Document:

EX-10.7

Exhibit 10.7

EMPLOYMENT AGREEMENT 

          THIS AGREEMENT is made as of the July 24, 2007

B E T W E E N:

COREL INC

(the “Corporation”)

 - and -

JEFF HASTINGS

(the “Executive”)

RECITAL:

          The Corporation and the Executive wish to enter into this Agreement to set out the rights and
obligations of each of them respecting the Executive’s employment with the Corporation.

          NOW THEREFORE in consideration of the mutual covenants and agreements contained in this
Agreement and other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the Corporation and the Executive agree as follows:

1 Definitions

In this Agreement,

	 	1.1	 	“Agreement” means this agreement as it may be amended from time to time;
	 
	 	1.2	 	“Affiliate” has the meaning attributed to such term in the Business
Corporations Act (Ontario) as the same may be amended from time to time and any
successor legislation thereto, and includes an Associate;
	 
	 	1.3	 	“Associate” has the meaning attributed to such term in the Business
Corporations Act (Ontario) as the same may be amended from time to time and any
successor legislation thereto;
	 
	 	1.4	 	“Benefits” has the meaning set out in section 6;
	 
	 	1.5	 	“Board” means the Board of Directors of Corel Corporation

 

 

	 	1.6	 	“Business” means the development, marketing or sale of computer software for
office productivity, graphics, or digital media, or any other software which the
Corporation may be involved in developing, marketing, or selling during the term of
this Agreement;
	 
	 	1.7	 	“Commencement Date” means August 10, 2007;
	 
	 	1.8	 	“Confidential Information” means all information, intellectual property (including
trade secrets) and facts relating to, used or proposed to be used in the Business of
the Corporation and its Affiliates, acquired by the Executive during any period in
which the Executive was affiliated with the Corporation in the capacity of an
employee, director or shareholder which is confidential based upon its nature or the
circumstances surrounding its disclosure, and includes, without limiting the
generality of the foregoing, information:

	 	a)	 	relating to the Corporation’s or an Affiliate’s products and services
or to the Corporation’s or a Affiliate’s research and development projects or
plans;
	 
	 	b)	 	relating to the Corporation’s or an Affiliate’s trade secrets,
technology, patentable and unpatentable inventions, discoveries, processes, test
procedures and results, records, specifications, data, formulations, know-how,
samples, specimens, manufacturing processes and regulatory information;
	 
	 	c)	 	relating to the Corporation’s or an Affiliate’s business policies,
strategies, operations, finances, plans or opportunities, including the identity
of, or particulars about, the Corporation’s or an Affiliate’s clients or
suppliers;

	 	1.9	 	“Change of Control”

	 	a)	 	means any transaction or series of transactions, whether by way of
consolidation, amalgamation, merger, reorganization or plan of amalgamation
involving Corel Corporation, into any other person (other than an Affiliate of the
Corporation or Vector);
	 
	 	b)	 	any transfer, conveyance, sale, lease, exchange or otherwise of all
or substantially all of the assets of Corel Corporation, to any other person
(other than Vector); and

 

 

	 	c)	 	the lawful acquisition by any person, or by a group of persons acting
jointly or in concert, of that number of voting shares of Corel Corporation, which
is 35% or more of the total voting shares issued and outstanding immediately after
such acquisition, unless Vector continues to hold a number of voting shares which
represents a greater percentage than the first-mentioned person or group of
persons.

Provided that shares of Corel Corporation acquired through a public offering shall be
deemed to not result in a Change of Control.

	 	1.10	 	“Date of Termination” has the meaning set out in section 7.1 of this
Agreement;
	 
	 	1.11	 	“Disability” means the mental or physical state of the Executive such that:

	 	a)	 	subject to applicable human rights legislation, due to
illness, disease, mental or physical disability or similar cause, the
Executive cannot substantially perform his duties as an employee, officer or
director of the Corporation or any of its Subsidiaries, as applicable;
	 
	 	b)	 	a court of competent jurisdiction has declared the
Executive to be mentally incompetent or incompetent to manage his affairs;
	 
	 	c)	 	the Executive is eligible for, has applied for, and has
been accepted for long-term disability benefits under the Corporation’s
long-term disability plan; or
	 
	 	d)	 	an attorney pursuant to a continuing power of attorney for
personal care or similar instrument is appointed to manage the affairs of the
individual due to the Executive’s mental incompetence;

	 	1.12	 	“Just Cause” means:

	 	a)	 	theft, fraud, dishonesty or willful misconduct by the
Executive in connection with the executive’s duties or involving the
property, business or affairs of the Corporation, or the carrying out of the
Executive’s duties;
	 
	 	b)	 	the significant breach by the Executive in any material
respect of the Executive’s employment agreement; or
	 
	 	c)	 	any other conduct that would be determined by the courts of
California to constitute gross misconduct.

 

 

	 	 	 	Anything herein to the contrary notwithstanding, Executive’s employment shall not
be terminated for “Just Cause” above unless written notice stating the basis for
the termination is provided to Executive, Executive is given thirty (30) days
after receipt of such notice to cure the neglect or conduct that is the basis of
such claim (but only with respect to curable actions or failures to act), and
Executive has an opportunity to be heard before the full Board of Directors, and,
after such hearing, there is a majority vote of the non-employee directors of the
Corporation to terminate Executive for Just Cause.
	 
