STORAGE TECHNOLOGY CORPORATION
2270 South 88th Street
Louisville, Colorado 80028-4309
(303) 673-5151
StorageTek
February 17, 1995
David E. Weiss
6900 Pawnee Way
Longmont, CO 80503
Dear David
This letter (the 'Agreement') sets forth the terms and conditions of your
employment with Storage Technology Corporation (the 'Company'). In
consideration of your employment by the Company on the terms and conditions
set forth below, and the mutual covenants and agreements contained herein,
you and the Company agree as follows:
1. Position: You will be employed full-time by the Company as
EXECUTIVE VICE PRESIDENT SYSTEMS DEVELOPMENT. You will report to the Chief
Executive Officer of the Company, or such other officer as he or she may
designate from time to time, and perform such duties as may be assigned you
from time to time. During the Employment Term (as herein defined), you
shall devote your entire working time, attention and energies to the
business of the Company. Except for personal investments, which shall not
conflict with the business of the Company, you shall not engage in any other
business activity or activities that require personal services by you that
may conflict with the proper performance of your duties hereunder.
2. Employment. The term of your employment pursuant to this
agreement (the 'Employment Term'), is effective as of November 16, 1994, and
shall thereafter continue on an 'at will' basis at the salary and terms
contained herein unless otherwise modified by the chief executive officer
('CEO') or his or her designee.
3. Base Compensation. For your services during the Employment Term,
the Company will pay you an annual base salary, effective November 15, 1994,
of $250,000.00 per year. Such salary shall be payable in installments in
accordance with the regular payroll policies of the Company in effect from
time to time during the Employment Term. The amount of your base salary may
be adjusted either upward or downward by the Company from time to time
during the Employment Term.
4. Bonuses.
(a) MBO Bonus Program. The Company currently maintains a
Management By Objective Bonus Program (the 'MBO Program'). During the
Employment Term, you shall be eligible for such bonuses as may be
established from time to time in accordance with the MBO Program by the
Company's Board of Directors (the 'Board'). For 1994, the Board has
established for you an On Plan Bonus potential percentage of 50%. Such
percentage may be adjusted either upward or downward for subsequent years
during the Employment Term. Any payments under the MBO Program shall be
made in accordance with the provisions of, and under the conditions
contained in, the MBO Program and the terms of any bonus award authorized
for you by the Board.
5. Termination of Employment.
(a) Termination Without Cause. If, during the Employment Term,
the Company elects to terminate your employment without 'Cause' (as that
term is defined in paragraph 5(d)), except for terminations covered by the
provisions of 5(b), or if you should die without Cause existing at such
time, you shall be entitled to receive, as a severance payment, a payment
equal to the sum of (i) your then current rate of annual base salary and
(ii) 100% of your On Plan Bonus potential percentage under the MBO Program
for the year of termination (whether or not such bonus would be otherwise
payable). Such amount shall be paid to you in a cash lump sum within thirty
days after your termination of employment pursuant to this paragraph 5(a).
In addition, you shall be entitled to exercise any vested stock options then
held to acquire shares of Common Stock in accordance with the Option
Agreement.
(b) Termination in the Event of Sale, Merger or Change of
Control. If, during the Employment Term, the Company is sold, or merged
with or into another company (in a transaction in which the Company is not
the surviving entity), or in which the stockholders of the Company
immediately prior to the merger own 50% or less of the Company after the
merger, or all or substantially all of the assets of the Company are sold,
or more than 25% of the outstanding voting capital stock of the Company is
acquired by another person or persons (as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) acting as a
group, (any of which events is referred to hereinafter as a 'Change in
Control'), and your employment is terminated either by you for any reason or
by the Company without Cause and such termination occurs within 24 months
after the date of any such Change in Control, then, upon such termination,
and subject to the provisions of 5(c) below, (i) the Company will pay you an
amount equal to two times your annual base salary then in effect, plus two
times 100% of your On Plan Bonus under the MBO Program based on your annual
salary and On Plan Bonus potential percentage in effect immediately prior to
the Change in Control (which shall be calculated as if the Company meets its
plan for such year and which shall be payable whether or not the Company
does in fact meet its plan), (ii) all outstanding stock options shall fully
vest and become exercisable in full, and (iii) the Company's right to
repurchase shall terminate with respect to any stock earlier purchased by
you under the Company's 1987 Equity Participation Plan, and all such stock
shall become fully vested. In addition, after such termination of
employment, you shall be entitled to exercise all stock options in
accordance with the terms of the Option Agreements. To the extent you would
be entitled to payments or your rights to restricted stock or stock options
would vest not only pursuant to the terms of this section 5(b), but also
pursuant to the provisions of other section(s) of this agreement, or other
agreements with the Company, then such payments shall be deemed made and
such vesting shall be deemed to occur pursuant to the terms of such other
section(s) or other agreements, and not under the terms of this section
5(b).
