EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.14
This Executive Employment Agreement (“Agreement”) is made effective as of November 30, 2007
(“Effective Date”), by and between OCZ Technology Group, Inc. (“Company”) and Xxxxxx Xxxxx
(“Executive”).
The parties agree as follows:
1. Employment. Company hereby employs Executive, and Executive hereby accepts such employment, upon the terms and conditions set forth herein.
2. Duties.
2.1 Position. Executive is employed as Senior Vice-President, Sales and shall have
the duties and responsibilities assigned by Company’s Board of Directors (“Board of
Directors”) both
upon initial hire and as may be reasonably assigned from time to time. Executive shall perform
faithfully
and diligently all duties assigned to Executive. Company reserves the right to modify
Executive’s
position and duties at any time in its sole and absolute discretion.
2.2 Best Efforts/Full-time. Executive will expend Executive’s best efforts on behalf
of Company, and will abide by all policies and decisions made by Company, as well as all
applicable
federal, state and local laws, regulations or ordinances. Executive will act in the best
interest of Company
at all times. Executive shall devote Executive’s full business time and efforts to the
performance of
Executive’s assigned duties for Company, unless Executive notifies the Board of Directors in
advance of
Executive’s intent to engage in other paid work and receives the Board of Directors’ express
written
consent to do so.
3. Nature of Employment. Executive’s employment with the Company is “at will.” This
means it is for no specified term and may be terminated by the Executive or the Company at any
time,
with or without cause or advance notice subject to the provisions regarding termination as set
forth in
Section 7 below. In addition, the Company reserves the right to modify Executive’s
compensation,
position, duties or reporting relationship to meet business needs and to decide on appropriate
discipline.
4. Compensation.
4.1 Base Salary. As compensation for Executive’s performance of Executive’s
duties hereunder, Company shall pay to Executive an initial Base Salary of $165,000 per year,
payable in
accordance with the normal payroll practices of Company, less required deductions for state
and federal
withholding tax, social security and all other employment taxes and payroll deductions. In the
event
Executive’s employment under this Agreement is terminated by either party, for any reason,
Executive
will earn the Base Salary prorated to the date of termination.
4.2 Incentive Compensation. Executive will be eligible to earn incentive
compensation in accordance with the Company’s Executive Bonus Plan, the terms, amount and payment
of which shall be determined by Company in its sole and absolute discretion.
4.3 Stock Options. Subject to the Board of Directors’ approval, Executive will be
granted an stock option to purchase 200,000 shares of Company’s Common Stock under Company’s 2004
Stock Incentive Plan (the “Plan”) at an exercise price equal to the fair market value of that stock
on the date of the grant (the “Option”) . The Option will be subject to the terms and conditions of
the Plan and
the standard stock option agreement provided pursuant to the Plan, which Executive will be required
to sign as a condition of receiving the Option. The Option will become fully vested if there is a
“Change of Control” (defined below) after which Executive terminates his employment because of a
material reduction in duties or is terminated within one year of such Change of Control other than
for “Cause” (defined below). For purposes of this Agreement, The term “Change of Control” shall
mean (i) the consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets or (ii) the consummation of a merger or consolidation of the Company with any
other corporation or entity, 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 or its
parent) directly or indirectly at least fifty percent (50%) of the total voting power represented
by the voting securities of the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation.
4.4 Performance and Salary Review. The Board of Directors will periodically
review Executive’s performance. Adjustments to salary or other compensation, if any, will be made
by the Board of Directors in its sole and absolute discretion.
5. Customary Fringe Benefits. Executive will be eligible for all customary and usual
fringe
benefits generally available to executives of Company subject to the terms and conditions of
Company’s
benefit plan documents. Company reserves the right to change or eliminate the fringe benefits
on a
prospective basis, at any time, effective upon notice to Executive.
6. Business Expenses. Executive will be reimbursed for all reasonable, out-of-pocket
business expenses incurred in the performance of Executive’s duties on behalf of Company. To
obtain
reimbursement, expenses must be submitted promptly with appropriate supporting documentation
in
accordance with Company’s policies.
