January 24, 2000
Mr. Alain Andreoli
XX XXXXXX XXXX
XXXXXXX XXXX,
XXXXXX
Dear Alain,
I am pleased to extend to you an offer of Corporate Vice President, General
Manager for International Operations, Global Services, and e-Business effective
January 1, 2000, reporting directly to David Weiss, the Chairman or the Chief
Executive Officer or the President. The compensation and benefit package being
offered with this corporate officer position is outlined below, and is subject
to approval of the Board of Directors. Upon acceptance of your offer letter, you
will be asked to sign an Employment Agreement for Corporate Officers that will
further define benefits and responsibilities which will include the terms and
conditions contained in this offer letter. A draft of this agreement is
submitted for your review.
Your annual base salary will be $325,000, and you will be considered for a merit
increase effective January 2001. You will be eligible to participate in the
StorageTek MBO Plan. For 2000, your MBO target incentive will be 60% of your
base salary at the target level of performance, 120% at the stretch level. This
MBO incentive plan is measured based upon 75% for your geographic area
performance and 25% on corporate performance. Currently, a portion, 25%, of any
MBO bonus will be paid in the form of equity, including shares of common stock,
or common stock equivalents. The details of this plan will be contained in a
separate MBO document and will be jointly agreed upon by you and me. Your bonus
will be paid if earned, on the normal payment schedule in February 2001.
Also, subject to the approval of the Board of Directors, you will receive 7,500
shares of StorageTek restricted common stock at par value, $0.10 per share.
These 7,500 shares will vest six years from the date of grant, unless
accelerated. The vesting can accelerate to the first, second, and third
anniversaries of the grant date through accomplishment of certain objectives
through the year. You and I will jointly define the performance criteria for
these restricted shares.
Further, subject to the approval of the Board of Directors, StorageTek will
grant to you a stock option to purchase 200,000 shares of StorageTek common
stock, at a price to be determined on the day the option is granted. The option
will be granted pursuant to the terms and conditions of the Company's 1995
Equity Participation Plan which is attached for your review. 140,000 of the
stock options will vest in increments of 33%, 33%, and 34% on the first through
the third anniversaries of the grant. 60,000 of the stock options will vest on
the sixth anniversary of the date of grant; however, the vesting schedule for
these options may be accelerated based upon the appreciation of the StorageTek
stock price. A portion of the shares, 30,000 shares, will vest if the closing
price of a share of StorageTek common stock on the NYSE, for 20 consecutive
trading days, equals or exceed 150% of the closing price of the stock on the
date the stock is granted, as reported in The Wall Street Journal; and the
remaining 30,000 shares will be accelerated if the closing price of a share, for
20 consecutive trading days, equals or exceeds 200% of the closing price of the
stock on date the stock is granted.
Subject to the approval of the Board of Directors and then current market
conditions, you may participate in the annual Stock Option Plan. The current
allocation model projects annual options grants. The actual amount will be based
upon current methodology at the time of the grant.
As a corporate officer, you are expected to comply with the Corporate Officer
Ownership Guideline for corporate vice presidents, which is currently 2,500
shares. You have three (3) years to accumulate the shares. You need to retain
ownership of 2,500 shares or common stock equivalent, during the course of your
employment to comply with the Corporate Officer Ownership Guideline as amended
from time to time.
Appropriate passports and visa(s) will be obtained for you and your family, and
the cost paid for by StorageTek. Human Resources will assist you with the
development and filing of these applications.
StorageTek will also provide the relocation for you and your family from London
to Colorado in accordance with the attached international transfer policy. The
policy also includes repatriation benefits, if needed.
To assist you with your relocation, StorageTek will provide a forgivable loan
which will be grossed up for tax purposes, in the amount of $300,000 plus
imputed prime + 1%, forgiven over a three year period, in order for you to
obtain permanent housing in the United States. This loan will be payable when
and if you purchase a home in the Louisville area. If you leave StorageTek
voluntarily or StorageTek terminates your employment for cause at any time
during the term of the loan for reasons other than change of control, you will
be responsible for repayment of the loan including tax gross- up, pro-rated for
the period of time you were in the position, at a rate of 8.33% per quarter. Any
tax gross-up due will be based upon actual gross-up amounts paid and incurred as
of that point in time.