(c) Limitation on Payments. In the event that the severance and
other benefits provided for in this Agreement or otherwise payable to you
(i) would constitute 'parachute payments' within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the 'Code') and (ii) but
for this section (c), would be subject to the excise tax imposed by Section
4999 of the Code, then such severance benefits shall be either (i) delivered
in full, or (ii) delivered as to such lesser extent which would result in no
portion of such severance benefits being subject to excise tax under Section
4999 of the Code, whichever of the foregoing amounts, taking into account
the applicable federal, state and local income taxes and the excise tax
imposed by Section 4999, results in the receipt by you on an after-tax
basis, of the greatest amount of severance benefits, notwithstanding that
all or some portion of such severance benefits may be taxable under Section
4999 of the Code. Unless you and the Company agree otherwise in writing,
any determination required under this section 5(c) shall be made in writing
by the Company's independent public accountants immediately prior to Change
of Control (the 'Accountants'), whose determination shall be conclusive and
binding upon you and the Company for all purposes. For purposes of making
the calculations required by this section 5(c), the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and
may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. You and the Company
shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under
this section. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
section 5(c).
(d) Termination for Cause. If the Company, during the Employment
Term, elects to terminate your employment for Cause, your employment will
terminate on the date fixed for termination by the Company (provided,
however, that if the Company so elects during the 24-month period following
a Change in Control, you shall be given prior notice and shall be permitted
to voluntarily terminate your employment pursuant to section 5(b) hereof, in
which case this section 5(d) shall be inapplicable). Following a
Termination for Cause under this section, the Company will not be obligated
to pay you any additional compensation, whether in the way of base
compensation, bonus or otherwise, other than the compensation due and owing
through the date of termination. 'Cause,' for purposes of this Agreement,
shall mean any of the following: (i) willful breach by you of any provision
of this Agreement or any other written agreement between you and the
Company; (ii) gross negligence or dishonesty in the performance of your
duties hereunder; (iii) engaging in conduct or activities or holding any
position that materially conflicts with the interest of, or materially
interferes with your duties owed to, the Company; (iv) engaging in conduct
that is materially detrimental to the business of the Company; or (v) any
intentional violation of Company policies applicable to employees of your
position with the Company.
6. Benefit Programs. You shall also be entitled to such benefits and
benefit programs that apply to you and your position as the Company and the
Board may adopt from time to time, in accordance with the provisions of such
programs then in effect. Certain presently existing benefit programs (which
may or may not remain in effect) are outlined below:
a. Life Insurance: Your life insurance coverage will be three
times your base salary.
b. Medical Coverage: You will have executive medical coverage.
This insurance covers 100% of your family's medical expenses up to $5,000
over our group insurance coverage annually. Qualified retirees will be
eligible to participate in the Officer Post-Retirement Medical Program at a
per-person cost equivalent to prevailing COBRA premiums.
7. Compensation Deferral: You will be able to defer your
compensation in accordance with the terms of our Executive Deferred
Compensation Plan.
8. Automobile: You will receive up to $750.00 Auto allowance per
month reimbursement on leased automobile payments and reimbursement for
regular maintenance and automobile insurance on your leased automobile.
Contact Marti Jordan (x33977) for more information on this program.
9. Miscellaneous Executive Perquisites: During your Employment Term,
you shall be eligible for the following:
- First class air travel as long as StorageTek is
profitable.
- Membership in an airline VIP club.
- Financial and tax counseling in an amount per year
equal to 1% of annual base salary.
10. Miscellaneous Provisions.
(a) Withholding. All payments to you pursuant to this Agreement
shall be subject to withholding of all amounts required to be withheld by
applicable Internal Revenue Service and State tax authorities by the Company
and shall be conditioned upon your submission of all information or
execution of all instruments necessary to enable the Company to comply with
such withholding requirements.
(b) Confidentiality Agreement. As a condition of your
employment, you have executed the Company's standard form of confidential
inventions and trade secrets agreement. You reaffirm that during the
Employment Term you will comply with all provisions of said agreement and
agree that you will enter into such modifications or amendments thereof as
the Company may reasonably request from time to time.
(c) Notice. Any notice required to be given in accordance with
the provisions of this Agreement shall be given in writing, either by
personal delivery or by causing such written notice to be mailed, first
class postage prepaid, in the United States mail to you at the address set
forth above or to the Company at its principal business address, or at such
other address for a party as shall be specified by like notice, provided
that notices of change of address shall be effective only upon receipt
thereof.
(d) Governing Law. This Agreement is entered into in accordance
with, and shall be interpreted pursuant to the provisions of, the internal
laws of the State of Colorado (without regard to conflict of law
principles).
(e) Severability. If any provision of this Agreement shall be
held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect or impair the validity or enforceability of the remaining
provisions of this Agreement, which shall remain in full force and effect in
accordance with their terms.
(f) Entire Agreement. This Agreement, together with the other
agreements referenced herein, embody the entire agreement between the
parties relating to the subject matter hereof, and supersede all previous
agreements or understandings, whether oral or written.
(g) Amendment of Agreement. This Agreement may not be modified
or amended, and no provision of this Agreement may be waived, except by a
writing signed by the parties hereto.
If this letter accurately sets forth the terms of our agreement relating to
your employment, please sign the enclosed copy of this letter in the space
provided below and return it to the Company.
Very truly yours,
/s/ Ryal R. Poppa
- ----------------------------
Ryal R. Poppa
Chairman and Chief Executive
Officer
/s/ David E. Weiss
------------------------
Name
March 1, 1995
------------------------
Date
Employment Agreement - Storage Technology Corp. and David E. Weiss
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