	 	1.13	 	“Good Reason” means any of the following, unless consented to by the
Executive:

	 	a)	 	any material reduction in the Executive’s annual base
salary, benefits or perquisites;
	 
	 	b)	 	any material reduction in the Executive’s ability to earn
incentive compensation. A material reduction shall include any unreasonable
change to targets and goals within any fiscal year or from year to year but
shall exclude a reduction caused by the failure of the Corporation of the
Executive to meet incentive compensation targets or goals; or
	 
	 	c)	 	any material reduction or material adverse change in
Executive’s title, the nature or scope of the authorities, power, functions,
responsibilities or duties of the executive;
	 
	 	d)	 	any breach by the Corporation of any of it’s obligations
under this agreement.
	 
	 	e)	 	a relocation of Executive’s principal place of employment
more than thirty-five (35) miles from its current location;
	 
	 	f)	 	the failure of any successor-in-interest to assume all of
the obligations of the Corporation under this Agreement; or
	 
	 	g)	 	the assignment of duties that are substantially
inconsistent with Executive’s training, education, professional experience
and the job for which he was initially hired hereunder.

	 	1.14	 	“Salary” has the meaning set out in section 3(a).
	 
	 	1.15	 	“Vector” means any entity or fund Affiliated with, or managed directly or
indirectly by, Vector Capital Corporation or its Affiliates, or any other entity
controlled, directly or indirectly, by such entities or funds

 

 

2 Employment of the Executive

	 	2.1	 	The Corporation shall employ the Executive in the position of President and
General Manager, Digital Media, of the Corporation for an indefinite period, subject
to termination pursuant to section 7;
	 
	 	2.2	 	While employed by the Corporation:

	 	i.	 	The Executive shall report to the Chief Executive Officer
of Corel Corporation and shall perform such duties, have such
responsibilities and exercise such powers and authorities as are assigned to
him by the Chief Executive Officer from time to time; and
	 
	 	ii.	 	The Executive shall devote substantially all of his
business time, attention and ability to the Business;
	 
	 	iii.	 	The Executive shall work out of the Fremont, California
office, however Executive acknowledges that he will be required to spend at
least 50% of his business time traveling to attend to running the business.

3 Remuneration

          Commencing and effective as of the Commencement Date, the remuneration of the Executive for
services hereunder shall be as follows:

	 	3.1	 	The Executive shall receive an annual gross salary (before deduction for
income taxes and other required deductions) of USD $300,000, which shall be reviewed
periodically and which may be increased (but not decreased without the prior written
consent of the Executive) at the discretion of the Board (the “Salary”), payable in
accordance with the policy of the Corporation for payments of salary to senior
management.
	 
	 	3.2	 	The Executive shall also be eligible for an incentive bonus of USD
$300,000 (subject to statutory withholdings and deductions), at target. The
incentive bonus shall be paid based upon the successful realization of objectives
set on a periodic basis by the Corporation in consultation with the Executive. All
payments will be made by bank credit transfer. Subject to section 8, payment of the
incentive bonus for fiscal year 2007 will be paid on a pro rata basis for the period
of actual employment in the fiscal year and with all targets deemed to have been
attained at the 100% level.
	 
	 	3.3	 	The Executive shall be eligible to participate in the Corporation’s
equity incentive plan. The Executive hereby acknowledges that the granting of

 

 

	 	 	 	options or other equity incentives is made only to full time employees; solely at
the Corporation’s discretion and that any such grant shall be subject to the terms
and conditions of the grant and of the plan in effect, from time to time. Without
limiting the foregoing, nothing in this Agreement shall in any way alter the terms
and conditions of any grant or of the plan. At the first scheduled Compensation
Committee meeting following Executives’ first day of employment, the Corporation
shall recommend for approval a grant of 150,000 stock options which would vest
according to the Corporation’s normal vesting schedule with 25% vesting on the one
year anniversary date and remaining vesting quarterly thereafter. In addition,
the Corporation will also recommend for approval a grant of 50,000 Restricted
Share Units (“RSUs”) to be vested during the term of Executive’s employment such
that 12,500 of the RSUs shall vest on the six (6) month anniversary date of the
grant and the remaining 37,500 RSUs shall vest in increments of 6,250 at the end
of each calendar quarter thereafter.

	 	3.4	 	The Executive shall be entitled to participate in benefits as are enjoyed
from time to time generally by its executives or its employees in accordance with
the established practices and policies of the Corporation as the Corporation may in
its absolute discretion create from time to time. In this regard, the Executive
acknowledges having received a description of the benefits in force as of the date
hereof.

4 Expenses

          The Corporation shall reimburse the Executive for all reasonable out-of-pocket expenses
incurred by the Executive while employed by the Corporation in the performance of his duties under
this Agreement (including attendance at industry, financing and other conferences relevant to the
Executive’s performance of his duties hereunder), in accordance with the Corporation’s policy for
reimbursement of expenses, upon presentation of receipts or such other supporting documentation as
the Corporation may reasonably require.

5 Vacation

          The Executive shall be entitled while employed by the Corporation to 4 weeks vacation with pay
per year, in accordance with its normal practices. Vacation shall be taken by the Executive at
such time as may be reasonably acceptable to the Corporation having regard to its operations.

 

 

6 Benefits

          While the Executive is employed by the Corporation, the Corporation shall provide to the
Executive the benefits made generally available to its executives or its employees (the
“Benefits”). The Benefits shall be provided in accordance with and subject to the terms and
conditions of the applicable fund, plan or arrangement relating thereto in effect from time to
time.

