Exhibit 10.13
STORAGE COMPUTER CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
AGREEMENT, effective September 14, 2000, by and between Storage Computer
Corporation, a Delaware corporation (the "Company") and Xxxx X. Xxxxxx (the
"Executive").
WHEREAS, the Company desires to employ the Executive as the Chief Operating
Officer of the Company and the Executive desires to accept such employment;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
ARTICLE I
EMPLOYMENT DUTIES AND BENEFITS
SECTION 1.1 EMPLOYMENT. The Company hereby employs the Executive as the
Chief Operating Officer of the Company. The Executive accepts such employment
and agrees to perform the duties and responsibilities associated with such
position.
SECTION 1.2 DUTIES AND RESPONSIBILITIES. From and after the effective
date of this Agreement (the "Commencement Date"), the Executive shall devote his
full time and attention to the business of the Company. . The Executive shall
be responsible for all day to day operations of the Company including sales and
marketing, purchasing, manufacturing, product development and research and
development functions. The Executive shall report to the Chief Executive
Officer of the Company.]
SECTION 1.3 WORKING FACILITIES. The Executive shall be furnished with
facilities and services suitable to the position and adequate for the
performance of the Executive's duties under this Agreement.
SECTION 1.4 NOMINATION AS A DIRECTOR. During the term of this Agreement,
the Company agrees to nominate the Executive for election as a member of the
Board of Directors of the Company at each meeting of stockholders of the Company
at which directors are to be elected.
ARTICLE II
COMPENSATION AND BENEFITS
SECTION 2.1 BASE SALARY. From and after the Commencement Date, the
Company shall pay to the Executive a salary at the rate of $130,000 per annum
(the "Base Salary") payable during the term of the Executive's employment in
accordance with the Company's payroll and withholding policies. The Base Salary
shall be subject to increase from time to time, but not less frequently than
annually, to reflect changes in the Executive's responsibilities hereunder,
employment market conditions, and such other factors as the Compensation
Committee of the Company's Board of Directors deems relevant.
SECTION 2.2 PERFORMANCE BONUS. In addition to the Base Salary, the
Executive shall be entitled to receive an annual performance bonus in an amount
to be determined by the Compensation Committee of the Company's Board of
Directors using such criteria (including, without limitation, the Company's
financial performance and the Executive's performance against goals and
objectives) as the Compensation Committee may from time to time establish in
consultation with the Executive.
SECTION 2.3 STOCK OPTIONS. As of the Commencement Date, the Executive
shall be granted options to acquire an aggregate of _________ shares of the
Company's Common Stock at an exercise price equal to the market price of such
stock on the Commencement Date and on substantially the other terms and
conditions set forth in the Non-Qualified Stock Option Agreement attached hereto
as Exhibit 1 and made a part hereof. Thereafter, the Executive shall be
eligible to receive additional grants of stock options under the Company's stock
option plan in effect from time to time at the discretion of the Compensation
Committee of the Board of Directors of the Company.
SECTION 2.4 BENEFIT PLANS. From and after the Commencement Date, the
Executive shall be entitled to participate in all benefit plans (including
vacation plans) provided to employees of the Company and senior executives in
particular, on the same basis, and subject to the same requirements and
limitations as may be made applicable to other senior executive employees of
the Company. Without limitation of the foregoing, the Company hereby
incorporates by reference in this Agreement the provisions of Section 5.16 of
the Agreement and Plan of Reorganization dated August 22, 2000 by and among the
Company, Cyber Acquisition Corporation and CyberStorage Systems Corporation.
ARTICLE III
TERM OF EMPLOYMENT AND TERMINATION
SECTION 3.1 TERM. The initial term of the Executive's employment
hereunder shall commence on the Commencement Date and shall terminate on the
second anniversary of the Commencement Date. This Agreement may be extended for
additional terms by mutual agreement between the Company and the Executive.
SECTION 3.2 TERMINATION BY THE COMPANY FOR CAUSE OR BY THE EXECUTIVE
WITHOUT GOOD REASON. As used herein the term "Cause" for termination of the
Executive's employment by the Company shall mean any of the following: (a)
conviction of, or the entry of a pleading of nolo contendere by the Executive
to, a felony or a misdemeanor involving fraud, embezzlement or similar act of
dishonesty committed by the Executive against the Company, with all appeals
relating thereto having been successfully exhausted, (b) the material breach of
the Executive's obligations under any confidentiality agreement with the Company
executed by the Executive, or (c) the Executive's willful and continued failure
to perform his employment duties and obligations, unless any of such acts or
omissions were done or omitted to be done in good faith and with the reasonable
belief that such act or omission was in the best interests of the Company.
