January 18, 2000
Xx. Xxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
RE: Retention Agreement
Dear Xxxx:
You have agreed to remain an employee of Storage Technology Corporation
("StorageTek" or the "Company") through at least March 31, 2001. In
consideration of your willingness to stay with the Company until at least March
31, 2001, this letter will confirm our agreement concerning the possible
termination of your employment with StorageTek on that date. In that regard,
this letter will define the terms of your severance under this Retention
Agreement (the "Retention Agreement") and your Executive Employment Agreement
dated September 30, 1999 (the "Employment Agreement") at the date of your
termination (the "Termination Date"). This Retention Agreement supersedes all
previous oral and written agreements regarding your employment with StorageTek,
including the understanding that the terms and conditions of this Retention
Agreement, to the degree that they may conflict with the terms and conditions of
your Employment Agreement, shall in all cases supersede the terms of the
Employment Agreement, which agreement shall, unless otherwise stated herein,
remain in full force and effect.
REPORTING RELATIONSHIP AND DUITES: During your period of continued
employment with the Company, you will remain a Corporate Vice President.
Although it is envisioned that in such capacity you will report to the
CEO, this reporting relationship may be changed at any time by the
Company. You further understand that your present and future duties and
responsibilities could also be substantially changed by the Company. It is
further understood and agreed by you that such changes will not, in
combination or in and of themselves, constitute and Involutary Termination
under the terms of the Employment Agreement.
GOALS AND OBJECTIVES: During your period of continued employment with the
Company you have agreed to focus on: (i) assisting in defining and
implementing the on-going corporate restructuring, (ii) assisting in the
continued refinement and implementation of corporate-wide cost reductions,
(iii) helping to improve the cycle time for implementing business
processes improvements, (iv) working to enhance supply chain management
(SLM) efficiencies, and (v) such other tasks as may be reasonably
requested of you, from time-to-time, by the Board of Directors, the CEO,
President or COO as the case may be.
SEPARATION: After your successful participation in the attainment of the
objectives stated above, and your continued employment through the
Termination Date, the Company will pay, within 30 days of the Termination
Date, a separation payment to you equal to: (i) one and one-half times
your then current annual salary, and (ii) one and one-half times your then
current target annual MBO bonus. Additionally, all of your outstanding and
unvested stock options will vest on the Termination Date (according to the
terms of your Stock Option Agreements and the Company's 1995 Stock Option
Plan) and the Company's right to repurchase any of your previously granted
restricted stock will terminate. Pursuant to the terms of StorageTek's
Stock Option Plan, you will have 90 days from the Termination Date to
exercise all of your vested options.
NO ADVERSE COMMENT: You agree that during your employment with the Company
through the Termination Date and for at least one year following the
Termination Date, you will not, except as specifically required by law or
court process or consented to in writing by the Company, (a) communicate
to any person or entity any adverse information, written or oral,
concerning the Company, its officers, directors, employees, attorneys,
agents or advisers (including any communication concerning information
that related to the business, operations, prospects or affairs of the
Company or any of its subsidiaries or affiliates) under the circumstances
in which there is a reasonable possibility that such information might be
publicly reported or disclosed or otherwise made available to third
parties (regardless of whether the communication of such information is
intended to have or cause that result is within your control), or (b)
provide to any person (other than your attorney or accountant) or entity
any information that concerns or related to the negotiations or
circumstances leading to the execution of this Retention Agreement.
NON-SOLICITATION PROVISIONS: Per the terms of Section 8 of your Employment
Agreement, you confirm that during the two-year period commencing with the
Termination Date, you will not, directly, or indirectly, hire, solicit, or
encourage any then-current Company employees to apply for employment with
any person or entity (a) with which you are (or intend to be) employed,
(b) by whom you or an entity in which you are employed or have a financial
interest is engaged as a consultant, recruited, independent contractor or
otherwise, or (c) in which you further covenant and agree that you will
not provide to any other person or entity the names of any person who is
then employed by the Company.
NON-COMPETE PROVISIONS: Per the terms of Section 8 of your Employment
Agreement, you confirm that for a period of eighteen months from the
Termination Date that you will not, either directly or indirectly, engage
in any activity in competition with any product or service of the Company
(said competitive activities to be determined and identified at the
reasonable discretion of the Company), or harmful or contrary to the best
interest of the Company, including accepting employment with or serving as
a consultant to any entity that is in competition with the Company. Per
Section 8, those companies deemed to be competitors to StorageTek will be
identified at the time of your termination.
EARLY TERMINATION: In the event of your Involuntary Termination, prior to
the Termination Date, the Company will pay you the separation pay and
benefits identified above at the time of your termination, provided that
you sign the Settlement and Release Agreement attached as Exhibit A to
your Employment Agreement. During the period of your employment with the
Company, all other terms of your employment as stated in your Employment
Agreement, including the "Change in Control" and termination for "Cause"
provisions will remain in effect through the Termination Date. If you
voluntarily terminate your employment with the Company before the
Termination Date, then you will not be entitled to receive any of the
separation benefits set forth in this Retention Agreement.
EMPLOYMENT EXTENSION: Should you and the Company reach an agreement on or
before the Termination Date whereby you would remain an employee of the
Company beyond the Termination Date, then you and the Company will enter
into a new employment agreement at that time. The terms and conditions of
that new employment agreement will then supersede the terms and conditions
of both this Retention Agreement and the Employment Agreement.
SETTELMENT AND RELEASE: The payments recited in this Retention Agreement
are contingent upon your execution and delivery to the Company a
Settlement and Release Agreement substantially in the form attached as
Exhibit A to your Employment Agreement.
NONDISCLOSURE: Unless otherwise required to do so by law, subpoena or
court order, you will not in any way communicate or discuss the terms of
this Retention Agreement or the circumstances of its execution with any
person, other than your attorneys or authorized Company personnel, said
personnel to be explicitly designated by the Company's President and CEO.
You understand that this nondisclosure provision applies particularly to
current and former employees of the Company and the Company's customers,
clients and vendors.
Please sign both copies of this letter below, indicating your acceptance,
and return one copy for our files.
Accepted and Agreed: Very truly yours,
STORAGE TECHNOLOGY CORP.
-------------------------- ------------------------------
XXXX X. XXXXXXXX Xxxxx X. Xxxxx
Chairman, President and
Chief Executive Officer
