EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of January 4, 2001,
between NEXSAN CORPORATION a Delaware corporation ("Company") and XXXX XXXXX
("Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to employ Executive as its Chief Financial
Officer and Executive desires to accept such employment, upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 The Company hereby agrees to employ Executive, and
Executive hereby agrees to accept employment by the Company and to serve, as the
Chief Financial Officer effective as of the consummation of the transactions
contemplated by (i) the Exchange Agreement among the Company and the
shareholders of Nexsan Technologies Ltd., and by (ii) the Stock Purchase
Agreement among the Company, Beechtree Capital, LLC, and the purchasers of the
Company's common stock ("Common Shares") parties thereto (the "Effective Date").
1.2 The Executive agrees to undertake the duties and
responsibilities inherent in such position and such other duties and
responsibilities as the President or the Board of Directors of the Company shall
from time to time reasonably assign to him. The Executive shall devote his
full-time efforts to the business of the Company and it Affiliates (defined
below) so as to increase the profitability and shareholder value of the Company;
and the Executive shall not be engaged in any other business activity during the
duration of this Agreement, unless written approval is first secured from the
Board of Directors of the Company.
1.3 Executive shall also serve at the option of the
Company as an officer or director of any other entity controlling, controlled by
or under common control with the Company (an "Affiliate") without additional
compensation, it being understood, however, that Executive is contemporaneously
herewith entering into a Contract of Employment with Nexsan Technologies, Ltd.
Without limiting the forgoing, during the term of this Agreement, the Executive
consents to being appointed as a member of the Company's Board of Directors.
1.4 The Executive agrees to abide by the rules,
regulations, instructions, personnel practices and policies of the Company and
any changes therein that may be adopted from time to time by the Company.
2. COMPENSATION
2.1 Base Salary
(a) The Company shall pay Executive a base salary
("Base Salary") at the rate of $25,000 per year. Base Salary shall be payable in
installments consistent with the Company's payroll practices then in effect. The
Company shall increase the Base Salary annually, beginning on the second
anniversary of the Effective Date, by five percent (5%) over the Base Salary in
effect the previous year.
2.2 Stock Options
Intentionally omitted.
2.3 Additional Compensation
Nothing contained in this Agreement shall prevent the
Board of Directors of the Company, in its sole and absolute discretion, from, at
any time, increasing Executive's compensation either permanently or for a
limited period, whether in Base Salary or by bonus or otherwise, if the Board of
Directors, in its sole discretion, shall deem it advisable to do so in order to
recognize and fairly compensate the Executive for services rendered, provided,
that nothing in this sentence shall in any manner obligate the Board of
Directors to make any such increase or provide any such additional benefits.
2.4 Withholdings, Etc.
Payment of all compensation and benefits to Executive
hereunder shall be made in accordance with the relevant Company policies in
effect from time to time, including normal payroll practices, and shall be
subject to all applicable employment and withholding taxes.
3. BENEFITS
Executive shall be entitled to participate in all health
care, insurance, deferred compensation and other employee benefit plans
generally available to executives of the Company, consistent with the terms of
those plans as they may currently exist or be modified from time to time. 4.
4. TERM AND TERMINATION
- 2 -
4.1 Unless earlier terminated as provided herein, the
initial term of this Agreement and of Executive's employment hereunder shall
commence on the Effective Date and shall terminate on the fifth anniversary (the
"Expiration Date") of the Effective Date. Unless this Agreement shall have been
earlier terminated, the term of this Agreement and Executive's employment will
be extended automatically for successive one (1) year terms commencing on the
Expiration Date unless either party elects to terminate this Agreement by
providing written notice to the other party at least one hundred eighty (180)
days prior to the expiration of the Initial Term or any renewal term of this
Agreement.
4.2 This Agreement and Executive's employment hereunder
shall terminate:
(a) upon the death of Executive;
(b) upon written notice to Executive if, as a result of
Executive's incapacity due to physical or mental
illness, Executive shall have been unable to perform
Executive's duties hereunder on a full time basis
for a consecutive period of one hundred twenty (120)
days or an aggregate of one hundred eighty (180)
days within any twelve-month period;
(c) upon written notice to Executive, for Cause.