7 Termination

	 	7.1	 	The employment of the Executive shall terminate or be terminable:

	 	a)	 	by retirement or resignation on not less than 1 months written
notice, of the Executive;
	 
	 	b)	 	by the Corporation at any time on written notice to the Executive for
Just Cause;
	 
	 	c)	 	by the Corporation or the Executive at any time on written notice
because of the occurrence of Disability;
	 
	 	d)	 	automatically upon the death of the Executive;
	 
	 	e)	 	by the Corporation at any time on written notice without Just Cause;
or
	 
	 	f)	 	by the Executive on written notice for Good Reason

8 Payments on Termination of Employment

8.1 If the employment of the Executive is terminated for retirement or resignation, pursuant to
section 7.1 (a), the Executive will receive payment for Salary, earned but unpaid incentive
bonus, and accrued but unused vacation owing on the Date of Termination.

8.2 If the employment of the Executive is terminated for Just Cause, pursuant to section 7.1
(b), the Executive will receive payment for Salary and accrued but unused vacation owing on the
Date of Termination.

8.3 If the employment of the Executive is terminated at any time by the Corporation for
Disability pursuant to section 7.1(c), by the death of the Executive pursuant to section
7.1(d), by the Executive without Just Cause pursuant to section 7.1(e), or by the Executive for
Good Reason pursuant to section 7.1(f), the following provisions shall apply conditional on
the Executive (or the Executive’s legal representative in the case of termination by reason of
death) providing a mutual full and final release to the Corporation in the form attached hereto
as Schedule A:

 

 

	 	a)	 	The Corporation shall pay to the Executive, immediately following the
Date of Termination, if not already paid, the Executive’s Salary and earned but
unpaid incentive bonus, and accrued but unused vacation owing at the Date of
Termination;
	 
	 	b)	 	The Corporation shall pay to the Executive forthwith following the
Date of Termination, a lump sum payment equivalent (less deduction for income
taxes and other required deductions) to twelve (12) month’s Salary.
	 
	 	c)	 	The Executive shall continue to receive health benefits for a period
of twelve (12) months following the Date of Termination, to the extent the
Corporation is permitted by the terms of the relevant benefit plan(s) to provide
such health benefits and, to the extent the Corporation is not so permitted, the
Corporation shall make a payment equal to the cost to the Corporation of such
benefits for said period;
	 
	 	d)	 	The Corporation shall reimburse expenses incurred by the Executive on
or prior to the Date of Termination for which the Executive would be entitled to
reimbursement but for the termination of his employment hereunder;
	 
	 	e)	 	The vesting of the Executive’s RSUs referred to in 3.3 above shall
accelerate, if required, such that all such RSUs shall be fully vested upon the
Date of Termination; and
	 
	 	f)	 	The Executive shall receive an additional twelve (12) months of
accelerated vesting of any outstanding equity awards and all vested stock options
shall be exercisable for twelve (12) months from the Date of Termination.

8.4 In the event the Executive is terminated by the Corporation without Just Cause within
twelve (12) months following a Change of Control or the Executive terminates his employment for
Good Reason within twelve (12) months following a Change of Control, then in either case, in
addition to receiving the payments and benefits referred to in section 8.3, conditional on the
Executive providing a full and final release to the Corporation in the form attached hereto as
Schedule A,
the vesting of the Executive’s stock options referred to in 3.3 above shall accelerate, to
the extent required, such that effective upon the Date of Termination at least 50% of the
options previously granted to the Executive shall become fully vested; and exercisable for
twelve (12) months from the Date of Termination.

8.5 The Executive is not obligated to mitigate his damages or to seek alternative employment.
The payments refereed to in section 8.3 (b) shall not be reduced if the Executive obtains
alternate employment following termination.

 

 

8.6 The Executive acknowledges and agrees that the provisions of this section 8 are in
satisfaction of and substitution for any and all statutory and common law rights, including
without limitation, any right to reasonable notice of termination or any incentive bonus
related to any partially completed fiscal year as tat the Date of Termination or thereafter.

9 Resignation as a Director and Officer 

               On the Executive ceasing to be an employee of the Corporation for any reason, the Executive
shall forthwith resign as a director and officer of the Corporation and all of its Affiliates
(unless such position is established through a shareholder agreement or other contractual right).

10 D & O Indemnification and Insurance

               The Executive shall be indemnified by the Corporation in his role as an officer thereof for
all actions taken in the attempted performance in good faith of Executive’s duties to the full
extent permitted at law.  The Corporation shall maintain appropriate Directors & Officers Insurance
during the term of Executive’s employment and for three (3) years following the Date of
Termination.    

11 Non-Solicitation

	 	11.1	 	The Executive shall not, during his employment and for the period ending twelve
(12) months after the Date of Termination, directly or indirectly induce or solicit or
attempt to induce:

	 	(i)	 	any employee of the Corporation of any of its Affiliates as
of the date of Termination to leave his or her employment; or
	 
	 	(ii)	 	any customer of the Corporation of any of its Affiliates as
of the Date of Termination to cease doing business with the Corporation or
any of its Affiliates and/or to purchase products or services from any other
party which products or services compete with the products and services of
the Corporation.

11.2 The Executive shall not, during his employment, directly or indirectly in any manner
whatsoever including either individually, or in partnership, jointly or in conjunction with
any other person, or as principal, agent, owner, consultant, contractor, executive, officer,
director, advisor or shareholder:

	 	a)	 	be engaged in any Competing Entity (as defined below);

 

 

	 	b)	 	have any financial or other interest (including an interest by way of
royalty or compensation arrangements) inor in respect of the business of any
Competing Entity; or

	 	c)	 	advise, render or provide services to, lend money to or guarantee the
debts or obligations of any Competing Entity.

