STORAGE TECHNOLOGY CORPORATION
CEO Employment Agreement
Effective from
July 11, 2000
This CEO Employment Agreement (the "Agreement") is entered into on June 28, 2000
with an effective date for the start of employment and the assumption of the
offices specified herein of July 11, 2000 (the "Effective Date") by and between
Storage Technology Corporation (the "Company"), a Delaware corporation, and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (hereinafter, "you" or "your") and sets forth the terms and
conditions of your employment with the Company. In consideration of your
employment by the Company on the terms and conditions set forth below, and the
mutual covenants and agreements contained herein, you and the Company agree as
follows:
1. Position. During the Term (as defined in Section 2, below), you will
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be employed full-time by the Company in the position of Chairman
of the Board of Directors, President and Chief Executive Officer
of the Company, and shall report directly to the Company's Board
of Directors (the "Board"). At a meeting of the Board or an
appropriate committee thereof, scheduled to take place on the
Effective Date, (i) you will be elected by the Board to be a
Director and Chairman of the Board; (ii) you will be appointed a
corporate officer, in your new capacity as President and Chief
Executive Officer; and (iii) your appointment will be announced
publicly. In such capacity, you will perform such duties and
have such responsibilities as may be assigned by the Board from
time to time that are normally inherent in such capacities in
corporations of similar size and character. During the Term, you
shall devote substantially all of your working time, attention
and energies to the business of the Company and shall be subject
to the Company's Corporate Policies and Practices from time to
time in effect during the Term. Nothing herein shall preclude
you from (i) serving on the boards of directors of a reasonable
number of other corporations with the concurrence of the Board
(which approval shall not be unreasonably withheld), (ii) serving
on the boards of a reasonable number of trade associations and/or
charitable organizations, (iii) engaging in charitable activities
and community affairs, and (iv) managing your personal
investments and affairs, provided that such activities do not
conflict or interfere with the effective discharge of your duties
and responsibilities under this Section 1.
2. Employment. The provisions of this Agreement shall terminate four
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years after the Effective Date ("Term"); provided, however, that
until such time as notice of non-renewal or termination of the
Agreement is given by either you or the Company to the other
party, ninety days or more prior to expiration of the existing
Term, of either party=s decision not to renew, the Term and this
Agreement shall automatically be renewed for subsequent one-year
terms; provided further that in no event shall the Term and this
Agreement be so extended to a date more than six years from the
Effective Date.
3. Base Compensation. For your services during the Term, the Company will
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pay you a base salary at the annualized rate equal to $800,000.
Such salary shall be paid periodically in accordance with the
normal payroll practices of the Company in effect from time to
time during the Term, less any withholding taxes as set forth in
Section 16(a), below. The amount of your base salary may be
increased by the Board from time to time during the Term (such
annualized base salary as may be increased from time to time by
the Board is referred to in this Agreement as "Base Salary").
4. Incentive Plans.
a) Annual Incentive Bonuses. With respect to the years 2000 and
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2001, you will instead of a bonus under this section receive the
payments described in Section 6. During the Term, with respect
to years following 2001, you shall be eligible to receive bonuses
under the terms and conditions of the Management by Objectives
Program, as modified from time to time (AMBO Program@) approved
by the Board or the Human Resources and Compensation Committee of
the Board, based upon the achievement of pre-established
financial and other corporate or personal performance goals.
Under the MBO Program you shall be eligible to receive a bonus
equal to 100% of your Base Salary at the target level of
performance. (Such annualized target bonus under the MBO Program
as may be increased from time to time by the Board is referred to
in this Agreement as "Target Bonus"). Additionally, under the
MBO Program you will be eligible to receive a bonus payment equal
to 200% of your Base Salary if certain Astretch@ goals are
achieved (as that term is defined in the MBO Program) or a
payment of up to 350% of your Base Salary should certain
Aultra-stretch@ goals be achieved (as that term is defined in the
MBO Program). Any payments under the MBO Program shall be made in
accordance with the provisions of, and under the conditions
contained in, the MBO Program, except as otherwise provided in
this Agreement, including the payment of a certain percentage of
that bonus in stock or common stock equivalents, at the Board=s
discretion, which amount is currently set at 40% of the MBO
Program bonus payout. As used in this Agreement, the term
AAnnual Bonus@ includes the 2000 Incentive Guarantee, the 2001
Incentive Guarantee (both as defined in Section 6) and the Target
Bonus.
b) Additional Long-Term Incentive Awards. You shall be eligible to
participate on an ongoing basis in all long-term incentive plans
made available to senior executives, including stock option or other
equity-based awards, commencing with awards for 2001, or sooner at
the discretion of the Board, in accordance with Company practices
applicable to its senior-level executives, at the discretion of the
Board.
