Document:

EXHIBIT 10.13

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT,
dated effective as of June 1, 2003, is entered into by and between Ciprico
Inc., a Delaware corporation (the “Company”) and Robert H. Kill, a Minnesota
resident (“Executive”).

 

WHEREAS, the Company
desires to employ Executive upon and subject to the terms and conditions set
forth in this agreement (“Agreement”), and Executive desires to render services
for the Company on such terms and conditions.

 

NOW, THEREFORE, in
consideration of the premises and the respective undertakings of the Company
and Executive set forth below, the Company and Executive agree as follows:

 

1.             Employment.  The Company hereby employs Executive as
Chief Executive Officer and President and other such positions of divisions or
subsidiaries as assigned by the Board of Directors, and Executive accepts such
employment and agrees to perform services for the Company, for the period and
upon the other terms and conditions set forth in this Agreement.

 

2.             Term of Employment.  The term of Executive’s employment hereunder
shall commence on the effective date hereof and shall continue for an initial
term of two (2) years (“Initial Term”). 
Prior to and within ninety (90) days of a date that is one year prior to
the scheduled termination date of this Agreement, the Board of Directors, or
committee thereof, shall review Executive’s goals and objectives and notify
Executive in writing whether the Agreement will be extended for an additional
one year beyond the scheduled termination date or notification date, whichever
is later, or terminate as scheduled.  If
Executive chooses not to extend the Agreement, Executive must notify the
Company in writing within thirty (30) days of Executive’s receipt of the
extension.  Notwithstanding anything to
the contrary in this Agreement, this Agreement may be terminated as provided in
Section 8 below.  The Initial Term
and additional terms are collectively referred to as “Term of Employment”).

 

3.             Position and Duties.

 

3.01         Service
with Company.  During his Term of Employment,
Executive agrees to perform such reasonable employment duties,  consistent with the terms of this
Agreement and the offices held by Executive as provided in section 1
above, as the Board of Directors of the Company shall assign to him from time to
time.  Such duties and employment
responsibilities is set forth in Exhibit A and shall be performed in accordance
with the Company’s rules, regulations and instructions now in force or which
may be adopted by the Company in the future.

 

3.02         Performance
of Duties.  During his Term of
Employment, the Executive agrees to serve the Company to the best of his
ability.  The Executive shall have
active involvement and be fully committed to the business and affairs of the
Company.  Executive hereby confirms that
he is under no contractual commitments inconsistent with his obligations set
forth in this Agreement.  During his
Term of Employment, Executive shall not render or perform services for any
other corporation, firm, entity or person, nor will he become involved in the
operations or management of any other commercial corporation, firm, entity or
person, that is in competition with the business of the Company.

 

3.03         Noncompetition.  In consideration of the payments to be made
to the Executive under this Agreement as provided in Sections 4.05 and 8.02
which the Executive acknowledges constitute new and valuable consideration, the
Executive hereby covenants and agrees that during the Term of Employment, and
for a period of twenty-four (24) months following the termination of
Executive’s employment for any reason (the “Restricted Period”), the Executive
shall not, directly or indirectly, own, manage, operate, control, act as an
advisor or consultant to, or participate in, the ownership, management,
operation, or control of any business involving the digital media storage
device and related services in any geographic market served by the Company
during the Restricted Period; provided, however, that the foregoing shall not
prevent the Executive from owning not more than two percent (2%) interest in
any entity engaged in such a competing business whose securities are traded on
any securities exchange or in the over-the-counter markets.

 

3.04         Nonsolicitation.  During the term of this Agreement or any
successor employment relationship between Executive and the Company, and for a
period of twelve (12) months following the termination of the employment
relationship between Executive and the Company, Executive agrees that he will
not solicit or accept, either directly or indirectly, as an individual or
through a partnership, corporation, or other entity, any employee of the
Company or consultant under contract with the Company for employment or any
other arrangement for compensation to perform services.

 

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4.             Compensation.

 

4.01         Base
Salary           As base compensation
for all services to be rendered by the Executive under this Agreement during
the Term of Employment, the Company shall pay to Executive a minimum monthly
base salary of $16,500 per month in 2003, which salary shall be paid in
accordance with the Company’s normal payroll procedures and policies and be
reviewed annually by the Board of Directors.

 

4.02         Stock
Options.  Executive shall be
granted, in 2003, an option to purchase
              
shares of the Company’s common stock, par value $.01 per share, pursuant to the
Company’s Stock Option Plan, at an exercise price equal to the closing bid
price for such common stock on the day of issuance consistent with past
practices.  All such stock options shall
be granted under, and pursuant to all terms and conditions of, the Qualified
Stock Option Plan.  The Board may
consider additional grants annually. 
These stock options will vest in accordance with the terms of the
Qualified Stock Option Plan.

 

4.03         Benefits.  Executive shall be entitled to such
company-sponsored benefits as are provided to executive employees of the
Company, subject to the terms and conditions of the applicable policies and/or
plans.

 

4.04         Expenses.  The Company will pay or reimburse Executive
for all reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the presentment of
appropriate vouchers in accordance with the Company’s normal policies for
expense verification.  Executive shall
be entitled to reimbursement for educational expenses approved by the Board of
Directors.

 

4.05         Deferred
Compensation.  The Company shall
maintain on its books a Deferred Compensation Account for Executive, with
amounts credited as set forth in the Company’s Deferred Compensation Plan.  As soon as practicable, the Company shall
credit to Executive’s Deferred Compensation Account the sum of Twenty-Five
Thousand Dollars ($25,000).

