January 27, 2000
Xx. Xxxxxx Xxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
RE: Retention and Separation Agreement
Dear Xxxxx:
You have agreed to remain an employee of Storage Technology Corporation
("StorageTek" or the "Company") through at least July 31, 2000 (the "Termination
Date"). In consideration of your willingness to stay with the Company until the
Termination Date, this letter will confirm our agreement concerning the
termination of your employment with StorageTek on that date. In that regard,
this letter will define the terms of your severance under this Retention and
Separation Agreement (the "Retention and Separation Agreement") and your
Executive Employment Agreement dated October 1, 1999 (the "Employment
Agreement") at the Termination Date. This Retention and Separation Agreement
supersedes all previous oral and written agreements regarding your employment
with StorageTek, it being understood that the terms and conditions of this
Retention and Separation 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
Chief Executive Officer (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, particularly if a successor as Chief Financial Officer (CFO)
is hired. If a new CFO is hired before the Termination Date, then you will
remain an employee of the Company as a non-officer employee supporting the
transition to the new CFO. During this transition assistance period as a
non-officer employee, you will continue with your then current salary and
with your then current officer benefit package through the Termination
Date. It is further understood and agreed by you that such changes will
not, in combination or in and of themselves, constitute an Involuntary
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) defining the Company's year 2000 business and operating plan, (iv)
improving the processes and performance of the Shared Services Center in
Atlanta, (v) completing the transition of the financial reporting systems
in Europe, and (vi) such other tasks as may be reasonably requested of
you, from time-to-time, by the Board of Directors, the CEO, or President,
as the case may be.
SEPARATION PAYMENT: 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. In this regard, it should be noted that
if you were to terminate on the Termination Date, then you would be
entitled to receive your first half year MBO bonus payment as if you were
an officer of the Company eligible for such bonus in an amount equal to
that which you would have received based on the Company's performance
against targeted objectives, as approved by the Board. This first half
year MBO bonus payment would be paid to you in addition to the one and
one-half times annual MBO bonus payment included in your severance
package.
STOCK OPTIONS AND RESTRICTED STOCK: After your successful participation in
the attainment of the objectives stated above, and your continued
employment through the Termination Date, 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 normally have 90 days from the
Termination Date to exercise all of your vested options. However, because
of your responsibilities at the Company, your knowledge of the Company's
activities may render you ineligible to trade in the Company's stock due
to the possession of "material inside information" after the Termination
Date, therefore the Company will enter into a consulting agreement with
you starting on the Termination Date and ending on September 30, 2000
whereby your eligible 90 day "trading window" will end on December 31,
2000. Should your actual termination be extended beyond the Termination
Date or should you still not be eligible to trade in the Company's stock
at the start of the delayed 90-day trading window starting on September
30, 2000, then by mutual agreement your consulting agreement may be
extended accordingly to insure that you have a 90-day trading window, free
from SEC prohibitions.
COBRA PAYMENTS: Starting from the Termination Date, you will be entitled
to receive COBRA benefits for the equivalent medical and dental coverage
for you and your family as may be in effect at the Termination Date, such
COBRA benefits will be paid for in full on your behalf by the Company.
These COBRA benefits will be paid for by the Company until the earlier to
occur of either (i) a date 18 months from the Termination Date, or (ii)
such time as you shall have entered into permanent employment with an
employer with a medical and dental plan.
OUT PLACEMENT SERVICES: Starting on the Termination Date, you shall be
eligible to participate in and receive the Company's standard executive
job placement assistance, such assistance to be paid for on your behalf by
the Company.
NO ADVERSE COMMENT: You agree that during your employment with the Company
through the Termination Date and for at least two years 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 and Separation
Agreement. Likewise, the Company shall refrain, for a similar period of
time, from communicating any adverse comments relating to you and/or your
tenure with the Company or the circumstances leading to the execution of
this Retention and Separation 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, 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, and for the purposes of Section 8, those companies deemed to be
competitors to StorageTek are EMC and IBM.
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 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 and Separation Agreement.
CHANGE IN CONTROL: If during your employment with the Company, the Company
should be acquired under a "Change in Control" event as that term has been
defined in your Employment Agreement, then you will receive the full
severance benefit as defined in the Employment Agreement. If a "Change in
Control" event were to occur after your employment with the Company had
been terminated, but prior to midnight December 31, 2000, then you will
receive an additional severance payment equal to one-half times your
salary and one-half times your on plan MBO bonus, as they were in effect
on the Termination Date.
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 and Separation Agreement and the Employment
Agreement.
SETTELMENT AND RELEASE: The payments recited in this Retention and
Separation 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.
COMPANY RELEASE: The Company hereby irrevocably and unconditionally
releases and discharges you and your heirs, successors, and assigns
(separately and collectively, "Releasees"), jointly and individually, from
any and all claims, known or unknown, which it, its past and present
subsidiaries, divisions, officers, directors, agents, employees,
successors, and assigns have or may have against Releasees and any and all
liability which Releasees may have to it, whether denominated claims,
demands, causes of action, obligations, damages or liabilities arising
from any and all bases, however denominated, provided, however, that this
release does not affect any claims which are based on Releasees'
dishonesty in the performance of duties as an employee of the Company, nor
any claims which may arise after the execution of this Retention and
Separation Agreement. The Company further agrees that it will not file or
permit to be filed on its behalf any claim against you which is released
hereby
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.
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Xxxxxx X. Xxxxx Xxxxx X. Xxxxx
Chairman, President and
Chief Executive Officer