5. Sign-on Equity Arrangements.
a) Stock Option/Restricted Share Grant. The Company will grant to
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you on the Effective Date options to purchase 1,000,000 shares of
the Company=s common stock plus, if necessary, additional options
and/or shares of its restricted stock, or a combination thereof
(such options and any shares of restricted stock to be granted
under the Company=s 1995 Equity Participation Plan (the APlan@)),
such that the aggregate amount realizable by you as of any date
after the Effective Date upon exercise of such options and sale
of any such restricted stock would be $5,000,000 if the price of
the Company=s common stock were $16, all such options were vested
and exercisable, and all such shares were free of restrictions.
The exercise price of all such options will be set at the Fair
Market Value as defined in the Plan for options granted on the
Effective Date (which Fair Market Value will be the closing price
of the Company=s common stock as quoted at the close of the
market on the preceding trading day). Such options and any such
restricted stock will vest in equal increments of 25% of the
total number of options or shares of restricted stock granted.
The first 25% tranche of such options and any restricted stock
shall vest on the Effective Date and the remaining 75% of such
options and any restricted stock shall vest in three equal
increments of 25% of the total number of options and any
restricted stock granted on each of January 1, 2001; January 1,
2002 and January 1, 2003. Under the terms of the Plan, except as
otherwise provided herein, such options when vested shall remain
exercisable for a period of ten years.
Attached as Exhibit C hereto is the form of Employee Stock Option
Agreement to be used with respect to such options, and as Exhibit D
hereto is the form of Restricted Stock Agreement to be used with
respect to any restricted stock granted pursuant to this Agreement.
b) Share Grant. On the Effective Date the Company will grant to you
100,000 registered and freely tradeable shares of its common stock,
which shall be vested immediately.
6. Sign-on Incentive Guarantees.
a) 2000 Incentive Guarantee. You will be granted on the Effective
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Date a guaranteed incentive award (the A2000 Incentive
Guarantee@), in lieu of an award under the second half fiscal
year 2000 MBO Program, equal to the greater of either (i) the
amount that you would have been paid under Section 4, above, if
the MBO Program applied, were an award to be made to participants
in the MBO Program; or (ii) $400,000, said payment to be made to
you no later than the first business day in January 2001; if the
amount due is greater than $400,000, then the additional amount
shall be paid no later than the date at which payments are made
to participants in the MBO Program.
b) 2001 Incentive Guarantee. You will be granted on the Effective
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Date a guaranteed incentive award (the A2001 Incentive
Guarantee@), in lieu of an award under the full fiscal year 2001
MBO Program, equal to the greater of either (i) the amount that
you would have been paid under Section 4, above, if the MBO
Program applied, were an award to be made to participants in the
MBO Program; or (ii) $800,000, said payment to be made to you no
later than the first business day in January 2002; if the amount
due is greater than $800,000, then the additional amount shall be
paid no later than the date at which payments are made to
participants in the MBO Program.
7. Sign-on Bonus. You will be paid, on the Effective Date or as soon as
reasonably practicable thereafter, a sign-on bonus equal to
$2,000,000.
8. Reimbursement of Business and Other Expenses; Relocation.
a) Expenses. You are authorized to incur reasonable expenses in
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carrying out your duties and responsibilities under this
Agreement and the Company shall promptly reimburse you for all
reasonable business expenses incurred in connection with carrying
out the business of the Company, subject to documentation in
accordance with the Company=s policy. The Company shall pay all
reasonable financial and tax consultant and legal fees and
expenses incurred by you in connection with the negotiation of
your employment arrangements with the Company.
b) Relocation Expense Reimbursement. It is agreed that within
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twelve months of the Effective Date you will relocate your
primary residence to the Louisville, Colorado area. In
completing such relocation, you will be eligible to participate
in the Company=s executive relocation reimbursement program.
Specifically, the Company will either pay or reimburse you for
the following expenses which payments or reimbursements shall be
grossed-up to the extent they are taxable to you.
i) Shipment of household goods and automobiles to Colorado,
plus storage of household goods while you are in temporary
living accommodations;
ii) Temporary living in Colorado for you and your family for up to
120 days;
iii) Travel, meals and lodging en route to Colorado for you and
your family;
iv) Two house-hunting trips to Colorado for you and your spouse
for up to a total of ten days;
v) Reasonable and standard closing costs associated with the
purchase of a home in Colorado, provided that such home is
purchased within 24 months of the Effective Date;
vi) Realtor fees and closing costs on the sale of your current
residence, provided that such sale occurs within 24 months of
the Effective Date; and
vii) A one-time relocation allowance equal to 8% of your Base
Salary.
