause
The Corporation may terminate the Executive’s employment for Cause, and upon such termination the Executive shall separate from service with the Corporation. For purposes of this Agreement, the term “Cause” shall mean, when used in connection with the Executive’s Separation from Service with the Corporation: (i) the Executive’s failure to attempt in good faith to perform his duties (other than as a result of physical or mental illness or injury); (ii) the Executive’s willful misconduct or gross negligence of a material nature in connection with the performance of his duties as an employee, which is or could reasonably be expected to be injurious to the Corporation, or any of its Affiliates (as defined below) (whether financially, reputationally or otherwise); (iii) a breach by the Executive of the Executive’s fiduciary duty or duty of loyalty to the Corporation or its Affiliates; (iv) except in connection with the Executive’s good faith performance of duties, the Executive’s intentional and unauthorized removal, use or disclosure of the Corporation’s or any Affiliate’s document (in any medium or form) relating to the Corporation or an Affiliate, or the customers of the Corporation or an Affiliate thereof and which may be injurious to the Corporation, its customers or their respective Affiliates; (v) the willful performance by the Executive of any act or acts of dishonesty in connection with or relating to the Corporation’s or its Affiliates’ business or the willful misappropriation (or willful attempted misappropriation) of any of the Corporation’s or any of its Affiliates’ funds or property; (vi) the indictment of the Executive or a plea of guilty or nolo contendere by the Executive to any felony or other serious crime involving moral turpitude; (vii) a material breach of any of the Executive’s obligations under any agreement entered into between the Executive and the Corporation or any of its Affiliates that is material to the employment relationship between Corporation or any of its Affiliates and the Executive, including without limitation, this Agreement; or (viii) a material breach of the policies or procedures of the Corporation or any of its 

Affiliates, which breach causes or could reasonably be expected to cause harm to the Corporation or its business reputation; provided that, with respect to the events in clauses (i), (ii), (iv) or (vii) herein, the Corporation shall have delivered written notice to the Executive of its intention to terminate the Executive’s employment for Cause, which notice specifies in reasonable detail the circumstances claimed to give rise to the Corporation’s right to terminate the Executive’s employment for Cause and the Executive shall not have cured such circumstances as determined by the Board in good faith, to the extent such circumstances are reasonably susceptible to cure as determined by the Board in good faith, within thirty (30) days following the Corporation’s delivery of such notice. For purposes of this Agreement, “Affiliate” means, with respect to any person, any other person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified. For the purposes of this definition and this Agreement, the term “Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.
(d) Corporation Termination Other than for Cause and Executive Voluntary Termination (Other Than for Good Reason)
The Corporation may terminate the employment of the Executive for any reason other than for Cause, notwithstanding any other provision of this Agreement, upon compliance with the terms of Section 6(a) hereof. The Executive may voluntarily terminate his employment, other than for Good Reason, provided that the Executive provides the Corporation with notice of his intent to terminate his employment at least ninety (90) days in advance of the Date of Separation from Service (as defined below). Upon such termination, in each case, the Executive shall separate from service with the Corporation. In the event of non-renewal of this Agreement by the Corporation in accordance with Section 3 hereof, the Corporation shall comply with the terms of Section 6(a) hereof.
(e) Good Reason
The Executive may terminate his employment and separate from service with the Corporation for Good Reason. For purposes of this Agreement, the term “Good Reason” shall mean, when used in connection with the Executive’s Separation from Service with the Corporation, unless the Executive shall have consented in writing thereto, (i) a material diminution in the Executive’s duties and responsibilities other than a change in such Executive’s duties and responsibilities that arises solely out of (a) the Parent Corporation becoming part of a larger organization following a Change in Control or any change in the reporting hierarchy incident thereto or (b) a reorganization of the Parent Corporation resulting in a similar change to similarly situated executive officers’ duties and responsibilities; (ii) a material reduction in the Executive’s Base Salary or Target Bonus, unless a proportional reduction in base salary or target bonus, as applicable, is also applicable to similarly situated executive officers; (iii) a relocation of the Executive’s primary work location more than fifty (50) miles from the Executive’s work location on the Effective Date; or (iv) a reduction in the Executive’s title or position with the Corporation other than a change in such Executive’s title or position that arises solely out of (a) the Parent Corporation becoming part of a larger organization following a Change in Control or any change in the reporting hierarchy incident thereto or (b) a reorganization of the Parent Corporation resulting in a similar change to similarly situated executive officers’ title or position; provided, that in each case, within thirty (30) days following the occurrence of any of the events set forth herein, the Executive shall have delivered written notice to the Corporation of his intention to terminate his employment for Good Reason, which notice specifies in reasonable detail the circumstances claimed to give rise to the Executive’s right to terminate employment for Good Reason, the Corporation shall not have cured such circumstances within thirty (30) days following the Corporation’s receipt of such notice, and the Executive’s Separation from Service with the Corporation shall have occurred within sixty (60) days following such failure to cure.

5. Procedure for Separation from Service
(a) Notice of Separation from Service. Any separation of the Executive from service with the Corporation (other than a separation from service on account of the death of Executive) shall be communicated by written “Notice of Separation from Service” to the other party hereto in accordance with Section 14(a) hereof.
(b) Date of Separation from Service. The Date of Separation from Service shall mean: (i) if the Separation from Service occurs due to the Executive’s death, the date of the Executive’s death; (ii) if the Separation from Service occurs due to a termination by the Corporation pursuant to Section 4(b), the date on which the Executive receives a Notice of Separation from Service from the Corporation; (iii) if the Separation from Service occurs due to the Executive’s voluntary termination without Good Reason, the date specified in the notice given pursuant to Section 4(d) hereof, which shall not be less than ninety (90) days after the Notice of Separation from Service; (iv) if the Separation from Service occurs due to the Executive’s termination with Good Reason, the date of his termination in accordance with Section 4(e) hereof; and (v) if the Separation from Service occurs for any other reason, the date on which a Notice of Separation from Service is given or any later date (within thirty (30) days, or any alternative time period agreed upon by the parties, after the giving of such notice) set forth in such Notice of Separation from Service.
(c) Section 409A of the Code. Notwithstanding anything to the contrary in Section 5(b), the determination of whether and when the Date of Separation from Service from the Corporation occurs for the purpose of determining when any amount that is “nonqualified deferred compensation” subject to Section 409A of the Code becomes due and payable shall be made in a manner consistent with, and based on the presumptions set forth in, Treas. Regs. Section 1.409A-1(h). Solely for purposes of the determination referred to in the preceding sentence, “Corporation” shall include all persons with whom the Corporation would be considered a single employer under Sections 414(b) and 414(c) of the Code. In the event that the Date of Separation from Service as determined in accordance with this Section 5(c) occurs before the notice period specified in Section 5(b) has elapsed, the Corporation may elect to pay, or commence payment of, any amounts to which this Section 5(c) applies following the completion of such notice period, but not later than December 31 of the calendar year in which the Date of Separation from Service occurs.
6. Separation Payments
(a) Other than for Cause or for Good Reason
In the event of the Executive’s Separation from Service due to termination by the Corporation other than for Cause (including a Separation from Service as a result of Disability but not death) or by the Executive for Good Reason, subject to (in respect of clauses (ii) through (iv)) the Executive’s continued compliance with Section 6(h) below, Section 20 below and the Restrictive Covenants Agreement described in Section 10 below, the Corporation shall pay to the Executive the amounts described below at the times specified below, and, except for (x) the Executive’s rights of indemnification and insurance provided in Section 9 hereof and (y) any vested benefits under any tax-qualified pension plans of the Corporation, the Corporation shall have no additional obligations under this Agreement:
(i) Accrued Payments. Within thirty (30) days following the Date of Separation from Service, (w) any Base Salary earned by the Executive but not paid through the Date of Separation from Service 

(reduced by any amounts that the Executive received in connection with benefits paid or payable as a result of Disability, if applicable); (x) any Variable Compensation earned by the Executive for the fiscal year prior to the year in which the Date of Separation from Service has occurred but not yet paid prior to the Date of Separation from Service (except that, with respect to (w) and (x), to the extent that the Executive has previously elected to defer the receipt of such Base Salary or Variable Compensation pursuant to an arrangement that meets the requirements of Section 409A of the Code, the timing of the payment of such Base Salary or Variable Compensation shall be in accordance with the terms of such arrangement); (y) the Executive’s accrued but unused vacation pay through the Date of Separation from Service; and (z) any Business Expenses not reimbursed as of the Date of Separation from Service (the amounts described in (w) through (z), together, the “Accrued Payments”);
(ii) Separation Payments. In respect of each month during the 12-month period measured from the day of the Executive’s Date of Separation from Service (the “Severance Period”), (x) an amount equal to one-twelfth of the Base Salary as in effect for the year in which the Date of Separation from Service occurs shall be paid in equal installments in accordance with the Corporation’s standard payroll practices (reduced by any amounts received by and/or payable to Executive in connection with benefits paid or payable as a result of Disability, if applicable) (the “Salary Continuation Payments”); and (y) an amount equal to one-twelfth of the Target Bonus as in effect for the year in which the Date of Separation from Service occurs shall be paid once a month (together with the Salary Continuation Payments, the “Separation Payments”);
(iii) Pro Rata Bonus. At the time that Variable Compensation for the Parent Corporation’s fiscal year in which the Date of Separation from Service occurred would otherwise be paid (but in no event later than the 15th day of the third month following the close of such fiscal year), an amount equal to the product of (i) the Target Bonus for such fiscal year that the Executive would have received had the Executive remained employed with the Corporation and (ii) a fraction, the numerator of which is the number of full weeks the Executive was employed with the Corporation in such fiscal year and the denominator of which is fifty-two (the “Pro Rata Bonus”); provided that, to the extent that the Executive has previously elected to defer the receipt of such bonus pursuant to an arrangement that meets the requirements of Section 409A of the Code, the timing of the payment of the Pro Rata Bonus shall be in accordance with the terms of such arrangement; and
(iv) Continued Group Medical Benefits. The Executive’s ability to participate in the medical plan of the Corporation shall continue only through the Date of Separation from Service. If the Executive elects to continue his health and dental insurance coverage pursuant to COBRA, the Corporation shall reimburse the Executive for the COBRA premiums for the Executive and his dependents for the number of months corresponding to the Severance Period; provided, however, that if the Executive is eligible to receive comparable medical or other welfare benefits under another employer-provided plan, the COBRA premium reimbursement described herein shall be terminated. The Executive shall promptly notify the Corporation of any changes in his medical benefits coverage.
(b) Timing of Separation Payments
Notwithstanding anything to the contrary in this Section 6, in the event that Executive is a “specified employee” (within the meaning of Section 409A(2)(B) of the Code) on the Date of Separation from Service, no Separation Payments shall be paid until the earlier of (x) the date of the Executive’s death or (y) the first business day of the first calendar month that begins after the six-month anniversary of the Date of Separation from Service at which time all Separation Payments which would otherwise have been paid that would otherwise have been paid during such period of delay shall be paid with Interest (as defined below) and the remaining Separation Payments shall be paid in accordance with Section 6(a) 