 

4.06         Development.  Executive will receive an annual written
performance review from the Board of Directors, or committee thereof, and the
Company will pay for any developmental, learning or training experiences
recommended by the Board of Directors or committee thereof.

 

4.07         Bonuses.  Executive shall be entitled to participation
in the Company’s management bonus program as defined by management and approved
by the Board.

 

5.             Confidential
Information.  Except as permitted or
directed by the Company’s Board of Directors, during the Term of Employment or
at any time thereafter, Executive shall not divulge, furnish or make accessible
to anyone or use in any way (other than in the ordinary course of the business
of the Company) any confidential or secret knowledge or information of the Company
which Executive has acquired or become acquainted with or will acquire or
become acquainted with prior to the termination of the Term of Employment,
whether developed by himself or by others, concerning any trade secrets,
confidential or secret designs, processes, formulae, plans, devices or material
(whether or not patented or patentable) directly or indirectly useful in any
aspect of the business of the Company, any customer or supplier lists of the
Company, any confidential or secret development or research work of the
Company, or any other confidential information or secret aspects of the
business of the Company.  Executive
acknowledges that the above-described knowledge or information constitutes a
unique and valuable asset of the Company and represents a substantial
investment of time and expense by the Company and its predecessors, that any
disclosure or other use of such knowledge or information other than for the
sole benefit of the Company would be wrongful and would cause irreparable harm
to the Company.  Both during and after
the Term of Employment, Executive will refrain from any act or omissions that
would reduce the value of such knowledge or information to the Company.  The foregoing obligations of
confidentiality, however, shall not apply to any knowledge or information which
is now published or which subsequently becomes generally publicly known in the
form in which it was obtained from the Company, other than as a direct or
indirect result of the breach of this Agreement by Executive.  It is hereby acknowledged that it is not the
intention of the foregoing provisions to preclude the Executive from securing
gainful employment with subsequent employers who are not competitors of the
Company or who would otherwise have no reasonable commercial use of the above
described knowledge or information, but only to protect the Company’s
confidential and proprietary information or knowledge.

 

6.             Ventures.  If, during the Term of Employment, Executive
is engaged in or associated with the planning or implementing of any project,
program or venture involving the Company and a third party or parties, all
rights in such project, program or venture shall belong to the Company.  Except as formally approved by the Company’s
Board of Directors, Executive shall not be entitled to any interest in such
project, program or venture or to any commission, finder’s fee or other
compensation in connection therewith other than the salary or other
compensation to be paid to Executive as provided in this Agreement.

 

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7.             Patent, Copyrights
and Related Matters.

 

7.01         Disclosure
and Assignment.  Executive will
promptly disclose in writing to the Company complete information concerning
each and every invention, discovery, improvement, device, design, apparatus,
practice, process, method or product, whether patentable or not, made,
developed, perfected, devised, conceived or first reduced to practice by
Executive, either solely or in collaboration with others, during the Term of Employment,
or within six months thereafter, whether or not during regular working hours,
relating to any phase of the business of the Company conducted at such time
(hereinafter referred to as “Developments”). 
Executive, to the extent that he has the legal right to do so, hereby
assigns and agrees to assign to the Company and all of the Executive’s right,
title and interest in and to any and all of such Developments.

 

7.02         Future
Developments.  As to any future
Developments made by Executive and which are first conceived or reduced to
practice during the Term of Employment, or within six months thereafter, but
which are claimed for any reason to belong to an entity or person other than
the Company, Executive will promptly disclose the same in writing to the
Company and shall not disclose the same to others if the Company, within sixty
(60) days thereafter, shall claim ownership of such Development under the terms
of this Agreement.  If the Company makes
such claim, Executive agrees that, insofar as the rights (if any) of Executive
are involved, it will be settled by arbitration in accordance with the rules of
the American Arbitration Association. 
The locale of the arbitration shall be Minneapolis, Minnesota (or other
locale convenient to the Company’s principal executive offices).  If the Company makes no such claim,
Executive hereby acknowledges that the Company has made no promise to receive
and hold in confidence any such information disclosed by Executive.

 

7.03         Limitation
on Section 7.01 and 7.02.  The provisions
of section 7.01 and 7.02 shall not apply to any Development meeting the
following conditions:

 

(a)           such Development was developed entirely on
Executive’s own time;

 

(b)           such Development was made without the use of
any Company equipment, supplies, facility or trade secret information; and

 

(c)           such Development does not relate (i)
directly to the business of the Company, or (ii) of the Company’s actual or
demonstrably anticipated research or development.

 

7.04         Executive
Assistance.  Executive agrees to
assist Company in obtaining patents or copyrights on any Developments assigned
to the Company that Company, in its sole discretion, seeks to patent or
copyright.  Executive also agrees to
sign all documents and do all things deemed necessary by Company to obtain
and/or maintain such patens or copyrights, to assign them to Company, and to
protect them against infringement.  The
obligations of this Section 7 are continuing and shall survive the
termination of Executive’s employment with Company.

 

7.05         Appointment
of Agent.  Executive irrevocably
appoints the Company to act as Executive’s agent and attorney in fact to
perform all acts necessary to obtain/or maintain patents or copyrights to any
Developments assigned by Executive to Company under this Agreement if (i)
Executive refuses to perform those acts or (ii) is unavailable, within the
meaning of the United States patent and copyright laws.  Executive acknowledges that the grant of the
foregoing power of attorney is coupled with an interest and shall survive the
death or disability of Executive and the termination of Executive’s employment
with Company.