StorageTek will directly pay into the French Social Security System on your
behalf to provide you coverage for disability and pension for a period of up to
three years beginning upon your date of transfer to the United States while you
are employed by StorageTek. Attachment #1 lists the agreed categories of
coverage and amounts estimated based upon your actual earnings. It is understood
the amounts will be adjusted every year with your earnings growth. If you leave
StorageTek voluntarily or StorageTek terminates your employment for cause at any
time during the three year period, you will be responsible for repayment of all
monies paid on your behalf, pro-rated for the period of time you were in the
position. Your maximum repayment exposure is $ 100,000.
StorageTek also offers a deferred compensation program. Under this program you
may defer up to 50% of your base salary and 75% of your bonus amount. Your
deferred income is credited with an interest rate equal to the ten-year T-Bill
rate plus 2.5 points. You will be provided further information regarding this
program.
You are also eligible to participate in the 401(k) plan immediately upon
transfer and begin contributions in the next available payroll cycle. You may
defer up to 18 percent of your base income into the 401(k) plan. StorageTek will
match 100 percent of the first three percent of your annual base pay and 50
percent of the next four percent of your base pay. You will have immediate
ownership (be fully vested) of the first three percent match. StorageTek's 50
percent match of your next four percent contribution will be vested after two
years of service.
You will receive life insurance coverage in the amount of three times your
initial base salary effective January 1, 2000. Subject to approval by the Board
of Directors, $850,000 of this coverage will be provided through an individually
owned life insurance coverage with the premium paid by the Company. Your group
term life insurance coverage will be $50,000. The individually owned policy is a
universal life policy that you own and that earns cash surrender value. A member
of StorageTek's compensation team will contact you regarding enrollment after
your employment date.
As a corporate vice president, you are eligible to receive severance benefits
under the terms of the Corporate Officer Agreement, which is attached for your
review.
In addition, the following executive perquisites are currently in effect for
corporate officers:
o First class air travel domestically, business class internationally.
o Financial and tax consulting expenses up to 1% of your base pay annually.
As part of your relocation benefit, StorageTek will pay for your tax preparation
for the 3 year period in France, the UK and the USA.
o Car allowance for a leased-quality vehicle of $550.00 per month, plus
reimbursement for maintenance and insurance.
o Executive vacation program allowing vacation as business conditions dictate.
There is no defined limit, and therefore, no vacation accrual.
o Supplemental executive health insurance program which will reimburse
qualified health and welfare expenses for you and your family which are not
covered by our standard plan. This has an annual limitation of $5,000.00.
You will be eligible for the standard United States benefits package upon your
date of transfer to the United States. While in Europe (until your transfer
date), you will remain entitled to your current benefits package, including
medical, insurance, housing, social security, pension, autos, etc. ( no
duplicate but continued benefits ).
You will be eligible for reimbursement of your maternity medical expenses that
occur in the US at the same level available to you in the UK through your
participation in the US medical plan, combined with the $5000 officer medical
benefit and any supplemental reimbursement that may be needed to keep you whole
with the UK benefit currently available to you.
We will honor your current assignment agreement (France to the UK) relative to
your tax situation, and provide protection for tax exposure that results of your
subsequent relocation from the UK to the US. We will evaluate your tax situation
during your assignment in the UK assuming there is no significant additional
cost to STK.
The offer is contingent upon your signing StorageTek's proprietary rights
agreement and identification of pre-employment commitments form which are
enclosed for your review. These enclosures define your obligations to StorageTek
with regard to disclosure and dissemination of confidential information,
ownership of intellectual property, disclosure of existing obligations and
commitments, and non-raiding obligations.
Please review and sign the enclosed documents, and return them along with a
signed acceptance copy of this letter in the enclosed self-addressed stamped
envelope.
If you have any questions regarding the conditions of this offer, please do not
hesitate to contact me at XXX-XXX-XXXX or Karen Niparko at XXX-XXX-XXXX. This
offer is valid through January 27th, 2000. If you accept this offer, your date
of transfer, as we discussed, will be approximately April 2000.
I look forward to working with you as a key member of the StorageTek team!
Very truly yours,
David Weiss
Chairman, Chief Executive Officer and President
Enclosures:
Acceptance Copy
Proprietary Rights Agreement
1995 Equity Participation Plan
Employment Agreement for Corporate Officers
International Assignment Policy
I accept the offer as outlined above and understand that my acceptance does not
create an employment contract and the detailed terms of my employment contract
will be agreed following appropriate legal advise.
Alain Andreoli Date