"Cause" means (i) any willful, material violation by
the Executive of any law or regulation applicable to
the business of the Company or any Affiliate; (ii)
the Executive's conviction for, or guilty plea or
plea of nolo contendere to, a felony (other than a
felony related solely to automobile infractions,
unless Executive is incarcerated as a result
thereof); (iii) the Executive's commission of an act
of personal dishonesty which involves personal
profit in connection with the Company or any other
entity having a business relationship with the
Company, (iv) gross carelessness or unjustifiable
neglect of Executive's duties or willful failure to
follow the lawful orders of the Board of Directors
of the Company; (v) any material breach by the
Executive this Agreement; (vi) the Executive's
violation of any of the policies of the Company or
any Affiliate so as to cause loss, damage or injury
to the property, reputation or employees of the
Company or any Affiliate, or (vi) any other willful
misconduct by the Executive which is materially
injurious to the business, financial condition or
business reputation the Company or any Affiliate; or
(d) upon written notice by the Company of termination.
- 3 -
4.3 Consequences of Termination
In the event that the Company terminates Executive's employment
pursuant to Section 4.2 then (a) the Executive's Base Salary shall be prorated
as of the date of termination or resignation and such prorated amount shall be
paid to Executive, and (b) the Company shall make such other and further
payments to Executive as may be provided pursuant to the terms of any employee
benefit plan in which Executive is a participant at the time of termination, to
the extent payable upon such termination in accordance with such plans or
applicable Company policies. In addition, if the Company terminates Executive's
employment pursuant to Section 4.2(d), then the Company shall cause the
compensation payable to Executive pursuant to the Contract of Employment with
Nexsan Technologies, Ltd. to be increased by an amount equal to his Base Salary
otherwise payable under Section 2.1 hereof.
5. ADDITIONAL AGREEMENTS AND UNDERSTANDINGS
5.1 Employment Location
The Executive shall perform the employment duties contemplated by this
Agreement from such location as the Company may from time to time specify, it
being understood that Executive's principal place of residence shall be the U.K.
The Executive acknowledges that his duties hereunder entail substantial travel.
5.2 Reimbursement of Expenses
Upon submission of itemized expense statements in the manner specified
by the Company, Executive shall be entitled to reimbursement for reasonable
travel and other reasonable business expenses duly incurred by Executive in the
performance of Executive's duties under this Agreement, all in accordance with
the policies and procedures established by the Company from time to time for the
Company's executives.
5.3 Company Property
Executive agrees that all operating and/or financial data and
projections, plans, contracts, agreements, literature, manuals, brochures,
books, schedules, correspondence and other materials furnished, disclosed or
otherwise made available to Executive by the Company or its Affiliates or
secured through the efforts of Executive, relating to the business conducted by
the Company and/or its Affiliates, are and shall remain the property of the
Company and/or its Affiliates, and Executive agrees to deliver all such
materials, including all copies or abstracts thereof, to the Company upon the
termination of Executive's employment hereunder, or at any other time at the
Company's request.
5.4 Confidential Information
- 4 -
Executive agrees that, except in the good faith performance of his
duties and responsibilities under this Agreement or as required by order of a
court or governmental agency having jurisdiction, he will not at any time during
or after his employment with the Company use, reveal, divulge or make known to
any person or entity any confidential or proprietary knowledge or information
concerning the Company or its Affiliates, including without limitation any such
information concerning any equipment, facilities, customers, end users,
contracts, leases, operating and/or financial data and projections, processes,
developments, schedules, lists, plans or other matters relating to the business
of the Company or its Affiliates and will retain all knowledge and information
Executive acquired during his employment therewith relating to the business of
the Company or its Affiliates in trust in a fiduciary capacity for the sole
benefit of the Company, its Affiliates and their respective successors and
assigns. Executive's obligations under this Section 5.4 shall not apply to any
information that (i) is or becomes known to the general public under
circumstances involving no breach by Executive of this Agreement, (ii) is
generally disclosed to third parties (excluding counsel, accountants, financial
advisors, employees, agents and material creditors of the Company) by the
Company without restriction on such third parties, or (iii) is approved for
release by written authorization of the President of the Company.
5.5 Developments
(a) Executive will make full and prompt disclosure to
the Company of all inventions, improvements, discoveries, methods, developments,
software, and works of authorship, whether patentable or not, which are created,
made, conceived or reduced to practice by the Executive or under his direction
or jointly with others during his employment by the Company, whether or not
during normal working hours or on the premises of the Company (all of which are
collectively referred to in this Agreement as "Developments").
(b) Executive agrees to assign and does hereby assign
to the Company (or any person or entity designated by the Company) all his
right, title and interest in and to all Developments and all related patents,
patent applications, copyrights and copyright applications.
(c) Executive agrees to cooperate fully with the
Company, both during and after his employment with the Company, with respect to
the procurement, maintenance and enforcement of copyrights and patents (both in
the United States and foreign countries) relating to Developments. Executive
shall sign all papers, including, without limitation, copyright applications,
patent applications, declarations, oaths, formal assignments, assignment of
priority rights, and powers of attorney, which the Company may deem necessary or
desirable in order to protect its rights and interests in any Development.
