G:\legal\ljs\emp-ag1.frm StorageTek
Protected
STORAGE TECHNOLOGY CORPORATION
Employment Agreement
January 1, 2000
G:\legal\ljs\emp-ag1.frm StorageTek
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page 14
CORPORATE OFFICER EMPLOYMENT AGREEMENT
This Corporate Officer Employment Agreement (the "Agreement") is entered into as
of January 1, 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. Previously, you and the Company entered into a
letter agreement dated January 7, 2000 concerning your employment with the
Company (the "Letter Agreement"). This Agreement shall supplement that Letter
Agreement. However, wherever there may be a conflict between the terms of this
Agreement and the Letter Agreement, the terms of the Letter Agreement shall
prevail. All prior agreements, other than the Letter Agreement, between you and
the Company concerning your employment with the Company are superseded by this
Agreement and shall henceforth be null and void. 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. You will be employed full-time by the Company in the position
of Corporate Vice President, International Operations, Global Services and
E-Business of the Company, which is an executive and management level position,
initially reporting to ▇▇▇▇▇ ▇▇▇▇▇, the Chairman, President and CEO of the
Company. During your employment, you shall devote your entire working time,
attention and energies to the business of the Company and shall be bound by the
Company?s Corporate Policies and Practices from time to time in effect. You
shall not engage in any other business or personal activity or activities that
require services by you that may conflict with the proper performance of your
duties hereunder.
2. Certain Defined Terms.
a. Cause. ?Cause? means any of the following: (i) willful failure to
perform your duties and responsibilities as an officer of the Company; (ii) your
willful breach of any provision of this Agreement; (iii) your willful breach of
any other written agreement between you and the Company; (iv) gross negligence
or dishonesty in the performance of your duties hereunder; (v) your willful
violation of any of the Corporate Policies and Practices as in effect from time
to time; (vi) your engaging in conduct or activities that materially conflict
with the interests of or injure the Company, or materially interfere with your
duties owed to the Company; (vii) your refusal to comply with or material
neglect of instructions received from your manager; and (viii) your conviction
(including any plea of guilty or nolo contendere) for a felony.
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 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) A 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 percent (50%) 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 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
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 weeks,
consecutive or otherwise, after its commencement. This definition is for
purposes of this agreement only and does not address company short term or long
term benefit policies.
d. Involuntary Termination. "Involuntary Termination" means any of 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 death or 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 10 below; (v)
without your express written consent, your relocation to a facility or a
location more than 50 miles from your present office location; (vi) without your
express written consent, a material reduction in your Base Salary and Target
Bonus opportunity, stated as a percentage of your Base Salary, as defined below,
as in effect immediately prior to such reduction, where a material reduction
shall be deemed to be a cumulative reduction of greater than fifteen percent
(15%), except as provided in Section 4 below; or (vii) without your written
consent, a significant reduction of your duties, authority, responsibilities.
e. Termination Date. "Termination Date" means any of the following: (i)
the date on which the Company delivers to you a written notice of termination or
such later date as may be specified in the notice of termination; (ii) in the
event employment 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 such effective date as you and the Company may agree. Any
notice of termination shall specify the provision(s) in this Agreement claimed
to provide a basis for termination.
3. Base Compensation. For your services during your employment, the Company
will pay you a base salary at the annualized rate equal to $ 325,000.00. Such
salary shall be paid periodically in accordance with the normal payroll
practices of the Company in effect from time to time, less any withholding taxes
as set forth below. The amount of your base salary may be increased from time to
time during your employment, and may be reduced, consistent with Section 2.d,
above, if the Board of Directors of the Company (?Board?) requires a decrease in
base salary for all corporate officers and business unit managers, or as may be
mutually agreed upon by you and the Company (such annualized base salary as may
be adjusted from time to time is referred to in this Agreement as ?Base
Salary?).
4. Incentive Bonuses. The Company currently maintains a Management By Objective
Bonus Program (the "MBO Program") as may be modified from time to time. During
your employment, you shall be eligible to receive bonuses under the terms and
conditions of the MBO Program approved by the Board and/or the Human Resources
and Compensation Committee of the Board, based upon the achievement of
pre-established financial and other performance goals. In particular, you are
specifically eligible to receive a bonus under the MBO Program equal to 60% of
your Base Salary at the target level of performance. The amount of your target
bonus opportunity, stated as a percentage of your Base Salary, may be increased
from time to time during your employment, and may be reduced if the Board
requires a decrease in the target bonus opportunity for all corporate officers
and business unit managers, or as may be mutually agreed upon by you and the
Company (such annualized target bonus as may be adjusted from time to time is
referred to in this Agreement as ?Target Bonus?). Any payments under the MBO
Program shall be made in accordance with the provisions of, and under the
conditions contained in, the MBO Program, and may be subject to achieving
pre-established individual performance goals. Failure to achieve your individual
performance goals may result in a reduced payment or no Target Bonus payment.
