EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.4
This Executive Employment Agreement (“Agreement”) is made effective as of April 4,
2006 (“Effective Date”), by and between OCZ Technology Group, Inc. (“Company”) and Xxxx Xxx
(“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, Marketing and
Communications 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 $125,000.00 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 a stock option to purchase 55,000 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.
4.4 Performance and Salary Review. The Board of Directors will periodically review
Executive’s performance on no less than an annual basis. 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.
7.2 Voluntary Termination. In the event Executive terminates his employment for any
reason, the Company requests that Executive provide three (3) months notice prior to the date of
termination. In the event of his voluntary termination, 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, 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 provide Executive with the following
but only if Executive signs a confidential general release of all claims in favor of the Company:
(a) a payment equal to three (3) months’ of Executive’s Base Salary then in effect on the date of
termination, less applicable
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withholding, payable 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 (the “Severance Period”); and (b) in the event
Executive was 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.
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.
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(1) year 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.
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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 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.
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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
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”), l0 (“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.
| Xxxx Xxx |
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| Dated: June 08, 2006 | /s/ Xxxx Xxx | |||
| OCZ TECHNOLOGY GROUP, INC. |
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| Dated: | By: | /s/ Xxxx Xxxxxxxx | ||
| Its: | ||||
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