EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is effective as of December 31,
1996, between nSTOR CORPORATION, INC., a Delaware corporation
("Employer"), and XXXXXXX XXXX ("Employee").
RECITALS:
A. Employer desires assurance of the continued
association and services of Employee in order to retain his
experience, abilities, and knowledge, and is therefore willing
to engage his services as an employee.
B. Employee desires to be employed by Employer and is
willing to render services on the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the above recitals
and of the mutual promises and conditions in this Agreement,
the parties agree as follows:
ARTICLE I
EMPLOYMENT
1.1 Duties of Employment. Employer shall employ
Employee as Executive Vice President or in such other capacity
as Employer may from time to time prescribe. During his
employment, Employee shall perform the duties specified for
his position by Employer, and shall devote his full business
time, energy, and ability to the business and interests of
Employer. Employee shall not, without Employer's prior
written consent, render to others services of any kind for
compensation, or engage in any other business activity that
would materially interfere with the performance of his duties
under this Agreement.
Employee represents to Employer that he has no other
outstanding commitments inconsistent with any of the terms of
this Agreement or the services to be rendered under it.
1.2 Term. Subject to earlier termination as provided in
this Agreement, Employee shall be employed for a term
beginning on the date of this Agreement and ending December
31, 1998.
ARTICLE II
COMPENSATION
2.1 Base Salary. During the term of this Agreement,
Employer agrees to pay Employee an annual Base Salary of Two
Hundred Thousand Dollars ($200,000). The Base Salary shall be
payable as current salary, in monthly installments subject to
all applicable withholdings and deductions.
2.2 Bonus Compensation. In addition to the Base Salary,
Employee shall be entitled to receive such bonuses, if any, as
shall be determined and paid in the sole and absolute
discretion of Employer.
2.3 Incentive Compensation. In addition to the Base
Salary, Employer shall pay to Employee as Incentive
Compensation (i) five percent (5%) of the net earnings of the
Parity Systems Division of Employer for calendar year 1997,
and (ii) three percent (3%) of the net earnings of the Parity
Systems Division of Employer for calendar year 1998, provided
that in no event shall Employee's Incentive compensation for
each such calendar year exceed One Hundred Thousand Dollars
($100,000).
Net earnings for the purpose of determining
Employee's Incentive Compensation shall mean the net earnings
of the Parity Systems Division of Employer as shown in
Employer's financial statements before deduction for interest
expense or taxes (EBIT).
Employee's Incentive Compensation shall be
determined quarterly during each calendar year and paid within
forty-five (45) days after the end of each calendar quarter,
subject to all applicable withholdings and deductions.
2.4 Stock Options. Upon qualification under applicable
securities laws of its Employee Stock Option Plan, Employer
shall grant Employee, pursuant to the terms of a Stock Option
Agreement entered into pursuant to such Plan, options to
purchase 100,000 shares of Employer's common stock at a price
of Two Dollars and Ten Cents ($2.10) per share. Employee's
options shall vest and be exercisable ratably in cumulative
monthly increments during the term of Employment.
2.5 Additional Benefits. During the employment term:
(a) Employee shall be entitled to receive all
benefits of employment generally available to other employees
when and as he becomes eligible for them, including health and
life insurance, and pension benefits. Employer reserves the
right to modify, suspend, or discontinue any and all of the
above benefit plans, policies, and practices at any time
without notice to or recourse by Employee, so long as such
action is taken generally with respect to other similarly
situated employees, and provided that no such modification,
supervision, or discontinuance shall have the effect of
reducing or eliminating a benefit which accrued prior to the
date of such change.
(b) Employee shall be entitled to paid vacation in
accordance with Employer's policies and practices in effect
with respect to Employer's other similarly situated employees.
(c) To the extent that such expenditures satisfy
the criteria under the Internal Revenue Code for deductibility
by Employer for federal income tax purposes as ordinary and
necessary business expenses, Employer shall reimburse Employee
promptly for reasonable business expenses made and
substantiated in accordance with the policies and procedures
established from time to time by Employer.
ARTICLE III
CONFIDENTIALITY AND NON-DISCLOSURE
Employee acknowledges and understands that he presently
has now and will receive, during the term of employment,
confidential and proprietary information of Employer. In
order to preserve and protect such information, Employee
agrees to enter into and execute, concurrently with the
execution of this Agreement, the Employee Proprietary
Information Agreement in the form and on the terms attached as
Exhibit A.
ARTICLE IV
TERMINATION
4.1 Termination for Cause. Employer may terminate this
Agreement at any time upon written notice if Employee commits
any material act of dishonesty; commits a material breach of
this Agreement, the Employee Proprietary Information Agreement
and Noncompetition Agreement (copies of which are attached as
Exhibits A and B), is guilty of gross carelessness or willful
misconduct; habitually neglects his duties of employment; or
acts in a way that has a direct, substantial, and adverse
effect on Employer's reputation.
