EXHIBIT 10.3
AGREEMENT
This Agreement (this "Agreement"), is made as of May 28, 2002, by and
between Nick Shahrestany, an individual ("Executive"), and Procom Technology,
Inc., a California corporation (the "Company").
RECITALS
WHEREAS, the Company and Executive are parties to that certain
Amended and Restated Employment Agreement dated October 28, 1996 (the
"Employment Agreement");
WHEREAS, the Company and Executive desire that the Employment
Agreement and Executive's employment with the Company terminate effective as of
the date of this Agreement; and
WHEREAS, the Company and Executive desire to set forth certain
agreements and understandings concerning the termination of Executive's
employment, all as provided in this Agreement.
AGREEMENT
In consideration of the covenants undertaken and the releases contained
in this Agreement, the Company and Executive agree as follows:
1. Termination of Employment and Employment Agreement. Effective as of
the date of this Agreement, (a) Executive's employment with the Company is
terminated and (b) the Employment Agreement is terminated, of no further force
or effect and superseded in its entirety by this Agreement, it being understood
and agreed that Executive shall not be entitled to any payments or benefits
whatsoever from the Company under the Employment Agreement or otherwise, except
as expressly provided in this Agreement. Without limiting the foregoing,
Executive shall not be entitled to receive compensation in respect of
Executive's status as a director of the Company at any point on or after the
date of this Agreement.
2. Term. The term of this Agreement shall begin on the date of this
Agreement and end on May 29, 2005 (the "Term").
3. Cash Payment. Not later than 5 p.m. Pacific Standard Time on May
31, 2002, Executive shall notify the Company in writing of its election to
receive either the monthly payments in accordance with Section 3(a) below or the
one-time, lump sum payment in accordance with Section 3(b) below. Executive's
election shall be irrevocable once received by the Company.
(a) Monthly Payments. If elected by Executive pursuant to this
Section 3, the Company shall pay Executive the monthly sum of $18,750,
less any legally required withholding and any other deductions required
under applicable law. The first such payment shall be made to Executive
on June 28, 2002, with each additional payment
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made on the 28th day of each succeeding month during the Term (or if
such day is a national holiday, Saturday or Sunday, then on the first
business day thereafter), such that the last monthly payment payable to
Executive under this Section 3(a) shall be made to Executive on May 28,
2005 for a total of 36 payments, provided, however, that the unpaid
amount of such monthly payments shall become immediately due and
payable: (i) upon a Change of Control (as hereinafter defined); or (ii)
in the event the Company improperly and unjustifiably fails to make a
required payment under this Agreement within sixty days following the
Company's receipt from Executive of written notice of such failure. A
Change of Control shall mean a merger or consolidation involving the
Company, or sale or transfer of all or substantially all of the
Company's assets or stock, in each case following which the
shareholders of the Company immediately prior to such transaction no
longer own, directly or indirectly, a majority economic interest in the
Company.
(b) Lump-Sum Payment. If elected by Executive pursuant to this
Section 3, the Company shall make a one-time, lump sum payment to
Executive in the amount of $225,000, less standard withholding and any
other deductions required under applicable law. Such payment shall be
made to Executive on or before May 31, 2002.
(c) Offsets. Notwithstanding any contrary provision of this
Agreement, the Company shall not have any right to offset against any
payment due hereunder any claims of Company against Executive not
released pursuant to this Agreement, other than claims or other amounts
that are the subject of a final judgment of a court of competent
jurisdiction.
4. Benefits.
(a) Except as provided in this Agreement, for the duration of the
Term of this Agreement, Executive shall be entitled to participate in
the Company's medical, dental and life insurance plans on the same
basis (i.e. at the same cost, if any, to Executive) on which Executive
participated in such plans as of immediately prior to the date of this
Agreement.
(b) Executive expressly acknowledges and agrees that he shall not
be entitled to any other benefits or perquisites from the Company
whatsoever, including, without limitation, any automobile allowances,
use of a Company credit card and/or cellular phone. Upon Executive's
execution of this Agreement, Executive shall deliver to the Company all
Company credit cards, cellular telephones, computer equipment or other
items owned by the Company that are in the possession or control of
Executive.