Should your employment with the Company be terminated per Section
9(b) below within two years of the Effective Date, then an aggregate
amount equal to the sum of all amounts in respect of relocation paid
to you pursuant to this Section, adjusted for any negative tax
effect on you but without requiring you to amend any tax return
already filed and reduced by 1/24 per month over a period of
twenty-four months starting from the Effective Date, shall be
repayable by you to the Company within thirty days of the
Termination Date.
c) Post-Termination Relocation. Following Involuntary Termination
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of your employment with the Company under Section 9(a) below, or
upon retirement or death, the Company will relocate you and your
family to the location of your choice in the United States,
covering the same expenses listed above on a tax-grossed up
basis. In addition, in the event that you suffer a loss on sale
of your principal residence in Colorado, the Company will
reimburse you for the loss.
9. Termination of Employment; Severance Benefits.
a) Involuntary Termination. If your employment terminates as a
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result of an Involuntary Termination other than for Cause (as
defined in Section 10(a) below), you shall be entitled to receive
a severance payment equal to the sum of (i) two times your Base
Salary for the fiscal year then in effect or the cumulative
amount of Base Salary remaining to be paid during the Term,
whichever amount is greater, plus (ii) two times your Annual
Bonus for the fiscal year then in effect, whether or not such
bonus would otherwise be payable, or the pro-rata Target Bonus
amounts that would have been paid over the Term based on the
Target Bonus for the fiscal year then in effect, whichever amount
is greater (or, if no Target Bonus is in effect for such year,
the highest Target Bonus in the three preceding fiscal years);
provided, that in the event of an Involuntary Termination upon a
Change of Control (as defined in Section 10(b), below), you shall
be entitled to receive a severance payment equal to the sum of
(i) three times your Base Salary for the fiscal year then in
effect, plus (ii) three times your Annual Bonus, whether or not
such bonus would otherwise be payable (or, if no Target Bonus is
in effect for such year, the highest Target Bonus in the three
preceding fiscal years). You shall also be entitled to the
following payments: (i) Base Salary through the Termination
Date; (ii) if termination occurs prior to 2002, the full amount
of the 2000 Incentive Guarantee and the 2001 Incentive Guarantee,
to the extent not previously paid, or if termination occurs
following 2001, a pro rata Target Bonus for the year of
termination (to the extent such a bonus is payable to other
participants in the MBO Program); (iii) the balance of any
incentive awards due for performance periods which have been
completed, but which have not yet been paid; (iv) stock options
or restricted stock pursuant to Section 9(d); (v) any expense
reimbursements or other unpaid amounts earned, accrued or owing
to you; or (vi) other benefits, if any, in accordance with
applicable plans and programs of the Company. Any severance
payments to which you become entitled pursuant to this Section
9(a) shall be paid to you in a lump sum within thirty calendar
days of your Termination Date and shall be paid contingent upon
your execution and delivery to the Company of a Settlement and
Release Agreement substantially in the form attached hereto as
Exhibit A. The Company will execute and deliver to you
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simultaneously therewith a Settlement and Release Agreement in
the form attached hereto as Exhibit B. In case of Disability,
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you shall, in addition, be entitled to any benefits available
under the Company=s employee or executive disability policies.
For purposes of this Section 9(a), any reference to your Base
Salary or Target Bonus shall be understood to refer to the amount
thereof disregarding any reduction that constitutes grounds for
Involuntary Termination as contemplated by Section 10(d).
b) Voluntary Resignation; Termination For Cause. 1) If you
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voluntarily resign from the Company (other than as an Involuntary
Termination), or if the Company terminates your employment for
Cause, then you shall not be entitled to receive any severance or
other benefits other than (i) Base Salary through your
Termination Date; (ii) stock options or restricted stock pursuant
to Section 9(d); (iii) any expense reimbursements or other unpaid
amounts earned, accrued or owing to you; (iv) other benefits, if
any, in accordance with applicable plans or programs of the
Company; and (v) except in case of termination for Cause, any
remaining unpaid amounts pursuant to Section 6. Further, you
hereby authorize the Company to offset any amounts owed by you to
the Company against any amounts the Company might otherwise owe
to you on the Termination Date.
