EXHIBIT 10.1
FORM OF EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") dated as of Janaury 19, 2000 is entered into by and
between nStor Taiwan, Inc. (the "Company"), a Florida corporation and a
wholly-owned subsidiary of nStor Technologies, Inc. ("NTI") and
_________________ (the "Executive").
Recitals
The Company, through its Board of Directors, desires to retain the services of
Executive, and Executive desires to be retained by the Company, on the terms and
conditions set forth in this Agreement.
Agreement
For and in consideration of the foregoing and of the mutual covenants of the
parties herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby employs Executive to serve in the capacities
described herein and Executive hereby accepts such employment and agrees to
perform the services described herein upon the terms and conditions
hereinafter set forth.
2. TERM. The term of Executive's employment pursuant to this Agreement shall
commence on the date hereof and shall terminate at the close of business on
the fourth anniversary of the date hereof, which period is referred to
herein as the "Initial Term." The Initial Term shall be subject to earlier
termination in accordance with the other terms and conditions set forth
herein. Upon the expiration of the Initial Term, the Executive's employment
shall continue automatically for periods of twelve calendar months (each
such term being referred to herein as an "Additional Term") unless, at
least 30 days prior to the termination of the Initial Term or an Additional
Term, as the case may be, the Executive or the Company gives notice to the
other of its intention to terminate the Executive's employment at the end
of such Initial Term or Additional Term.
3. DUTIES. Executive shall serve as and have the title of President of the
Company. The Executive's principal place of employment shall be in Taipei,
Taiwan. Executive agrees to devote his full business time, energy, skills
and best efforts to such employment while so employed. Nothing in this
Agreement shall preclude Executive from engaging, so long as, in the
reasonable determination of the Board of Directors, such activities do not
interfere with his duties and responsibilities hereunder, in charitable and
community affairs, from managing any passive investment made by him or from
serving, subject to the prior approval of the Board of Directors, as a
member of the board of directors or as a trustee of any other corporation,
association or entity.
4. COMPENSATION. The Company shall pay Executive, and Executive agrees to
accept, (i) on the date hereof, US$____________ in common stock of NTI, par
value $0.05 per share ("NTI Common Stock"), which NTI Common Stock will be
valued based on the average closing price of one share of NTI Common Stock
on The American Stock Exchange for the ten (10) trading days immediately
preceding the date hereof and will be subject to the restrictions set forth
in that certain Subscription Agreement of even date herewith between NTI
and the Executive; and (ii) base compensation ("Base Compensation") at the
rate of US$________ per month for the first year of the Initial Term, and
US$____________ per month for the second year of the Initial Term.
Executive's Base Compensation will be increased by 5% in each of the
remaining two years of the Initial Term. The Base Compensation specified in
this Section 4 may be further increased annually during the term of this
Agreement in the sole discretion of the Compensation Committee of the Board
of Directors.
5. FRINGE BENEFITS.
(a) Generally. Executive shall be eligible for fringe benefits
pursuant to any health and disability insurance, pension, retirement,
profit sharing, stock option, or other employee fringe benefit plan that
either the Company or NTI, makes available to their employees and for which
Executive will qualify according to his eligibility under the provisions
thereof without giving effect to Executive's prior years of service with
OneofUs Limited Company ("OneofUs") for purposes of such eligibility.
(b) Vacation, Holidays and Illness. During the term of this Agreement,
Executive shall be entitled to days off with pay for vacation (not less
than four weeks per year), Taiwanese national holidays, illness or other
appropriate purposes.
6. EXPENSES. Except as otherwise agreed to herein, the Executive shall be
reimbursed for all usual expenses incurred on behalf of the Company, in
accordance with Company practices and procedures, provided that Executive
furnishes the Company with adequate documentary evidence required by the United
States Internal Revenue Code (the "Code") or any regulation promulgated
thereunder for the substantiation of such expenditures as a deductible business
expense of the Company and not as deductible compensation to Executive.
7. TERMINATION. The term of Executive's employment under this Agreement may be
terminated prior to expiration of the Initial Term or any Additional Term
provided in Section 2 hereof only in accordance with the following Sections.