5. Confidentiality of Trade Secrets.
(a) Executive shall not, at any time on or after the date of this
Agreement, disclose, directly or indirectly, to any person or entity or
use for Executive's own benefit any trade secrets or confidential
information relating to the Company's business, operations, marketing
data, business plans, strategies, employees, negotiations
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and contracts with other companies, or any other subject matter
pertaining to the business of the Company or any of its clients,
customers, consultants or licensees, known, learned or acquired by
Executive during the period of Executive's employment by the Company
(collectively, "Confidential Information").
(b) Executive shall promptly deliver to the Company upon execution
of this Agreement or at any time the Company may so request, all
memoranda, notes, records, reports, manuals, drawings, blueprints,
Confidential Information and any other documents of a confidential
nature belonging to the Company, including all copies of such material
which Executive may then possess or have under Executive's control,.
Upon termination of Executive's employment by the Company pursuant to
this Agreement, Executive shall not take any document, data or other
material of any nature containing or pertaining to the proprietary
information of the Company.
6. Non-Solicitation.
(a) Non-Solicitation of Employees. For a period of two years from
the date of this Agreement, Executive will not solicit any of the
employees, agents or independent contractors of the Company to leave
the employ of the Company for a competitive company or business.
However, Executive may solicit any employee, agent or independent
contractor who voluntarily terminates his or her employment with the
Company after a period of 120 days have elapsed since the termination
date of such employee, agent or independent contractor. None of the
foregoing shall be deemed a waiver of any and all rights and remedies
the Company may have under applicable law.
(b) Non-Solicitation of Customers. For a period of two years from
the date of this Agreement, Executive shall not directly or indirectly,
either for Executive or for any other person or entity, solicit any
person or entity to terminate such person's or entity's contractual
and/or business relationship with the Company, nor shall Executive
interfere with or disrupt or attempt to interfere with or disrupt any
such relationship. None of the foregoing shall be deemed a waiver of
any and all rights and remedies the Company may have under applicable
law.
7. Release. Except for (i) those obligations created by or arising out
of this Agreement, (ii) any rights under any indemnification agreement between
the Executive and the Company, (iii) any rights arising out of the certificate
of incorporation or bylaws of the Company, (iv) any indemnification rights
arising by statute, or (iv) any rights arising out of any stock option agreement
between the Company and Executive (each as in effect on the date of this
Agreement), Executive, on behalf of himself, his descendants, dependents, heirs,
executors, administrators, assigns, and successors, and each of them, hereby
covenants not to sue and fully releases and discharges Company and its parents,
subsidiaries and affiliates, past and present, and each of them, as well as
their trustees, directors, officers, agents, attorneys, insurers, executives,
stockholders, representatives, assigns, and successors, past and present, and
each of them, hereinafter together and collectively referred to as "Releasees,"
with respect to and from any and all claims, wages, demands, rights, liens,
agreements, contracts, covenants, actions, suits, causes of action, obligations,
debts, costs, expenses, attorneys' fees, damages, judgments,
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orders and liabilities of whatever kind or nature in law, equity or otherwise,
whether now known or unknown, suspected or unsuspected, and whether or not
concealed or hidden, which he now owns or holds or he has at any time heretofore
owned or held as against said Releasees, arising out of or in any way connected
with the Employment Agreement and/or Executive's employment with the Company,
his termination from employment with the Company, or any other transactions,
occurrences, acts or omissions or any loss, damage or injury whatever, known or
unknown, suspected or unsuspected, resulting from any act or omission by or on
the part of said Releasees, or any of them, committed or omitted prior to the
date of this Agreement including, without limiting the generality of the
foregoing, any claim under Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the
California Fair Employment and Housing Act, the California Family Rights Act, or
any claim for severance pay, bonus, sick leave, holiday pay, vacation pay, life
insurance, health or medical insurance or any other fringe benefit, workers'
compensation or disability.
