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EXHIBIT 10.19
AMENDMENT NO. 1 TO THE EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 TO THE AGREEMENT made as of December 26,1992,
between STORAGE DIMENSIONS, INC., a Delaware corporation (the "Employer"), and
XXXXXX XXXXX (the "Employee"), is made as of this 9th day of March, 1998.
WITNESSETH:
WHEREAS, Employer and Employee entered into an Employment Agreement on
December 22, 1992 (the "Agreement") by which Employee currently serves as Vice
President and Chief Financial Officer of Employer;
WHEREAS, Employer and Employee now desire to amend the Agreement to
change the benefits payable to Employee in the event of termination of
Employee's employment or consulting relationship with Employer.
NOW, THEREFORE, in consideration of the premises, the covenants
contained herein, and other good and valuable consideration, the Employer and
the Employee hereby amend the Agreement as follows:
1. AMENDMENT TO SECTION 4.1(b) OF THE AGREEMENT. Section 4.1(b) of the
Agreement is hereby amended to read in its entirety as follows:
"(b) In addition, for so long as Employee continues to be
engaged by Employer or any subsidiary thereof as an employee or a
consultant and for the period during which Employer or any subsidiary
thereof makes severance payments to Employee pursuant to Section 5.3(a),
Employee will not, without the express written consent of Employer,
directly or indirectly engage, participate or invest in or assist, as
owner, part owner, shareholder, partner, director, officer, trustee,
employee, agent or consultant, or in any other capacity, any business
organization other than Employer whose activities or products are
competitive with activities or products of Employer or any subsidiary
thereof in which activities Employee shall have participated or as to
which products Employee shall have had responsibility either in their
development, marketing or otherwise, provided that Employee may make
passive investments in a competitive enterprise the shares of which are
publicly traded if Employee's investment constitutes less than 5% of the
outstanding shares of such enterprise. The foregoing agreement not to
compete shall apply in any and all cities and counties of each state of
the United States of America in which the activities of Employer or any
subsidiary thereof shall have been conducted, or the products of any of
them sold, on or before the date upon which Employee's employment by
Employer or any subsidiary thereof ceases."
2. AMENDMENT TO SECTION 4.2 OF THE AGREEMENT. Section 4.2 of the
Agreement is hereby amended to add the following sentence to the end of Section
4.2 of the Agreement:
"For purposes of this Section 4.2, the term "Employer" shall be deemed
to include Storage Dimensions, Inc. or its successor and any entity
which is a subsidiary of the
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foregoing during the period in which the noncompetition agreement set
forth in Section 4.1 is in effect."
3. AMENDMENT TO SECTION 5.1 OF THE AGREEMENT. Section 5.1 of the
Agreement is hereby amended to add the following language to the end thereof:
or until terminated pursuant to Section 5.2 of this Agreement, as
amended."
4. AMENDMENT OF SECTION 5.2 OF THE AGREEMENT.
(a) Section 5.2(b) is hereby amended to delete the phrase "thirty
(30) days" from the first sentence thereof.
(b) Section 5.2(b) of the Agreement is hereby amended to add the
following language to the end of Section 5.2(b):
"Any termination of Employee's status as an employee or
consultant of the Employer (but not a change in status from employee to
consultant) following a "Change in Control", whether at Employer's or
Employee's option (other than a termination by Employer under Section
5.2(c)), shall be deemed to be a termination by Employer pursuant to
this Section 5.2(b) and Employer shall make severance payments as
provided in Section 5.3(a). "Change of Control" shall mean any merger or
sale of substantially all of the assets of the Employer or other
transaction pursuant to which the stockholders of Employer before such
transaction no longer hold at least 50% of the voting securities of the
Employer after such transaction. In no event, however, shall the change
in Employee's title contemplated under Section 2.1 of this Agreement, as
amended, or any commensurate change in Employee's duties be a
termination pursuant to this Section 5.2(b) or trigger Employer's
obligation to make severance payments under Section 5.3(a)."
(c) Section 5.2 of the Agreement is hereby amended to add a new
subsection (d), as follows:
"(d) If, following termination of Employee's employment with
Employer by either Employee or Employer, the parties mutually determine
that Employee should be retained as a consultant to Employer, the
parties will execute the Consulting Agreement attached hereto as Exhibit
B."
5. AMENDMENT OF SECTION 5.3(a) OF THE AGREEMENT. Section 5.3(a) of the
Agreement is hereby amended to read in its entirety as follows:
"(a) Upon a termination described in Section 5.2(b), Employer
shall pay to Employee for a period of 47 weeks following such
termination one hundred percent (100%) of Employee's regular weekly base
salary in effect on the date of termination of Employee's employment or
consulting relationship hereunder (less applicable income tax
withholding), such amount to be payable in equal installments on the
Company's normal payment date for employees beginning on the payment
date next following the date of such termination. In the event of such
termination, the stock option referred to in Section 3.2(b), and any
subsequently granted stock options, shall
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be exercisable only to the extent vested as of such termination in
accordance with their terms; provided, however, that such options shall
be amended by the Company in order to provide that they may be
exercised, to the extent exercisable at the time of such termination,
for a period of one year from the date of such termination (provided,
however, that the extension of time in which the options may be
exercised shall only be triggered if the termination is at the
Employer's option or is mutually agreed to by Employer and Employee)."
6. AMENDMENT OF SECTION 6.2 OF THE AGREEMENT. Section 6.2 shall be
amended to add the following as a new paragraph immediately following the
paragraph which begins "To Employer":
"provided, however, that notwithstanding the foregoing,
following the Closing Date, any notice to be delivered hereunder to
Employer shall instead be sent to the following address:
Artecon, Inc.
0000 Xx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, President and CEO"
7. NO OTHER AMENDMENT. Except as expressly amended hereby, all
provisions of the Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment to the
Employment Agreement as of the day and year first above written.
STORAGE DIMENSIONS, INC.
By: /s/ Xxxxx Xxxxxxxxxx
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Xxxxx Xxxxxxxxxx, Chairman of the Board
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
The foregoing amendment is consented to pursuant to Section 5.2 of the Merger
Agreement.
ARTECON, INC.
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President and CEO
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