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Exhibit 10.12
AMENDMENT NO. 1 TO THE EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 TO THE AGREEMENT made as of December 26, 1992,
between STORAGE DIMENSIONS, INC., a Delaware corporation (the "Employer"), and
Xxxxx X. Eeg (the "Employee"), is made as of this __ day of March, 1998.
WITNESSETH:
WHEREAS, Employer and Employee entered into an Employment Agreement on
December 22, 1992 (the "Agreement") by which Employee currently serves as
President and Chief Executive Officer of Employer;
WHEREAS, Employer and Employee now desire to amend the Agreement to
change the benefits payable to Employee in the event of termination of
Employee's employment or consulting relationship with Employer.
NOW, THEREFORE, in consideration of the premises, the covenants
contained herein, and other good and valuable consideration, the Employer and
the Employee hereby amend the Agreement as follows:
1. Amendment to Section 2.1 of the Agreement. Section 2.1 of the
Agreement is hereby amended to add the following sentence as a new penultimate
sentence to Section 2.1 of the Agreement:
"Notwithstanding the foregoing, effective as of the closing date (the
"Closing Date") of the merger contemplated pursuant to that certain
Agreement and Plan of Merger and Reorganization dated as of December 22,
1997 among Employer, Storage Acquisition Corp. and Artecon, Inc. (the
"Merger Agreement"), Employee shall serve as a consultant to Employer."
2. Amendment to Section 3.2 of the Agreement. Section 3.2 of the
Agreement is hereby amended to read as follows:
"(a) Management Bonus Plan. Employee shall no longer be entitled
to receive any bonuses under the terms of Employer's Management Bonus
Plan, a copy of which is attached hereto as Exhibit A."
3. Amendment to Section 4.1(b) of the Agreement. Section 4.1(b) of the
Agreement is hereby amended to read in its entirety as follows:
"(b) In addition, for so long as Employee continues to be
engaged by Employer or any subsidiary thereof as an employee or a
consultant and for the period during which Employer or any subsidiary
thereof makes severance payments to Employee pursuant to
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Section 5.3(a), Employee will not, without the express written consent
of Employer, directly or indirectly engage, participate or invest in or
assist, as owner, part owner, shareholder, partner, director, officer,
trustee, employee, agent or consultant, or in any other capacity, any
business organization other than Employer whose activities or products
are competitive with activities or products of Employer or any
subsidiary thereof in which activities Employee shall have participated
or as to which products Employee shall have had responsibility either in
their development, marketing or otherwise, provided that Employee may
make passive investments in a competitive enterprise the shares of which
are publicly traded if Employee's investment constitutes less than 5% of
the outstanding shares of such enterprise. The foregoing agreement not
to compete shall apply in any and all cities and counties of each state
of the United States of America in which the activities of Employer or
any subsidiary thereof shall have been conducted, or the products of any
of them sold, on or before the date upon which Employee's employment by
Employer or any subsidiary thereof ceases."
4. Amendment to Section 4.2 of the Agreement. Section 4.2 of the
Agreement is hereby amended to add the following sentence to the end of Section
4.2 of the Agreement:
"For purposes of this Section 4.2, the term "Employer" shall be deemed
to include Storage Dimensions, Inc. or its successor and any entity
which is a subsidiary of the foregoing during the period in which the
noncompetition agreement set forth in Section 4.1 is in effect."
5. Amendment to Section 5.1 of the Agreement. Section 5.1 of the
Agreement is hereby amended to add the following language to the end thereof:
"or until terminated pursuant to Section 5.2 of this Agreement, as
amended."
6. Amendment of Section 5.2 of the Agreement.
(a) Section 5.2(b) is hereby amended to delete the phrase
"thirty (30) days" from the first sentence thereof.