For the purposes of this Agreement, a Competing Entity are defined as Microsoft; Adobe, Google,
Yahoo, Sun; Sony, Sigmaflow; ACD Systems; Autodesk; Quark, Pinnacle, Sonic, Nero, Cyberlink,
Avid, Muvee, and Magix or any of their successors, and, on notice to the Executive, other
entities that the Corporation may add to this definition, from time to time before termination
of the Executive’s employment, acting in good faith, whose business consists of developing or
marketing word processing, spreadsheet, presentation, process management, flowcharting, digital
imaging or graphics software which the Corporation determines is in competition with its
business.

Nothing in this Agreement shall prevent the Executive from owning not more than 5% of any class
of securities of an entity, the securities of which are listed on a recognized stock exchange
or traded in the over the counter market in Canada which carries on a business which is the
same as or which competes with the business of the Corporation or any of its Affiliates;

12 Confidentiality

12.1 The Executive agrees that all Confidential Information is the property of the
Corporation or its Affiliates and that he shall keep the Confidential Information secret and
confidential and shall not use (other than in connection with his employment with the
Corporation or any of its Affiliates) or disclose to any person, directly or indirectly, any
Confidential Information at any time hereafter, provided, however, that nothing in this
section shall preclude the Executive from disclosing or using Confidential Information if:

	 	a)	 	the Confidential Information is available to the public or in the public
domain at the time of such disclosure or use, without breach of this Agreement;
	 
	 	b)	 	disclosure is required to be made by any law, regulation, governmental
body, or authority or by court order; or
	 
	 	c)	 	disclosure is made to a court or other governmental regulatory or
arbitral body which is determining the rights of the parties under this Agreement;

12.2 The Executive acknowledges and agrees to return to the Corporation or destroy upon the
Corporation’s request, upon the termination of his employment under this Agreement, all
records, books, samples, paper, notes or other

 

 

documents or assets belonging to the Corporation or any Affiliate or relating to their
business and to return or destroy upon the Corporation’s request, any written Confidential
Information;

12.3 The Executive further acknowledges and agrees that the obligations under this section 12
shall exist and continue in full force and effect notwithstanding any breach or repudiation,
or alleged breach or repudiation, of or termination of this Agreement by the Corporation;

12.4 For greater certainty, the Corporation acknowledges that this section 12 is not intended
to apply to the skill, expertise, know-how and experience of the Executive gained in the
performance of his employment or with respect to any skill, expertise, know-how and
experience the Executive obtained prior to or outside his employment or directorship duties
with the Corporation.

13 Intellectual Property

               The Executive hereby assigns the Corporation his entire right, title and interest in any
invention, work or formula, whether patentable or not or copyrightable or not, which is conceived
or made solely by the Executive or jointly by the Executive and any other person or persons during
the Executive’s employment and which relates in any manner to the Business, research or other
activities of the Corporation or which results from any task assigned to or performed by the
Executive on behalf of the Corporation. The Executive covenants and agrees that (i) he shall
promptly disclose to the Corporation any invention or work covered by this paragraph, (ii) if
requested by the Corporation, he shall promptly execute a specific assignment of title to the
Corporation for such invention or work, and (iii) he shall take all reasonable actions necessary to
assist the Corporation, at the Corporation’s expense, to secure patent or copyright protection in
the United States, Canada and in foreign countries.

14 Remedies

               The Executive acknowledges that a breach or threatened breach by the Executive of any
provision of any of sections 11, 12 or 13 of this Agreement shall result in the Corporation and/or
its Affiliates suffering irreparable harm which cannot be calculated or fully or adequately
compensated by the recovery of damages alone. Accordingly, the Executive agrees that the
Corporation and/or its Affiliates shall be entitled to (and the Executive shall not argue or take a
position that the Corporation or any Affiliate shall not suffer irreparable harm) interim,
interlocutory and permanent injunctive relief, specific performance and other equitable remedies,
in addition to any other relief to which the Corporation and/or its Affiliates may become entitled.

15 Notice

               Any notice or other communication required or permitted to be given hereunder shall be in
writing and shall be given by facsimile or other means of

 

 

electronic communication or by delivery by hand as hereinafter provided. Any such notice or
other communication, if mailed by registered mail, shall be deemed to have been received on the day
such mail is delivered by the post office, or if sent by facsimile or other means of electronic
communication, shall be deemed to have been received on the business day following the sending, or
if delivered by hand shall be deemed to have been received at the time it is delivered to the
applicable address noted below either to the individual designated below or to an individual at
such address having apparent authority to accept deliveries on behalf of the addressee. Notice of
change of address shall also be governed by this section. In the event of a general discontinuance
of postal service due to strike, lock-out or otherwise, notices or other communications shall be
delivered by hand or sent by facsimile or other means of electronic communication and shall be
deemed to have been received in accordance with this section. Notices and other communications
shall be addressed as follows:

if to the Executive:

Jeff Hastings

754 Jordan Ave.,

Los Altos, CA  94022

if to the Corporation:

Corel Inc, c/o Corel Corporation

1600 Carling Avenue

Ottawa, Ontario K1Z 8R7

Attention: General Counsel

Telecopier No: (613) 725-2691

16 Assignment

               This Agreement shall be assignable by the Corporation but shall not be assignable by the
Executive.

17 Invalidity of Provisions

               Each of the provisions contained in this Agreement is distinct and severable and a declaration
of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall
not affect the validity or enforceability of any other provision hereof.