5. Termination of Employment; Severance Benefits.
a. Involuntary Termination. If your employment terminates as a
result of an Involuntary Termination other than for Cause, you shall be entitled
to receive a severance payment equal to the sum of (i) one times your Base
Salary for the fiscal year then in effect, plus (ii) one times your Target Bonus
for the fiscal year then in effect, 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); provided, that in the event of an
Involuntary Termination upon a Change of Control, you shall be entitled to
receive a severance payment equal to the sum of (x) two times your Base Salary
for the fiscal year then in effect, plus (y) two times your Target 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). Any severance payments to which you become entitled pursuant to this
Section shall be paid to you (or your estate or beneficiary in the event of your
death) 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.
b. Restricted Stock and Stock Options. In the event you are entitled
to receive severance pursuant to this Section, then, in addition to such
severance, all unvested stock options granted to you under the Company's stock
option plans (or under any successor company's stock option plans) on or after
the Effective Date 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.
c. Voluntary Resignation; Termination For Cause. If you 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 except for those benefits, if any, as
may then be established under then existing benefits plans at the time of your
resignation or termination.
d. Notice of Termination. Any termination (of your employment with
the Company other than by reason of your Death or Disability) shall be
communicated by a notice of termination given to the other in accordance with
the Notice Provisions 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.
6. 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, stock option, restricted stock and other equity plans,
bonus 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. During your employment, the Company shall
provide you with (i) an annual reimbursement for financial and tax and estate
planning expenses incurred by you in an amount not to exceed 1% of your Base
Salary; and (ii) the various executive officer perquisites to the extent the
Company continues to offer them from time to time.
b. Stock option, restricted stock or other equity benefits, if any,
shall be awarded by the Board pursuant to the terms and conditions of the
Company?s equity plans for employees, as may be in effect from time to time. The
Company?s 1995 Equity Participation Plan, as amended, provides that stock option
and stock appreciation rights may be subject to forfeiture and any option gain
may be payable by you to the Company during a period specified in the plan in
the event you may engage in activities that are in competition with the Company
following your termination. You are encouraged to carefully review the terms of
the plan and any other equity plans that may be in effect from time to time, and
any stock option agreements in their entirety.
7. Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to you (i) would
constitute ?parachute payments? within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the ?Code?) 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 greatest
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
?Accountants?). 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. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section.
8. Non-Compete; Non-Solicit.
a. Each of the parties hereto recognize 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
your employment with the Company is essential to protect the business and good
will of the Company.
b. You agree that during your employment with the Company and for a
period ending twelve months following the Termination Date, you will not either
directly or indirectly, engage in any activity in competition with any product,
service or other activity of the Company (said competing products, services or
activities to be determined and identified at the Company?s reasonable
discretion at the Termination Date, which competition will be defined to include
the design, manufacture or sale of products and services in markets that the
Company is either actively involved in or has expressed its positive intent to
enter into at the Termination Date), or harmful or contrary to the interests of
the Company, including, but not limited to: accepting employment with or serving
as a consultant or advisor or director to any employer that is in competition
with the Company or acting against the interests of the Company; or disclosing
or misusing any confidential, proprietary or material 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.
c. You agree that for a period of twenty four months following the
Termination Date that you will not, either directly or indirectly: (i) induce or
attempt to influence any employee of the Company to leave his/her employ with
the Company; (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; or
(iii) provide to any other person or entity the names of any employee who is
employed by the Company on the Termination Date. 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 if you breach the covenants contained in this
Section, you will forfeit your right to receive any severance benefits under
this Agreement. Further, you agree that if any severance payments have been paid
to you, the total amount of such payments shall be returned and paid to the
Company promptly upon the Company notifying you of such breach. Nothing
contained in this paragraph (d) shall preclude injunctive relief.
e. You agree that the Company would suffer an irreparable injury if
you were to breach the covenants contained in this Section and that the Company
would by reason of such breach or threatened breach be entitled to injunctive
relief in a court of appropriate jurisdiction and you hereby stipulate to the
entering of such injunctive relief prohibiting you from engaging in such breach.
f. If any of the restrictions contained in this Section 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 8 in its reduced form for all purposes in the
manner contemplated hereby.