 

7.06         Notice
and Acknowledgment.  Executive
acknowledges that this section of this Agreement does not apply to a
Development for which there was no equipment, supplies, facilities or trade
secret information of the Company used and which was developed entirely on
Executive’s own time, and which does not relate directly to the business of the
Company or the Company’s actual or demonstrably anticipated research or
development, or which does not result from any work performed by Executive for
the Company.

 

8.             Termination.

 

8.01         Grounds
for Termination.  Notwithstanding
any other provision of this Agreement to the contrary, this Agreement will
terminate prior to the end of the Term of Employment under the following
circumstances:

 

(a)           By
mutual agreement of Executive and the Company;

 

(b)           Immediately
upon the death of Executive;

 

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(c)           Immediately upon the bankruptcy or
insolvency of the Company;

 

(d)           Immediately, in the event of (i) Executive’s
personal dishonesty, willful misconduct, breach of fiduciary duty, intentional
failure to perform stated duties, willful violation of any laws (other than
minor traffic violations or similar offenses), or material breach of the
policies or procedures of the Company; and

 

(e)           Upon Executive’s inability to perform the
essential functions of his position due to physical or mental disability, with
or without reasonable accommodation, as determined in the good faith judgment
of the Board of Directors, and such inability continues for a period consistent
with Company policy as may otherwise be required by applicable law.

 

Notwithstanding any termination of this Agreement, Executive, in
consideration of his employment hereunder to the date of such termination,
shall remain bound by the provisions of this Agreement which specifically
relate to periods, activities or obligations upon or subsequent to the
termination of Executive’s employment.

 

8.02         Severance
Payment for Termination Following a Change in Control.  The rights and obligations of the Company
and Executive as to a termination following a Change of Control (as defined in
a Change of Control Agreement) are governed by a Change of Control Agreement
between the Company and Executive dated effective as of April 17,
2003.  In the event of any
inconsistencies between this Agreement and the Change of Control Agreement, the
Change of Control Agreement shall control.

 

8.03         Surrender
of Records and Property.  Upon
termination of his employment with the Company, Executive shall deliver
promptly to the Company all records, manuals, books, blank forms, documents,
letters, memoranda, notes, notebooks, reports, data, tables, calculations or
copies thereof, which are the property of the Company or which relate in any
way to the business, products, information of the Company, including, but not
limited to, all documents which in whole or in part contain any trade secrets
or confidential information of the Company, which in any of these cases are in
his possession or under his control. 
Provided, however, that Executive shall be entitled to retain items of
sentimental value, copies of which shall be provided to the Company at the
request of the Company and at the Company’s expense.

 

9.             Miscellaneous.

 

9.01         Governing
Law.  This Agreement is made under
and shall be governed by and construed in accordance with the laws of the State
of Minnesota.

 

9.02         Prior
Agreements.  This Agreement,
together with the Change of Control Agreement, contain the entire Agreement of
the parties relating to the subject matter hereof and supersede all prior
agreements and understandings with respect to such subject matter, and the
parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement which are not set forth herein.

 

9.03         Withholding
Taxes.  The Company shall  withhold from all salary, bonus, severance
pay or other benefits payable under this Agreement all federal, state, city or
other taxes as shall be required pursuant to any law or governmental regulation
or ruling.

 

9.04         Amendments.  No amendment or modification of this
Agreement shall be deemed effective unless made in writing and signed by the
parties hereto.

 

9.05         No
Waiver.  No term or condition of
this Agreement shall be deemed to have been waived, nor shall there be any
estoppel to enforce any provisions of this Agreement except by a statement in
writing signed by the party by whom enforcement of the waiver or estoppel is
sought.  Any written waiver shall not be
deemed a continuing waiver unless specifically stated, shall operate only as to
the specific term or condition waived and shall not constitute a waiver of such
term or condition for the future or as to any act other than specifically
waived.

 

9.06         Severability.  To the extent any term or provision of this
Agreement shall be invalid or unenforceable, the term or provision shall be
considered deleted herefrom and the remaining term and provision of the
Agreement shall be unaffected and shall continue in full force and effect.  In furtherance and not in limitation of the
foregoing, should the duration or geographical extent of, or business
activities covered by, any provision of this Agreement be in excess of that
which is valid and enforceable under applicable law, then such provision shall
be construed to cover only that duration, extent or activities which may
validly and enforceable be covered. 
Executive acknowledges the uncertainty of the law in this respect and
expressly stipulates that this Agreement be given the construction which
renders its provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.

 

4

 

9.07         Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Company’s successor or assigns.  This Agreement shall not be assignable, in
whole or in part, by Executive without prior written consent of the Company.

 

9.08         Injunctive
Relief.  Executive agrees that it
would be difficult to compensate the Company fully for damages for any
violation of the provisions of this Agreement, including without limitation the
provisions of Sections 3, 5, 6 and 7. 
Accordingly, Executive specifically agrees that the Company shall be
entitled to temporary and permanent injunctive relief in any court of competent
jurisdiction, to enforce the provisions of this Agreement and that such relief
may be granted without the necessity of proving actual damages.  This provision with respect to injunctive
relief shall not, however, diminish the right of the Company to claim and
recover damages in addition to injunctive relief.

 

9.09         Survival.  The parties agree that sections 3, 5 and 7
shall survive termination of this Agreement and term of Executive’s employment
for any reason.