18 Entire Agreement

               This Agreement constitutes the entire agreement between the parties pertaining to the subject
matter of this Agreement. There are no warranties, representations or agreements between the
parties in connection with the subject matter of this Agreement except as specifically set forth or
referred to in this Agreement. No

 

 

reliance is placed on any representation, opinion, advice or assertion of fact made by the
Corporation or its directors, officers and agents to the Executive except to the extent that the
same has been reduced to writing and included as a term of this Agreement. Accordingly, there
shall be no liability, either in tort or in contract, assessed in relation to any such
representation, opinion, advice or assertion of fact, except to the extent aforesaid. Any dispute
or ambiguity between the Agreement, the terms of this Agreement shall apply, unless there is clear
and convincing evidence that another agreement mutually agreed to by the parties supersedes such
term of this Agreement.

19 Waiver, Amendment

               Except as expressly provided in this Agreement, no amendment or waiver of this Agreement shall
be binding unless executed in writing by the party to be bound thereby. No waiver of any provision
of this Agreement shall constitute a waiver of any other provision nor shall any waiver of any
provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.

20 Currency

               Except as expressly provided in this Agreement, all amounts in this Agreement are stated and
shall be paid in United States currency.

21 Governing Law

               This Agreement shall be governed by and construed in accordance with the laws of the State of
California.

22 Severability and Judicial Modification

               If any provision of this Agreement is held by a court or arbitration panel of competent
jurisdiction to be enforceable only if modified, such holding shall not affect the validity of the
remainder of this Agreement, the balance of which shall continue to be binding upon the parties
hereto with any such modification to become a part hereof and treated as though originally set
forth in this Agreement. The parties further agree that any such court or arbitration panel is
expressly authorized to modify any such unenforceable provision of this Agreement in lieu of
severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the
offending provision, deleting any or all of the offending provision, adding additional language to
this Agreement, or by making such other modifications as it deems warranted to carry out the intent
and agreement of the parties as embodied herein to the maximum extent permitted by law. The
parties expressly agree that this Agreement as so modified by the court or arbitration panel shall
be binding upon and enforceable against each of them. In any event, should one or more of the
provisions of this Agreement be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions hereof, and if
such provision or provisions are not modified as provided above, this Agreement

 

 

shall be construed as if such invalid, illegal or unenforceable provisions had never been set
forth herein.

23 Counterparts

               This Agreement may be signed in counterparts and each of such counterparts shall constitute an
original document and such counterparts, taken together, shall constitute one and the same
instrument. Counterpart signature pages may be delivered by facsimile.

24 Acknowledgement

Each of the Corporation and the Executive acknowledges that:

	 	a)	 	he or it has had sufficient time to review and consider
this Agreement thoroughly;
	 
	 	b)	 	he or it has read and understands the terms of this
Agreement and his or its obligations hereunder;
	 
	 	c)	 	he or it was afforded the opportunity to retain independent
legal advice concerning the interpretation and effect of this Agreement; and
	 
	 	d)	 	this Agreement is entered into voluntarily and without any
pressure.

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

	 	 	 	 	 	 	 
	SIGNED, SEALED & DELIVERED

	 	 	)	 	 	For: Corel Inc.
	 
	 	 	 	 	 	 
	in the presence of

	 	 	)	 	 	/s/ DAVIDDOBSON
	 

	 	 	 	 	 	 
	 

	 	 	)	 	 	David Dobson
	 
	 	 	 	 	 	 
	 

	 	 	)	 	 	For: Executive
	 
	 	 	 	 	 	 
	Witness
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	)	 	 	/s/ JEFF HASTINGS
	 	 	 	 	 	 	 
	Witness Name (Printed)
	 	 	)	 	 	Jeff HastingsEX-10.8

Exhibit 10.8

PERSONAL AND CONFIDENTIAL

August 8, 2007

Kevin Thornton

802 Regal Court

Highland Village, Texas 75077

Dear Kevin,

We are delighted to present to you this offer of employment with Corel Inc. as our Senior Vice
President, Sales and Marketing, Americas.

The details of your employment are:

1. Title: Senior Vice President, Sales and Marketing, Americas, reporting to the Chief Operating
Officer.

2. Place of Work: Your primary place of employment will be remote in Dallas, TX, however, you
will be required to travel frequently to Ottawa, Canada as well other domestic and international
locations as required to meet the business needs.

3. Term: Subject to Section 7 below, you will be employed for an indefinite period commencing
September 1, 2007.

4. Compensation:

A base salary equivalent to US $264,000 per annum, (subject to tax and other withholdings) subject
to annual review and adjustment by the Board. You would also be eligible to participate in our
Annual Incentive Plan (AIP) for executives and your target incentive under this program will be US
$176,000 (subject to tax and other withholdings). The targets would be set annually by the Board
in consultation with you.

For fiscal year 2007, your AIP will be paid out at the 100% Payout level prorated for the period
you are employed during fiscal year 2007. For fiscal year 2008, your AIP will be paid out at 100%
Payout level for the Q1 (first quarter) period.

In addition, Corel will provide to you a one-time hiring bonus in the amount of $35,000 US
(subject to tax and other withholdings) to be paid out upon submission of documentation referencing
the bonus plan structure of your previous employer. This amount will be payable on the first pay
date following September 28, 2007. Should you voluntarily leave your employment with Corel within
the first six (6) months of commencing employment, monies paid to you shall become refundable to
Corel. This refund obligation will reduce on a straight line basis over the six (6) month period.

 

 

5. Stock Options

At the next Board of Directors meeting, following your date of hire, your recommended stock option
grant of 40,000 options will be presented for approval. These options would vest according to the
terms of the plan which provides vesting of 10,000 of these options on the first anniversary
following the date of grant and thereafter, 2500 options shall vest at the end of each quarter
until all said options are fully vested. These options are governed by the Corel Corporation
Equity Incentive Plan (“the Plan”), as it may be amended from time to time.