above. “Interest” shall mean interest at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code, from the date on which payment would otherwise have been made but for any required delay through the date of payment.
(c) Cause or Voluntarily (other than for Good Reason)
In the event of the Executive’s Separation from Service with the Corporation due to termination by the Corporation for Cause or voluntarily by the Executive other than for Good Reason, the Corporation shall pay the Executive, within thirty (30) days following the Date of Separation from Service, any Accrued Payments. In the event of the Executive’s Separation from Service with the Corporation due to termination voluntarily by the Executive other than for Good Reason, the Board, in their sole and absolute discretion, may waive the notice period required by Section 4(d) above, in which case the Executive’s employment shall be deemed to terminate immediately, provided the Executive shall still be entitled to compensation due on account of Annual Base Salary and benefits earned up to the last date of the 3 month advance written notice period given by the Executive and any Variable Compensation earned and prorated during such 3 month notice period. Except as provided in this Section 6(c), and except for the Executive’s rights of indemnification and insurance provided in Section 9 hereof and any vested benefits under any tax qualified pension or equity incentive compensation plans of the Corporation, and continuation of health insurance benefits on the terms and to the extent required by statute as may be applicable to the Executive, the Corporation shall have no additional obligations under this Agreement.
(d) Death
In the event of the Executive’s Separation from Service with the Corporation as a result of the Executive’s death, the Corporation shall pay the Executive’s estate within thirty (30) days following the Date of Separation from Service, the Accrued Payments. Except as provided in this Section 6(d), and except for the Executive’s rights of indemnification and insurance provided in Section 9 hereof and any vested benefits under any tax qualified pension or equity incentive compensation plans of the Corporation, the Corporation shall have no additional obligations under this Agreement.
(e) Options
Except as expressly stipulated in Section 7 hereof, any options which have not vested as of the Date of Separation from Service shall terminate and be of no further force and effect as of the Date of Separation from Service and neither any period of notice nor any payment in lieu thereof upon Separation from Service hereunder shall be considered as extending the period of employment for the purposes of vesting of options notwithstanding anything to the contrary in any other agreement between the Parent Corporation and the Executive. In the event of a Separation from Service other than by the Corporation for Cause, the Executive shall have the right to exercise any options which are vested as at the Date of Separation from Service for ninety (90) days following such date at which time such unexercised options will expire. In the event of a Separation from Service by the Corporation for Cause, all options, vested and unvested, shall terminate and be of no further force and effect as of Date of Separation from Service and neither any period of notice nor any payment in lieu thereof upon Separation from Service hereunder shall be considered as extending the period of employment for the purposes of vesting of options notwithstanding anything to the contrary in any other agreement between the Corporation and the Executive. In addition, notwithstanding anything contained in this Section 6 or elsewhere in this Agreement, in the event of Separation from Service due to death of the Executive, the estate of the Executive shall be entitled to exercise any options which have vested as at the date of death of the Executive, at any time during the period which is twelve (12) months following the date of death of the Executive at the end of which period such options will expire.

(f) Long Term Compensation
Except as expressly provided in Section 7 below, in the event of the Executive’s Separation from Service for any reason, all outstanding awards granted under any LTIP shall continue to be governed by the terms set forth in such LTIP.
(g) No Further Entitlements
Except as expressly provided in this Section 6 and Section 7 below, in the event of the Executive’s Separation from Service for any reason, the Executive will not be entitled to receive any further payments, in lieu of notice or as damages for any reason whatsoever. Except as to any entitlement as expressly provided in this Agreement, the Executive hereby waives any claims the Executive may have against the Corporation or the Parent Corporation for or in respect of termination pay, severance pay, or notice in lieu thereof on account of loss of office or employment.
(h) Release
Notwithstanding anything to the contrary in this Agreement, the payments and benefits described in Section 6(a) above, other than the Accrued Payments, shall commence being made to the Executive, subject to the condition that Executive has delivered to the Corporation an executed copy of a release substantially in the form attached as Schedule “D” and that such release has become effective, enforceable and irrevocable in accordance with its terms, on the date that is 30 days after the Date of Separation from Service or, to the extent required, on the date specified in Section 6(b) above.
7. Change in Control
(a) Definition
For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Parent Corporation on a consolidated basis to any person or group of related persons for purposes of Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act” and a “Group,” respectively); (ii) the approval by the holders of the outstanding voting power of the Parent Corporation of any plan or proposal for the liquidation or dissolution of the Parent Corporation; (iii) any person or Group shall become the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, of shares representing more than 50% of the aggregate outstanding voting power of the Parent Corporation and such person or Group actually has the power to vote such shares in any such election; (iv) the replacement of a majority of the Board over a twelve-month period from the directors who constituted the Board at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board then still in office who were members of such Board at the beginning of such period; or (v) consummation of a reorganization, merger, consolidation or similar transaction involving the Parent Corporation and/or any entity controlled by the Parent Corporation, or a sale or other disposition of substantially all of the assets of the Parent Corporation, or the acquisition of assets or stock of another entity by the Parent Corporation or any entity controlled by the Parent Corporation (each, a “Business Combination”) unless following such Business Combination the shareholders of the Parent Corporation immediately prior to the Business Combination own at least 50% of the then-outstanding equity securities and of the combined voting power of the corporation or other entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such Business Combination, owns the Parent Corporation or substantially all of the Parent Corporation’s assets either directly or through one or more subsidiaries). 

Notwithstanding the foregoing, for the purposes of this Agreement, an event or series of events shall not be deemed to be a Change in Control to the extent that the application of the relevant definition of Change in Control would cause any tax to become due under Section 409A of the Code.
(b) Change-in-Control Benefits and Payments
In the event of the Executive’s Separation from Service due to termination by the Corporation other than for Cause or by the Executive for Good Reason within the one (1) year period following a Change in Control, then the Executive shall be entitled to the following, notwithstanding any else in this Agreement to the contrary:
(i) payments under Section 6(a) of this Agreement at the time and in the manner set forth therein except that for purposes of clause (ii) of Section 6(a), the Severance Period shall be 24 months;
(ii) all options which have not vested as of the Date of Separation from Service 11 shall vest immediately upon such Date and the Executive shall have the right to exercise all of such options for 90 days following such Date at which time any unexercised options will expire; and
(iii) all outstanding awards granted under any LTIP shall vest 100% and any payments under Section 6.2(b) of the Schedule to the LTIP (Special Provisions Applicable to Eligible Employees Subject to Section 409A of the United States Internal Revenue Code) shall be made as set forth therein except that the Target Bonus (as defined in the LTIP) shall vest 100%;
(iv) notwithstanding anything to the contrary in this Section 7, in the event that Executive is a “specified employee” (within the meaning of Section 409A(2)(B) of the Code) on the Date of Separation from Service, no Separation Payments shall be paid until the earlier of the date of the Executive’s death or the first business day of the first calendar month that begins after the six-month anniversary of the Date of Separation from Service at which time all Separation Payments which would otherwise have been paid that would otherwise have been paid during such period of delay shall be paid with Interest (as defined below) and the remaining Separation Payments shall be paid in accordance with Section 6(a) above. “Interest” shall mean interest at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code, from the date on which payment would otherwise have been made but for any required delay through the date of payment.
(c) Certain Additional Payments by the Corporation
(i) If it is determined (as hereafter provided) that any payment or distribution by the Corporation or Parent Corporation to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement of the Corporation or Parent Corporation, including without limitation any stock options or other equity award, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto), or any interest or penalties with respect to such excise tax (such tax or taxes, together with any such interest and penalties, are hereafter collectively referred to as the “Excise Tax”), then the Payments shall be payable either (x) in full or (y) as to the maximum value of such lesser amount which would result in no portion of the Payments being subject to the Excise Tax and Executive shall receive the greater, on an after-tax basis, of (x) or (y) above. The reduction of the amounts payable under this Agreement, if applicable, shall be made as follows:

First, if the Payments include the value of acceleration in the time at which any Payment not subject to Section 409A of the Code is paid, a delay in the time of payment (but not a delay of vesting) of such Payment, provided that such delay shall apply to the aggregate amount of such Payments (and not on a Payment-by-Payment basis) and such aggregate amount shall be delayed only to the extent necessary to satisfy this Section 7(c)(i);
Second, to the extent further reduction is required by this Section 7(c)(i), a reduction in the amount of Payments required to be paid or delivered, provided that the Executive shall be entitled to select among the forms of Payment that shall be reduced; and
Third, to the extent further reduction is required by this Section 7(c)(i), if the Payments include the value of acceleration in the time at which any Payment vests, a cutback in the extent of such accelerated vesting, provided that such cutback shall apply to the aggregate amount of such Payments (and not on a Payment-by-Payment basis) and accelerated vesting of such aggregate amount shall be cut back only to the extent necessary to satisfy this Section 7(c)(i).
(ii) Subject to the provisions of Section 7(c)(i) of this Agreement, all determinations required to be made under this Section 7(c), including whether an Excise Tax is payable by Executive and the amount of such Excise Tax and whether and, if so, what reductions are required by Section 7(c)(i), will be made by a nationally recognized firm of certified public accountants (the “Accounting Firm”) chosen by the Corporation. The Corporation will direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Corporation and Executive within fifteen (15) calendar days after the date of the event giving rise to the Payment or the Date of Separation from Service, if applicable, and any other such time or times as may be reasonably requested by the Corporation or Executive. If the Accounting Firm determines that an Excise Tax would be payable by Executive, it will perform the calculation set out in Section 7(c)(i). Any determination by the Accounting Firm as to the determination made under Section 7(c)(i) will be binding upon the Corporation, the Parent Corporation and Executive. If the Accounting Firm determines that no Excise Tax is payable by Executive, it will, at the same time as it makes such determination, furnish Executive with an opinion that he has substantial authority not to report any Excise Tax on his federal, state, local income or other tax return. The Corporation, Parent Corporation and Executive will each cooperate with the Accounting Firm in connection with the preparation and issuance of the determination contemplated by this Section 7(c)(ii).
(iii) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by Section 7(c)(ii) of this Agreement will be borne by the Corporation and paid as incurred. If such fees and expenses are initially advanced by Executive, the Corporation will reimburse Executive the full amount of such fees and expenses within fifteen (15) business days after receipt from Executive of a statement therefor and reasonable evidence of his payment thereof.
8. No Mitigation
Except as expressly provided herein, the Executive shall not be required to seek other employment or otherwise mitigate the amount of any payments to be made by the Corporation pursuant to this Agreement. Except as otherwise provided herein, the payments provided pursuant to this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by another employer after the termination of the Executive’s employment or otherwise. The Corporation’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Corporation may have against the Executive or others.

9. Legal Fees; Indemnification; Liability Insurance
(a) In the event of any contest or dispute between the Corporation and the Executive with respect to this Agreement or the Executive’s employment hereunder, each of the parties shall be responsible for its respective legal fees and expenses.
(b) During the Term and for so long as there exists liability thereafter with regard to the Executive’s activities during the Term on behalf of the Corporation, the Corporation shall indemnify the Executive to the fullest extent permitted by applicable law (and in no event in connection with the Executive’s gross negligence or willful misconduct), and shall at the Corporation’s election provide the Executive with legal representation or shall advance to the Executive reasonable attorneys’ fees and expenses as such fees and expenses are incurred (subject to an undertaking from the Executive to repay such advances if it shall be finally determined by a judicial decision which is not subject to further appeal that the Executive was not entitled to the reimbursement of such fees and expenses).
(c) During the Term and for six years thereafter, the Executive shall be entitled to the same directors’ and officers’ liability insurance coverage that the Corporation or the Parent Corporation provides generally to its other directors and officers, as may be amended from time to time for such directors and officers.
10. Restrictive Covenants
The Executive agrees to execute contemporaneously with his execution of this Agreement the confidentiality and non-solicitation agreement annexed hereto as Schedule “C” (the “Restrictive Covenants Agreement”).
11. Injunctive Relief
It is impossible to measure in money the damages that will accrue to the Corporation or any of its Affiliates in the event that the Executive breaches any of the Restrictive Covenants. In the event that the Executive breaches any such Restrictive Covenant, the Corporation or any of its Affiliates shall be entitled to an injunction restraining the Executive from violating such Restrictive Covenant (without posting any bond). If the Corporation or any of its Affiliates shall institute any action or proceeding to enforce any such Restrictive Covenant, the Executive hereby waives the claim or defense that the Corporation or any of its Affiliates has an adequate remedy at law and agrees not to assert in any such action or proceeding the claim or defense that the Corporation or any of its Affiliates has an adequate remedy at law. The foregoing shall not prejudice the Corporation’s or any of its Affiliates’ right to require the Executive to account for and pay over to the Corporation or any of its Affiliates, and the Executive hereby agrees to account for and pay over, the compensation, profits, monies, accruals or other benefits derived or received by the Executive as a result of any transaction constituting a breach of any of the Restrictive Covenants.
12. Arbitration; Forum Selection.
(a) Arbitration
If there is a disagreement or dispute between the parties with respect to this Agreement or the interpretation thereof, such disagreement or dispute will be referred to binding arbitration to be conducted by a single arbitrator, if Executive and the Corporation agree upon one, otherwise by three arbitrators appointed as hereinafter set out, pursuant to the American Arbitration Association’s (the “AAA”) rules governing commercial arbitration in effect at the time of the arbitration, except as modified herein. A party who wishes to arbitrate shall give written notice of such intention to the other party (a “Notice of 

Intention”). The arbitrator shall be appointed by agreement by agreement of Executive and the Corporation or, in default of agreement within ten (10) Business Days of service of the Notice of Intention, each of Executive and the Corporation shall within five (5) Business Days of the expiry of the aforesaid ten (10) Business Day period, select one arbitrator and notify the other of its selection, with the third arbitrator to be chosen by the first two named arbitrators within five (5) Business Days of the expiry of the aforesaid five (5) Business Day period. If one of the parties does not so notify the other of its selection within the prescribed time, then the arbitrator selected by the other party in accordance with the above procedure shall be the sole arbitrator. The arbitration shall be held in the State of Delaware. The procedure to be followed shall be as agreed by the parties or, in default of agreement, determined by the arbitrator(s), provided, however, that depositions or examinations for discovery will not be allowed but information may be exchanged by other means. The parties will use their best efforts to ensure that the arbitration hearing is conducted no later than sixty (60) days after the arbitrator is, or arbitrators are, selected. The final decision of the arbitrator or arbitrators or any two of the three arbitrators will be furnished to the parties in writing and will constitute a conclusive determination of the issue in question, binding upon the parties, without right of appeal. The fees and expenses of the arbitration shall be in the discretion of the arbitrator(s). Judgment upon the award may be entered in any court of competent jurisdiction.
(b) Forum Selection
The parties hereby agree that all demands, claims, actions, causes of action, suits, proceedings and litigation between or among the parties or arising out of the employment relationship between the Executive and the Corporation not subject to the Arbitration provision in Section 12(a) hereof shall be filed, tried and litigated only in a federal or state court located in the State of Delaware. In connection with the foregoing, the parties hereto irrevocably consent to the jurisdiction and venue of such court and expressly waive any claims or defenses of lack of jurisdiction of or proper venue by such court.
13. Section 409A
(a) The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Code and the regulations and guidance promulgated thereunder (except to the extent exempt as short-term deferrals or otherwise) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If the Executive notifies the Corporation (with specificity as to the reason therefor) that the Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause Executive to incur any additional tax or interest under Section 409A of the Code or the Corporation independently makes such determination, the Corporation shall, after consulting with Executive and solely in the event and to the extent the Corporation’s outside counsel deems it necessary to avoid any such additional tax or interest, reform such provision to comply with Section 409A of the Code. To the extent that any provision hereof is modified in order to comply with Section 409A of the Code, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Corporation of the applicable provision without violating the provisions of Section 409A of the Code. In no event shall the Corporation be required to pay Executive any “gross-up” or other payment with respect to any taxes or penalties imposed under Section 409A of the Code with respect to any benefit paid or promised to Executive hereunder.
(b) It is intended that each installment, if any, of the payments and benefits, if any, provided to the Executive under Section 6 hereof shall be treated as a separate “payment” for purposes of Section 409A of the Code. Neither the Corporation nor the Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409 of 

the Code.
(c) All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code to the extent that such reimbursements or in-kind benefits are subject to Section 409A of the Code. All expenses or other reimbursements paid pursuant herewith that are taxable income to the Executive shall in no event be paid later than the end of the calendar year next following the calendar year in which Executive incurs such expense or pays such related tax. With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A of the Code, the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that, the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code, if applicable, solely because such expenses are subject to a limit related to the period the arrangement is in effect and such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense occurred.
(d) Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the Date of Separation from Service”), the actual date of payment within the specified period shall be within the sole discretion of the Corporation.
14. Miscellaneous
(a) Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to be given when delivered personally or four days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight courier service and, in each case, addressed as follows (or if it is sent through any other method agreed upon by the parties):
If to the Corporation:
c/o Open Text Inc.
1301 South Mopac Expressway, Suite 150 
Austin, Texas 78746

With a copy to, in all cases, the Parent Corporation:
c/o Open Text Corporation 
275 Frank Tompa Drive Waterloo, Ontario
Canada N2L 0A1

If to the Executive:
Stephen F. Murphy
Address on file.
        

or to such other address as any party hereto may designate by notice to the others.
(b) This Agreement shall constitute the entire agreement among the parties hereto with respect to the Executive’s employment hereunder, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to the Executive’s employment.
(c) This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing signed by the party or parties against whom or which enforcement of such waiver is sought. The failure of any party hereto at any time to require the performance by any other party hereto of any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by any party hereto of a breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision or a waiver of the provision itself or a waiver of any other provision of this Agreement.
(d) The parties hereto acknowledge and agree that each party has reviewed and negotiated the terms and provisions of this Agreement and has had the opportunity to contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement. Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in favor or against either party.
(e) The parties hereto hereby represent that they each have the authority to enter into this Agreement, and the Executive hereby represents to the Corporation that the execution of, and performance of duties under, this Agreement shall not constitute a breach of or otherwise violate any other agreement to which the Executive is a party. The Executive hereby further represents to the Corporation that he will not utilize or disclose any confidential information obtained by the Executive in connection with any former employment with respect to his duties and responsibilities hereunder.
(f) This Agreement is binding on and is for the benefit of the parties hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Neither this Agreement nor any right or obligation hereunder may be assigned by the Executive.
(g) The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Corporation to assume this Agreement in the same manner and to the same extent that the Corporation would have been required to perform it if no such succession had taken place. As used in the Agreement, “the Corporation” shall mean both the Corporation as defined above and any such successor that assumes this Agreement, by operation of law or otherwise.
(h) Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section 14(h), be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. No waiver of any provision or violation of this Agreement by the Corporation shall be implied by the Corporation’s forbearance or failure to take action.
(i) The Corporation may withhold from any amounts payable to the Executive hereunder all federal, state, city or other taxes that the Corporation may reasonably determine are required to be 