2) There will be no termination for Cause without your first having
been given written notice thereof in accordance with Section 9(g),
and then having been given a reasonable opportunity to be heard by
the Board.
c) Death: In the event of your death, your legal representative
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shall receive (i) your Base Salary through the end of the month
in which death occurs; (ii) if death occurs prior to 2002, the
full amount of the 2000 Incentive Guarantee and the 2001
Incentive Guarantee, to the extent not previously paid, or if
death occurs following 2001, your pro-rata Target Bonus amount
for the fiscal year in which death occurs, at the Target Bonus
for the fiscal year then in effect, whether or not such Bonus
would otherwise have been payable; (iii) any incentives, other
than stock options or restricted stock, on a pro-rata basis,
payable when scheduled to be paid; (iv) stock options or
restricted stock pursuant to Section 9(d); (v) any expense
reimbursements or other earned, accrued or unpaid amounts owing
to you; and (vi) other benefits, if any, in accordance with
applicable plans or programs of the Company.
d) Restricted Stock and Stock Options. 1) In the event your
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employment terminates for any reason other than a termination
pursuant to Section 9(b), then, in addition to such severance as
you may otherwise receive, all unvested stock options granted to
you under the Company's stock option plans (or under any
successor company's stock option plans) shall vest and become
exercisable in full, and the Company's right to repurchase any
shares of restricted stock purchased under any of the Company's
stock plans on or after the Effective Date shall terminate and
all such stock shall become fully vested. In addition, any stock
options granted to you shall remain exercisable for their
originally scheduled terms, subject to the other original terms
and conditions of such options.
2) In the event your employment is terminated pursuant to Section 9(b),
you shall be entitled to exercise your vested options for a period
of 180 days (plus any number of days during which exercise would be
restricted for any reason) following your termination and unvested
options shall be forfeited.
e) Medical Benefits. In the event you are entitled to receive
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severance payments pursuant to Section 9(a), then, in addition to
such severance payments, the Company shall pay you a lump sum
payment in an amount that the Company reasonably determines to
represent the estimated cost that you may incur to extend for a
twenty-four month period under the COBRA continuation laws the
medical coverage for you and your dependents in effect on the
Termination Date or, in the event of an Involuntary Termination
upon a Change in Control, for a thirty-six month period. Such
payment may be used for such continuation coverage or for any
other purpose.
f) Other Benefits. In the event you are entitled to severance
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payments pursuant to Section 9(a), then, in addition to such
severance payments, (i) for a period of twenty-four months after
the Termination Date (for a period of thirty-six months in the
event of an Involuntary Termination upon a Change of Control),
the Company shall continue to provide you with (A) long-term
disability insurance benefits as in effect as of the Termination
Date, or such comparable benefits as the Company may determine to
be sufficient to satisfy its obligations to you under this
Agreement; and (B) the allowance for financial and tax and estate
planning services in effect on the Termination Date (as defined
in Section 10(e), below) and (ii) for a period of twenty-four
months after the Termination Date (for a period of thirty-six
months in the event of an Involuntary Termination upon a Change
of Control), the Company shall continue to provide you with life
insurance benefits. Notwithstanding the foregoing, if you become
covered under any life or disability insurance plan provided by a
subsequent employer, then the amount of coverage required to be
provided by the Company hereunder shall be reduced by the amount
of coverage provided by the subsequent employer's insurance plans.
g) Notice of Termination. Any termination (of your employment with
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the Company other than by reason of your death) shall be
communicated by a notice of termination given by one party to the
other in accordance with Section 16(d) of this Agreement. Such
notice shall indicate the specific termination provision in this
Agreement relied upon, shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and shall specify
the Termination Date (as defined in Section 10(e), below).
h) No Mitigation; No Offset. In the event of any termination of
employment under this Section 9, you shall be under no obligation to
seek other employment and, except as otherwise stated explicitly
herein, there shall be no offset against amounts due you under this
Agreement on account of any remuneration received from any
subsequent employer.
i) Nature of Payments. Any amounts due under this Section 9 are in the
nature of severance payments considered to be reasonable by the
Company and are not in the nature of a penalty.