 

9.10         Blue
Pencil Doctrine.  In the event that
any provision of this Agreement is held to be overbroad as written, such
provision shall be deemed amended to narrow its application to the extent
necessary to make the provision enforceable according to applicable law and
shall be enforced as amended.

 

9.11         Mandatory
Arbitration.  In the event any
dispute arises under this Agreement, or as to the breach hereof, the parties
shall discuss the dispute in a good faith effort to arrive at a mutual
settlement.  If notwithstanding, such
dispute cannot be settled, except for sections 9.08 (which the parties
specifically acknowledge and agree entitles the Company to, among other relief,
injunction relief, relief in any court of competent jurisdiction if Executive
breaches section 3, 5, 6 and 7), such dispute shall be submitted to
binding arbitration conducted in Minneapolis, Minnesota, in accordance with the
then-current Commercial Rules of the American Arbitration Association )
(“AAA”).  The costs and expenses of the
arbitration shall be paid by the party against whom the arbitrators render a
decision, if a decision is rendered against a party; otherwise the costs and
expenses shall be shared equally by Executive and the Company.  The arbitrators shall have full power and
authority to rule on any question of law in the same manner as any judge of any
court of competent jurisdiction, and the decision of the arbitrators shall be
final and conclusive upon the parties, and shall not be subject to any appeal
or review if the arbitrators have followed the Commercial Rules of the
AAA.  The arbitrators shall have full
power to make any award (including the award of equitable remedies) that shall
under the circumstances presented to them be deemed to be proper; provided that
the arbitrators shall not have the power to award punitive damages or to limit,
expand or otherwise modify the terms of this Agreement.  Judgment may be entered upon any award
rendered by the arbitrators in accordance with applicable law in any court of
competent jurisdiction.

 

IN WITNESS WHEREOF, the
parties have executed this Agreement effective as of the date and year first
written above.

 

 

	
   

  	
  CIPRICO INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ 

  	
  James W. Hansen

  	
   

  	
   

  
	
   

  	
   

  	
  Its 

  	
  Chairman of the Board

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Robert H. Kill

  	
   

  	
   

  
	
   

  	
  Robert H. Kill

  	
   

  
									

 

5

 

CHANGE OF CONTROL AGREEMENT

 

	
  Parties:

  	
  Ciprico Inc.

  	
  (“Company”)

  
	
   

  	
  17400 Medina Road

  Plymouth, MN 55447

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Robert H. Kill

  	
  (“Executive”)

  
	
   

  	
   

  	
   

  
	
  Effective Date:

  	
  06/01/03

  	
   

  	
   

  
				

 

RECITALS:

 

1.             Executive
has been employed by Company since 08/86 as President/CEO, has extensive
knowledge and expertise relating to Company’s business and has contributed to Company’s
success.

 

2.             The
parties recognize that a “Change of Control” may materially change or diminish
Executive’s responsibilities and substantially frustrate Executive’s commitment
to the Company.

 

3.             The
parties further recognize that it is in the best interests of the Company and
its stockholders to provide certain benefits payable upon a “Change of Control
Termination” to encourage Executive to continue in his position in the event of
a Change of Control, although no such Change of Control is now contemplated or
foreseen.

 

4.             The
parties further desire to provide for certain benefits payable upon certain
involuntary terminations of Executive’s employment.

 

AGREEMENTS:

 

In consideration of the mutual covenants set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

1.             Term of
Agreement.  The term of this
Agreement shall commence on the Effective Date and shall continue in effect
until termination of Executive’s employment which does not constitute a Change
of Control Termination; provided, however, that if a Change of Control of the
Company shall occur during the term of this Agreement, this Agreement shall
instead continue in effect for a period of twelve (12) months following the
date of such Change of Control.  Any
rights and obligations accruing before the termination or expiration of this
Agreement shall survive to the extent necessary to enforce such rights and
obligations.

 

2.             “Change
of Control.”  For purposes of
this Agreement, “Change of Control” shall mean any of the following events
occurring after the date of this Agreement:

 

(a)           A
merger or consolidation to which the Company is a party if the individuals and
entities who were shareholders of the Company immediately prior to the
effective date of such merger or consolidation have, immediately following the
effective date of such merger or consolidation, beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less than
fifty percent (50%) of the total combined voting power of all classes of
securities issued by the surviving corporation for the election of directors of
the surviving corporation;

 

(b)           The
acquisition of direct or indirect beneficial ownership (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) of securities of the Company
by any person or entity or by a group of associated persons or entities acting
in concert in one or a series of transactions, which causes the aggregate beneficial
ownership of such person, entity or group to equal or exceed twenty percent
(20%) or more of the total combined voting power of all classes of the
Company’s then issued and outstanding securities;

 

(c)           The
sale of substantially all of the assets of the Company to any person or entity
that is not a wholly-owned subsidiary of the Company;

 

(d)           The
approval by the stockholders of the Company of any plan or proposal for the
liquidation of the Company;

 

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(e)           A
change in the composition of the Board of the Company at any time during any
consecutive twenty-four (24) month period such that the “Continuity Directors”
no longer constitute at least a seventy percent (70%) majority of the Board.  For purposes of this event, “Continuity
Directors” means those members of the Board who were directors at the beginning
of such consecutive twenty-four (24) month period or were elected by, or on the
nomination or recommendation of, at least a two thirds (2/3) majority of the
then-existing Board of Directors; or

 

(f)            The
execution by the Company of an agreement in principle or a definitive agreement
relating to an event described in Section 2(a), 2(b), 2(c), 2(d) or 2(e)
that ultimately results in such a Change of Control, or a tender or exchange
offer or proxy contest is commenced that ultimately results in an event
described in Section 2(b) or 2(e).