7. Termination of Executive’s Employment.
7.1 Termination for Cause. In the event Executive’s employment is terminated
for Cause, Executive shall be entitled to receive only the Base Salary then in effect, prorated to
the date of termination ,as well as any accrued but unused vacation or PTO. All other Company
obligations to Executive pursuant to this Agreement will become automatically terminated and
completely extinguished. For purposes of this Agreement, Cause shall mean (a) the Executive’s
theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or
falsification of any Company documents or records; (b) the Executive’s material failure to abide by
the Company’s written policies relating to confidentiality and reasonable workplace conduct; (c)
the Executive’s unauthorized use, misappropriation, destruction or diversion of any material asset
or corporate opportunity of the Company (including, without limitation, the Executive’s improper
use or disclosure of the Company’s confidential or proprietary information); (d) any intentional
act by the Executive which has a material detrimental effect on the Company’s reputation or
business, (e) any material breach by the Executive of this Agreement and any other agreement
between the Company and Executive, including without limitation, the Company’s Executive
Innovations and Proprietary Rights Agreement/Non-Disclosure Agreement and stock option agreement,
which breach is not cured within 15 days after Executive receives notice from the Board specifying
said breach; or (f) the Executive’s conviction (including any plea of guilty or nolo contendere) of
any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs
the Executive’s ability to perform his duties with the Company.
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7.2 Voluntary Termination. Except as otherwise provided in Section 4.3, in the
event Executive terminates his employment for any reason, Executive shall be entitled to
receive only the
Base Salary then in effect, prorated to the date of termination, as well as any accrued but
unused vacation
or PTO. All other Company obligations to Executive pursuant to this Agreement will become
automatically terminated and completely extinguished.
7.3 Termination Without Cause by the Company. Company may terminate
Employee’s employment under this Agreement without Cause at any time. In the event of such
termination prior to the second anniversary of this Agreement, in addition to receiving Base
Salary then in
effect, prorated to the date of termination, along with any accrued but unused vacation or
PTO, the
Company shall also pay Executive the following but only if Executive signs a confidential
general release
of all claims in favor of the Company: (i) if the Executive is terminated prior to the first
anniversary of
this Agreement the Executive shall receive a payment equal to six (6) months’ of Executive’s
Base Salary
then in effect on the date of termination or (ii) if the Executive is terminated on or after
the first
anniversary of this Agreement but prior to the second anniversary of this Agreement, the
Executive shall
receive a payment equal to three (3) months of the Executive’s Base Salary then in effect on
the date of
termination. If the Executive is terminated on and after the second anniversary of this
Agreement, no
additional payment shall be owed or made. In the event Executive was terminated without Cause
and
covered under the Company’s group health plan at the time of Executive’s termination of
employment
and he timely elects to continue his group health coverage under federal/state law (COBRA),
the
Company will reimburse Executive for his COBRA premiums until the earlier of (i) Executive’s
coverage
under another employer’s group health plan or (ii) until the last day of the Severance Period
(defined
below). All payments referred to in this Section 7.3, shall be paid in equal monthly
installments
beginning on the first payday following the effective date of the general of claims noted
above and
thereafter, in accordance with Company’s regular payroll cycle until all such amounts are paid
in full (the
“Severance Period”). All payments referred to in this Section 7.3 shall be reduced by
applicable
withholding..
8. No Conflict of Interest. During the term of Executive’s employment with Company and
during any period Executive is receiving payments from Company pursuant to this Agreement,
Executive
must not engage in any work, paid or unpaid, that creates an actual conflict of interest with
Company.
