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EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS AGREEMENT is effective as of November 8, 2000 between TRICORD SYSTEMS,
INC., a Delaware corporation (the "Company"), and XXXX X. XXXXXXX (the
"Employee").
WHEREAS, the Employee is a party to a prior Employment Agreement with the
Company dated as of May 2, 1995 (the "Prior Agreement"), and
WHEREAS, the Employee has resigned as the Chief Executive Officer of the
Company but the parties desire that the Employee continue as an employee of the
Company to assist in certain transition matters and to provide strategic advice
to the current Chief Executive Officer of the Company and to the Company's Board
of Directors (the "Board"), and
WHEREAS, the parties desire to set forth the terms of such continuing
employment of the Employee by the Company;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Company and the Employee, each intending to be legally bound, agree as follows:
1. Employment. Subject to all of the terms and conditions of this Agreement, the
Company agrees to continue to employ the Employee as a strategic advisor to the
Chief Executive Officer of the Company and the Board.
2. Duties. The Employee's duties will consist of working with the current Chief
Executive Officer of the Company as may reasonably be needed to assist in
transition matters and to provide ongoing advice, analysis and guidance to the
Chief Executive Officer and the Board regarding product development, marketing,
distribution and other strategic matters regarding the Company. The Employee
will generally perform his duties from his home office in Safety Harbor,
Florida, but such duties will at all times be performed under the control and
direction of the Company.
3. Term. The term of this Agreement will commence on the date set forth above
and will continue until January 31, 2003, subject to earlier termination in
accordance with Section 4 hereof. The Prior Agreement will be terminated upon
the effectiveness of this Agreement.
4. Termination. Subject to the respective continuing obligations of the Company
and the Employee under Sections 6, 7, 8, 9, 11 and 12 hereof:
(a) This Agreement may be terminated upon the Employee's death or Total
Disability. For purposes of this Agreement, "Total Disability" will be as
defined in the long-term disability plan of the Company then in effect or, if
no such plan exists, will mean such disability that prevents the Employee
from performing his duties under Section 2 of this Agreement for a continuous
period of 90 days.
(b) This Agreement will be terminated automatically without notice of any
kind upon the consummation of a Change in Control of the Company, as defined
in Section 13.1 of the Company's 1998 Stock Incentive Plan as in effect on
the date hereof (a "Change in Control").
(c) This Agreement may be terminated by either the Company or the Employee
at any time upon 30 days' written notice to the Company or the Employee, as
the case may be.
5. Compensation.
(a) Base Salary. The Company agrees to pay the Employee a base salary (the
"Base
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Salary") of $240,000 per year through January 31, 2001. Effective as of
February 1, 2001 and the through the remaining term of this Agreement, the
Employee's Base Salary will be $150,000 per year. The Base Salary will be
payable in accordance with the standard payroll practices of the Company. The
Employee will also receive a one-time payment of $150,000 payable on January
15, 2001.
(b) Benefit Plans. The Employee will be eligible to participate in and
receive benefits under any other benefit plans or programs or additional
compensation or remuneration plans or programs of the Company available to
employees of the Company generally. The Company, however, will not be
obligated to adopt or continue any such benefit plans or programs during the
term of this Agreement, and the Employee's participation in any such plans or
programs will be subject to the provisions, limitations and rules applicable
to such plans or programs.
(c) Expenses. The Company will pay or reimburse the Employee for all
reasonable expenses (including, without limitation, expenses for
entertainment, travel, personal business education, meals, hotel
accommodations) that the Employee incurs while performing his duties under
this Agreement, provided that the Employee accounts properly for such
expenses to the Company in accordance with Company policies.
6. Payments Upon Termination.
(a) If this Agreement is terminated by the Employee pursuant to Section
4(c) of this Agreement, the Employee will receive the following: (i) the
Employee will be paid his Base Salary through the date of termination; (ii)
the Employee will be paid any benefits payable to the Employee pursuant to
the terms and conditions of any benefit plan in which the Employee
participated during the term of his employment, the right to which had vested
on the date of his termination under the terms and conditions of such plans;
and (iii) the Employee will be paid any unpaid expense reimbursement.