 

3.             Termination.  For purposes of this Agreement, “Change of
Control Termination” shall mean any of the following events occurring within
twelve (12) months after a change of control occurring during the term of this
Agreement.

 

(a)           The
termination of Executive’s employment by the Company for any reason except Good
Cause.  For purposes of this Agreement,
“Good Cause” shall include, but not be limited to, the following:

 

(i) Executive’s conviction of or plea of guilty or nolo contendere to a felony resulting from
conduct occurring on or after the date of the Change of Control;

 

(ii) Executive’s incurable breach of any material element of any
proprietary or confidential information agreement with the Company;

 

(iii) Executive’s conduct that is materially detrimental to Company’s
business reputation or goodwill;

 

(iv) Any dishonesty in dealing between Executive and Company or between
Executive and Company’s vendors, advisors, other employees, or customers;

 

(v) Executive’s active use of alcohol or controlled substances in a
manner which impairs Executive’s ability to perform his duties;

 

(vi) Executive’s violation of any material portion of this Agreement;

 

(vii) Executive’s failure to substantially perform his material duties,
which failure is not cured within thirty (30) days after Executive’s receipt of
written notice from Company specifying the non-performance.

 

In no event shall Executive’s death or disability (as defined below)
constitute Good Cause.  “Disability”
shall mean Executive’s failure or inability, for reasons of health, to perform
Executive’s usual and customary duties on behalf of the Company in the usual
and customary manner for a total of more than 90 consecutive business days
(excluding Saturdays, Sundays and days during which the Company is closed due
to a recognized holiday).

 

(b)           The
termination of employment with the Company by Executive for Good Reason.  Such termination shall be accomplished by,
and effective upon, Executive giving written notice to the Company of his
decision to terminate.  “Good Reason”
shall mean a good faith determination by Executive, in Executive’s sole and
absolute judgment that any one or more of the following events has occurred on
or after the date of the Change of Control without the Executive’s express
written consent:

 

(i)            A
change in Executive’s reporting responsibilities, titles or offices as in
effect immediately prior to the date of the Change of Control, or any removal
of Executive from or any failure to re-elect Executive to any of such
positions, which has the effect of diminishing Executive’s responsibility or
authority;

 

(ii)           A
reduction in Executive’s base salary in effect immediately prior to the date of
the Change of Control;

 

(iii)          Requiring
Executive to move to or work from a location that is outside of a fifty (50)
mile radius of Executive’s job location on the date of the Change of Control;

 

(iv)          Without
the adoption of a replacement plan, program or arrangement that provides
benefits to Executive that are equal to or greater than those benefits that are
discontinued or adversely affected:

 

(A)          The
Company’s failure to continue in effect, within its maximum stated term, any
pension, bonus, incentive, stock ownership, stock purchase, stock option, life
insurance, health, accident, disability, or any other employee compensation or 

 

7

 

benefit plan, program or arrangement, in which Executive is
participating immediately prior to the date of the Change of Control; or

 

(B)           The
Company taking any action that would adversely affect Executive’s participation
or materially reduce Executive’s benefits under any of such plans, programs or
arrangements; or

 

(v)           Any
material breach by the Company of this Agreement so long as Executive has given
the Company thirty (30) days notice of such breach, and the Company has not
cured the breach during that thirty (30) day period.

 

Termination for “Good Reason” shall not include Executive’s death or a
termination of employment by Executive for any reason other than the events
specified in clauses (1) through (5) above.

 

4.             Compensation
and Benefits.  Subject to the
limitations contained in Section 5 below, upon a Change of Control
Termination, Executive shall be entitled to the following compensation and
benefits:

 

(a)           The
Company shall pay to Executive:

 

Within five (5) days of the Change of Control Termination, all salary
and other compensation earned by Executive through the date of the Change of
Control Termination at the rate in effect immediately prior to such Change of
Control Termination;

 

(ii)           Within
fifteen (15) days of the Change of Control Termination, all other amounts to
which the Board of Directors in its discretion determines Executive is entitled
to receive under any compensation plan maintained by the Company, subject to
any distribution requirements contained in such compensation plans and prorated
as appropriate if termination occurs prior to the end of any Compensation plan
period; and

 

(iii)          A
severance benefit in a single lump sum payment, an aggregate amount equal to
one hundred percent (100%) of Executive’s then current annual base salary.

 

(b)           The
Company shall provide, at no cost to Executive, continued coverage under the
Company’s group life, health or dental benefit plans, if any, at a level
comparable to the benefits which Executive was receiving or entitled to receive
immediately prior to the Change of Control Termination or, if greater, at a
level comparable to the benefits which Executive was receiving immediately
prior to the event which constituted Good Reason.  Executive shall be entitled to such continued coverage for the
maximum period required by applicable federal and state law following such
Change of Control Termination or, if earlier, until Executive is eligible to be
covered for such benefits through his employment with another employer.  The Company may, in its sole discretion,
provide such coverage through the purchase of individual insurance contracts
for Executive.

 

5.             Non-Solicitation.  During the term of this Agreement or any
successor employment relationship between Executive and the Company, and for a
period of twelve (12) months following the termination of the employment
relationship between Executive and the Company, Executive agrees that he will
not solicit or accept, either directly or indirectly, as an individual or
through a partnership, corporation, or other entity, any employee of the
Company or consultant under contract with the Company for employment or any
other arrangement for compensation to perform services.