Such work shall include, but is not limited to, directly or indirectly competing with Company
in any way,
or acting as an officer, director, Executive, consultant, stockholder, volunteer, lender, or
agent of any
business enterprise of the same nature as, or which is in direct competition with, the
business in which
Company is now engaged or in which Company becomes engaged during the term of Executive’s
employment with Company, as may be determined by the Board of Directors in its sole
discretion. If the
Board of Directors believes such a conflict exists during the term of this Agreement, the
Board of
Directors may ask Executive to choose to discontinue the other work or resign employment with
Company. If the Board of Directors believes such a conflict exists during any period in which
Executive
is receiving payments pursuant to this Agreement, the Board of Directors may ask Executive to
choose to
discontinue the other work. In addition, Executive agrees not to refer any client or potential
client of
Company to competitors of Company, without obtaining Company’s prior written consent, during
the
term of Executive’s employment and during any period in which Executive is receiving payments
from
Company pursuant to this Agreement.
9. Confidentiality and Proprietary Rights. Executive agrees to read, sign and abide by
Company’s Executive Nondisclosure and Assignment Agreement, which is provided with this
Agreement
and incorporated herein by reference.
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10. Nonsolicitation. Executive understands and agrees that Company’s Executives
and
customers and any information regarding Company Executives and/or customers is
confidential and
constitutes trade secrets.
10.1 Nonsolicitation of Customers or Prospects. Executive agrees that during the term
of this Agreement and for a period of ninety (90) days after the termination of this
Agreement, Executive
will not, either directly or indirectly, separately or in association with others, interfere
with, impair,
disrupt or damage Company’s relationship with any of its customers or customer prospects by
soliciting
or encouraging others to solicit any of them for the purpose of diverting or taking away
business from
Company.
10.2 Nonsolicitation of Company’s Executives. Executive agrees that during the term
of this Agreement and for a period of one hundred and eighty (180) days after the termination
of this
Agreement, Executive will not, either directly or indirectly, separately or in association
with others,
interfere with, impair, disrupt or damage Company’s business by soliciting, encouraging or
recruiting any
of Company’s Executives or causing others to solicit or encourage any of Company’s Executives
to
discontinue their employment with Company.
10.3 Non-Disparagement. Executive agrees that he shall not, at any time in the future,
make any critical or disparaging statements about the Company or any of its employees or
products to any
other person or entity.
11. Injunctive Relief. Executive acknowledges that Executive’s breach of the covenants
contained in sections 8-10 (collectively “Covenants”) would cause irreparable injury to
Company and
agrees that in the event of any such breach, Company shall be entitled to seek temporary,
preliminary and
permanent injunctive relief without the necessity of proving actual damages or posting any
bond or other
security.
12. Agreement to Arbitrate. To the fullest extent permitted by law, Executive and
Company
agree to arbitrate any controversy, claim or dispute between them arising out of or in any way
related to
this Agreement, the employment relationship between Company and Executive and any disputes
upon
termination of employment, including but not limited to breach of contract, tort,
discrimination,
harassment, wrongful termination, demotion, discipline, failure to accommodate, family and
medical
leave, compensation or benefits claims, constitutional claims; and any claims for violation of
any local,
state or federal law, statute, regulation or ordinance or common law. Claims for workers’
compensation,
unemployment insurance benefits, breach of Company’s Executive Innovations and Proprietary
Rights
Agreement and Company’s right to obtain injunctive relief pursuant to section 11 above are
excluded.
For the purpose of this agreement to arbitrate, references to “Company” include all parent,
subsidiary or
related entities and their Executives, supervisors, officers, directors, agents, pension or
benefit plans,
pension or benefit plan sponsors, fiduciaries, administrators, affiliates and all successors
and assigns of
any of them, and this agreement shall apply to them to the extent Executive’s claims arise out
of or relate
to their actions on behalf of Company.
12.1 Consideration. The mutual promise by Company and Executive to arbitrate any
and all disputes between them (except for those referenced above) rather than litigate them
before the
courts or other bodies, provides the consideration for this agreement to arbitrate.
12.2 Initiation of Arbitration. Either party may exercise the right to arbitrate
by
providing the other party with written notice of any and all claims forming the basis of
such right in
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sufficient detail to inform the other party of the substance of such claims. In no event shall the
request for arbitration be made after the date when institution of legal or equitable proceedings
based on such claims would be barred by the applicable statute of limitations.
