Document:

EXHIBIT 10.16

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT,
dated effective as of September 30, 2004, is entered into by and between
Ciprico Inc., a Delaware corporation (the “Company”) and James W. Hansen, 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 expiration of the Initial Term, 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 the Agreement is renewed upon expiration of the Initial Term, the
Company shall notify Executive in writing whether the Agreement will be renewed
for additional one year, or terminate as scheduled, ninety (90) days prior to
the expiration date of then extension term. 
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 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 or any
successor employment relationship between Executive and the Company, and for a
period of twelve (12) 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.  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 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.

 

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 $11,500 per month for the first twelve (12)
months and $12,333 per month for the second twelve months of the Initial Term,
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 Ownership.

 

(a)           Stock
Options.  Executive shall be granted,
at signing, an option to purchase 50,000 shares of the Company’s common stock,
par value $.01 per share, pursuant to the Company’s Qualified Stock Option
Plan, at an exercise price equal to 125% of the closing sale 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.

 

(b)           Stock
Purchase.  If Executive has not
purchased at least 50,000 shares of Company’s Common Stock in the open market
by December 31, 2004, the Company agrees, at Executive’s sole discretion, to
sell to Executive the number of shares of its Common Stock equal to the
difference of 50,000 and the number of shares Executive purchased in the open
market between September 1, 2004 and December 31, 2004.  The purchase of such shares by Executive from
the Company shall be at a purchase price equal to the closing sale price of
Company’s Common Stock on the date of such purchase.  Executive shall make the election and effect
the purchase no later than January 15, 2005.

 

4.03         Benefits.  Executive shall be eligible to participate
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         Consulting Arrangement.  The Company will pay The Hansen Company, an
affiliate of Executive, $1,000 per month for the first twelve (12) months of
the Initial Term and $1,250 per month for the second twelve (12) months of the
Initial Term for strategic planning services.

 

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 eligible to participate in
the Company’s short-term and long-term management bonuses programs 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.

 

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 (6) 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 (6) 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
patents 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;

 

(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; or

 

(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 Payments.

 

(a)           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 September 1, 2004. 
In the event of any inconsistencies between this Agreement and the
Change of Control Agreement, the Change of Control Agreement shall control.

 

(b)           If
Executive’s employment is terminated by the Company other than pursuant to
Section 8.01(d) or in connection with a Change of Control, the Company shall
pay Executive as severance pay an amount equal to the total compensation (base
salary, target bonus and consulting pay) paid to Executive during the 12-month
period immediately preceding his termination or the total compensation for the
remaining portion of the Initial Term, whichever is greater, payable at the
Company’s option in either a lump sum or in installments in accordance with the
Company’s standard payroll policies (beginning after the expiration of any
applicable consideration and/or rescission periods), subject to required
withholding and deductions.  Any
severance pay provided herein may, at Company’s discretion, be conditioned upon
the execution of a full and final release by the Executive of all claims
against the Company arising out of his employment and the termination thereof,
the form of which will be provided by the Company.

 

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
enforceably 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.

 

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/ Michael M. Vekich

  	
   

  
	
   

  	
  Its

  	
  Chairman of the Audit Committee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/ James W. Hansen

  	
   

  
	
   

  	
  James W. Hansen

  
							

 

 

CHANGE OF CONTROL AGREEMENT

 

	
  Parties:

  	
  Ciprico Inc.

  	
  (“Company”)

  
	
   

  	
  17400 Medina Road

  	
   

  
	
   

  	
  Plymouth, MN 55447

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  James W. Hansen

  	
  (“Employee”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Effective Date:    September 30, 2004

  	
   

  

 

RECITALS:

 

1.             Employee is employed
by Company pursuant to an Employment Agreement dated September 30, 2004.

 

2.             The parties recognize
that a “Change of Control” may materially change or diminish Employee’s
responsibilities and substantially frustrate Employee’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 Employee 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 Employee’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 Employee’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;

 

(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.

 

1

 

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 a letter of intent, 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 Employee’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)            Employee’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)           Employee’s
willful and repeated failure to fulfill his employment duties with the Company;
provided, however, that for purposes of this clause (ii), an act or failure to
act by Employee shall not be “willful” unless it is done, or omitted to be
done, in bad faith and without any reasonable belief that Employee’s action or
omission was in the best interests of the Company;

 

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

 

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

 

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

 

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

 

(vii)         Employee’s
violation of any material portion of this Agreement;

 

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

 

In no event shall Employee’s death or disability (as defined below)
constitute Good Cause.  “Disability”
shall mean Employee’s failure or inability, for reasons of health, to perform
Employee’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
Employee for Good Reason.  Such termination
shall be accomplished by, and effective upon, Employee giving written notice to
the Company of his decision to terminate. 
“Good Reason” shall mean a good faith determination by Employee, in
Employee’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
Employee’s express written consent:

 

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

 

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

 

2

 

(iii)          Requiring Employee to
move to or work from a location that is outside of a fifty (50) mile radius of
Employee’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 Employee 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
benefit plan, program or arrangement, in which Employee is participating
immediately prior to the date of the Change of Control; or

 

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

 

(v)           Any
material breach by the Company of this Agreement so long as Employee 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 Employee’s death or a
termination of employment by Employee 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, Employee shall be
entitled to the following compensation and benefits:

 

(a)           The Company shall pay
to Employee:

 

(i)            Within
five (5) days of the Change of Control Termination, all salary and other
compensation earned by Employee 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 Employee
may be entitled to receive under any compensation plan maintained by the
Company, subject to any distribution requirements contained in such
compensation plans; and

 

(iii)          A
severance benefit in a single lump sum payment, an aggregate amount equal to
fifty percent (50%) of Employee’s then current annual base salary.