 

6.             Payment
of Attorneys Fees and Other Costs. 
If, after a Change in Control of the Company, a good faith dispute
arises with respect to the enforcement of Executive’s rights under this
Agreement or if any legal or arbitration proceeding shall be brought in good
faith to enforce or interpret any provision contained herein or to recover
damages for breach hereof, Executive shall recover from the Company (a)
reasonable attorneys’ fees and necessary costs and disbursements incurred by
Executive as a result of such dispute or such legal or arbitration proceeding,
and (b) prejudgment interest on any money judgment or arbitration award
obtained by Executive calculated at the prime rate announced from time to time
by Wells Fargo Bank Minnesota, N. A., or the maximum rate permitted under
Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended, or
any successor provision, whichever rate is lower, such prejudgment interest to
be paid from the date that payments to Executive should have been made under
this Agreement.

 

7.             Withholding
Taxes. The Company shall be entitled to deduct from all payments or
benefits provided for under this Agreement any federal, state or local income
and employment related taxes required by law to be withheld with respect to
such payments or benefits.

 

8.             Successors
and Assigns.  This Agreement
shall inure to the benefit of and shall be enforceable by Executive, his heirs
and the personal representative of his estate, and shall be binding upon and
inure to the benefit of the Company and its successors and assigns.  The Company will require the transferee of
any sale of all or substantially all of the business and assets of the Company
or the survivor of any merger, consolidation or other transaction expressly to
agree to

 

8

 

honor this Agreement in the same manner and to the same extent that the
Company would be required to perform this Agreement if no such event had taken
place.  Failure of the Company to obtain
such agreement before the effective date of such event shall be a breach of
this Agreement and shall entitle Executive to the benefits provided in
Section 4 as if Executive had terminated employment for Good Reason
following a Change in Control.

 

9.             Notices.  For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt. 
All notices to the Company shall be directed to the attention of the
Board of Directors of the Company.

 

 

	
  For Ciprico:

  	
  17400 Medina Road

  Plymouth, MN 55447

  
	
   

  	
   

  
	
  For Executive:

  	
  Robert H.Kill

  14479 Boulder Pointe Rd

  Eden Prairie, MN 55347

  

 

10.           Captions.  The headings or captions set forth in this
Agreement are for convenience only and shall not affect the meaning or interpretation
of this Agreement.

 

11.           Governing
Law.  The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Minnesota.

 

12.           Construction.  Wherever possible, each term and provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law.  If any term
or provision of this Agreement is invalid or unenforceable under applicable
law, (a) the remaining terms and provisions shall be unimpaired, and (b) the
invalid or unenforceable term or provision shall be deemed replaced by a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the unenforceable term or provision.

 

13.           Amendment;
Waivers.  This Agreement may
not be modified, amended, waived or discharged in any manner except by an
instrument in writing signed by both parties hereto.  The waiver by either party of compliance with any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any other provision of this Agreement, or of any subsequent breach by such
party of a provision of this Agreement.

 

14.           Entire
Agreement.  This Agreement
supersedes all prior or contemporaneous negotiations, commitments, agreements
(written or oral) and writings between the Company and Executive with respect
to the subject matter hereof and constitutes the entire agreement and
understanding between the parties hereto. 
All such other negotiations, commitments, agreements and writings will
have no further force or effect, and the parties to any such other negotiation,
commitment, agreement or writing will have no further rights or obligations
thereunder.

 

15.           Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.

 

 

	
   

  	
  CIPRICO INC.

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James W. Hansen

  	
   

  
	
   

  	
     Its:

  	
  Chairman of the Board

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert H. Kill

  	
   

  
	
   

  	
  Robert H. Kill

  
								

 

9EXHIBIT
10.14

 

SEVERANCE AGREEMENT

 

	
  Parties:

  	
   

  	
  Ciprico Inc.

  	
   

  	
  (“Company”)

  
	
   

  	
   

  	
  17400 Medina Road

  Plymouth, MN 55447

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thomas S. Wargolet

  	
   

  	
  (“Executive”)

  
	
   

  	
   

  	
  8981 Victoria Drive

  	
   

  	
   

  
	
   

  	
   

  	
  Eden Prairie, MN 55347

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Effective Date:

  	
  November 15, 2003

  	
   

  	
   

  
						

 

RECITALS:

 

1.             Executive has been employed by Company
since October, 2000 as Vice President – Finance / Chief Financial Officer, has
extensive knowledge and expertise relating to Company’s business and has
contributed to Company’s success.

 

2.             The parties recognize that a “Change of
Control” may materially change or diminish Executive’s responsibilities and
substantially frustrate Executive’s commitment to the Company.

 

3.             The parties further recognize that it is
in the best interests of the Company and its stockholders to provide certain
benefits payable upon a “Severance Termination” to encourage Executive to
continue in his position.

 

4.             The parties further desire to provide for
certain benefits payable upon certain involuntary terminations of Executive’s employment.

 

AGREEMENTS:

 

In consideration of the mutual covenants set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.             Term of
Agreement.  The term of this
Agreement shall commence on the Effective Date and shall continue in effect
until termination of Executive’s employment which does not constitute a
Severance Termination; provided, however, that if a Change of Control of the
Company shall occur during the term of this Agreement, this Agreement shall
instead continue in effect for a period of twelve (12) months following the
date of such Change of Control.  Any
rights and obligations accruing before the termination or expiration of this
Agreement shall survive to the extent necessary to enforce such rights and
obligations.