(a) For Cause. This Agreement may be immediately terminated by the
Company for Cause. For purposes of this Agreement, the term "Cause" shall
mean the termination of the Executive by the Board of Directors of the
Company as a result of the existence or occurrence of one or more of the
following conditions or events:
(i) a material breach by the Executive of any provision of this
Agreement, or the willful and continued failure of Executive to
perform his duties under his employment with the Company, which
failure or breach shall continue for more than ten (10) days after
written notice thereof is received by the Executive;
(ii) performance by the Executive of any act of fraud or material
misrepresentation or a material act of misappropriation which results
or is intended to result in Executive's Personal Enrichment at the
expense of the Company. For purposes of this Agreement, the term
"Personal Enrichment" shall mean financial gain over and above the
salary, bonus, benefits or other compensation to which Executive is
otherwise entitled under this Agreement;
(iii) conviction of the Executive of any crime which constitutes
a felony offense involving violence (but not involving a motorized
vehicle) or fraud, embezzlement, theft or business activities;
(iv) the entry of a judgment or order enjoining or preventing the
Executive from such activities as are essential for the Executive to
perform his services as required by this Agreement unless such
judgment or order is the subject of an appeal or other proceeding to
set it aside or modify it and such proceeding is timely filed and
being pursued with due diligence; or
(v) Executive has engaged in willful and deliberate conduct or
activities intended to materially damage the business of the Company,
it being understood that neither conduct or activities pursuant to the
Executive's exercise of his good faith business judgment nor
unintentional physical damage to properties by the Executive shall be
a ground for such a determination.
(b) With Good Reason. This Agreement may be immediately terminated by
the Executive for Good Reason. For purposes of this Agreement, the term
"Good Reason" shall mean the termination by the Executive of his employment
with the Company as a result of the existence or occurrence of one or more
of the following conditions or events:
(i) the failure by the Company to comply with the provisions of
Sections 4, 5 or 6 which failure or breach shall continue for more
than ten (10) days after the date on which the Board of Directors of
the Company receives written notice;
(ii) the requirement by the Company that the Executive be based
at any location outside of Taiwan;
(iii) the reassignment by the Company of the Executive's material
responsibilities to a third party without the consent of the
Executive; or
(iv) the Executive is asked to (A) take any action which is, or
which the Executive considers based on an opinion of counsel to be, a
violation of law or (B) refrain from taking any action required by
law.
(c) Mutual. Executive's employment under this Agreement may be
terminated upon mutual written agreement of the Company and the Executive.
(d) Death. In the event of the death of Executive, this Agreement shall
terminate immediately.
(e) Disability. If, during Executive's employment under this
Agreement, Executive shall become permanently disabled and unable to
perform his duties as required herein ("Disability") for a consecutive
period of one hundred eighty (180) days, then the Company many, upon thirty
(30) days written notice to Executive, terminate Executive's employment
under this Agreement.
8. DEATH AND DISABILITY. In the event of the termination of Executive's
employment under this Agreement by reason of the Executive's death or
Disability, the Company shall pay Executive (or his heirs and/or personal
representatives), Base Compensation through a date which is one year after the
date of Death or the date of termination for Disability as provided in Sections
7(d) and 7(e), respectively.
9. RESTRICTIVE COVENANTS. In consideration of the foregoing, the Executive
agrees that the Executive shall not:
(a) during the term of his employment and, if the Company shall terminate the
Executive for Cause or if the Executive voluntarily terminates his
employment with the Company without Good Reason, for a period of one (1)
year following the date of termination (the "Noncompete Period"), directly
or indirectly, alone or as a partner, joint venturer, officer, director,
employee, consultant, agent, independent contractor, or security holder, of
any company or business, engage in, or finance, or provide financial
assistance with respect to, any business activity competitive with or
similar to that engaged in by NTI, Newco or any of their subsidiaries,
successors, or assigns (the "NTI Companies") as of the date hereof (the
"NTI Business"); provided, however, that the beneficial ownership of less
than five percent (5%) of any class of securities of any entity having a
class of equity securities actively traded on a national securities
exchange or over-the-counter market shall not be deemed, in and of itself,
to violate the prohibitions of this Section;
(b) during the Noncompete Period, directly or indirectly, (i) induce any
customer of the Company or any NTI Company to patronize any business which
is directly or indirectly in competition with the NTI Business conducted by
any of the NTI Companies; (ii) canvass, solicit or accept from any Person
which is a customer of the NTI Business conducted by any of the NTI
Companies, any such competitive business, provided, however, that the
Executive may cause OneofUs to furnish replacement products to former
customers of OneofUs for the sole purpose of fulfilling OneofUs' product
warranty obligations to such former customers, if any; or (iii) request or
advise any customer or other business relationship of the NTI Business
conducted by any of the NTI Companies to withdraw, curtail or cancel any
such person's business with the NTI Companies or their successors; and
(c) during the Noncompete Period, directly or indirectly, employ any person who
was employed by the NTI Companies, or in any manner seek to induce any
employee of the NTI Companies to leave his or her employment.