10. Certain Defined Terms.
a) Cause. "Cause" means (i) you are convicted of a felony
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involving moral turpitude or involving fraud against the Company,
or (ii) you are guilty of willful gross neglect or willful gross
misconduct in carrying out your duties under this Agreement,
resulting, in either case, in material economic harm to the
Company, unless you believed in good faith that your action or
non-action was in or not opposed to the best interests of the
Company.
b) Change of Control. "Change of Control" means the occurrence of any
of the following events:
i) The acquisition by any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended), other than the Company or a person that,
on the Effective Date and immediately prior to such
acquisition, directly or indirectly controls, is controlled
by, or is under common control with, the Company, of the
"beneficial ownership" (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company
representing thirty-five percent (35%) or more of the total
voting power represented by the Company's then outstanding
voting securities; or
ii) the majority of the Board consists of individuals other than
Incumbent Directors, which term means the members of the Board
on the Effective Date; provided that any person becoming a
director subsequent to such date whose election or nomination
for election was supported by three-quarters of the directors
who then comprised the Incumbent Directors shall be considered
to be an Incumbent Director;
iii) merger or consolidation of the Company with any other
corporation, other than 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
(including the parent corporation of such surviving
entity)) at least fifty-one percent (51%) of the total
voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately
after such merger or consolidation; or
iv) the approval by the stockholders of the Company of a plan of
complete liquidation of the Company, or the sale or
disposition by the Company of all or substantially all the
Company's assets.
c) Disability. "Disability" means that you have been unable to
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substantially perform your duties under this Agreement as the
result of your incapacity due to physical or mental illness for a
period of twenty-six consecutive weeks after its commencement, as
determined by a medical doctor selected by the Company and you.
If the parties cannot agree on a medical doctor, each party shall
select a medical doctor and the two doctors shall select a
third, who shall be the approved medical doctor for this purpose.
d) Involuntary Termination. "Involuntary Termination" means any of
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the following: (i) termination of your employment by the Company
which is not effected for Cause; (ii) termination of your
employment with the Company by reason of your Disability; (iii)
during the twenty-four month period following a Change of
Control, termination of your employment for any reason other than
for Cause; (iv) the failure of the Company to obtain the
assumption of this Agreement by any successors contemplated in
Section 14(a) below; (v) without your express written consent,
your relocation to a facility or a location more than 50 miles
from the Company's principal business offices located in
Louisville, Colorado; (vi) without your express written consent,
a reduction in your Base Salary or Target Bonus as in effect
immediately prior to such reduction; (vii) the failure to elect
or reelect you to any of the positions described in Section 1
above; (viii) a change in the reporting structure so that you
report to someone other than the Board; (ix) without your express
written consent, a significant reduction of your duties,
authority (including reporting lines to you) or responsibilities
relative to your duties, authority and responsibilities as in
effect immediately prior to such reduction (except with respect
to sale or other disposition of a division or subsidiary of the
Company); (x) the taking of any action by the Company, including
eliminating a plan without providing a substitute or reducing
your awards under a plan, the result of which would substantially
diminish the aggregate projected value of your awards under the
Company=s bonus and benefit plans; or (xi) the taking of any
action by the Company that could substantially diminish the
aggregate value of the benefits provided to you under the
Company=s medical, health, accident, disability, life insurance,
thrift and retirement plans.
e) Termination Date. "Termination Date" means any of the following:
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(i) the date on which the Company delivers to you a written
notice of termination or such later date, not to exceed ninety
days, specified in the notice of termination; (ii) in the event
the Term ends by reason of your death or Disability, the date of
death or determination of Disability; and (iii) in the event this
Agreement is terminated by you, the date on which you deliver a
written notice of termination to the Company, or a date
determined in accordance with Section 2, above. Any notice of
termination shall specify the provision(s) in this Agreement
claimed to provide a basis for termination.
11. Excise Tax. In the event that the severance and other benefits
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provided for in this Agreement or otherwise payable to you (i) would
constitute Aparachute payments@ within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the ACode@) and (ii) but
for this Section, would be subject to the excise tax imposed by Section
4999 of the Code, then such severance and other benefits shall be
either (i) delivered in full, or (ii) delivered as to such lesser
extent which would result in no portion of such severance and other
benefits being subject to excise tax under section 4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by
Section 4999, results in the receipt by you on an after-tax basis, of
the greater amount of benefits, notwithstanding that all or some
portion of such benefits may be taxable under Section 4999 of the
Code. Unless you and the Company agree otherwise in writing, any
determination required under this Section shall be made in writing by
the Company=s independent public accountants (the AAccountants@). Such
determination shall be conclusive and binding upon you and the Company
for all purposes. For purposes of making the calculations required by
this Section, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable,
good faith interpretations concerning the application of Sections 280G
and 4999 of the Code. You and the Company shall furnish to the
Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this
Section. If a determination is made by the Accountants that a
reduction in the aggregate of all payments due to you upon a Change of
Control is required by this Section 11, you shall have the right to
specify the portion of such reduction, if any, that will be made under
this Agreement and each plan or program of the Company. If you do not
so specify within 60 days following the date of a determination by the
Accountants pursuant to the preceding sentence, the
Company shall determine, in its sole discretion, the portion of such
reduction, if any, to be made under this Agreement and each plan or
program of the Company. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section.