In addition to your new hire grant, we wish to confirm that, as an executive at Corel, you will be
eligible to participate in our annual key performer grant program. Grants under this program are
discretionary and determined annually and presented to the Board of Directors for approval. A
prescribed date for this grant has not been set, however our intent is to have these grants
approved and distributed to employees before the end of April each year. Nothing in this agreement
or otherwise shall constitute any agreement that you will in fact receive a key performer grant.

6. Group Benefits, 401k and Vacation Plan

As a regular full-time employee, you shall be eligible to participate in our group benefits plans,
401k, and vacation plan, effective from your date of hire, in accordance with the established
practices and policies of Corel and our benefit carriers.

You will be provided with a summary of our current US group benefits and 401k including pricing.
It is important that you understand the details provided to ensure you have adequate coverage.
Please feel free to contact your local Human Resources Advisor if you have any concerns about
coverage for pre-existing conditions.

Your vacation entitlement will start at twenty (20) days per calendar year, pro-rated from date of
hire.

7. At Will Employment

Employment with Corel will be in an at-will capacity, meaning that either you or Corel would be
able to end your employment at any time for any reason or no reason with or without advance notice.
Neither this Agreement nor any other oral statements, policies or procedures constitute an express
or implied contract of employment or an agreement of any specific duration or otherwise limit
Corel’s right to terminate your employment and this agreement without notice or, except as
expressly set out in this section, without payment, compensation, benefit or other consideration.
Your at-will status will not be altered except in writing and signed by Corel’s Vice President,
Human Resources.

In the event your employment is terminated by Corel without Cause, provided that you execute
a Full and Final Release in a form to be provided by Corel, you will receive:

(a) a payment equivalent to six (6) months of Base Pay plus six (6) months AIP calculated
as if the AIP was earned at the 100% payout level, prorated for said six (6) month period;
and

(b) family COBRA coverage for medical and dental for a period of twelve (12) months. If,
prior to completion of the twelve (12) month period following the termination you commence a
position with another employer, or become self-employed, then the COBRA coverage will end.

For the purposes of the foregoing “Cause” means:

 

 

	 	(i)	 	theft, fraud, dishonesty or willful misconduct by you in connection with your
duties or involving the property, business or affairs of the company;
	 
	 	(ii)	 	any breach of the Corel Code of Business Conduct and Ethics;
	 
	 	(iii)	 	any material breach of any other Corel policy or procedure;
	 
	 	(iv)	 	a breach by you, in any material respect, of this employment agreement;
	 
	 	(v)	 	any restriction on your ability to travel freely and without difficulty to
and between the USA, Canada, Taiwan and Japan; or
	 
	 	(vi)	 	any conduct that would be determined by the courts of Texas to constitute
misconduct.

8. Confidentiality Obligations and IP Assignment:

You agree to preserve the confidentiality of Corel information and to assign any industrial and
intellectual property rights you may have or acquire to Corel in accordance with the provisions of
Schedule A attached hereto.

9. Non-Solicitation Obligations:

You agree that, during the period of employment with Corel, and in the event of the termination of
your employment for any reason whatsoever within one (1) year of the date of such termination, you
will not indirectly or directly, by any means in any capacity, approach, solicit, or contact in the
course of being engaged in a business competitive with Corel or attempt to direct away from Corel:

(i) any client or potential client of Corel with whom you had dealings during the term of
your employment with Corel;

(ii)
any client or potential client made known to you by Corel during the term of your
employment, 

or in any manner assist any person in any of the foregoing activities.

You agree that during the period of your employment by Corel, and in the event of the termination
of your employment for any reason whatsoever within one (1) year of the date of such termination,
you will not, directly or indirectly, attempt or agree to train, recruit or solicit any person
employed by Corel to provide services to yourself or any person who engages in a business similar
to the business of Corel or in any manner assist any person in any of the foregoing activities.

10. Non-Competition

You agree that during the period of your employment, and in the event of the termination of your
employment for any reason whatsoever within one (1) year of the date of such termination, you will
not, directly or indirectly, whether as principal, agent, distributor, representative, consultant,
employee, director, officer, manager, trustee, owner, partner, stockholder, limited partner, joint
venturer, independent contractor, other investor or in any other capacity invest in, undertake,
carry on, be engaged in, be concerned with, have a financial interest in, advise, lend money to,
guarantee the debts or obligations of or permit your name or any part thereof to be used or
employed by or associated with any person or entity engaged in, concerned with or interested in,
directly or indirectly, an undertaking or business anywhere in the world which is engaged in a
business in competition with Corel, other than (1) an investment of not more than five percent (5%)
of the stock, equity or other ownership interests of any person or entity whose applicable
securities are publicly traded; and/or (2) as an employee, where the employer and any affiliate of
the employer carries on

 

 

an undertaking or business (and you are not directly and/or actively involved in that undertaking
or business) in competition with Corel and that undertaking or business amounts to less than 5% of
the annual net revenue of the employer and any affiliate, on a consolidated basis.

11. Employer Policies and Regulations: You agree to abide by Corel’s policies and regulations, as
established from time to time including the Network Use and Security Policy which is attached
hereto as Schedule B.

12. Applicable Law: This agreement and the rights and obligations of the parties hereunder shall
be construed and governed in accordance with the laws of the State of Texas.

13. Entire Agreement: This agreement contains the entire understanding and agreement between the
parties hereto with respect to your employment and any and all previous agreements and
representations, written or oral, express or implied, between the parties hereto or on their
behalf, are hereby void. No amendment or variation of any of the provisions of this agreement
shall be valid unless made in writing and signed by each of the parties hereto.