(b) If this Agreement is terminated for any other reason, including the
death or Total Disability of the Employee or termination by the Company for
any reason pursuant to Section 4(c) hereof, or is terminated upon the
consummation of a Change in Control pursuant to Section 4(b) hereof, the
Employee will receive the following: (i) the Employee will be paid, in the
form of a lump sum payment payable within 10 days of such termination, his
Base Salary through the end of the original term of this Agreement, (ii) the
Company will maintain, for 18 months following the effective date of such
termination of employment (the "COBRA Period"), a group health plan that by
its terms covers the Employee (and his family members and dependents who were
eligible to be covered as of such termination) under the same terms and at
the same cost to the Employee and his family members and dependents as other
employees who continue to be employed by the Company during such period,
(iii) following the end of the COBRA Period, the Company will provide the
Employee with, or reimburse the Employee for, health plan coverage comparable
to that provided by clause (ii) above for such number of months as equals the
number of full months between the date of his termination of employment and
the end of the original term of this Agreement, provided that the Company
will not be required to pay more than $1,000 per month, (iv) the Employee
will be paid any benefits payable to the Employee pursuant to the terms and
conditions of any benefit plan in which the Employee participated during the
term of his employment, the right to which had vested on the date of his
death or termination under the terms and conditions of such plans, (v) all
stock options then held by the Employee will become immediately exercisable
in full and will remain exercisable for 90 days following such
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termination, and (vi) the Employee will be paid any unpaid expense
reimbursement.
(c) In the event of the death of the Employee, all payments and benefits
to which the Employee would be entitled will pass to the Employee's
representatives, heirs and beneficiaries.
7. Inventions.
(a) "Inventions," as used in this Section 7, means any discoveries,
improvements, formulae, proprietary rights or data, trade secrets, shop
rights, ideas and know-how (whether or not they are in writing or reduced to
practice) or works of authorship (whether or not they can be patented or
copyrighted) that the Employee makes, authors, or conceives (either alone or
with others) and that:
(i) concern directly the Company's business or the Company's present
or possible future research or development;
(ii) result from any work the Employee performs for the Company;
(iii) use the Company's equipment, supplies, facilities, or trade
secret information; or
(iv) the Employee develops during any such time that Section 2 above
obligates him to perform his employment duties.
(b) The Employee agrees that all Inventions he makes during or within six
months after the term of this Agreement will be the Company's sole and
exclusive property. The Employee will, with respect to any such Invention:
(i) keep current, accurate, and complete records, which will belong
to the Company and be kept and stored on the Company's premises while
the Employee is employed by the Company;
(ii) promptly and fully disclose the existence and describe the
nature of the Invention to the Company in writing (and without
request);
(iii) assign (and the Employee does hereby assign) to the Company
all of his rights to the Invention, any applications he makes for
patents or copyrights in any country, and any patents or copyrights
granted to him in any country; and
(iv) acknowledge and deliver promptly to the Company any written
instruments, and perform any other acts necessary in the Company's
opinion to preserve property rights in the Invention against
forfeiture, abandonment, or loss and to obtain and maintain letters
patents and/or copyrights on the Invention and to vest the entire right
and title to the Invention in the Company.
The requirements of this Section 8(b) do not apply to an Invention for which
no equipment, supplies, facility or trade secret information of the Company
was used and which was developed entirely on the Employee's own time, and (x)
which does not relate directly to the Company's business or to the Company's
actual or demonstrably anticipated research or development, or (y) which does
not result from any work the Employee performed for the Company. Except as
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previously disclosed to the Company in writing, the Employee does not have,
and will not assert, any claims to or rights under any Inventions as having
been made, conceived, authored or acquired by the Employee prior to his
employment by the Company.
8. Confidential Information.
(a) "Confidential Information," as used in this Section 8, means
information that is not generally known and that is proprietary to the
Company or that the Company is obligated to treat as proprietary. This
information includes, without limitation:
(i) trade secret information about the Company and its products;
(ii) "Inventions," as defined in Section 7(a) hereof;
(iii) information concerning the Company's business, as the Company
has conducted it during the last five years or as it may conduct it in
the future; and
(iv) information concerning any of the Company's past, current, or
possible future products, including (without limitation) information
about the Company's research, development, engineering, purchasing,
manufacturing, accounting, marketing, selling or leasing.
Any information that the Employee reasonably considers or that the Company
treats as Confidential Information will be presumed to be Confidential
Information (whether the Employee or others originated it and regardless of
how he obtained it).
(b) Except as required in his duties to the Company, the Employee will
never, either during or after his employment by the Company, use or disclose
Confidential Information to any person not authorized by the Company to
receive it. When the Employee's employment with the Company ends, he will
promptly turn over to the Company all records and any compositions, articles,
devices, apparatus and other items that disclose, describe or embody
Confidential Information, including all copies, reproductions and specimens
of the Confidential Information in his possession, regardless of who prepared
them.