4.2 Termination Without Cause. Employer may terminate
this Agreement without cause upon sixty (60) days prior
written notice to Employee.
4.3 Resignation. Employee may terminate this Agreement
by giving Employer sixty (60) days prior written notice of
resignation.
4.4 Death or Disability. This Agreement shall
terminate immediately upon the death or disability of
Employee. "Disability" shall be deemed to occur at the end of
any calendar month during which Employee is and has been for
the [four] consecutive full calendar months then ending,
unable due to mental or physical illness or injury to perform
substantially all of his duties under this Agreement in the
normal and regular manner.
4.5 Benefits on Termination. Upon the termination of
Employee's employment pursuant to Section 4.1 (for cause), 4.3
(resignation), or 4.4 (death or disability), Employer shall
pay Employee his Base Salary and Incentive Compensation
accrued on a pro rata basis through the effective date of such
termination, and Employer shall thereafter have no further
obligations to Employee under this Agreement, except those
obligations provided by applicable law.
Upon the termination of Employee's employment
pursuant to Section 4.2 (without cause), Employer shall pay
Employee his Base Salary and Incentive Compensation for the
balance of the term specified in Section 1.2, and Employer
shall thereafter have no further obligations to Employee under
this Agreement.
ARTICLE V
GENERAL PROVISIONS
5.1 Entire Agreement. This Agreement (including
Exhibits A and B) contains the entire agreement between the
parties covering the subject matter described therein and
supersedes all prior oral and written agreements,
understandings, commitments, and practices between them,
including all prior employment agreements, whether or not
fully performed by Employee before the date of this Agreement.
No oral modifications, express or implied, may alter or vary
the terms of this Agreement. No amendments to this Agreement
may be made except by a writing signed by both parties.
5.2 Governing Law. The formation, construction, and
performance of this Agreement shall be construed in accordance
with the laws of the State of California, and the correct
venue for purposes of any proceeding brought to enforce or
interpret the provisions Agreement shall be deemed to be the
County of Santa Xxxxx, State of California.
5.3 Notices. Any notices to Employer required or
permitted under this Agreement shall be given in writing to
Employer, either by personal service or by registered or
certified mail, postage prepaid, addressed to Employer at its
then principal place of business. Any such notice to Employee
shall be given in a like manner and, if mailed, shall be
addressed to Employee at his home address then shown in
Employer's files. Fur purposes of determining any time limit
in this Agreement, a notice shall be deemed to have been given
(i) on the date of service, if served personally, or (ii) on
the second business day after mailing.
5.4 Severability. If any provision of this Agreement
is held invalid or unenforceable, the remainder of this
Agreement shall nevertheless remain in full force and effect.
5.5 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be
an original, but all of which together will constitute one and
the same instrument.
5.6 Legal Fees and Expenses. Should any party
institute any action or proceeding to enforce this Agreement
or any provision thereof, or for damages by reason of any
alleged breach of this Agreement, or for a declaration of
rights hereunder, the prevailing party in any such action or
proceeding shall be entitled to receive from the other party
all costs and expenses, including reasonable attorney's fees,
incurred by the prevailing party in connection with such
action or proceeding.
5.7 Assignment. This Agreement and the rights, duties,
and obligations hereunder may not be assigned or delegated by
any party without the prior written consent of the other
party, and any attempted assignment or delegation without such
prior written consent shall be void and of no effect.
Notwithstanding the foregoing, Employer may assign or delegate
its rights, duties, and obligations hereunder to any affiliate
or to any person or entity which succeeds to all or
substantially all of the business of Employer through merger,
consolidation, reorganization, or other business combination
or by acquisition of all or substantially all of the assets of
Employer.
5.8 Binding Effect. This Agreement shall inure to the
benefit of, and the obligations hereunder shall continue to be
binding upon, the parties and their respective successors,
assigns, heirs, and personal representatives.
5.9 Non-Waiver. No failure or neglect of either party
hereto in any instance to exercise any right, power, or
privilege hereunder or under law shall constitute a waiver of
any other right, power, or privilege. All waivers by either
party must be contained in a written instrument signed by the
party to be charged.
5.10 Indemnification. Employer shall indemnify and hold
Employee harmless for actions taken in good faith while
performing services for Employer during the term of this
Agreement. Employer will advance and pay all expenses
(including reasonable attorney's fees) and costs actually and
necessarily incurred by Employee in connection with the
defense of any action, suit, or proceeding which has been
brought against Employee by reason of such indemnified actions
taken in good faith while performing services for Employer
during the term of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as
of the date first set forth above.
EMPLOYER: EMPLOYEE:
nStor Corporation, Inc., a
Delaware corporation
/s/ X. Xxxxx /s/ N. D. Xxxx
By___________________________
____________________________
XXXXXXX XXXX
Its President