Except for (i) those obligations created by or arising out of this
Agreement, (ii) any rights under any indemnification agreement between the
Executive and the Company, (iii) any rights arising out of the certificate of
incorporation or bylaws of the Company, (iv) any indemnification rights arising
by statute, or (iv) any rights arising out of any stock option agreement between
the Company and Executive (each as in effect on the date of this Agreement), the
Company hereby covenants not to sue and fully releases and discharges Executive
with respect to and from any and all claims, demands, rights, liens, agreements,
contracts, covenants, actions, suits, causes of action, obligations, debts,
costs, expenses, attorneys' fees, damages, judgments, orders and liabilities of
whatever kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected, and whether or not concealed or hidden, which
it now owns or holds or has at any time heretofore owned or held as against
Executive, arising out of or in any way connected with the Employment Agreement
and/or Executive's employment with the Company, his termination from employment
with the Company, or any other transactions, occurrences, acts or omissions or
any loss, damage or injury whatever, known or unknown, suspected or unsuspected,
resulting from any act or omission by or on the part of Executive committed or
omitted prior to the date of this Agreement. Notwithstanding the foregoing or
any contrary provision of this Agreement, the foregoing release of Executive by
the Company shall not extend to any claims that arise out of facts that are
finally adjudged by a court of competent jurisdiction to constitute a willful
breach of fiduciary duty or a crime under any federal, state or local law.
It is the intention of Executive and the Company in executing this
instrument that the same shall be effective as a bar to each and every claim,
demand and cause of action hereinabove specified. In furtherance of this
intention, each of the Company and Executive hereby expressly waives any and all
rights and benefits conferred upon it or him by the provisions of SECTION 1542
OF THE CALIFORNIA CIVIL CODE and expressly consents that this Agreement shall be
given full force and effect according to each and all of its express terms and
provisions, including those related to unknown and unsuspected claims, demands
and causes of action, if any, as well as those relating to any other claims,
demands and causes of action hereinabove specified. SECTION 1542 provides:
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"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
Executive and Company each acknowledges that he or it understands the
significance and consequence of such release and such specific waiver of SECTION
1542.
8. Severability. If any provision of this Agreement or the application
thereof is held invalid, the invalidity shall not affect other provisions or
applications of the Agreement which can be given effect without the invalid
provisions or applications and to this end the provisions of this Agreement are
declared to be severable.
9. Entire Agreement. This instrument constitutes and contains the
entire agreement and understanding of the parties with respect to the matters
addressed in this Agreement between the parties, and supersedes and replaces all
prior negotiations and all agreements proposed or otherwise, whether written or
oral, concerning the subject matters of this Agreement (including, without
limitation, the Employment Agreement). This is an integrated document.
10. Counterparts. This Agreement may be executed in counterparts, and
each counterpart, when executed, shall have the efficacy of a signed original.
Photographic copies of such signed counterparts may be used in lieu of the
originals for any purpose.
11. Arbitration. Any dispute or controversy between Executive, on the
one hand, and the Company on the other hand, in any way arising out of, related
to, or connected with this Agreement or the subject matter of this Agreement, or
otherwise in any way arising out of, related to, or connected with Executive's
employment with the Company or the termination of Executive's employment with
the Company, shall be resolved through final and binding arbitration in Orange
County, California, pursuant to California Civil Procedure Code ss.ss.
1282-1284.2, with the exception of Sections 1283 and 1283.05. In the event of
such arbitration, the prevailing party shall be entitled to recover all
reasonable costs and expenses incurred by such party in connection with such
arbitration, including attorneys' fees. The nonprevailing party shall also be
solely responsible for all costs of the arbitration, including, but not limited
to, the arbitrator's fees, court reporter fees, and any and all other
administrative costs of the arbitration, and promptly shall reimburse the
prevailing party for any portion of such costs previously paid by the prevailing
party. Any dispute as to the reasonableness of costs and expenses shall be
determined by the arbitrator.