9. Successors.
a. Company's Successors. Any successor to the Company (whether
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.
10. 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
have executed the Company's standard form Proprietary Rights Agreement or any
other confidential inventions and trade secrets agreement. You hereby reaffirm
that during your employment with the Company 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 your employment with the
Company, you agree to comply with the corporate officer stock ownership
guidelines approved by the Board or any committee of the Board, as may be
amended from time to time.
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
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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. 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. The Company
may assign its rights under this Agreement to an affiliate.
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 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
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.
k. Knowledge and Representation. 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 that you have been encouraged to and have had an opportunity
to consult legal counsel prior to signing this Agreement.
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:
Title: _______________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇:
EXHIBIT A
SETTLEMENT AND RELEASE
1. In exchange for payment of salary (in the amount of ________) and bonus
(in the amount of _________) to ___________ ("Employee"), by Storage
Technology Corporation ("Company") and other good and valuable
consideration, Employee hereby irrevocably and unconditionally releases
and discharges the Company, its past and present subsidiaries,
divisions, officers, directors, agents, employees, successors, and
assigns (separately and collectively, "releasees") jointly and
individually, from any and all claims, known or unknown, which he/she,
his/her heirs, successors or assigns have or may have against releasees
and any and all liability which releasees may have to him/her whether
denominated claims, demands, causes of action, obligations, damages, or
liabilities arising from any and all bases, however denominated,
including but not limited to, any claims of discrimination under the Age
Discrimination in Employment Act ("ADEA"), the Older Workers Benefit
Protection Act, the Rehabilitation Act, the Family Medical Leave Act,
the Americans with Disabilities Act, Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1991 or any federal or state civil
rights act, claims for wrongful discharge, breach of contract, or for
damages under any other federal, state or local law, rule or regulation,
or common law under any theory; provided, however, that this release
does not affect (1) any claims for benefits which have vested or shall
vest on or before the effective date of this Settlement and Release
(?Release?) under any of the Company's benefit plans; (2) any claims for
indemnification for acts of Employee which have occurred or may occur as
an officer or employee of the Company; or (3) any claims which may arise
after the execution of this Release. This release specifically excepts
any claim Employee may wish to make for unemployment compensation, and
the Company agrees not to contest any claim made by Employee for
unemployment compensation. This release is for any relief, no matter
how denominated, including, but not limited to, back pay, front pay,
compensatory damages, punitive damages, or damages for pain and
suffering. Employee further agrees that he/she will not file or permit
to be filed on his/her behalf any such claim, will not permit
himself/herself to be a member of any class seeking relief against the
releasees and will not counsel or assist in the prosecution of claims
against the releasees, whether those claims are on behalf of
himself/herself or others, unless he/she is under a court order to do
so.
2. Employee agrees that by signing this Release, he/she is giving up the
right to ▇▇▇ for age discrimination, and that under this Release
Employee shall receive consideration to which he/she is not otherwise
entitled, and would not receive but for his/her release of rights under
the ADEA. Employee has up to twenty-one (21) days after delivery of
this Release to consider whether to sign this Release. Employee agrees
that, after he/she has signed and delivered this Release to the Company,
this Release will not be effective or enforceable until the end of a
seven (7) day revocation period beginning the day after the Employee
signs this Release, and that Employee will not receive the severance
payment due under the Employment Agreement until this seven-day period
has expired. During this seven-day period, Employee may revoke this
Release, without reason and in his/her sole judgment, but he/she may do
so only by delivering a written statement of revocation to the Company
to the attention of General Counsel. If the Company does not receive a
written statement of revocation from Employee by the end of the
revocation period, then this Release will become legally enforceable and
Employee may not thereafter revoke this Release.
3. Employee agrees that this Release shall be governed by federal law and the
internal laws of the State of Colorado, irrespective of the choice of law
rules of any state.
ACKNOWLEDGMENT:
Employee's signature below acknowledges that he/she has read this document
fully, that he/she understands and agrees to its contents, that he/she
understands that it is a legally binding document, and that he/she has been
advised to consult a lawyer of his/her choosing before signing this Release, and
has had the opportunity to do so.
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Date EMPLOYEE
This Release presented to Employee on __________________________.