 

2.             “Change
of Control.”  For purposes of
this Agreement, “Change of Control” shall mean any of the following events
occurring after the date of this Agreement:

 

(a)           A
merger or consolidation to which the Company is a party if the individuals and
entities who were shareholders of the Company immediately prior to the
effective date of such merger or consolidation have, immediately following the
effective date of such merger or consolidation, beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less than
fifty percent (50%) of the total combined voting power of all classes of
securities issued by the surviving corporation for the election of directors of
the surviving corporation;

 

(b)           The
acquisition of direct or indirect beneficial ownership (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) of securities of the Company
by any person or entity or by a group of associated persons or entities acting
in concert in one or a series of transactions, which causes the aggregate
beneficial ownership of such person, entity or group to equal or exceed twenty
percent (20%) or more of the total combined voting power of all classes of the
Company’s then issued and outstanding securities;

 

(c)           The
sale of substantially all of the assets of the Company to any person or entity
that is not a wholly-owned subsidiary of the Company;

 

(d)           The
approval by the stockholders of the Company of any plan or proposal for the
liquidation of the Company;

 

1

 

(e)           A
change in the composition of the Board of the Company at any time during any
consecutive twenty-four (24) month period such that the “Continuity Directors”
no longer constitute at least a seventy percent (70%) majority of the
Board.  For purposes of this event,
“Continuity Directors” means those members of the Board who were directors at
the beginning of such consecutive twenty-four (24) month period or were elected
by, or on the nomination or recommendation of, at least a two thirds (2/3)
majority of the then-existing Board of Directors; or

 

(f)            The
execution by the Company of an agreement in principle or a definitive agreement
relating to an event described in Section 2(a), 2(b), 2(c), 2(d) or 2(e)
that ultimately results in such a Change of Control, or a tender or exchange
offer or proxy contest is commenced that ultimately results in an event
described in Section 2(b) or 2(e).

 

3.             Termination.  For purposes of this Agreement, “Severance
Termination” shall mean any of the following events during the term of this
Agreement.

 

(a)           The termination of
Executive’s employment by the Company, whether or not a Change in Control has
occurred, for any reason except Good Cause. 
For purposes of this Agreement, “Good Cause” shall include, but not be
limited to, the following:

 

(i)            Executive’s conviction
of or plea of guilty or nolo contendere
to a felony resulting from conduct occurring on or after the date of the Change
of Control;

 

(ii)           Executive’s incurable
breach of any material element of any proprietary or confidential information
agreement with the Company;

 

(iii)          Executive’s conduct that
is materially detrimental to Company’s business reputation or goodwill;

 

(iv)          Any dishonesty in
dealing between Executive and Company or between Executive and Company’s
vendors, advisors, other employees, or customers;

 

(v)           Executive’s active use
of alcohol or controlled substances in a manner which impairs Executive’s
ability to perform his duties;

 

(vi)          Executive’s violation of
any material portion of this Agreement;

 

(vii)         Executive’s failure to
substantially perform his material duties, which failure is not cured within
thirty (30) days after Executive’s receipt of written notice from Company
specifying the non-performance.

 

In no event shall Executive’s death or
disability (as defined below) constitute Good Cause.  “Disability” shall mean Executive’s failure or inability, for
reasons of health, to perform Executive’s usual and customary duties on behalf
of the Company in the usual and customary manner for a total of more than 90
consecutive business days (excluding Saturdays, Sundays and days during which
the Company is closed due to a recognized holiday).

 

(b)           The
termination of employment with the Company by Executive for Good Reason.  Such termination shall be accomplished by,
and effective upon, Executive giving written notice to the Company of his
decision to terminate.  “Good Reason”
shall mean a good faith determination by Executive, in Executive’s sole and
absolute judgment that any one or more of the following events has occurred on
or after the date of a Change of Control without the Executive’s express
written consent:

 

(i)            A
change in Executive’s reporting responsibilities, titles or offices as in
effect immediately prior to the date of the Change of Control, or any removal
of Executive from or any failure to re-elect Executive to any of such
positions, which has the effect of diminishing Executive’s responsibility or
authority;

 

(ii)           A
reduction in Executive’s base salary in effect immediately prior to the date of
the Change of Control;

 

(iii)          Requiring
Executive to move to or work from a location that is outside of a fifty (50)
mile radius of Executive’s job location on the date of the Change of Control;

 

(iv)          Without
the adoption of a replacement plan, program or arrangement that provides
benefits to Executive that are equal to or greater than those benefits that are
discontinued or adversely affected:

 

2

 

(A)          The Company’s failure to
continue in effect, within its maximum stated term, any pension, bonus,
incentive, stock ownership, stock purchase, stock option, life insurance,
health, accident, disability, or any other employee compensation or benefit
plan, program or arrangement, in which Executive is participating immediately
prior to the date of the Change of Control; or

 

(B)           The Company taking any
action that would adversely affect Executive’s participation or materially
reduce Executive’s benefits under any of such plans, programs or arrangements;
or

 

(v)           Any material breach by
the Company of this Agreement so long as Executive has given the Company thirty
(30) days notice of such breach, and the Company has not cured the breach
during that thirty (30) day period.

 

Termination for “Good Reason” shall not
include Executive’s death or a termination of employment by Executive for any
reason other than the events specified in clauses (1) through (5) above.