withheld pursuant to any applicable law or regulation, (it being understood that the Executive shall be responsible for payment of all taxes in respect of the payments and benefits provided herein).
(j) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to its principles of conflicts of law.
(k) This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. A facsimile of a signature shall be deemed to be and have the effect of an original signature.
(l) The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.
15. Disclosure
During the Term, the Executive shall promptly disclose to the Board full information concerning any interest, direct or indirect, of the Executive (as owner, shareholder, partner, lender or other investor, director, officer, employee, consultant or otherwise) or any member of his family in any business that is reasonably known to the Executive to purchase or otherwise obtain services or products from, or to sell or otherwise provide services or products to, the Corporation or to any of its suppliers or customers.
16. Return of Materials
All files, forms, brochures, books, materials, written correspondence, memoranda, documents, manuals, computer disks, software products and lists (including lists of customers, suppliers, products and prices) pertaining to the business of the Corporation or any of its subsidiaries, Affiliates, and Associates that may come into the possession or control of the Executive shall at all times remain the property of the Corporation or such subsidiary, Affiliate or Associate, as the case may be. The term “Associate” shall have the meaning ascribed thereto under Rule 14a-1(a) of the General Rules of the Securities Exchange Act of 1934. On termination of the Executive’s employment for any reason, the Executive agrees to deliver promptly to the Corporation all such property of the Corporation in the possession of the Executive or directly or indirectly under the control of the Executive. The Executive agrees not to make for his personal or business use or that of any other party, reproductions or copies of any such property or other property of the Corporation.
17. Resignation of Directorships, etc.
The Executive agrees that after Separation from Service, he will, at the request of the Board, tender his resignation from any position he may hold as an officer or director of the Corporation or any of its subsidiaries, Affiliates or Associates, and the Executive further covenants and agrees, if so requested by the Board, not to stand for re-election to any office of the Corporation or any of its subsidiaries, Affiliates or Associates at any time following termination of the Executive’s employment hereunder.
18. No Derogation
Nothing herein derogates from any rights the Executive may have under applicable law, except as set out in this section. The parties agree that the rights, entitlements and benefits set out in this Agreement to be paid to the Executive are in full satisfaction of any rights or entitlements the Executive may have as against the subsidiaries, Affiliates and Associates of the Corporation as a result of the termination of his employment with such subsidiaries, Affiliates or Associates.

19. Currency
All dollars referenced herein are in US dollars unless expressly provided to the contrary.
20. Non-Disparagement
Each of the parties to this Agreement covenants and agrees not to engage in any pattern of conduct that involves the making or publishing of written or oral statements or remarks (including, without limitation, the repetition or distribution of derogatory rumors, allegations, negative reports or comments) which are disparaging, deleterious or damaging to the integrity, reputation or goodwill of the other party, which for the purposes of the Corporation, includes its subsidiaries, Affiliates or Associates or its and their management. For the sake of clarity, nothing in this Section 20 shall prohibit statements or remarks made in the good faith performance of the Corporation or Executive’s obligations under this Agreement or in accordance with applicable law.
21. No Set-Off
The existence of any claim, demand, action or cause of action of the Executive against the Corporation, whether or not based upon this Agreement, will not constitute a defense to the enforcement by the Corporation of any covenant or agreement of the Executive contained herein.
* * * * * *

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
Executive

_/s/ Stephen F. Murphy     
Stephen F. Murphy

Open Text Corporation
OpenText Inc.

  /s/ Mark Barrenechea      
Mark Barrenechea
President and Chief Executive Officer

Schedule A

Equity Ownership Guidelines

EQUITY OWNERSHIP GUIDELINES

In a continuing effort to align the interests of the Executives of the Parent Corporation, with the 
interest of Parent Corporation’s shareholders, the Board has established the following 
recommended Equity Ownership guidelines (the “Guidelines”).

COVERED EXECUTIVES

The Guidelines cover the Parent Corporation’s CEO, all NEO’s (Named 
Executive Officers), and the Executive Leadership Team (the “Covered Executives”).

OWNERSHIP GUIDELINES

The Board recommends that the Covered Executives achieve the equity ownership levels 
within five (5) years after the date of his/her qualifications as a Covered Executive, 
and (ii) hold such number of common shares or share equivalents recommended for so long as 
they are Covered Executives.

	
		
	Executive Title
	Required Equity Ownership

	CEO
	4x base salary

	Executive Leadership Team
	1x base salary

Covered Executives may achieve these Guidelines through the exercise of stock option awards, purchases under the Open Text Employee Stock Purchase Plan (“ESPP”), through an open market purchase made in compliance with applicable securities laws or through any equity plan(s) the Corporation may adopt from time to time.  Until the Guideline is met, it is recommended that a Covered Executive retains a portion of any stock option exercise or LTIP award in common shares of the Corporation to contribute to these Guidelines.

For the purpose of compliance with the Guidelines, the common shares will be valued at the greater of their book value (i.e., purchase price) and the current market value.  The Compensation Committee of the Board will review the recommended executive ownership guideline achievement levels on an annual basis.

Schedule B

Benefits

Benefits to be enjoyed by the Executive during the term of this Agreement shall include, but are not limited to:

		
	(i)
	reimbursement of reasonable cell phone expenses consistent with corporate policy;

		
	(ii)
	a US$5,000 perquisite allowance per fiscal year, which may be used for reimbursement of the following types of services or fees:

		
	•
	Financial planning 

		
	•
	Tax planning 

		
	•
	Estate planning 

		
	•
	Athletic/Health Club 

		
	•
	Additional Life Insurance

		
	(iii)
	the services of Medisys Health Group Inc., for the purposes of obtaining mandatory and regular Health Examinations.

Schedule C

Restrictive Covenants Agreement 

EMPLOYEE CONFIDENTIALITY AND 
NON-SOLICITATION AGREEMENT 

As an employee of Open Text Corporation or any related or affiliated company (the “Company”): 
A.     I understand and agree that I have a responsibility to protect and avoid the unauthorized use or disclosure of confidential information of the Company; and 
B.     I have a responsibility not to solicit or entice away from the Company any customer of the Company or any employee of the Company. 

I.    Confidential Information. For purposes of this Agreement, the term “confidential information” means all information that is not generally known and which I obtained from the Company, or learn, discover, develop, conceive or create during the term of my employment with the Company, and which relates directly to the business or to assets of the Company. Confidential information includes, but is not limited to: inventions, discoveries, know-how, ideas, computer programs, designs, algorithms, processes and structures, product information, research and development information, lists of clients and other information related thereto, financial data and information, business plans and processes, and any other information of the Company that the Company informs me, or which I should know by virtue of my position or the circumstances in which I learned it, is to be kept confidential. Confidential information also includes information obtained by the Company in confidence from its vendors or its clients. Confidential information may or may not be labeled as “confidential”. If I am unsure as to whether information is “confidential”, I will ask my manager for assistance. 
Confidential information does not include any information that has been made generally available to the public. It also does not include any general technical skills or general experience gained by me during my employment with the Company. I understand that the Company has no objection to my using these skills and experience in any new business venture or employment following the cessation of my employment with the Company. 
I recognize and acknowledge that in the course of my employment with the Company I may obtain knowledge of confidential and proprietary information of a special and unique nature and value and I may become familiar with trade secrets of the Company relating to the conduct and details of the Company’s business. While I am employed by the Company and for a period of three years following the cessation of my employment I agree: 
A.     to keep confidential and hold in secrecy and not disclose, divulge, publish, reveal or otherwise make known, directly or indirectly, or suffer or permit to be disclosed, divulged, published, revealed or otherwise made known to any person whatsoever, or used (except for the benefit and proper purposes of the Company), and shall faithfully do all in my power to assist the Company in holding in secrecy all of the Company’s confidential information as defined above. 
B.     to keep confidential and hold in secrecy and not disclose, divulge, publish, reveal or otherwise make known, directly or indirectly, or suffer or permit to be disclosed, divulged, published, revealed or otherwise made known to any person whatsoever, or used (except for the benefit and proper purposes of the Company) any and all secrets or confidential information related to the Company’s activities or affairs which I now know or which are hereafter disclosed or made known to me or otherwise learned or acquired by me, including 

information respecting the business affairs, prospects, operations or strategic plans respecting the Company, which knowledge I gain in my capacity as an employee of the Company and which knowledge is not publicly available or disclosed. 

II.     Agreement Not to Solicit. I agree that while I am an employee of the Company and for six (6) months thereafter that I will: 
A.     not solicit or entice or attempt to solicit or entice away from the Company any of the employees of the Company to enter into employment or service with any person, business, firm or corporation other than the Company; 
B.     not solicit or entice or attempt to solicit or entice away from the Company any customer or any other person, firm or corporation dealing with the Company. 

III.     Return of Documents. Upon the cessation of my employment with the Company for any reason, I agree to return to the Company all records, documents, memoranda, or other papers, copies or recordings, tapes, disks containing software, computer source code listings, routines, file layouts, record layouts, system design information, models, manuals, documentation and notes as are in my possession or control. I acknowledge and agree that all such items are strictly confidential and are the sole and exclusive property of the Company. 

IV.     General. 
A.     I further represent and warrant that I have not entered into any Agreement with any previous or present employer which would prevent me from accepting employment with the Company or which would prevent me from lawfully executing this Agreement. 
B.     I understand that the obligations outlined in this Agreement are the concern and responsibility of all employees of the Company. I agree to report in writing any violations of these policies to my manager or to the Vice-President of Human Resources. 
C.     All the provisions of this Agreement will be deemed severable, and if any part of any provision is held illegal, void or invalid under applicable law, such provision may be changed to the extent reasonably necessary to make the provision, as so changed, legal, valid and binding. If any provision of this Agreement is held illegal, void or invalid in its entirety, the remaining provisions of this Agreement will not in any way be affected or impaired, but will remain binding in accordance with its terms. 
D.     This Agreement and all the rights and obligations arising herefrom shall be interpreted and applied in accordance with the laws of the Province of Ontario and in the courts of the Province of Ontario there shall be exclusive jurisdiction to determine all disputes relating to this Agreement and all the rights and obligations created hereby. I hereby irrevocably attorn to the jurisdiction of the courts of the Province of Ontario. 
E.     I acknowledge that my employment with the Company is contingent on my acceptance and my observance of this Agreement, and that such employment is adequate and sufficient consideration to bind me to all of the covenants and agreements made by me under this Agreement. 