12. Non-Compete; Non-Solicit.
a) Each of the parties hereto recognizes that your services are
special and unique and that the level of compensation and the
other provisions herein for compensation and benefits are partly
in consideration of and conditioned upon your agreement not to
compete with the Company, and that your covenant not to compete
or solicit as set forth in this Section during and after the Term
is essential to protect the business and good will of the
Company. This Section 12 shall supersede any provision of the
Plan or any other plan or agreement covering substantially the
same matters.
b) You agree that during the Term and for a period ending
twenty-four months following the Termination Date during which
you shall have received severance due under this Agreement as a
result of Involuntary Termination (the "Covenant Period"), you
will not either directly or indirectly, engage in Competitive
Business (as defined below) including, but not limited to:
accepting employment with or serving as a consultant or advisor
or director to any Competitive Business; acting against the
interests of the Company; disclosing or misusing any proprietary
or material confidential information concerning the Company (such
information includes, without limitation, information regarding
the Company's operations, its products and services, product
designs, business plans, strategic plans, marketing and
distribution plans and arrangements, customers, and financial
statements, budgets and forecasts, and employee names, titles,
compensation, skills and performance); or participating in any
hostile takeover attempt of the Company. ACompetitive Business@
means a business which produces data storage systems, including
disk and tape drives, cartridge libraries or corporate network
backup and recovery software and such new products and services
in such new businesses or markets as the Company shall have prior
to the Termination Date committed to produce or provide. The
foregoing restrictions shall not apply (x) in connection with
performance of your duties hereunder, (y) if you are required to
make any disclosure or take any action by law or by a court,
agency, or other governmental order, or (z) in making any
disclosure in confidence to a lawyer or other professional
advisor for the purpose of securing professional advice. The
restrictions set for this in this Section shall not apply to any
document, record or other information, that (i) has previously
been disclosed to the public or is in the public domain other
than as a result of your breach of this Section, or (ii) is known
or generally available within any trade or industry in which the
Company or any of its affiliates is active.
c) You agree that during the Covenant Period, you will not, other
than in the performance of your duties hereunder, either directly
or indirectly: (i) induce or attempt to influence any
then-current employee of the Company to leave his/her employ with
the Company; or (ii) solicit or encourage then-current employees
of the Company to apply for employment with any person or entity
with which you are employed or with which you intend to become
employed, or in which you have or intend to have a financial
interest, as a consultant, recruiter, independent contractor or
otherwise, or in which you have a substantial financial or equity
interest. For purposes of this Section, the term "Company" shall
mean and include the Company, any subsidiary or affiliate of the
Company, any successor to the business of the Company (by merger,
consolidation, sale of assets or stock or otherwise) and any
other corporation or entity for which you may serve as a
director, officer or employee at the request of the Company or
any successor of the Company.
d) You agree that the Company would suffer an irreparable injury if you
were to breach the covenants contained in Sections 12(b) or 12(c)
and that the Company would by reason of such breach or threatened
breach be entitled to injunctive relief in a court of appropriate
jurisdiction.
e) If any of the restrictions contained in this Section 12 shall be
deemed to be unenforceable by reason of the extent, duration or
geographical scope or other provisions thereof, then the parties
hereto contemplate that the court shall reduce such extent,
duration, geographical scope or other provision hereof and enforce
this Section 12 in its reduced form for all purposes in the manner
contemplated hereby.
13. Employee Benefit Programs.
a) You shall be eligible to participate in the employee and
executive benefit programs maintained by the Company, including
(without limitation) any qualified or non-qualified retirement
plans or programs, savings and profit-sharing plans, deferred
compensation plans, life, short-term and long-term disability,
medical, accident and other insurance programs, paid vacations in
accordance with the policy for executive officers as may be in
effect from time to time, and similar plans or programs, subject
in each case to the generally applicable terms and conditions of
any such plan or program and to the sole determination of the
Board, or any committee of the Board, or other committee
administering such plan or program. In particular, you may
participate in the Company=s Profit Sharing and Thrift Plan (the
Company=s 401 (k) Plan) and the Company=s Deferred Compensation
Plan. Upon your request, the Company shall implement a special
deferred compensation arrangement for you under which you may
elect to defer receipt of your Base Salary and bonus amounts into
a secular trust or a rabbi trust which is secured by insurance,
provided such arrangement is possible to implement without
additional tax liability to the Company. The Company will pay
the expenses associated with any such trust (including any
associated insurance) in an amount not to exceed $20,000 per year.