10. CONFIDENTIAL INFORMATION. Executive recognizes and acknowledges that he will
have access to certain confidential information of the Company and NTI and of
corporations with whom the Company and NTI do business, and that such
information constitutes valuable, special and unique property of the Company and
NTI and such other corporations. For the period of time which is the greater of
(i) the fifth anniversary of the date hereof or (ii) one year after the
Executive is no longer employed by the Company ("Confidentiality Period"),
Executive agrees not to disclose or use, except in the discharge of his duties
and responsibilities hereunder, any such confidential information, including
without limitation, information regarding research, developments, product
designs or specifications, manufacturing processes, "know-how," prices,
suppliers, customers, costs or any knowledge or information with respect to
confidential or trade secrets of the Company or NTI. Notwithstanding the
preceding sentence, it is understood that such confidential information does not
include information that is publicly available unless such information became
publicly available as a result of a breach of this Section 10 or information
that is required by law or the order of any governmental authority under color
of law to be disclosed. Executive acknowledges and agrees that all notes,
records, reports, sketches, plans, unpublished memoranda or other documents
belonging to the Company or NTI, but held by Executive, concerning any
information relating to the Company or NTI's business, whether confidential or
not, are the property of the Company and NTI and will be promptly delivered to
it upon Executive's leaving the employ of the Company. Executive also agrees to
execute such confidentiality agreements that the Board may adopt, and may modify
from time to time, as a standard form to be executed by all employees of the
Company, to the extent such standard forms are not materially more restrictive
than the provisions of this Agreement.
11. ACKNOWLEDGMENTS OF THE PARTIES. The parties agree and acknowledge that the
restrictions contained in Sections 9 and 10 are reasonable in scope and duration
and are necessary to protect the NTI Companies. If any provision of Section 9 or
10 as applied to any party or to any circumstance is adjudged by a court to be
invalid or unenforceable, the same shall in no way affect any other circumstance
or the validity or enforceability of any other provision of this Agreement. If
any such provision, or any part thereof, is held to be unenforceable because of
the duration of such provision or the area covered thereby, the parties agree
that the court making such determination shall have the power to reduce the
duration and/or area of such provision, and/or to delete specific words or
phrases, and in its reduced form, such provision shall then be enforceable and
shall be enforced. It is expressly acknowledged and agreed that the restrictions
contained in Sections 9 and 10 herein shall survive and continue to be in
effect, in accordance with the terms hereof, following the expiration or
termination for any reason of the Executive's relationship with the Company. The
provisions of Sections 9 and 10 shall be construed as an agreement on the part
of Executive independent of any other part of this Agreement or any other
agreement, and the existence of any claim or cause of action of Executive
against the Company or the NTI Companies, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by the Company
of the provisions of Sections 9 or 10.
12. INTELLECTUAL PROPERTY.
(a) Executive waives any right (including personal or moral right), title or
interest in and to works of authorship, works-made-for-hire and other
inventions, patents, trademarks, service marks, trade names, logos,
copyrights, mask works, confidential business information (including
formulas, compositions, manufacturing and production processes and
techniques, prototypes, technical data, design, drawings, diskettes, stored
data, switch, application, operating system, specifications, lists of and
data relating to, current, prior and prospective customers and suppliers,
pricing and cost information, business and marketing plans and proposals),
computer software and any other intellectual property conceived or
developed by Executive while working for OneofUs, Newco or any NTI Company
or in which the Executive has or may have any proprietary rights
("Intellectual Property"), and hereby transfers any such right, title or
interest which the Executive has or may have in the Intellectual Property
to the Company.
(b) At all times, during and after Executive's employment with Newco, Executive
shall not assert any right (including any personal or moral right) against
Newco or any NTI Company in and to any Intellectual Property.
13. NOTICES. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by overnight delivery service to
the addresses below or to such other address as either party shall designate by
written notice to the other:
If to the Executive:
To the address set forth below his signature on the signature page hereof.
If to the Company:
H. Xxxxx Xxxx
c/o nStor Technologies, Inc.
000 Xxxxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
14. ENTIRE AGREEMENT; MODIFICATION.
(a) This Agreement contains the entire agreement of the Company and Executive,
and the Company and Executive hereby acknowledge and agree that this
Agreement supersedes any prior statements, writings, promises,
understandings or commitments between the parties hereof.
(b) No future oral statements, promises or commitments with respect to the
subject matter hereof, or other purported modification hereof, shall be
binding upon the parties hereto unless the same is reduced to writing and
signed by each party hereto.