_________________________        _______________________________
Print Name of Witness            Print Name of Employee

_________________________        _______________________________
Signature of Witness                Signature of Employee

Date: ____________________

Schedule D

General Release 

1. Release of Claims and Waiver of Rights.
(a) In consideration of any payments and benefits being provided to me under Section 6(a) of the employment agreement (the “Employment Agreement”) dated as of December 18, 2015, as it may have been amended to the date hereof, between me and Open Text Corporation (the “Company”), those payments and benefits being good and valuable consideration, the adequacy and sufficiency of which are acknowledged by me (the “Payments”), I, Stephen F. Murphy hereby release, remise and acquit Company, its present and past parents, subsidiaries and affiliates, their successors, assigns, benefit plans and/or committees, and their respective present or past officers, directors, managers, supervisors, employees, shareholders, attorneys, advisors, agents and representatives in their individual and corporate capacity, and their successors and assigns (the “Releasees”), from, and hold them harmless against, any and all claims, obligations, or liabilities (including attorneys, fees and expenses), asserted or unasserted, known or unknown, that I, my heirs, successors or assigns have or might have, which have arisen by reason of any matter, cause or thing whatsoever related to my employment (or termination of my employment) with the Company on or prior to the date on which this General Release is signed. 
(b) The terms “claims, obligations, or liabilities” (whether denominated claims, demands, causes of action, obligations, damages or liabilities) include, but are not limited to, any and all claims under any contract with the Company, claims of age, disability, race, religion, national origin, sex, retaliation, and/or other forms of employment discrimination, breach of express or implied contract, breach of employee handbook, practices or procedures, libel, slander, intentional tort or wrongful dismissal, claims for reinstatement or reemployment, arising under any federal, state, or local common or statutory law; claims for unpaid salary, commission or fringe benefits; or any other statutory claim before any state or federal court, tribunal or administrative agency, arising out of or in any way related to my employment relationship with the Company and its affiliates and the termination of that relationship. I will not file or permit to be filed on my behalf any such claim.
(c) This General Release constitutes, among other things, a waiver of all rights and claims I may have under the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621, et seq.) (“ADEA”), the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, Title VII of the United States Civil Rights Act of 1964, all as amended including the amendment set forth in 42 U.S.C. § 1981 concerning damages in cases of intentional discrimination in employment and any other comparable national or state laws, all as amended, and as may be specified on or prior to the date on which this General Release is signed. 
(d) Notwithstanding the preceding paragraphs (b) or (c) or any other provision of this Agreement, this General Release is not intended to interfere with my right to file a charge with the Equal Employment Opportunity Commission (the “EEOC”) in connection with any claim I believe I may have against the Company or its affiliates. However, by executing this General Release, I hereby waive the right to recover in any proceeding I may bring before the EEOC or any state human rights commission or in any proceeding brought by the EEOC or any state human rights commission on my behalf. In addition, this General Release is not intended to interfere with my right to challenge that my waiver of any and all ADEA claims pursuant to this General Release is a knowing and voluntary waiver, notwithstanding my specific representation that I have entered into this General Release knowingly and voluntarily.
(e) This General Release is for any relief, no matter how denominated, including, but not limited to, injunctive relief, wages, back pay, front pay, compensatory damages, or punitive damages.

(f) This General Release shall not apply to any rights in the nature of indemnification or payments under (i) applicable law, (ii) the charter, bylaws or operating agreements of the Company, or (iii) applicable directors and officers insurance policies which I may have with respect to claims against me relating to or arising out of my employment with the Company and its affiliates or my service on their respective boards of directors, or any vested benefit to which I am entitled under any tax qualified pension plan of the Company or its affiliates, COBRA continuation coverage benefits or any other similar benefits required to be provided by statute. Furthermore, notwithstanding anything to the contrary contained in this Section 1, I do not release any of the Releasees from the Company’s obligation to timely provide me with all payments and benefits to which I am entitled pursuant to the terms of the Employment Agreement, or any other obligations of the Company under the Employment Agreement.
2.  Representations and Covenants. I hereby represent and agree to all of the following:
(a) I have carefully read this General Release.
(b) I understand it fully.
(c) I am freely, voluntarily and knowingly releasing the Releasees in accordance with the terms contained above.
(d) Before executing this General Release, I had twenty-one (21) days to consider my rights and obligations under this General Release.
(e) The period of time I had to consider my rights and obligations under this General Release was reasonable.
(f) Before signing this General Release, I was advised to consult with an attorney and given a reasonable period of time to do so and in executing this General Release have not relied on any representation or statement not set forth herein.
(g) Execution of this General Release and the General Release becoming enforceable (in accordance with paragraph (h) below) within 30 days from the date of my “separation from service” (as determined under Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations issued thereunder) is a condition to the Payments, which payments and benefits are in addition to anything of value to which I am already entitled to receive from the Company and its affiliates.
(h) For a period of seven (7) days following the date on which I sign this General Release, I may revoke it. Any such revocation must be made in writing and received by the Corporate Secretary of the Company, by the seventh day following the date on which I sign this General Release. The Company’s obligation to pay the consideration as set forth in Section 1 above shall not become effective or enforceable until this seven (7) day revocation period has expired without my having exercised my right to revoke.
(i) There are no pending lawsuits, charges, employee dispute resolution proceedings, administrative proceedings or other claims of any nature whatsoever, that I have brought (and which are pending) against any Releasee, in any state or federal court, before any agency or other administrative body or in any other forum.
(j) I am not aware of any material violation of any laws or Company policies or procedures by a Company employee or officer that has not been reported to Company officials.
(k) If I violate my obligations under the Employment Agreement and such violation causes material harm to the Company, I understand that, in addition to other relief to which the Company may be entitled, the Company shall be entitled to cease providing the Payments and benefits provided to me pursuant to Section 1 above unless such violation is cured (if capable of being cured) within 30 days of notification by the Company to me of such violation (and, following such cure, all suspended payments shall be made in a single lump sum), and this General Release will remain in full force and effect.

(l) If I should hereafter make any claim or demand or commence or threaten to commence any action, claim or proceeding against the Releasees with respect to any matter, cause or thing which is the subject of the release under Section 1 of this General Release, this General Release may be raised as a complete bar to any such action, claim or proceeding, and the applicable Releasee may recover from me all costs incurred in connection with such action, claim or proceeding, including attorneys’ fees. 
(m) If any provision of this General Release is declared illegal, invalid, or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such provisions will immediately become null and void, leaving the remainder of this General Release in full force and effect.  
(n) This General Release shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflicts of laws principles.
3. Declaration. I declare under penalty of perjury under the laws of the State of Delaware that the foregoing is true and correct.

___________________________                Date: ___________________
Stephen F. Murphy

Acknowledged before me this ______________
________________, NOTARY PUBLICex10-1.htm

Exhibit 10.1

 

	
 
	
the digital engagement company

 

EMPLOYMENT AGREEMENT

 

Bridgeline Digital, Inc., a Delaware Corporation (the “Employer” or the “Company”) and Roger “Ari” Kahn (the “Employee”), in consideration of the mutual promises made herein, agree as follows (herein “Employment Agreement”):

 

 

ARTICLE 1
TERM OF EMPLOYMENT

 

Section 1.1     Specified Period. Employer hereby employs Employee, and Employee hereby accepts employment with Employer for the term of thirteen (13) months, with the period beginning on August 24, 2015 (the “Commencement Date”), and terminating on September 30, 2016 (“Initial Term”).

 

Section 1.2     Succeeding Term. At the end of the Initial Term, or any succeeding one year term, this Employment Agreement shall renew for successive periods of one (1) year (each a “Succeeding Term”) only if the Employer gives written notice of renewal to Employee not less than sixty (60) days prior to the end of the Initial Term or any applicable Succeeding Term. If such notice of renewal is not provided to Employee by the Employer, this Employment Agreement will terminate, except the provisions of Sections 2.3, 2.4, 2.5 and 2.6 shall continue in force so long as Employee remains employed by the Employer or any Affiliate of the Employer, whether under this Employment Agreement or not, and whether as a consultant or not, and shall survive any termination of employment under this Employment Agreement for the periods specified therein, all as is more specifically provided in Section 7.10. Once this Employment Agreement terminates, for any reason whatsoever, including as of the expiration of the Initial Term or any applicable Succeeding Term in accordance with the terms contained herein, then Employee shall become an employee at will.

 

Section 1.3     Employment Term Defined. As used herein, the phrase “employment term” refers to the entire period of employment of Employee by Employer hereunder, whether such employment is during the Initial Term, any Succeeding Term or, following the end of any applicable Succeeding Term, as an employee at will.

 

 

ARTICLE 2
DUTIES AND OBLIGATIONS OF EMPLOYEE

 

Section 2.1     General Duties. Employee shall serve as Executive Vice President & Chief Operating Officer for the Employer during the Initial Term, and as President & Chief Operating Officer of the Employer during any Succeeding Term. In such capacity, Employee shall do and perform all services, acts or things consistent within the scope of his employment and consistent with his position, in accordance with the reasonable instructions of and policies set by Employer’s Chief Executive Officer, or his designee. Employee shall perform such services at 80 Blanchard Road, Burlington, Massachusetts, or at such other location as may be reasonably designated by Employer. Employee shall be available to make business trips globally and within the United States for the purpose of meeting with and consulting with other members of the Employer’s management, as well as with present and proposed customers and parties with whom the Employer does business, all on reasonable terms, bearing in mind the position of Employee.