9. Competitive Activities. The Employee agrees that during his employment with
the Company and for a period of one year after his employment with the Company
ends:
(a) He will not alone, or in any capacity with another firm:
(i) directly or indirectly engage in any commercial activity that
competes with the Company's business, as the Company has conducted it
during the five years before the Employee's employment with the Company
ends, (A) within any state in the United States, or (B) within any country
in which the Company directly or indirectly markets or services products
or provides services or reasonably intends during such period to market or
service products or provide services;
(ii) in any way interfere or attempt to interfere with the Company's
relationships with any of its current or potential customers; or
(iii) employ or attempt to employ any of the Company's then employees
on
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behalf of any other entity competing with the Company.
(b) The Employee may, however, accept employment with an entity competing
with the Company so long as the business of such entity is diversified and,
as to a separately managed and operated part of its business, does not
compete with the Company; provided, however, that prior to accepting such
employment, the Employee and such competing entity will provide the Company
with written assurances satisfactory to the Company that the Employee will
not render services directly or indirectly to any part of such entity's
business that competes with the business of the Company.
10. Conflicting Business. The Employee agrees that he will not transact business
with the Company personally, or as agent, owner, partner or shareholder of any
other entity; provided, however, that the Employee may enter into any business
transaction that is, in the opinion of the Board of Directors of the Company,
reasonable, prudent or necessary to the Company, so long as any such business
transaction is at arm's-length as though between independent and prudent
individuals.
11. No Adequate Remedy. The Employee understands that if he fails to fulfill his
obligations under this Agreement, the damages to the Company would be very
difficult to determine. Therefore, in addition to any other rights or remedies
available to the Company at law, in equity or by statute, the Employee hereby
consents to the specific enforcement by the Company of Sections 7, 8 and 9 of
this Agreement through an injunction or restraining order issued by an
appropriate court.
12. Miscellaneous.
(a) Successors and Assigns. Except as provided in the next sentence, this
Agreement may not be assigned without the Employee's consent, which consent
will not be unreasonably withheld. In any event, the Company may assign this
Agreement without the consent of the Employee in connection with a merger,
consolidation, assignment, sale, or other disposition of substantially all of
its assets or business.
(b) Modification. This Agreement may be modified or amended only by a
writing signed by each of the parties hereto.
(c) Governing Law. The laws of the State of Minnesota will govern the
validity, construction, and performance of this Agreement, without regard to
the conflict of laws provisions of any jurisdictions. Any legal proceeding
related to this Agreement will be brought in an appropriate Minnesota court,
and each of the parties hereto hereby consents to the exclusive jurisdiction
of that court for this purpose.
(d) Construction. Wherever possible, each provision of this Agreement will
be interpreted so that it is valid under applicable law. If any provision of
this Agreement is to any extent invalid under applicable law in any
jurisdiction, that provision will still be effective to the extent it remains
valid. The remainder of this Agreement also will continue to be valid, and
the entire Agreement will continue to be valid in other jurisdictions.
(e) Non-Waiver. No failure or delay by either the Company or the Employee
in exercising any right or remedy under this Agreement will waive any
provision of the Agreement. Nor will any single or partial exercise by either
the Company or the Employee of any right or remedy under this Agreement
preclude either of them from otherwise or further exercising these rights or
remedies, or any other rights or remedies granted by any law or any related
document.
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(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which,
when taken together, will constitute one and the same instrument.
(g) Entire Agreement. This Agreement supersedes all previous and
contemporaneous oral negotiations, commitments, writings, and understandings
among the parties hereto concerning the matters in this Agreement, including,
without limitation, the Prior Agreement and any policy or personnel manuals
of the Company or any of its subsidiaries or affiliates.
(h) Notices. All notices and other communications required or permitted
under this Agreement will be in writing and hand delivered or sent by
registered first-class mail, postage prepaid, and will be effective upon
receipt if hand delivered, and five (5) business days after mailing if sent
by mail, to the following addresses or such other addresses as either party
will have notified the other party:
If to the Company: Tricord Systems, Inc.
0000 Xxxxxxxxx Xxxx., Xxxxx 00
Xxxxxxxx, Xxxxxxxxx 00000
Attn: Chief Executive Officer
If to the Employee: Xxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxxx, Xxxxxxx 00000
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the date first above written.
TRICORD SYSTEMS, INC.
By /s/ Xxxx X. Xxxxxxx
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Its President/CEO
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/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
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