5.6 Non-Competition
While employed hereunder and for a period of one (1) year
thereafter, Executive shall not (i) enter into the employment of, or act as a
consultant, director, officer, or
- 5 -
employee of, or render any service or advice to, any other business,
partnership, association, corporation or other entity which directly engages in
competition in any material respect with any business presently carried on or
under development, or which hereafter during the period of his employment by the
Company shall be carried on or be under development by the Company and which is
then being carried on by the Company, in the United States or any foreign
country where such business is then or was within the one year period ending on
the date of termination conducted, other than the Company or any Affiliate (a
"Competing Business") or (ii) invest or otherwise acquire any interest, whether
as a shareholder, lender, partner, proprietor, vendor or otherwise, in any
Competing Business (excluding ownership of less than 2% of a class of securities
of a publicly_traded company). While employed hereunder and for a period of one
(1) year after termination of employment, Executive shall not encourage,
solicit, or attempt to induce (or assist others to encourage, solicit, or
attempt to induce) any customer of the Company or any user of products of the
Company to reduce, restrict, or terminate its business relationship with the
Company or any reseller which is a customer of the Company or its use of
products, or products which incorporate products, manufactured by the Company,
or to shift its business from the Company or any such reseller to any other
supplier of competing goods or services
5.7 Non-Solicitation
While employed hereunder and for a period of one (1)
year thereafter, Executive shallnot, directly or indirectly, entice, induce or
in any manner influence any person who is, or shall have been during such
period, in the service of the Company or its Affiliates, or employed or engaged
by or otherwise associated with any person or entity, to leave such service.
5.5 Survival, Rights and Remedies
The provisions of this Section 5 shall survive the
termination of this Agreement and the termination of Executive's employment with
the Company and shall run to and inure to the benefit of the Company and its
successors and assigns. Executive represents, warrants and acknowledges that he
has carefully read this Section 5, that he has had an opportunity to have the
provisions contained herein explained to him by his attorney, and that he
understands the provisions contained herein. Executive further acknowledges
that, by reason of his training, skills, experience and employment hereunder,
the services to be rendered by him under the provisions of this Agreement and
their value to the Company are of a special, unique and extraordinary character
and that it would be difficult or impossible to replace such services, and he
further acknowledges that a violation by him of any of the provisions of this
Section 5 could cause continuing material and irreparable injury to the Company
and that in such event money damages would not be readily calculable and the
Company would not have an adequate remedy at law. Executive acknowledges and
agrees that (i) the restrictions under this Section 5 are reasonable and will
not interfere with Executive's ability to earn a livelihood or impose upon him
any undue hardship, and (ii) any breach of the covenants, provisions and
restrictions contained in this Section 5 shall cause, and shall be deemed to be,
a fundamental and material breach of
- 6 -
Executive's fiduciary and contractual obligations to Employer. Therefore,
Executive agrees that the Company shall be authorized and entitled to obtain
from any court of competent jurisdiction, interim and permanent equitable
relief, including without limitation, injunctive relief, in the event of any
such breach or threatened breach of the provisions of this Section 5, together
with payment of reasonable attorneys' fees and disbursements and any other costs
of enforcement incurred in connection with such breach or threatened breach.
These rights and remedies shall be cumulative and shall be in addition to any
other rights or remedies whatsoever to which the Company shall otherwise be
entitled hereunder, at law or otherwise, including the right to seek damages
(including any consequential damages) which any court of competent jurisdiction
may deem appropriate.
6. APPLICABLE LAW; ARBITRATION
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by and construed and
enforced in accordance with the laws of the State of New York. Except as
provided in Section 5.8, any controversy or claim arising under the provisions
of this Agreement or of any breach or alleged breach thereof shall be subject to
mediation under the auspices of the American Arbitration Association in New
York, New York or any other location mutually agreeable to the parties, and, if
not resolved thereby, shall be settled by arbitration, before a single
arbitrator sitting in New York, New York or any other location mutually
agreeable to the parties, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association, and judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction. The arbitrator
shall be authorized to decree any and all relief of an equitable nature, and
shall also be authorized to award damages and costs. Notwithstanding the
foregoing, in the extent of a breach or impending breach of this Agreement,
either party may seek an injunction, restraining order or other equitable relief
from any court of competent jurisdiction.
7. SUCCESSORS
This Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amounts still are
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee, or other designee or, if there be no
such designee, to Executive's estate.