15. ASSIGNMENT. The rights and obligations of the parties under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
permitted assigns of the parties. Neither party may assign his or its rights or
obligations under this Agreement without the prior written consent of the other
party provided, however, the Company may assign its rights and delegate its
obligations hereunder to any NTI Company without the prior consent of Executive.
16. TERMINATION. All of the provisions of this Agreement shall terminate upon
the termination of this Agreement, except that (i) Section 9 shall only
terminate upon the expiration of the Noncompete Period; (ii) Section 10 shall
only terminate upon the expiration of the Confidentiality Period and (iii)
Section 12 shall survive the termination of this Agreement to the extent of its
terms.
17. NO MITIGATION. The Executive shall not be required to mitigate the amount of
any payments due hereunder upon termination of Executive's employment by seeking
other employment or otherwise, nor shall the amount of any such payments be
reduced by any employment by another employer after termination of Executive's
employment hereunder.
18. MISCELLANEOUS.
(a) The section headings contained herein are for reference purposes only and
shall not in any way affect the meaning or the interpretation of this
Agreement.
(b) The failure of any party to enforce any provision of this Agreement shall
in no manner affect the right to enforce the same, and the waiver by any
party of any breach of any provision of this Agreement shall not be
construed to be a waiver by such party of any succeeding breach of such
provision or a waiver by such party of any breach of any other provision.
(c) All written notices required in this Agreement shall be sent by overnight
delivery service against receipt.
(d) In the event any one or more of the provisions of this Agreement shall for
any reason be held invalid, illegal or unenforceable, the remaining
provisions of this Agreement shall be unimpaired, and the invalid, illegal
or unenforceable provision shall be replaced by a mutually acceptable
valid, and enforceable provision which comes closest to the intent of the
parties.
(e) The prevailing party in any litigation brought to enforce the provisions
contained in this Agreement shall be entitled to reimbursement from the
nonprevailing party for reasonable attorneys' fees and expenses incurred in
connection with such litigation, as well as interest on any judgment at the
maximum interest rate allowed by applicable law.
(f) This Agreement may be executed in any number of counterparts, each of which
shall constitute an original and all of which together shall constitute one
and the same instrument.
(g) This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the day and year first above written.
nSTOR TAIWAN, INC.
By: /S/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
EXECUTIVE
_____________________
Address:
EXHIBIT 10.2
January 17, 2000
Xx. Xxxxx Xxxxxxxxx
00000 Xxxx Xxx Xxxx
Xxx Xxxxx, XX 00000
Dear Xxxxx:
This letter confirms the employment arrangement between you and nStor
Technologies, Inc. (nStor):
Term: Two years (January 17, 2000 - January 16, 2002)
Position: President and CEO. You will devote full business time, energy, skills
and best efforts to such employment.
Compensation:
Base: $325,000 per year
Bonus: First year - $125,000
Second year - based on objectives set by the Board of
Directors
Incentive: 10% of net pre-tax earnings based upon the audited financial
statements of nStor for 2001, to be paid within 15 days from the date such
amount has been determined
StockOptions: Effective on the date of commencement of employment, you will be
granted an option to purchase 1million shares of nStor common stock on the
following terms:
Exercise price - $2.50 (which was slightly above the average market
price during the last week of December, 1999 when the terms of the
employment arrangement were agreed to)
Vesting 1/17/01 333,333 shares
7/17/01 333,334 shares
1/17/02 333,333 shares
January 17, 2000
Xx. Xxxxx Xxxxxxxxx
Page 2 of 2
However, if the market price reached $9.50 at any time prior to
7/17/01, 500,000 shares (less what is already vested) will become
exercisable immediately or if the market price reaches $14.50 at any time
prior to 1/17/02, all unvested options will become exercisable immediately.
Expiration date: 1/17/10
Termination: If the Board of Directors chooses to terminate your employment
prior to 7/17/01, other than for cause (fraud or illegal acts), 50% of your
options will be vested and you will have five years from that date to
exercise them. If you voluntarily terminate your employment, or if your
employment is terminated for cause, you will only be entitled to your Base
Compensation earned up to the date of termination. If you voluntarily
terminate your employment, all rights with respect to any then exercisable
options will lapse after 30 days from the date of the voluntary
termination. If your employment is terminated for cause, all rights with
respect to any then exercisable options will lapse immediately.
Relocation Reasonable expenses to relocate from Santa Xxxxxxx to San Diego
Expenses: area
Approved By: Very truly yours,
/s/ Xxxxx Xxxxxxxxx /s/ Xxxx Xxxxxx
_____________________________ _____________________________
Xxxxx Xxxxxxxxx Xxxx Xxxxxx
Vice President