 

Section 2.2     Devotion to Employer’s Business.

 

(a)     Subject to paragraph (b) below, Employee shall devote his skill, expertise and entire productive time attention to diligently promote and improve the business of Employer during the Initial Term, any Succeeding Term or thereafter as an employee at will.

 

 

	
 
	
Employee
	
 
	
Bridgeline

 

 

 

 

 

(b)     Employee shall not engage in any other business duties or pursuits whatsoever, or directly or indirectly render any services of a business, commercial or professional nature to any other person or organization, whether for compensation or otherwise, without the prior written consent of the Employer’s Chief Executive Officer; provided, that (i) Employer recognizes, consents and agrees that Employee shall at all times be permitted to continue to manage Employee’s interest in and the business of Great Land Holdings, L.P. and its affiliates, and (ii) this Employment Agreement shall not be interpreted to prohibit Employee from making passive personal investments or conducting private business, community or philanthropic affairs if those affairs do not materially interfere with the services required under this Employment Agreement.

 

Section 2.3     Confidential Information; Tangible Property; Competitive Activities.

 

(a)     Employee shall hold in confidence and not use or disclose to any person or entity without the express written authorization of Employer, either during the term of employment or any time thereafter, secret or confidential information of Employer, as well as secret or confidential information and materials received in confidence from third parties by Employer or by Employee in connection with his duties hereunder. If any confidential information described below is sought by legal process, Employee will promptly notify Employer and will cooperate with Employer in preserving its confidentiality in connection with any legal proceeding.

 

The parties hereto hereby stipulate that, to the extent it is not known publicly, the information described in this Section (herein referred to as “Confidential Information”) is important, material and has independent economic value (actual or potential) from not being generally known to others and that any breach of any terms of this Section 2.3 is a material breach of this Employment Agreement: (i) the names, buying habits and practices of Employer’s customers or prospective customers; (ii) Employer’s sales and marketing strategy and methods and related data; (iii) the names of Employer’s vendors and suppliers; (iv) cost of materials/services; (v) the prices Employer obtains or has obtained or for which it sells or has sold its products or services; (vi) development costs; (vii) compensation paid to employees or other terms of employment; (viii) Employer's past and projected sales volumes; (ix) confidential information relating to Employer’s actual products, proposed products or enhancements of existing products, including, but not limited to, source code, programming instructions, engineering methods and techniques, logic diagrams, algorithms, development environment, software methodologies, and technical specifications for the Employer’s web design and content management software. Confidential Information shall also include all information which the Employee should reasonably understand is secret or confidential information, if the Employee has participated in or otherwise been involved with the development, analysis, invention or origination of such Confidential Information belonging to the Employer, including, without limitation, methods, know-how, formula, customer and supplier lists, personnel and financial data, business plans, as well as product information, product plans and product strategies. Notwithstanding the foregoing, “Confidential Information” does not include any information which (A) is now available to the public or which becomes available to the public, (B) is or becomes available to the Employee from a source other than the Employer and such disclosure is not a breach of a confidentiality agreement with the Employer, (C) is required to be disclosed by any government agency or in connection with a court proceeding, or (D) does not relate to the business of Employer and was independently conceived by Employee without reference to or use of any of Employer’s confidential information, as demonstrated by competent evidence.

 

All Confidential Information, as well as all software code, methodologies, models, samples, tools, machinery, equipment, notes, books, correspondence, drawings and other written, graphical or electromagnetic records relating to any of the products of Employer or relating to any of the Confidential Information of Employer which Employee shall prepare, use, construct, observe, possess, or control shall be and shall remain the sole property of Employer and shall be returned by Employee upon termination of employment.

 

	
 
	
Employee
	
 
	
Bridgeline

 

 

2

 

 

(b)     During his employment and for twelve (12) months after the termination of his employment for any reason whatsoever, Employee shall not, directly or indirectly, without the written consent of the Employer: (i) invest (except for the ownership of less than 5% of the capital stock of a publicly held company), or hold a directorship or other position of authority in any of the Company's Direct Competitors (“Direct Competitors” defined as: any person or entity, or a department or division of an entity, whereby more than 25% of the person’s or entity’s total revenues are derived from the Competitive Services (“Competitive Services” defined as design and development for third parties of: Internet/Intranet/Extranet Web sites and Web applications, content management software, document management software, analytics software, eCommerce, eMarketing, or services such as Web consulting services or Web hosting services)), (ii) undertake preparation of or planning for an organization or offering of Competitive Services, (iii) combine or collaborate with other employees or representatives of the Employer or any third party for the purpose of organizing, engaging in, or offering Competitive Services, or (iv) be employed by, serve as a consultant to or otherwise provide services to (whether as principal, partner, shareholder, member, officer, director, stockholder, agent, joint venturer, creditor, investor or in any other capacity), or participate in the management of a Direct Competitor or participate in any other business that the Employer may be engaged or is planning to undertake in at the date of the termination of this Employment Agreement. Notwithstanding any to the contrary contained in this Section 2.3, in the event your employment is terminated for reasons in which economic factors are considered (specifically, a layoff, a closing of the office where you are employed or termination without cause), then the provisions of this Section 2.3 shall not apply. However, all other provisions of this Employment Agreement shall remain in full force and effect, including without limitation sections 2.3(a), 2.3(c) through 2.3(f).

 

(c)     During his employment and for twelve (12) months after the termination of such employment for any reason whatsoever, Employee shall not become employed by, associated with, or engaged by, in any capacity whatsoever, any customer, client or account (as defined below) of the Employer whereby Employee provides services to such customer, client or account similar to those provided by the Employer to the customer, client or account during Employee’s employment. Employee acknowledges and understands that Employer’s customers, clients and accounts have executed or will execute agreements pursuant to which the customer, client or account agrees not to hire Employer’s employees.

 

(d)     During his employment and for twelve (12) months after the termination of such employment for any reason whatsoever, Employee shall not, directly or indirectly, without the consent of the Employer: contact, recruit, solicit, induce or employ, or attempt to contact, recruit, solicit, induce or employ, any employee, consultant, agent, director or officer of the Employer to terminate his/her employment with, or otherwise cease any relationship with, the Employer; or contact, solicit, divert, take away or accept business from, or attempt to contact, solicit, divert or take away, any clients, customers or accounts, or prospective clients, customers or accounts, of the Employer, or any of the Employer’s business with such clients, customers or accounts which were, directly or indirectly, contacted, solicited or served by Employee, or were directly or indirectly under his responsibility, while Employee was employed by the Company, or the identity of which Employee became aware during the term of his employment.

 

As used in this agreement the term "client," "customer," or "accounts" shall include: (i) any person or entity that is a client, customer or account of the Employer on the date hereof or becomes a client, customer or account of the Employer during Employee’s employment; (ii) any person or entity that was a client, customer or account of the Employer at any time during the two-year period preceding the date of Employee’s termination; and (iii) any known prospective client, customer or account to whom the Employer has made a presentation (or similar offering of services) within a period of one hundred eighty (180) days preceding the date of the termination of Employee’s employment.

 

	
 
	
Employee
	
 
	
Bridgeline

 

 

3

 

 

(e)     The covenants of this Section 2.3 shall be construed as separate covenants covering their subject matter in each of the separate counties and states in the United States in which Employer (or its Affiliates) transacts its business. If at any time the foregoing provisions shall be deemed to be invalid or unenforceable or are prohibited by the laws of the state or place where they are to be enforced, by reason of being vague or unreasonable as to duration or place of performance, this Section 2.3 shall be considered divisible and shall become and be immediately amended to include only such time and such area as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over this Employment Agreement; and the Employer and Employee expressly agree that this Section 2.3, as so amended, shall be valid and binding as though any invalid or unenforceable provision had not been included herein.

 

(f)     Employee represents and warrants that Employee is free to enter into this Employment Agreement and to perform each of the terms and covenants contained herein, and that doing so will not violate the terms or conditions of any agreement between Employee and any third party.

 

Section 2.4     Inventions and Original Works.

 

(a)     Subject to Section 2.4(b) below, Employee agrees that he will promptly make full written disclosure to Employer, will hold in trust for the sole right and benefit of Employer, and hereby irrevocably assigns to Employer without any additional compensation, all of his right, title and interest in and to any and all inventions (and patent rights with respect thereto), original works of authorship (including all copyrights with respect thereto), developments, improvements or trade secrets which Employee may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, relating to or concerning the business of the Employer, whether or not conceived, developed or reduced to practice: (i) during working hours, (ii) while on Employer premises, (iii) with use of Company equipment, materials or facilities, or (iv) while performing his duties under this Employment Agreement (“Employer Intellectual Property”).

 

Employee acknowledges that all original works of authorship relating to the business of Employer which are made by Employee (solely or jointly with others) within the scope of his duties under this Employment Agreement and which are protectable by copyrights are “works made for hire” as that term is defined in the United States Copyright Act (17 U.S.C.A., Section 101), and that Employee is an employee as defined under that Act. Employee further agrees from time to time to execute written transfers to Employer of ownership or specific original works or authorship (and all copyrights therein) made by Employee (solely or jointly with others) which may, despite the preceding sentence, be deemed by a court of law not to be “works made for hire” in such form as is acceptable to Employer in its reasonable discretion. Employee hereby waives in favor of Employer and its assigns and licensees any and all artist’s or moral rights Employee may have in respect of any Invention pursuant to any local, state or federal laws or statutes of the United States and all similar rights under the laws of all jurisdictions.