14. Severability: In the event that any provision herein or part thereof shall be deemed
void, invalid, illegal or unenforceable by a court or other lawful authority of competent
jurisdiction, this agreement shall continue in force with respect to the enforceable provisions and
all rights accrued under the enforceable provisions shall survive any such declaration, and any
non-enforceable provision shall, to the extent permitted by law, be replaced by a provision which,
being valid, comes closest to the intention underlying the invalid, illegal or unenforceable
provision.

15. Corel Affiliates

For the purposes of sections 8, 9, 10, and 11 herein the term “Corel” shall include any other
company which is an affiliate of Corel, including, without limitation, Corel Corporation.

*          *          *

It is important to us that you fully understand all of the details of your employment, including
the benefits, any benefit limitations, and services that are available to you. All the attached
documents need to be completed and processed prior to your start date and as a condition of your
employment. Please note that this offer is also contingent upon Corel’s receipt of a clean report
from our third party verification agency. To indicate your acceptance of this offer, please
initial each page and sign below; then return the originals by mail to Corel Corporation, 1600
Carling Avenue, Ottawa, Ontario, K1Z 8R7 to Tracey Clements, HR Advisor in Human Resources and fax
a copy to (613) 761-1146. If you have any questions, please feel free to contact Tracey directly
at 613-728-0826 x1738.

Kevin, we are convinced that your skills and experience are a terrific match for this position and
that your contribution and commitment with Corel will be rewarding. I look forward to working with
you.

 

 

Best Regards,

/s/ DAVID DOBSON

David Dobson

CEO

I, Kevin Thornton, acknowledge that I am aware of my right to obtain independent legal advice
before signing this agreement (including Schedule B) and have either received such advice or chosen
not to seek such advice. I acknowledge and agree that I have read and fully understand this
agreement and agree that all such terms are reasonable and that the I sign this agreement freely,
voluntarily and without duress.

	 	 	 	 	 	 	 
	/s/ KEVIN THORNTON

	 	 
	 	August 9, 2007
	 	 
	 

	 	 	 	 	 	 
	Kevin Thornton (signature)

	 	 	 	Date	 	 

Schedule A

CONFIDENTIAL INFORMATION

               1. You acknowledge that you may, in your capacity as an employee of Corel, from time to time
receive Confidential Information of Corel which Corel wishes and is entitled to protect. You
understand that “Confidential Information” includes, but is not limited to, any part of the
computer systems, software source code, system logic, systems, marketing plans, patents, trade
secrets, know-how, technical expertise, financial information, product information, customer
information, your remuneration package and other information relating to the business of Corel,
whether verbal or written, regardless of the form or medium, with respect to the business of Corel,
as well as all proprietary and other information of a confidential nature which is provided to
Corel by third parties.

 

 

2. You agree that you will hold the Confidential Information in trust and confidence for Corel, and
that you will not disclose the Confidential Information to any person or entity without the prior
written approval of Corel or use the Confidential Information for any purpose other than the
specific purposes required by your duties with Corel.

3. You agree that you will not copy the Confidential Information without Corel’s written permission
or as required by your duties with Corel. You agree that you will not remove any Confidential
Information from Corel’s premises without the express permission of Corel. If Corel requests, you
will immediately return all Confidential Information in your possession or control to Corel.

4. You agree that you will advise Corel promptly of any information known to you prior to your
employment with Corel which could be included as Confidential Information but which you consider to
be excluded from the provisions of this agreement.

5. You acknowledge that the disclosure or use of Confidential Information by you contrary to
the terms of this agreement will cause Corel irreparable harm, for which damages may not be
adequate compensation and acknowledge that Corel may apply for equitable relief, including an
injunction, in order to stop any breach or threatened breach by you of this agreement. You are
required to notify Corel immediately of any breach of your obligations under this agreement which
comes to your attention.

6. The obligations of confidentiality hereunder shall not apply to any information that
(a) is or becomes information in the public domain without any act or omission by you, (b) was in
your possession free of any obligation of confidentiality before being disclosed to you by Corel,
or 8 was disclosed to you by a third party without breach by such third party of any
obligation to keep such information confidential. You agree to disclose any information which you
believe is qualified by this paragraph before acting upon it.

7. You understand and acknowledge that the obligations of confidentiality and non-disclosure
contained in this agreement shall continue in full force and effect notwithstanding the termination
of your employment with Corel and that you must continue to observe these obligations when seeking
new employment.

INDUSTRIAL AND INTELLECTUAL PROPERTY

8. You acknowledge that all improvements, inventions, know-how and discoveries, technology,
patents, copyrightable materials, computer programs, designs, documentation, processes, techniques
or procedures in any way related to Corel’s business which are developed, invented, or written by
you alone or together with others, including all derivative works, during the course of your
employment with Corel, or at any time using Confidential Information (“Developments”) are the
exclusive property of Corel.

9. You agree that you will fully disclose all Developments to Corel and you hereby waive all your
moral rights in all Developments as of the moment they are created and transfer all your interest
in all Developments, including all derivative works, exclusively to Corel on a world-wide,
royalty-free basis as of the moment they are created and, as required by Corel, will protect
Corel’s interest in such Developments. You agree to execute any documents which Corel feels are
necessary, at Corel’s expense, to enable Corel to apply for or enforce its patent, copyright,
industrial design, trademark right, or any other industrial or intellectual property rights in the
Developments.

 

 

10. You acknowledge that you are not a party to any prior agreements which have created, or which
could create in any third party rights which are or could become inconsistent with your obligations
herein, and you agree that you will fully disclose to Corel at your earliest opportunity any such
prior agreements as well as any claims made or notices provided by a third party which allege any
such agreement or interest.