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As used herein, the term "Good Reason" for termination of the Executive's
employment by the Executive shall mean (w) reduction in the Executive's base
salary below $130,000 or such higher base salary as is in effect immediately
prior to such reduction, or the elimination of the annual bonus plan referred to
in Section 2.2 above, (x) removal from the Executive's position as Chief
Operating Officer of the Company, or failure to re-elect or reappoint the
Executive to such positions, (y) a material decrease in the Executive's duties
or responsibilities or the assignment to the Executive of duties and
responsibilities, which are materially inconsistent with such positions, or (z)
the failure of the Company to obtain the assumption in writing of its
obligations to perform this Agreement by any successor entity pursuant to
Section 5.4 below. Upon the date of termination of the Executive's employment by
the Company for Cause or by the Executive for other than Good Reason, the
Company's obligation to pay any compensation including bonuses shall terminate,
at which time the Company shall be responsible for compensating the Executive
solely for any unpaid salary through the date of termination.
SECTION 3.3 TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE
FOR GOOD REASON. In the event the Executive's employment is terminated by the
Company without Cause or by the Executive for Good Reason, then the Executive
shall be entitled to receive, in addition to any unpaid salary through the date
of termination, (subject to the terms of this Section 3.3) severance payments
from the date of termination through the second anniversary of the Commencement
Date at a rate equal to his full monthly Base Salary at the time of termination
of his employment, payable in accordance with the Company's standard payroll and
withholding policies. During the time the Executive is entitled to receive
severance payments hereunder, the Company shall keep in full force and effect
all benefits afforded to the Executive at the time of the termination of his
employment, which benefits shall be provided on terms identical to those
provided during the term of the Executive's employment, including health
insurance coverage (if permitted under the applicable plan) subject to the
appropriate contribution from the Executive, if applicable. Upon the expiration
of such coverage during the period the Executive is receiving such severance
payments, (and only during such period) the Company will reimburse the Executive
for the cost of comparable health insurance coverage, provided however, that the
amount of such reimbursement shall be subject to gross-up for federal and state
income taxes so that the Executive will not be out-of pocket on an after-tax
basis with respect thereto.
In no event shall the severance payments payable under this Section 3.3 be
deemed to be included in the Executive's Base Salary for purposes of determining
bonus compensation payable to the Executive. The severance payments payable
under this Section 3.3 shall terminate upon the commencement by the Executive of
full time employment with a new employer.
SECTION 3.4 CONTINUING ASSISTANCE. In partial consideration for the
severance payments payable to the Executive pursuant to Section 3.3 in the event
the Executive terminates his employment for Good Reason, the Executive shall,
for a period of 45 days following the date of his voluntary termination of his
employment for Good Reason, remain available, for at least three days per week,
to assist the Company on such matters (including transition of responsibilities
to his successor) as the Board of Directors of the Company may reasonably
request. The Company shall reimburse the Executive for his reasonable out-of-
pocket expenses incurred in connection with his performance of post-termination
services pursuant to this Section 3.4 but shall not be required to make any
other payment to the Executive in connection therewith except for the severance
payments pursuant to Section 3.3.
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Section 3.5 DISABILITY. In the event of the Executive's "disability" as
defined herein, the Executive's employment shall automatically terminate. The
term "disability" shall mean the Executive's inability because of physical or
mental incapacity to perform the Executive's usual duties as Chief Operating
Officer of the Company for a period of one hundred eighty (180) days in any
consecutive twelve (12) month period. During such 180 day period the Executive
shall continue to receive the Executive's full salary and bonus compensation and
all other benefits as provided herein.
ARTICLE IV
CONFIDENTIALITY AND COMPETITION
SECTION 4.1 FURTHER OBLIGATIONS OF THE EXECUTIVE DURING AND AFTER EMPLOYMENT.
(a) The Executive agrees that during the term of his employment under this
Agreement, he will engage in no other business activities which are or may be
competitive with, or which might place him in a competing position to that of,
the Company or any subsidiary of the Company.
(b) The Executive realizes that during the course of his employment, the
Executive will have produced and/or have access to confidential business plans,
information, business opportunity records, notebooks, data, formula,
specifications, trade secrets, customer lists, account lists and inventions of
the Company and its affiliates ("Confidential Information"). Therefore, during
the term of his employment and for a period of two years following the
termination of his employment, the Executive agrees to hold in confidence and
not directly or indirectly to disclose or use or copy or make lists of any such
Confidential Information, except to the extent authorized by the Company in
writing. All records, files, business plans, documents, equipment and the like,
or copies thereof, relating to Company's business, or the business of an
affiliated company, which the Executive shall prepare, or use, or come into
contact with, shall remain the sole property of the Company, or of an affiliated
company, and shall not be removed from the Company's premises without its
written consent, and shall be promptly returned to the Company upon termination
or resignation of employment with the Company or its affiliated companies.