 

(b)     The parties agree that the “business of the Employer” for the purposes of this Section 2.4 is acting as “a designer and developer for third parties of Internet/Intranet/Extranet Web sites and Web applications, content management software, document management software, analytics software, eCommerce, eMarketing, or services such as Web consulting services or Web hosting services”. Employee shall provide to Employer, and attach hereto as Exhibit 2.4(b), a list identifying and describing in reasonable detail all inventions (and patent rights with respect thereto), original works of authorship (including all copyrights with respect thereto), developments, improvements, concepts or trade secrets which Employee has solely or jointly conceived or developed or reduced to practice, or caused to be conceived or developed or reduced to practice to date, and other intellectual property of Employee. For the avoidance of doubt, Employee will identify on Exhibit 2.4(b) with sufficient detail any intellectual property belonging to Employee prior to the date hereof, including that related to the business of the Employer (collectively the “Employee's Personal Intellectual Property”). Employer acknowledges and agrees that the provisions of Section 2.4(a) shall not apply to Employee’s Personal Intellectual Property or to any inventions (and patent rights with respect thereto), original works of authorship (including all copyrights with respect thereto), developments, improvements, concepts or trade secrets conceived of or developed by Employee during the term of this Employment Agreement that is not Employer Intellectual Property.

 

	
 
	
Employee
	
 
	
Bridgeline

 

 

4

 

 

Section 2.5     Maintenance of Records. Except with respect to the Intellectual Property for which the Employer has no rights, Employee agrees to keep and maintain reasonable written records of all inventions, original works of authorship, trade secrets developed or made by his (solely or jointly with others) during the employment term. Employee also agrees to make and maintain adequate and reasonable written records customarily maintained by corporate managers, including, without limitation, lists and telephone numbers of persons and companies he has contacted during his engagement by the Employer. Immediately upon the Employer’s request and promptly upon termination of Employee’s employment by Employer, Employee shall deliver to Employer all written records as described in this Section, together with all memoranda, notes, records, reports, photographs, drawings, plans, papers, computer storage media, Confidential Information or other documents made or compiled by Employee or made available to Employee during the course of his engagement by Employer, and any copies or abstracts thereof, whether or not of a secret or confidential nature, and all of such records, memoranda or other documents shall, during and after the engagement of Employee by Employer, be and shall be deemed to be the property of Employer.

 

Section 2.6     Obtaining Letters Patent and Copyright Registration. During the employment term hereunder, Employee agrees to assist Employer, at Employer’s expense, to obtain United States or foreign letters patent, and copyright registrations (as well as any transfers of ownership thereof) covering inventions and original works of authorship assigned hereunder to Employer. Such obligation shall continue beyond the termination of this Employment Agreement for a reasonable period of time not to exceed one (1) year, subject to Employer’s obligation to compensate Employee at such reasonable rates as may be mutually agreed upon by the Employer and Employee at the time, but not exceeding the annualized rate provided for in Section 4.1 of this Employment Agreement, and reimbursement to Employee of all expenses incurred.

 

If Employer is unable for any reason whatsoever, including Employee’s mental or physical incapacity, to secure Employee’s signature to apply for or to pursue any application for any United States of foreign letters, patent or copyright registrations (or any document transferring ownership thereof) covering inventions or original works or authorship assigned to Employer under this Employment Agreement, Employee hereby irrevocably designates and appoints Employer and its duly authorized officers and agents as Employee's agent and attorney-in-fact to act for and in his behalf and stead to execute and file any such applications and documents and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations or transfers thereof with the same legal force and effect as if executed by Employee. This appointment is coupled with an interest in and to the inventions and works of authorship and shall survive Employee's death or disability. Employee hereby waives and quitclaims to Employer any and all claims of any nature whatsoever which Employee now or may hereafter have against third parties for infringement of any patents or copyrights resulting from or relating to any such application for letters, patent or copyright registrations assigned hereunder to Employer.

 

ARTICLE 3
COMPENSATION OF EMPLOYEE

 

Section 3.1     Annual Salary. As compensation for his services hereunder, Employee shall be paid a salary at the rate of $12,500.00 semi-monthly (the equivalent of Three Hundred Thousand Dollars and Zero Cents ($300,000.00) per year (“Salary”) from the Commencement Date. Salary shall be paid in equal installments not less frequently than twice each month.

 

Section 3.2     Quarterly Bonus. Employer shall pay to Employee a quarterly bonus in accordance with the terms set forth on Exhibit 3.2.

 

Section 3.3     Tax Withholding. Employer shall have the right to deduct or withhold from the compensation due to Employee hereunder any and all sums required for federal income and social security taxes and all state or local taxes now applicable or that may be enacted and become applicable in the future, for which withholding is required by law.

 

	
 
	
Employee
	
 
	
Bridgeline

 

 

5

 

 

Section 3.4     Stock Options. The Employer may, at the Employer’s sole discretion, issue Stock Options to the Employee. All stock options granted the Employee shall be subject to a stock option agreement, a stock option plan, and such other restrictions as are generally applicable to stock options issued to employees of the Employer, as each may be amended from time to time.

 

ARTICLE 4
EMPLOYEE BENEFITS

 

Section 4.1     Annual Vacation. Employee shall be entitled to twenty (20) business days of paid vacation during each year of this Employment Agreement. Five (5) days of unused vacation shall be permitted to be carried over into the next year, and will not be paid in the form of cash except pursuant to Section 6.3 hereof.

 

Section 4.2     Benefits. Employee shall be eligible to participate in benefit plans or practices provided by Employer, including health and life insurance coverage, holidays, and other paid time off.

 

Section 4.3     Business Expenses. Employer shall reimburse Employee for all appropriate expenses for travel and entertainment by Employee for legitimate business purposes, per the Employer’s expense policies and provided that Employee furnishes to Employer adequate records and documentary evidence for the substantiation of each such expenditure, as required by the Internal Revenue Code of 1986, as amended. Per the Company’s policy’s, expense reports must be submitted each month to ensure reimbursement.

 

ARTICLE 5
TERMINATION OF EMPLOYMENT

 

Section 5.1     Termination. Employee’s employment hereunder may be terminated by Employee or Employer as herein provided, without further obligation or liability, except as expressly provided in this Employment Agreement.

 

Section 5.2     Resignation, Retirement, Death or Disability. Employee’s employment hereunder shall be terminated at any time by Employee’s resignation, or by Employee’s retirement, death, or his inability to perform the essential functions of his position under this Employment Agreement, without reasonable accommodation, for a total of ninety (90) days or more in any continuous two hundred (200) day period because of a substantial physical or mental impairment (“Disability”). For up to six (6) months, Employer shall continue payment to Employee of all Salary and bonus compensation during any period of Disability, and all benefits shall continue to accrue during any such period. After six (6) months the Employer shall not be liable for any additional payments to Employee. 

 

Section 5.3     Termination for Cause. Employee’s employment hereunder may be terminated for Cause. "Cause" is one or more of the following: (i) gross misconduct by the Employee; or (ii) the willful disregard of the rules or policies of Employer which causes financial harm to Employer, provided that Employer must provide Employee with written notice of such willful disregard and Employee fails to cure (if curable) such willful disregard within ten (10) business days of such notice; or (ii) the violation of any noncompetition or nonsolicitation covenant with, or assignment of inventions obligation to, Employer; or (iii) the formal charge of Employee of a felony; or (iv) the commission of an act of embezzlement, fraud or breach of fiduciary duty to Employer; (v) engagement in a specific act or pattern of behavior which damages the reputation of the Company, (vi) the failure of the Employee to perform in a material respect his employment obligations as set forth in this Employment Agreement without proper cause and the continuation thereof after delivery to Employee of written notice from Employer specifying in reasonable detail the nature of such failure and a reasonable opportunity to cure. For purposes of this Section, no act, or failure to act, on Employee’s part shall be considered “willful” unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the best interest of the Employer.

 

	
 
	
Employee
	
 
	
Bridgeline

 

 

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Section 5.4     Termination Without Cause; Termination for Good Reason. Employee’s employment hereunder may be terminated without Cause upon ten (10) business days’ notice for any reason. Employee's employment may be terminated by Employee at any time for Good Reason. For purposes of this Employment Agreement, “Good Reason” shall mean:

 

(a) failure of the Employer to continue Employee in the position of Chief Operating Officer; (b) material diminution in the nature or scope of Employee’s responsibilities, duties or authority (provided, however, any general diminution of the business of the Employer, shall not constitute “Good Reason”); (c) material failure of the Employer to provide Employee the compensation and benefits in accordance with the terms of Articles 3 and 4 hereof, other than a reduction in compensation or benefits that is generally applicable to all other similarly situated employees of the Company; (d) any material breach of this Agreement by Employer which is not cured within ten (10) days after notice thereof describing in reasonable detail the nature of such breach or breaches;.

 

Section 5.5     Expiration. Employee's employment hereunder shall be terminated upon expiration of the Term of Employment as provided in Sections 1.1 and 1.2, unless the parties agree that Employee's employment shall become “at will.” 

 

Section 5.6     Notice of Termination. Any termination of Employee’s employment by the Employer or by Employee (other than termination by reason of resignation, retirement, or death), shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Employment Agreement, a “Notice of Termination” shall mean a notice which shall include the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee's employment under the provision so indicated.

 

Section 5.7     Date of Termination. The “Date of Termination” shall be: (a) if Employee’s employment is terminated by his death, the date of his death; (b) if Employee’s employment is terminated by reason of Employee’s disability, thirty (30) days after Notice of Termination is given; (c) if Employee's employment is terminated for Cause, the date the Notice of Termination is given or after if so specified in such Notice of Termination; (d) if Employee's employment is terminated for any other reason, the date on which a Notice of Termination is given, subject to Section 5.4 hereof.

 

ARTICLE 6
PAYMENTS TO EMPLOYEE UPON TERMINATION

 

Section 6.1     Death, Disability or Retirement. In the event of Employee’s Retirement, Death or Disability, all benefits generally available to Employer's employees as of the date of such an event shall be payable to Employee or Employee's estate, in accordance with the terms of any plan, contract, understanding or arrangement forming the basis for such payment. Neither Employer nor any affiliate shall have any further obligation to Employee under this Employment Agreement or otherwise, except for payment to Employee of any and all accrued Salary and bonuses, provision of the opportunity to elect COBRA health care continuation and otherwise as may be expressly required by law.

 

Section 6.2     Termination for Cause or Resignation. In the event Employee is terminated by Employer for Cause or Employee resigns (other than a Termination by Employee for Good Reason), neither Employer nor any affiliate shall have any further obligation to Employee under this Employment Agreement or otherwise, except for payment to Employee of any and all accrued Salary and bonuses, provision of the opportunity to elect COBRA health care continuation and otherwise as may be expressly required by law.

