Employment Agreement - Storage Technology Corp. and W. Russell Wayman
STORAGE TECHNOLOGY CORPORATION
2270 South 88th Street
Louisville, Colorado 80028-4309
February 17, 1995
W. Russell Wayman
5305 Gallatin Place
Boulder, CO 80303
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
CORPORATE VICE PRESIDENT, GENERAL COUNSEL & SECRETARY. 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 $200,000.00 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.
(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 40%. 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 $550.00 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
- 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
(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
/s/ W. Russell Wayman
February 27, 1995