b) During the Term of this Agreement (and thereafter pursuant to
Section 9(f), above), the Company shall provide you with (i) life
insurance coverage in an amount equal to $5,000,000.00 and a
medical benefits program with a supplemental payment coverage of
$15,000.00 per year, which benefits will be provided to you in
addition to the programs maintained for other employees; (ii) an
annual reimbursement for financial and tax and estate planning
expenses incurred by you in an amount not to exceed 2.5% of your
Base Salary; (iii) reasonable and customary car allowance for an
executive of your position, (iv) membership in a country club of
your choosing with the Company=s approval, and (v) the various
executive officer perquisites to the extent the Company continues
to offer them from time to time, including first class air travel
and a Company-paid annual physical.
c) The Company agrees to take any steps necessary so that any life
insurance required to be provided to you by it may be owned by any
trust, estate, or other entity designated by you, and that any
trust, estate or other entity designated by you may be the
beneficiary of any such life insurance, provided such steps are
possible to implement without additional tax liability to the
Company.
14. Successors.
a) Company's Successors. Any successor to the Company (whether
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direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially
all of the Company's business and assets shall assume the
obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to
the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes
under this Agreement, the term "Company" shall include any
successor to the Company's business and assets which executes and
delivers the assumption agreement described in this Section or
which becomes bound by the terms of this Agreement by operation
of law.
b) Employee's Successors. The terms of this Agreement and all your
rights hereunder shall inure to the benefit of, and be enforceable
by, your personal or legal representatives, executors,
administrators, successors, heirs, devisees and legatees.
15. Indemnification; Liability Insurance.
a) The Company agrees that if you are made a party, or are
threatened to be made a party, to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that you are or were a
director, officer or employee of the Company or are or were
serving at the request of the Company as a director, officer,
member, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether or not the basis of
such Proceeding is your alleged action in an official capacity
while serving as a director, officer, member, employee or agent,
you shall be indemnified and held harmless by the Company to the
fullest extent legally permitted or authorized by the Company's
certificate of incorporation or bylaws or resolutions of the
Company's Board of Directors or, if greater, by the laws of the
State of Delaware, against all cost, expense, liability and loss
(including, without limitation, attorney's fees, judgments,
fines, ERISA excise taxes or other liabilities or penalties and
amounts paid or to be paid in settlement) reasonably incurred or
suffered by you in connection therewith, and such indemnification
shall continue as to you even if you have ceased to be a
director, member, employee or agent of the Company or other
entity and shall inure to the benefit of your heirs, executors
and administrators. The Company shall advance to you all
reasonable costs and expenses incurred by you in connection with
a Proceeding within 20 calendar days after receipt by the Company
of a written request for such advance. Such request shall
include an undertaking by you to repay the amount of such advance
if it shall ultimately be determined that you are not entitled to
be indemnified against such costs and expenses.
b) Neither the failure of the Company (including its board of
directors, independent legal counsel or stockholders) to have
made a determination prior to the commencement of any proceeding
concerning payment of amounts claimed by you under Section 15(a)
above that indemnification of you is proper because you have met
the applicable standard of conduct, nor a determination by the
Company (including its board of directors, independent legal
counsel or stockholders) that you have not met such applicable
standard of conduct, shall create a presumption that you have not
met the applicable standard of conduct.
c) The Company agrees to continue and maintain a directors' and
officers' liability insurance policy covering you at least to the
extent the Company provides such coverage for its other executive
officers.
16. Miscellaneous Provisions.
a) Withholding. All payments to you pursuant to this Agreement shall be
subject to withholding of all amounts required to be withheld by
applicable Internal Revenue Service and State tax authorities by the
Company and shall be conditioned upon your submission of all
information or execution of all instruments necessary to enable the
Company to comply with such withholding requirements.
b) Confidentiality Agreement. As a condition of your employment, you
will have executed the Company's standard form of confidential
inventions and trade secrets agreement. You hereby reaffirm that
during the Term and thereafter you will comply with all provisions
of such agreement and agree that you will enter into such
modifications or amendments thereof as the Company may reasonably
request from time to time.
c) Stock Ownership Guidelines. During the Term, you agree to comply
with the corporate officer stock ownership guidelines approved by
the Board or any committee of the Board, as they may be amended from
time to time, and which ownership guidelines are now set at 20,000
shares of the Company's Common Stock for the President and Chief
Executive Officer, said shares to be accumulated within three years
of the Effective Date.
d) Notice. Any notice required to be given under this Agreement shall
be given in writing, either by personal delivery or by causing such
written notice to be mailed, first class postage prepaid, in the
United States mail, to the parties at the addresses set forth below,
or at such other address for a party as shall be specified by like
notice, provided that notices of change of address shall be
effective only upon receipt thereof.