Except as may be necessary to enter judgment upon the award or to
the extent required by applicable law, all claims, defenses and proceedings
(including, without limiting the generality of the foregoing, the existence of
the controversy and the fact that there is an arbitration proceeding) shall be
treated in a confidential manner by the arbitrator, the parties and their
counsel, and each of their agents, and employees and all others acting on behalf
of or in concert with them. Without limiting the generality of the foregoing, no
one shall divulge to any
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third party or person not directly involved in the arbitration the contents of
the pleadings, papers, orders, hearings, trials, or awards in the arbitration,
except as may be necessary to enter judgment upon an award as required by
applicable law. Any court proceedings relating to the arbitration hereunder,
including, without limiting the generality of the foregoing, to prevent or
compel arbitration or to confirm, correct, vacate or otherwise enforce an
arbitration award, shall be filed under seal with the court, to the extent
permitted by law. Notwithstanding the foregoing, either party may seek
provisional injunctive relief in court pending final resolution or the
arbitration proceeding.
12. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
13. Notices. All notices, requests, demands, claims and other
communications made in connection with this Agreement will be in writing. Any
notice, request, demand, claim or other communication in connection with this
Agreement shall be deemed duly given if it is sent by registered or certified
mail, return receipt requested, postage prepaid and addressed to the intended
recipient as set forth below:
If to the Company:
Procom Technology, Inc.
58 Discovery
Irvine, CA 92618
Attention: Alex Razmjoo, Chief Executive Officer
If to the Executive:
Nick Shahrestany
28 Shoreridge
Newport Coast, CA 92657
Any party may send any notice, request, demand, claim or other communication in
connection with this Agreement to the intended recipient at the address set
forth above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail or electronic mail),
but no such notice, request, demand, claim or other communication sent using
such other means shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any party may change the address
to which notices, requests, demands, claims and other communications in
connection with this Agreement are to be delivered by giving the other parties
notice in the manner set forth in this Agreement.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of California without giving
effect to any choice
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or conflict of law provision or rule (whether of the State of California or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California.
15. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by Buyer
and the Sellers. No waiver by any party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence.
16. Construction; Access to counsel. The parties have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement. Executive has been
advised by his own counsel in connection with the negotiation and Executive's
execution of this Agreement.
17. Right to Injunctive and Equitable Relief. Executive's obligations
not to disclose or use Confidential Information and to refrain from the
solicitations described in Section 6 are of a special and unique character which
gives them a particular value. The Company cannon be reasonably or adequately
compensated for damages in an action at law in the event Executive braches such
obligations. Therefore, Executive expressly agrees that the Company shall be
entitled to injunctive and other equitable relief without bond or other security
in the event of such breach in addition to any other rights or remedies which
the Company may possess or be entitled to pursue. Furthermore, the obligations
of Executive under Sections 5 and 6 and the rights and remedies of the Company
under this Section 17 are cumulative and in addition to, and not in lieu of, any
obligations, rights or remedies created by applicable law relating to
misappropriation or theft of trade secrets or Confidential Information.
18. Assignment. Executive shall have the right to assign all or any
portion of the payments required to be made to Executive hereunder; provided,
that the Company shall not be obligated to make any payment due hereunder to
Executive to any party other than Executive unless the Company shall have
received from Executive a written notice of such assignment not less than ten
days prior to the date payment is required to be made hereunder and such notice
includes reasonably specific payment instructions for the assignee; and provided
further, the Company assumes no obligation or liability for any inaccuracy of
such payment instructions. Notwithstanding the foregoing, no assignment by
Executive of all or any payments due Executive hereunder shall relieve Executive
from any covenant or obligation of Executive hereunder.
19. Public Statements. Executive agrees that, without the prior written
consent of the Company, he shall not directly or indirectly make any public
disclosure, or any statements to or otherwise communicate with any reporter or
representative of the media, including, without limitation, any trade, technical
or financial publication, television or cable station, newspaper, magazine,
internet or other medium, or any member of the financial community, including,
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without limitation, any financial analyst in each case with respect to any
matter pertaining to the Company or the termination of Executive's employment
pursuant to this Agreement.
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I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full understanding
of its consequences.
EXECUTED on this __ day of May, 2002.
"EXECUTIVE"
/s/ Nick Shahrestany
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Name: Nick Shahrestany
"COMPANY"
Procom Technology, Inc.
a California corporation
By: /s/ Alex Razmjoo
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___________________________________
Its: CHIEF EXECUTIVE OFFICER
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