 

	
 
	
Employee
	
 
	
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Section 6.3     Termination Without Cause; Termination for Good Reason. Subject to other provisions in this Article 6 to the contrary and during the Initial Term any Succeeding Term, upon the occurrence of a termination of Employee’s employment without Cause by Employer or a Termination for Good Reason by Employee, Employer shall:

 

(a) Pay to Employee any and all accrued Salary, bonuses and vacation;

 

(b) Pay to Employee, or in the event of Employee's subsequent death, to Employee's surviving spouse, or if none, to Employee's estate, as severance pay or liquidated damages, or both, a sum equal to (i) the monthly rate of salary payable to Employee under this Employment Agreement for a period of twelve (12) months, and (ii) the amount of one full quarterly incentive bonus, earned;

 

(c) Cause any stock options issued to Employee which have not lapsed and which are not otherwise exercisable to be accelerated so as to be immediately exercisable by Employee (or Employee’s surviving spouse or estate);

 

(d) Pay the Employer’s portion of the COBRA health insurance continuation premium in the same amount Employer contributed for Employee’s health insurance as of the date of Employee’s termination for a period of three (3) months and thereafter provide Employee the opportunity to continue to elect COBRA health care continuation at Employee’s cost (provided that Employee makes the required premium contributions); provided, however, that Employer's obligation to contribute its portion of the COBRA insurance premium during this period will cease immediately in the event Employee becomes employed following termination. Employee agrees to notify Employer immediately regarding such new employment; and

 

(e) Provide to Employee such other payments or benefits as may be expressly required by law.

 

Section 6.4     Definition.      A “Change in Control” will be deemed to have occurred only if any of the following events have occurred:

 

	
(i)
	
any “person”, as such term is used in Section 13(d) and 14(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership in stock of the Company) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities;

 

	
(ii)
	
individuals who constitute the Board (as of the date hereof, the “incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company stockholders, was approved by a vote of at least a majority of the directors them comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company, as such terms used in Rule 14a-11 of Regulation 14A under the Exchange Act) will be, for purposes of this Employment Agreement, considered as though such person were a member of the Incumbent Board; or

 

	
 
	
Employee
	
 
	
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(iii)
	
the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, and such merger or consolidation is consummated, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation of the Company or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “person” (as hereinabove defined) acquires more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities; or

 

	
(iv)
	
the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.

 

Section 6.5     Expiration.      In the event that the employment of Employee is terminated due to the expiration of this Agreement, Employer shall pay to Employee $25,000 a month for three (3) consecutive months following the expiration date. 

 

ARTICLE 7
GENERAL PROVISIONS

 

Section 7.1     Notices. Any notices to be given hereunder by either party to the other shall be in writing and may be transmitted by personal delivery or by mail, first class, postage prepaid, or by electronic facsimile or email transmission (with verification of receipt). Mailed notices shall be addressed to the parties at their respective addresses set forth herein. Each party may change that address by written notice in accordance with this section. Notices delivered personally shall be deemed communicated as of the date of actual receipt. Mailed notices shall be deemed communicated as of one day after the date of mailing.

 

Section 7.2     Governing Law; Jurisdiction. This Employment Agreement shall be governed by, construed and interpreted in accordance with the laws of the Commonwealth of Massachusetts, without regard to its principles of conflicts of laws. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Employment Agreement or any of the transactions contemplated hereby, shall be brought against any of the parties in the courts of the Commonwealth of Massachusetts, and each of the parties irrevocably submits to the exclusive jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding, waives any objection to venue laid therein, agrees that all claims in respect of any action or proceeding shall be heard and determined only in any such court and agrees not to bring any action or proceeding arising out of or relating to this Employment Agreement or any transaction contemplated hereby in any other court. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

 

Section 7.3     Attorney’s Fees and Costs. If Employer or Employee commences any action at law or in equity against arising out of or relating to this Employment Agreement (other than any statutory cause of action relating to employment, including but not limited to claims under state and federal employment laws) and Employer prevails in such action, Employee shall reimburse Employer its reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which Employer may be entitled. In the event Employee prevails in such action, Employer shall reimburse Employee its reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which Employee may be entitled. This provision shall be construed as applicable to the entire contract. Employer shall reimburse Employee for Employee’s legal costs relating to the negotiation, execution and delivery of this Agreement in an amount not to exceed $2,000.

 

	
 
	
Employee
	
 
	
Bridgeline

 

 

9

 

 

Section 7.4     Entire Agreement. This Employment Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the subject matter contained herein and contains all of the covenants and agreements between the parties with respect to that subject matter, including without limitation, any prior Employment Agreement between Employer and Employee. Each party to this Employment Agreement acknowledges that no representation, inducement, promise or agreement, orally or otherwise, have been made by any party, or anyone acting on behalf of either party, which is not embodied herein, and that no other agreement, statement or promise not contained in this Employment Agreement shall be valid or binding on either party.

 

Section 7.5     Modification. Any modification of this Employment Agreement will be effective only if it is in writing and signed by the Employee and properly authorized by Employer's Board of Directors and signed by the Chief Executive Officer of Employer.

 

Section 7.6     Effect of Waiver. The failure of either party to insist on strict compliance with any of the terms, covenants or conditions of this Employment Agreement by the other party shall not be deemed a waiver of that term, covenant or condition, nor shall any waiver or relinquishment of any right or power at any one time or times be deemed a waiver or relinquishment of that right or power for all or any other times.

 

Section 7.7     Partial Invalidity. If any provision in this Employment Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.

 

Section 7.8     Assignment. The rights and obligations of the parties hereto shall inure to the benefit of, and shall be binding upon, the successors and assigns of each of them; provided, however, that Employee shall not, during the continuance of this Employment Agreement, assign this Employment Agreement without the previous written consent of the Employer, and provided, further, that nothing contained in this Employment Agreement shall restrict or limit the Employer in any manner whatsoever from assigning any or all of its rights, benefits or obligations under this Employment Agreement to any successor corporation or entity or to any affiliate of the Employer without the necessity of obtaining the consent of Employee. “Affiliate” as used throughout this Employment Agreement means any person or entity which directly or indirectly controls, or is controlled by, or is under common control with, the Employer.

 

Section 7.9     Specific Performance. If there is any violation of Employee's obligations herein contained, the Employer, or any of its Affiliates, shall have the right to specific performance in addition to any other remedy which may be available at law or at equity.

 

Section 7.10     Survival of Sections. The provisions of Sections 2.3, 2.4, 2.5 and 2.6 shall continue in force so long as Employee remains employed by the Employer or any Affiliate of the Employer, whether under this Employment Agreement or not, and whether as a consultant or not, and shall survive any termination of employment under this Employment Agreement for the periods specified therein. Notwithstanding the foregoing, the provision of Sections 2.5 shall survive for only three years following any termination of employment.

 

Section 7.11     Injunctive Relief/Acknowledgement. Employee understands and acknowledges that the Employer's Proprietary Information, Inventions and good will are of a special, unique, unusual, extraordinary character which gives them a peculiar value, the loss of which cannot be reasonably compensated by damages in an action at law. Employee understands and acknowledges that, in addition to any and all other rights or remedies that the Employer may possess, Employer shall be entitled to injunctive and other equitable relief, without posting a bond, to prevent a breach or threatened breach of this Employment Agreement (and/or any provision thereof) by Employee . In the event that a court of appropriate jurisdiction awards the Company injunctive or other equitable relief due to Employee’s breach of the terms of this Employment Agreement, Employee agrees that the time periods provided in Article 2.3 of this Employment Agreement shall be tolled for the period during which Employee is in breach of the Employment Agreement, and shall resume once Employee complies with such injunctive or other equitable relief.

 

	
 
	
Employee
	
 
	
Bridgeline

 

 

10

 

 

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of this _____ day of July, 2015.

 

 

	
Employer:  
	
 
	
Employee:
	 
	
Bridgeline Digital, Inc.  
	
 
	
 
	 
	
 
	
 
	
 
	
 
	 
	
 
	
 
	
 
	
 
	 
	
By: 
	
 
	
 
	
 
	 
	
 
	
Thomas L. Massie
	
 
	
Roger “Ari” Kahn
	 
	
 
	
President & Chief Executive Officer
	
 
	
 
	 

 

 

11

 

 

EXHIBIT 2.4(b)

 

Employee’s Personal Intellectual Property

 

 

 

None

 

 

 

	
 
	
Employee
	
 
	
Bridgeline

 

 

12

 

 

EXHIBIT 3.2

 

 

Roger “Ari” Kahn – FY 2015 - 2016 Incentive Bonus*: Beginning October 1, 2015 you will have the opportunity to earn a quarterly incentive bonus of $31,250.00 ($125,000.00 annually).

 

Your Fiscal 2016 quartlery bonus meterics and objectives will be mutually determined by September 30, 2015. 

 

 

 

 

 

*All bonuses will be paid on the second (30th/31st) payroll of the month following the quarter end. For purposes of all bonuses that are covered by this Employment Agreement, such amounts shall be considered “earned” if you are employed by Bridgeline as an employee in good standing at the time any metric or objective is achieved or as of the end of any quarterly period in which it is achieved; provided, that in the event any such metric or objective is achieved in any quarter during which Employee was employed by Employer but during such quarter such employment was terminated, Employer shall pay to Employee such portion of the applicable bonus as equals (a) the number of days during such quarter during which Employee was employed by Employer, divided by (b) the number of days in such quarter. 

 

 

	
Employer:  
	
 
	
Employee: 

	
Bridgeline Digital, Inc.  
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
By:
	
/s/ Thomas L. Massie
	
 
	
/s/ Roger “Ari” Kahn

	
 
	
Thomas L. Massie
	
 
	
Roger “Ari” Kahn

	
 
	
President & Chief Executive Officer
	
 
	
 

 

	
 
	
Employee
	
 
	
Bridgeline

 

 

 

13

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