 

4.             Compensation
and Benefits.  Subject to the
limitations contained in Section 5 below, upon a Severance Termination,
Executive shall be entitled to the following compensation and benefits:

 

(a)           The Company shall pay to Executive:

 

Within five (5) days of the Severance Termination, all salary and other
compensation earned by Executive through the date of the Severance Termination
at the rate in effect immediately prior to such Severance Termination;

 

(ii)           Within
fifteen (15) days of the Severance Termination, all other amounts to which the
Board of Directors in its discretion determines Executive is entitled to
receive under any compensation plan maintained by the Company, subject to any
distribution requirements contained in such compensation plans and prorated as
appropriate if termination occurs prior to the end of any Compensation plan
period; and

 

(iii)          A
severance benefit in a single lump sum payment, an aggregate amount equal to
one hundred percent (100%) of Executive’s then current annual base salary.

 

(b)           The
Company shall provide, at no cost to Executive, continued coverage under the
Company’s group life, health or dental benefit plans, if any, at a level
comparable to the benefits which Executive was receiving or entitled to receive
immediately prior to the Severance Termination or, if greater, at a level
comparable to the benefits which Executive was receiving immediately prior to
the event which constituted Good Reason. 
Executive shall be entitled to such continued coverage for the maximum
period required by applicable federal and state law following such Severance
Termination or, if earlier, until Executive is eligible to be covered for such
benefits through his employment with another employer.  The Company may, in its sole discretion,
provide such coverage through the purchase of individual insurance contracts
for Executive.

 

5.             Non-Solicitation.  During the term of this Agreement or any
successor employment relationship between Executive and the Company, and for a
period of twelve (12) months following the termination of the employment
relationship between Executive and the Company, Executive agrees that he will
not solicit or accept, either directly or indirectly, as an individual or
through a partnership, corporation, or other entity, any employee of the Company
or consultant under contract with the Company for employment or any other
arrangement for compensation to perform services.

 

6.             Payment
of Attorneys Fees and Other Costs. 
If, after a Change in Control of the Company, a good faith dispute
arises with respect to the enforcement of Executive’s rights under this
Agreement or if any legal or arbitration proceeding shall be brought in good
faith to enforce or interpret any provision contained herein or to recover
damages for breach hereof, Executive shall recover from the Company (a)
reasonable attorneys’ fees and necessary costs and disbursements incurred by
Executive as a result of such dispute or such legal or arbitration proceeding,
and (b) prejudgment interest on any money judgment or arbitration award
obtained by Executive calculated at the prime rate announced from time to time
by Wells Fargo Bank Minnesota, N. A., or the maximum rate permitted under
Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended, or
any successor provision, whichever rate is lower, such prejudgment interest to
be paid from the date that payments to Executive should have been made under
this Agreement.

 

7.             Withholding
Taxes. The Company shall be entitled to deduct from all payments or
benefits provided for under this Agreement any federal, state or local income
and employment related taxes required by law to be withheld with respect to
such payments or benefits.

 

3

 

8.             Successors
and Assigns.  This Agreement
shall inure to the benefit of and shall be enforceable by Executive, his heirs
and the personal representative of his estate, and shall be binding upon and
inure to the benefit of the Company and its successors and assigns.  The Company will require the transferee of
any sale of all or substantially all of the business and assets of the Company
or the survivor of any merger, consolidation or other transaction expressly to
agree to honor this Agreement in the same manner and to the same extent that
the Company would be required to perform this Agreement if no such event had
taken place.  Failure of the Company to
obtain such agreement before the effective date of such event shall be a breach
of this Agreement and shall entitle Executive to the benefits provided in Section 4
as if Executive had terminated employment for Good Reason following a Change in
Control.

 

9.             Notices.  For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt. 
All notices to the Company shall be directed to the attention of the
Board of Directors of the Company.

 

	
  For Ciprico:

  	
   

  	
  17400 Medina Road

  Plymouth, MN 55447

  
	
   

  	
   

  	
   

  
	
  For Executive:

  	
   

  	
  8981 Victoria Drive

  Eden Prairie, MN 55347

  

 

10.           Captions.  The headings or captions set forth in this
Agreement are for convenience only and shall not affect the meaning or
interpretation of this Agreement.

 

11.           Governing
Law.  The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Minnesota.

 

12.           Construction.  Wherever possible, each term and provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law.  If any term
or provision of this Agreement is invalid or unenforceable under applicable
law, (a) the remaining terms and provisions shall be unimpaired, and (b) the
invalid or unenforceable term or provision shall be deemed replaced by a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the unenforceable term or provision.

 

13.           Amendment;
Waivers.  This Agreement may
not be modified, amended, waived or discharged in any manner except by an
instrument in writing signed by both parties hereto.  The waiver by either party of compliance with any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any other provision of this Agreement, or of any subsequent breach by such
party of a provision of this Agreement.

 

14.           Entire
Agreement.  This Agreement
supersedes all prior or contemporaneous negotiations, commitments, agreements
(written or oral) and writings between the Company and Executive with respect
to the subject matter hereof and constitutes the entire agreement and
understanding between the parties hereto. 
All such other negotiations, commitments, agreements and writings will
have no further force or effect, and the parties to any such other negotiation,
commitment, agreement or writing will have no further rights or obligations
thereunder.

 

15.           Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered as of the day and year
first above written.

 

	
   

  	
  CIPRICO INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert H. Kill

  	
   

  	
   

  
	
   

  	
     Its:

  	
  President and CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Thomas S. Wargolet

  	
   

  	
   

  
	
   

  	
  Thomas S. Wargolet

  	
   

  
							

 

4

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