Company: Storage Technology Corporation
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Attention: General Counsel
Executive: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Storage Technology Corporation
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with a copy to his personal address most recently
notified to the Company.
e) Amendment or Modification. This Agreement may not be amended or
modified and no provision shall be waived unless agreed to in
writing and signed by you and the Company. No waiver by either party
of any breach of this Agreement shall be deemed a waiver of any
other provision or condition at another time.
f) Assignment. Except as otherwise provided herein, the rights of any
person to payments or benefits under this Agreement shall not be
made subject to option or assignment, either by voluntary or
involuntary assignment or by operation of law, including (without
limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any action in violation of this Section shall be void.
g) Governing Law. This Agreement is entered into in accordance
with, and shall be interpreted pursuant to the provisions of, the
laws of the State of Colorado.
h) Arbitration. Any controversy or claim arising between you and
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the Company including, without limitation, any claims, demands or
causes of action alleging wrongful discharge; unlawful
discrimination based on sex, age, race, national origin,
disability, religion or other unlawful basis; breach of contract;
or any claims seeking damages under any federal, state or local
law, rule, regulation or common law theory; but excluding any
claims by you for worker's compensation or unemployment
compensation, and excluding any claims by the Company for
injunctive relief (for instance, for breach of confidentiality,
breach of a covenant not to compete, violation of trade secrets,
or unfair competition), shall be resolved by final and binding
arbitration. By signing below, you voluntarily waive any right
to submit claims to a judge or jury in either state or federal
court. The arbitration shall be held in Denver, Colorado, or
elsewhere by mutual agreement. The selection of the arbitrator
and procedure shall be governed by the Employment Arbitration
Rules of the American Arbitration Association, as amended. The
arbitrator shall be someone with a minimum seven years of
employment law background and from the AAA Commercial Arbitration
Panel or, if both parties agree, the Judicial Arbiters Group.
The arbitrator shall apply the applicable substantive law to any
claim; for any state law claim or damages issues, the law of
Colorado shall govern, including but not limited to the
provisions of C.R.S. Sections 13-21-102(5). Judgment upon an
award rendered by an arbitration may be entered by any court
having jurisdiction. The Company will pay the cost normally
associated with the arbitration, including the arbitrator's fee
and any fee for a hearing facility. Following resolution of all
claims between the parties in an arbitration proceeding, if the
arbitrator so determines, the Company shall reimburse you for all
reasonable legal fees and expenses that you incurred in
connection with a successful claim to enforce your rights under
this Agreement.
i) Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall
not affect or impair the validity or enforceability of the remaining
provisions of this Agreement, which shall remain in full force and
effect in accordance with their terms.
j) Entire Agreement. This Agreement, together with the other
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agreements referenced herein, embody the entire agreement between
the parties relating to the subject matter hereof, and supersede
all previous agreements or understandings, whether oral or
written. In the event of any inconsistency between any provision
of this Agreement and any provision of any plan, employee
handbook, personnel manual, program, policy, arrangement or
agreement of the Company or any of its Affiliates, the provisions
of this Agreement shall control unless you otherwise agree in a
writing that expressly refers to the provision of this Agreement
you are waiving.
k) Knowledge and Representations. 1) By signing below, you acknowledge
that the terms of this Agreement have been fully explained to you,
that you understand the nature and extent of the rights and
obligations provided under this Agreement, and the you have been
encouraged to and have had an opportunity to consult legal counsel
prior to signing this Agreement.
2) The Company represents and warrants that (i) it is fully
authorized by action of its Board (and of any other body whose
action is required) to enter into this Agreement and to perform its
obligations under it; (ii) the execution, delivery and performance
of this Agreement, by it does not violate any applicable law,
regulation, order, judgment or decree or any agreement, plan or
corporate governance document to which it is a party or by which it
is bound; and (iii) upon the execution and delivery of this
Agreement by the parties, this Agreement shall be a valid and
binding obligation of the Company, enforceable against it in
accordance with its terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency or similar laws
affecting the enforcement of creditors= rights generally.
l) Counterparts. This Agreement may be executed in two or more
counterparts.
IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of the Company by its duly authorized officer or representative, as
of the day and year first above written.
STORAGE TECHNOLOGY CORPORATION
By:
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇
Chairman, Human Resources & Compensation Committee
of the Board of Directors
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