(c) The Executive agrees that for a period of two (2) years after
termination or cessation of his employment for any reason he will not:
(i) directly or indirectly, either as principal, agent, stockholder,
employee, consultant, representative or in any other capacity, own, manage,
operate or control, or be concerned, connected or employed by, or otherwise
associate in any manner with, engage in or have a financial interest in any
business which performs any of the principal services or researches,
develops, manufactures or sells any of the principal products provided or
offered by the Company or under development by the Company during the term
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of the Executive's employment hereunder, except that nothing contained
herein shall preclude the Executive from purchasing or owning stock in any
such competitive business if such stock is publicly traded, and provided
that the Executive's holdings do not exceed one percent (1%) of the issued
and outstanding capital stock of such business.
(ii) Either individually or on behalf of or through any third party,
solicit, divert or appropriate or attempt to solicit, divert or
appropriate, for the purpose of competing with the Company or any present
or future parent, subsidiary or other affiliate of the Company or any joint
venture or collaborative enterprise in which the Company holds an interest,
any customers or patrons of the Company, or any prospective customers or
patrons with respect to which the Company has developed or made a
presentation for the use or exploitation of products or services of the
Company anywhere in the world.
The Executive further recognizes and acknowledges that (i) the types of
employment which are prohibited by this paragraph are reasonable and (ii) the
specified but broad geographical scope of the provisions of this paragraph is
reasonable.
(d) The Executive shall not during the term of his employment or at any
time during the period of one (1) year following termination of his employment
solicit any person who is employed by or a consultant to the Company or any
affiliate or subsidiary of the Company either during the Executive's period or
employment or during such one (1) year period, to terminate such person's
employment by or consultancy to the Company, such affiliate or subsidiary. As
used herein the term "solicit" shall include, without limitation, requesting,
encouraging, assisting or causing, directly or indirectly, any such employee or
consultant to terminate such person's employment by or consultancy to the
Company, affiliate or subsidiary.
(e) In exchange for the Executive's agreement to be bound by this Section
4.1, in the event that the Executive's employment with the Company is terminated
by the Company without Cause, or by the Executive for Good Reason, then the
Company agrees to pay to the Executive during the period following the period in
which he is receiving severance payments under Section 3.3 and continuing during
the remainder of the two-year non-competition period provided for herein, non-
competition payments (the "Non-Competition Payments") at a rate equal to his
full monthly Base Salary at the time of termination of his employment, payable
in accordance with the Company's standard payroll and withholding policies.
During the time the Executive is entitled to receive Non-Competition Payments
hereunder, the Company shall keep in full force and effect all benefits afforded
to the Executive at the time of the termination of his employment, which
benefits shall be provided on terms identical to those provided during the term
of the Executive's employment.
(f) At the Company's election, the Company may release the Executive from
any further obligations under subsection 4.1(c), in which event the Company
shall be released from any obligation to pay to the Executive any of the Non-
Competition Payments which would otherwise have been due and payable following
the Executive's receipt of such election. Such election may be made at any time
during the two-year period referred to in Section 4.1(c).
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ARTICLE V
GENERAL MATTERS
SECTION 5.1 GOVERNING LAW. This Agreement shall be governed by the laws
of the State of New Hampshire and shall be construed in accordance therewith.
SECTION 5.2 NO WAIVER. No provision of this Agreement may be waived
except by an agreement in writing signed by the waiving party. A waiver of any
term or provision shall not be construed as a waiver of any other term or
provision.
SECTION 5.3 AMENDMENT. This Agreement may be amended, altered or revoked
at any time, in whole or in part, by filing with this Agreement a written
instrument setting forth such changes, signed by each of the parties.
SECTION 5.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of: (a) the Company, and any successors or assigns of
the Company, whether by way of a merger or consolidation, or liquidation of the
Company, or by way of the Company selling all or substantially all of the assets
and business of the Company to a successor entity; and the Company agrees to
require any successor entity to expressly assume or unconditionally guarantee
the Company's obligations under this Agreement (unless such obligations are
assumed by operation of law); and (b) the Executive and his heirs, executors and
administrators.
SECTION 5.5 TEXT TO CONTROL. The headings of articles and sections are
included solely for convenience in reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
SECTION 5.6 SEVERABILITY. If any provision of this Agreement is declared
by any court of competent jurisdiction to be invalid for any reason, such
invalidity shall not affect the remaining provisions. On the contrary, such
remaining provisions shall be fully severable, and this Agreement shall be
construed and enforced as if such invalid provisions had not been included in
the Agreement.
In Witness Whereof, the Company and the Executive have executed this
Agreement as of the date first above written.
STORAGE COMPUTER CORPORATION
By: /s/ Xxxxxx Xxxxxxx
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/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
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