12.3 Arbitration Procedure. The arbitration will be conducted in Sunnyvale,
California by a single neutral arbitrator and in accordance with the then current rules for
resolution of employment disputes of the American Arbitration Association (AAA) (available on-line
at xxx.xxx.xxx). The parties are entitled to representation by an attorney or other representative
of their choosing. The arbitrator shall have the power to enter any award that could be entered by
a judge of the trial court of the State of California, and only such power, and shall follow the
law. The parties agree to abide by and perform any award rendered by the arbitrator. The arbitrator
shall issue the award in writing and therein state the essential findings and conclusions on which
the award is based. Judgment on the award may be entered in any court having jurisdiction thereof.
13. General Provisions.
13.1 Successors and Assigns. The rights and obligations of Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors and assigns
of Company.
Executive shall not be entitled to assign any of Executive’s rights or obligations under this
Agreement.
13.2 Waiver. Either party’s failure to enforce any provision of this Agreement shall
not in any way be construed as a waiver of any such provision, or prevent that party
thereafter from
enforcing each and every other provision of this Agreement.
13.3 Attorneys’ Fees. Each side will bear its own attorneys’ fees in any dispute
unless
a statutory section at issue, if any, authorizes the award of attorneys’ fees to the
prevailing party.
13.4 Severability. In the event any provision of this Agreement is found to be
unenforceable by an arbitrator or court of competent jurisdiction, such provision shall be
deemed
modified to the extent necessary to allow enforceability of the provision as so limited, it
being intended
that the parties shall receive the benefit contemplated herein to the fullest extent permitted
by law. If a
deemed modification is not satisfactory in the judgment of such arbitrator or court, the
unenforceable
provision shall be deemed deleted, and the validity and enforceability of the remaining
provisions shall
not be affected thereby.
13.5 Interpretation; Construction. The headings set forth in this Agreement are for
convenience only and shall not be used in interpreting this Agreement. This Agreement has been
drafted
by legal counsel representing Company, but Executive has participated in the negotiation of
its terms.
Furthermore, Executive acknowledges that Executive has had an opportunity to review and revise
the
Agreement and have it reviewed by legal counsel, if desired, and, therefore, the normal rule
of
construction to the effect that any ambiguities are to be resolved against the drafting party
shall not be
employed in the interpretation of this Agreement.
13.6 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the United States and the State of California. Each party consents
to the
jurisdiction and venue of the state or federal courts in Sunnyvale, California, if applicable,
in any action,
suit, or proceeding arising out of or relating to this Agreement.
13.7 Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be delivered as follows with notice deemed given as indicated: (a) by personal
delivery when
delivered personally; (b) by overnight courier upon written verification of receipt; (c) by
telecopy or
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facsimile transmission upon acknowledgment of receipt of electronic transmission; or
(d) by certified or registered mail, return receipt requested, upon verification of receipt.
Notice shall be sent to the addresses set forth below, or such other address as either party may
specify in writing.
13.8 Survival. Sections 8 (“No Conflict of Interest”), 9 (“Confidentiality and
Proprietary Rights”), 10 (“Nonsolicitation”), 11 (“Injunctive Relief”), 12 (“Arbitration”), 13
(“General Provisions”) and 14 (“Entire Agreement”) of this Agreement shall survive Executive’s
employment by Company.
14. Entire Agreement. This Agreement, including the Company Executive
Nondisclosure and Assignment Agreement incorporated herein by reference and Company’s 2004 Stock
Incentive Plan and related option documents described in subsection 4.3 of this Agreement,
constitutes the entire agreement between the parties relating to this subject matter and
supersedes all prior or simultaneous representations, discussions, negotiations, and agreements,
whether written or oral. This Agreement may be amended or modified only with the written consent
of Executive and the Board of Directors of Company. No oral waiver, amendment or modification will
be effective under any circumstances whatsoever.
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THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND
EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE
DATES SHOWN BELOW.
| Xxxxxx Xxxxx | ||||||||
Dated: |
[Insert address] | |||||||
| OCZ TECHNOLOGY GROUP, INC. | ||||||||
Dated: |
By: | |||||||
| Its: | ||||||||
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