(b) Section 5.2(b) of the Agreement is hereby amended to add the
following language to the end of Section 5.2(b):
"Any termination of Employee's status as an employee or
consultant of the Employer (but not a change in status from
employee to consultant) following a "Change in Control", whether
at Employer's or Employee's option (other than a termination by
Employer under Section 5.2(c)), shall be deemed to be a
termination by Employer pursuant to this Section 5.2(b) and
Employer shall make severance payments as provided in Section
5.3(a). "Change of Control" shall mean any merger or sale of
substantially all of the assets of the Employer or other
transaction pursuant to which the stockholders of Employer before
such transaction no longer hold at least 50% of the voting
securities of the Employer after such transaction. In no event,
however, shall the change in Employee's title
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contemplated under Section 2.1 of this Agreement, as amended, or
any commensurate change in Employee's duties be a termination
pursuant to this Section 5.2(b) or trigger Employer's obligation
to make severance payments under Section 5.3(a)."
(c) Section 5.2 of the Agreement is hereby amended to add a new
subsection (d), as follows:
"(d) If, following termination of Employee's employment with
Employer by either Employee or Employer, the parties mutually determine
that Employee should be retained as a consultant to Employer, the
parties will execute the Consulting Agreement attached hereto as Exhibit
B."
7. Amendment of Section 5.3(a) of the Agreement. Section 5.3(a) of the
Agreement is hereby amended to read in its entirety as follows:
"(a) Upon a termination described in Section 5.2(b), Employer
shall pay to Employee for a period of 66 weeks following such
termination one hundred percent (100%) of Employee's regular weekly base
salary in effect on the date of termination of Employee's employment or
consulting relationship hereunder (less applicable income tax
withholding), such amount to be payable in equal installments on the
Company's normal payment date for employees beginning on the payment
date next following the date of such termination. In the event of such
termination, the stock option referred to in Section 3.2(b), and any
subsequently granted stock options, shall be exercisable only to the
extent vested as of such termination in accordance with their terms;
provided, however, that such options shall be amended by the Company in
order to provide that they may be exercised, to the extent exercisable
at the time of such termination, for a period of two years from the date
of such termination."
8. Amendment of Section 6.2 of the Agreement. Section 6.2 shall be
amended to add the following as a new paragraph immediately following the
paragraph which begins "To Employer":
"provided, however, that notwithstanding the foregoing, following the
Closing Date, any notice to be delivered hereunder to Employer shall
instead be sent to the following address:
Artecon, Inc.
0000 Xx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, President and CEO"
9. No other Amendment. Except as expressly amended hereby, all
provisions of the Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment to the
Employment Agreement as of the day and year first above written.
STORAGE DIMENSIONS, INC.
By:
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Xxxxx Xxxxxxxxxx, Chairman of the Board
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Xxxxx X. Eeg
The foregoing amendment is consented to pursuant to Section 5.2 of the
Merger Agreement.
ARTECON, INC.
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Xxxxx X. Xxxxxxx
President and CEO
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Exhibit B
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is effective as of February
____, 1998 between Storage Dimensions, Inc., a Delaware corporation (the
"Company") and Xxxxx X. Eeg (the "Consultant").
RECITALS
A. The Company and Consultant are parties to that certain employment
agreement (the "Employment Agreement"), dated December 26, 1992, by and between
the Company and Consultant, as amended, a copy of which is attached hereto.
B. The parties have determined to end Consultant's employment
relationship with the Company and to enter into a Consulting Agreement by which
Consultant would perform certain services for the Company.
In consideration of the mutual covenants herein contained the Company
and the Consultant agree as follows:
1. Services.
(a) The Consultant shall provide consulting services to the
Company in such matters as may be agreed upon by the Consultant and the Company.
In such capacity, Consultant shall have the duties and responsibilities
determined by the Company's Board, and shall report to the Company's Chief
Executive Officer or such other person designated by the Board.
(b) Unless otherwise determined by the Company and Consultant,
the Consultant shall render such services to the Company on a full-time basis
and shall not accept other employment during the term of this Agreement.