8. MISCELLANEOUS
8.1 Entire Agreement
- 7 -
This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
8.2 Notices
Every notice required by the terms of this Agreement
shall be given in writing by serving the same upon the party to whom it was
addressed personally or by registered or certified mail, return receipt
requested, at the address set forth below or at such other address as may
hereafter be designated by notice given in compliance with the terms hereof:
If to Executive: Xxxx Xxxxx
------------------------
0 Xxxxxxxx Xxxxx, Xxxxxxx
-------------------------
Xxxxxxxxxx, XX00XX U.K.
-----------------------
If to Company: Nexsan Corporation
c/o Beechtree Capital LLC
0 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
and Nexsan Technologies, Ltd.
Xxxxxxxx Xxxxx
Xxxx Xxxxxxx Xxxx
Xxxxxxxx
Xxxxx XX00 0XX
Xxxxxxx
with a copy to: RubinBaum LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxx Xxxxx, Esq.
Facsimile No.: (212) 698_7825
or such other address as shall be provided in accordance with the terms hereof.
Such notice shall be effective upon mailing.
8.3 Other Agreements
Executive hereby represents that he is not bound by the terms of any
agreement with any previous employer or other party to refrain from using or
disclosing any trade secret or confidential or proprietary information in the
course of his employment with the Company or to refrain from competing,
- 8 -
directly or indirectly, with the business of such previous employer or any other
party. Executive further represents that his performance of all the terms of
this Agreement and as an employee of the Company does not and will not breach
any agreement to keep in confidence proprietary information, knowledge or data
acquired by him in confidence or in trust prior to his employment with the
Company.
8.4 Assistance In Proceedings, Etc.
After termination of his employment, and upon reasonable notice,
Executive shall furnish such information and proper assistance to the Company as
may reasonably be required by the Company in connection with any legal or
quasi-legal proceeding, including any external or internal investigation,
involving the Company or any of its affiliates or in which any of them is, or
may become, a party. The Company shall compensate Executive at the rate of
$1,000 per hour for any such services performed after termination and will
reimburse Executive for all reasonable expenses incurred in connection therewith
in accordance with the provisions of Section 2 of this Agreement..
8.5 Waivers
No delay or failure by any party hereto in
exercising, protecting or enforcing any of its rights, titles, interests or
remedies hereunder, and no course of dealing or performance with respect
thereto, shall constitute a waiver thereof. The express waiver by a party hereto
of any right, title, interest or remedy in a particular instance or circumstance
shall not constitute a waiver thereof in any other instance or circumstance. All
rights and remedies shall be cumulative and not exclusive of any other rights or
remedies.
8.6 Amendments in Writing
No amendment, modification, waiver, termination or
discharge of any provision of this Agreement, nor consent to any departure
therefrom by either party hereto, shall in any event be effective unless the
same shall be in writing, specifically identifying this Agreement and the
provision intended to be amended, modified waived, terminated or discharged and
signed by the Company and the Executive, and each such amendment, modification,
waiver, termination or discharge shall be effective only in the specific
instance and for the specific purpose for which given. No provision of this
Agreement shall be varied, contradicted or explained by any oral agreement,
course of dealing or performance or any other matter not set forth in an
agreement in writing and signed by the Company and the Executive.
8.7 Severability
If any provision of this Agreement shall be held
invalid, illegal or unenforceable in any jurisdiction, for any reason,
including, without limitation, the duration of such provision, its geographical
scope or the extent of the activities prohibited or required by it, then, to the
full extent permitted by law, (a) all other provisions hereof shall remain in
full force and effect in such jurisdiction and
- 9 -
shall be liberally construed in order to carry out the intent of the parties
hereto an nearly as may be possible, (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
any other provision hereof, and (c) any court or arbitrator having jurisdiction
thereover shall have the power to reform such provision to the extent necessary
for such provision to be enforceable under applicable law.
8.8 Cooperation.
Upon termination of employment with the Company, Executive shall
cooperate with the Company, as reasonably requested by the Company, to effect a
transition of Executive's responsibilities and to ensure that the Company is
aware of all matters which had been handled by Executive. The Company will
reimburse Executive for all reasonable expenses incurred in connection
therewith.
8.9 Protection Of Reputation.
From the date hereof, Executive agrees that he will take no action
which is intended, or could reasonably be expected, to harm the Company or its
reputation or which could reasonably be expected to lead to unwanted or
unfavorable publicity to the Company, provided, that nothing in this Section 8.9
shall affect the ability of Executive to enforce any remedy available at law or
in equity.
8.10 Counterparts
This Agreement may be executed in counterparts, each
of which counterpart shall be deemed an original, but all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the 4th day of January, 2001
NEXSAN CORPORATION
By: /s/ Xxxxxx Xxxxx
---------------------------
Title: CEO
---------------------------
OPTIONEE:
/s/ Xxxx Xxxxx
---------------------------
- 10 -