11. You acknowledge that, from time to time, Corel uses the image, likeness, voice or other
representation of its employees in connection with the production of corporate reports, advertising
and promotional materials, and training videos. You hereby agree that if, during the course of
your employment, you participate in such productions, Corel may use your image, likeness, voice or
other representation in perpetuity, in all media and in all territories for the purposes described
above without further compensation to you.

12. You are required to devote your whole working time and attention to your
employment. You will not, during the term of your employment, perform work or services for any
competitor of Corel. As well, you will not, during your employment with Corel, compete directly or
indirectly with Corel.

13. You understand that a failure by Corel to enforce any particular provision of this
agreement is not to be considered a waiver of any of its rights and will not release you of any
responsibility for performance under this agreement.

14. The various sections of this agreement are independent and the invalidity of any one
particular clause will not affect the enforce ability of the other provisions of this agreement.

I have read, I understand, and I hereby agree to comply with the above terms and conditions of
employment with Corel Inc.

	 	 	 	 	 	 	 	 	 
	Signed:

	 	/s/ KEVIN THORNTON
	 	 
	 	August 9, 2007
	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Kevin Thornton
	 	 	 	Date	 	 

 

 

Schedule B

NETWORK USE & SECURITY

     The purpose of this policy is to establish guidelines for the proper use of computer network
resources by employees and to increase the overall security of our computer network, including the
Internet and all software, hardware, related equipment and/or services (the “Network”). Improper
use of the Network by you can expose yourself and Corel to potential civil and criminal penalties,
litigation, embarrassment and adverse publicity. Further, the use of unauthorized software on the
Network can compromise Network performance or unduly complicate the work of Corel’s MIS department.
Accordingly, it is important that all employees be familiar with and abide by the terms of this
policy.

     By using the Network, you acknowledge and agree that:

     The Network is owned by Corel Inc, its parent, subsidiaries and/or affiliates (“Corel”). It
is to be used:

	 	$ 	 	 only by you; and,
	 
	 	$ 	 	primarily for authorized business purposes that are directly related to your work
for Corel.

You may make personal use of the Internet, provided that such personal use does not interfere with
your ability to perform your job and does not otherwise offend this policy; however you should have
no expectation as to privacy with respect to any use of the Internet or the Network.

Corel has the right and ability to monitor any and all aspects of your use of the Network,
including, but not limited to, monitoring sites that you visit on the Internet and the material
contained in your files and e-mail. Current auditing technology allows Corel to conduct a detailed
Internet audit which includes tracking the Internet sites that you visit and identifying Corel
employees who visit certain sites. Anything you create, store, send, post or otherwise access
and/or transmit via the Network should not be considered private. Your use of passwords, access
codes, account numbers or other Network-related authorizations does not necessarily ensure privacy.

You are responsible for using the Network in an ethical and lawful manner, including as follows:

Your use of the Network must comply with all relevant intellectual property laws,
inclusive of copyright and the terms and conditions of third party software license
or Network-related agreements to which you or Corel are a party. Without limiting
the foregoing, you are not to knowingly use the Network (I) to operate software that
has been copied illegally; and/or (ii) to transmit software to third parties without
written authorization from your Director. Software that is licensed to you
personally may not be used on the Network without the prior written authorization of
your Director.

You are not to use the Network to create, store, send, post or otherwise access and/or transmit
inappropriate, offensive and/or illegal material, including but not limited to, harassing,
embarrassing, sexually explicit and pornographic material (collectively referred to
“Inappropriate Material”). Participation in chat groups, discussion groups, newsletters
and/or other public forums that contain or make reference to Inappropriate Material is
similarly prohibited. Should you encounter Inappropriate Material on the Network, you agree
to report it to the Human Resources Department. Should you mistakenly access Inappropriate
Material, you agree to advise the Human Resources Department.

You will not use the Network to knowingly make or disseminate any defamatory, negligent or other
similar statements.

 

 

     You have an obligation to safeguard the Network’s integrity and security. You are responsible
for all transactions and transmissions made using your password, unless your password was illegally
obtained by a third party. You agree to not disclose confidential passwords, access codes, account
numbers or other Network-related authorizations that are assigned to you from time to time. You
are not to destroy, password protect, encrypt or remove software or data without prior written
authorization from your Manager. You may be required to disclose your password or assist with the
decryption of a file to allow access by authorized Corel employees. You agree not to attempt to
access or use the Network through the use of another users I.D. or password or to otherwise
misrepresent yourself as another user of the Network.

Remote access privileges are for Corel employees only. Any access by a third party (such as a
friend, spouse or roommate) will result in immediate withdrawal of all remote access privileges and
may result in further disciplinary action.

You acknowledge and agree that, from time to time, Corel may provide you with notice of changes to
this policy’s terms and conditions and that such changes shall be binding upon you.

Violation of this policy may result in disciplinary action, including dismissal for cause, and/or
subject you to penalties or civil, criminal and/or copyright proceedings. Corel will cooperate
fully with local, provincial, state and federal officials in any investigation that is
Network-related.

ACKNOWLEDGMENT

I hereby acknowledge receiving and reading a copy of the above Corporate Policy — Network Use and
Security on the date indicated below and I agree to abide and be bound by the above terms and
conditions, as amended from time to time.

	 	 	 	 	 	 	 
	/s/ KEVIN THORNTON

	 	 
	 	August 9, 2007
	 	 
	 

	 	 	 	 	 	 
	Kevin Thornton

	 	 	 	(date)

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