Consultant shall not participate in Company employee benefit plans in which he
participated at the time of termination of his employment with the Company,
other than under COBRA or similar laws and at Consultant's expense.
2. Compensation. As full consideration for the consulting services
provided by the Consultant, the Company shall pay to the Consultant the
Consultant's monthly salary as an employee of the Company in effect on the date
of termination of Consultant's employment with the Company, payable in
accordance with the regular payroll procedures of the Company. In addition to
the foregoing amount, the Company shall promptly reimburse the Consultant for
all reasonable expenses incurred by the Consultant in providing consulting
services under this Agreement.
3. Competition. The Consultant represents to the Company that the
Consultant does not have any agreement with any other party, firm, or company
which would preclude Consultant from fulfilling his obligations hereunder.
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4. Confidentiality. The parties agree that the Proprietary Information
and Assignment of Inventions Agreement previously executed by the parties with
respect to Consultant's former employment with the Company shall remain in full
force and effect during the term of this Agreement.
5. Return of Materials. The Consultant agrees to promptly return,
following the termination of this Agreement or upon earlier request by the
Company, all drawings, tracings, and written materials in the Consultant's
possession and (i) supplied by the Company in conjunction with the Consultant's
consulting services under this Agreement or (ii) generated by the Consultant in
the performance of consulting services under this Agreement.
6. Defense and Indemnification. The Company agrees, at its sole expense,
to defend the Consultant against, and to indemnify and hold the Consultant
harmless from, any claims or suits by a third party against the Consultant or
any liabilities or judgments based thereon, either arising from the Consultant's
performance of services for the Company under this Agreement or arising from any
Company products which result from the Consultant's performance of services
under this Agreement.
7. Term and Termination.
(a) Either party may terminate this Agreement at any time and for
any reason upon two weeks notice to the other.
(b) Termination of this Agreement shall not affect (i) the
Company's obligation to pay for services previously performed by the Consultant
or expenses reasonably incurred by the Consultant for which the Consultant is
entitled to reimbursement under paragraph 2, above, (ii) the Company's
obligations to defend and indemnify the Consultant under paragraph 6 above,
(iii) the Consultant's continuing obligations to the Company under paragraphs 4
and 5, above, or (iv) the Company's obligations to make severance payments
pursuant to the Employment Agreement following termination of this Agreement.
8. Miscellaneous.
(a) This Agreement shall inure to the benefit of and be binding
upon the respective heirs, executors, successors, representatives, and assigns
of the parties, as the case may be; provided, however, the obligations hereunder
of each party to the other are personal and may not be assigned without the
express written consent of such other party.
(b) The relationship created by this Agreement shall be that of
independent contractor, and the Consultant shall have no authority to bind or
act as agent for the Company or its employees for any purpose.
(c) This Agreement shall be construed in accordance with
California law.
(d) Notice or payments given by one party to the other hereunder
shall be in writing and deemed to have been properly given or paid if deposited
with the United States Postal Service, registered or certified mail, addressed
to the Company's principal executive officer, in the care of the Company, or to
the address of Consultant shown in the records of the Company.
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(e) This Agreement replaces all previous agreements and the
discussions relating to the subject matters hereof and this Agreement and the
Employment Agreement constitute the entire agreement between the Company and the
Consultant with respect to the subject matters of this Agreement. This Agreement
may not be modified in any respect by any verbal statement, representation, or
agreement made by any employee, officer, or representative of the Company, or by
any written documents unless it is signed by an officer of the Company and by
the Consultant.
(f) If any term or provision of this Agreement is deemed invalid,
contrary to, or prohibited under applicable laws or regulations of any
jurisdiction, this Agreement (save only this sentence) shall be invalid.
(g) This Agreement may be executed simultaneously in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Consulting Agreement
effective the date first stated above.
STORAGE DIMENSIONS, INC.
By:
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Name:
----------------------------
Title:
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Xxxxx X. Eeg
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