 

(b)           The Company shall provide, at no cost to Employee,
continued coverage under the Company’s group life, health or dental benefit
plans, if any, at a level comparable to the benefits which Employee 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
Employee was receiving immediately prior to the event which constituted Good
Reason.  Employee shall be entitled to
such continued coverage for a six month period following such Change of Control
Termination or, if earlier, until Employee 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 Employee.

 

5.             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 Employee’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, Employee shall recover from the Company (a)
reasonable attorneys’ fees and necessary costs and disbursements incurred by
Employee 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 Employee 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 Employee should have been made under this
Agreement.

 

6.             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

 

7.             Successors and Assigns.  This Agreement shall inure to the benefit of
and shall be enforceable by Employee, 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 Employee to the benefits provided in Section 4 as
if Employee had terminated employment for Good Reason following a Change in
Control.

 

8.             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 Employee:

  	
  26 Highway 96 East

  
	
   

  	
  Dellwood, MN 55110

  

 

9.             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.

 

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

 

11.           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.

 

12.           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.

 

13.           Entire Agreement.  This Agreement supersedes all prior or
contemporaneous negotiations, commitments, agreements (written or oral) and
writings between the Company and Employee 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.

 

14.           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/ Michael M. Vekich

  	
   

  
	
   

  	
  Its:

  	
  Chairman of the Audit Committee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James W. Hansen

  	
   

  
	
   

  	
  Employee

  	
   

  
							

 

4EXHIBIT 10.17

 

SEPARATION AGREEMENT AND RELEASE

 

This Separation Agreement and Release (“Agreement”) effective as of
September 30, 2004 is made by and between Robert H. Kill (“Kill”) and Ciprico
Inc. (the “Company”).

 

R E C I T A L S

 

WHEREAS, Kill was employed by the Company as its Chief Executive
Officer (CEO) and President pursuant to an Employment Agreement dated May 1,
2003 (the “Employment Agreement”);

 

WHEREAS, Kill notified the Company of his intention to resign his
position as CEO and President, effective March 18, 2004.

 

WHEREAS, from March 19, 2004 through the date of Kill’s execution of
this Agreement, Kill remained employed by the Company.

 

WHEREAS, Kill and the Company wish to enter into this Agreement to
memorialize their mutual agreement regarding the end of his employment with
the  Company.

 

NOW, THEREFORE, in consideration of the premises and the  mutual promises and covenants contained in
this Agreement, the Company and Kill agree:

 

A G R E E M E N T

 

1.             Employment Agreement.  Pursuant to Paragraph 8.01(a) of Kill’s
Employment Agreement, Kill’s employment pursuant to his Employment Agreement
and the Employment Agreement will terminate by mutual agreement effective September
30, 2004.  Notwithstanding anything
herein to the contrary, the parties hereby agree that Paragraphs 5, 6, 7 and 9
of Kill’s Employment Agreement survive the termination of Kill’s employment and
the termination of the Employment Agreement forever and that Paragraphs 3.03
and 3.04 of Kill’s Employment Agreement survive the termination of Kill’s
employment and the termination of the Employment Agreement for a period of one
(1) year from the effective date of this Agreement.

 

2.             Separation Payment.  Specifically in consideration of Kill signing
this Agreement and subject to the limitations, obligations, and other
provisions contained in this Agreement, the Company shall pay Kill $16,250.00
on the first day of each month for twelve (12) calendar months beginning
October 1, 2004 and ending September 1, 2005, less authorized and required
deductions and withholdings.

 

3.             COBRA Premiums.  Specifically in consideration of Kill signing
this Agreement and subject to the limitations, obligations, and other
provisions contained in this Agreement, the Company shall pay through September
30, 2005, the entire premium for Kill’s health and dental insurance coverage
under the Company’s group health and dental insurance plans.  The Company will discontinue payments under
this Paragraph 3 before September 30, 2005 if, and at such time as, Kill (1) is
covered or eligible to be covered under the health and/or dental insurance
policy of a new employer, or (2) ceases to participate, for whatever reason, in
the Company’s group insurance plans. 
Notwithstanding the foregoing, the COBRA period for continuation of his
insurance coverage under Company’s group plans will begin on October 1, 2004.

 

4.             Use of Office and Telephone.  So long as Kill serves as the Company’s
Chairman of the Board, Kill may use, free of charge, office space and the
telephone at the Company’s offices.

 

5.             Release
of Claims by Kill.  Specifically
in consideration of the separation pay and benefits described in this Agreement
(Paragraphs 3 and 4), by signing this Agreement, Kill, for himself and anyone
who has or obtains legal rights or claims through him, agrees to the following:

 

a.             Kill
hereby does release, agree not to sue, and forever discharges the Company (as
defined below) of and from any and all manner of claims, demands, actions,
causes of action, administrative claims, liability, damages, claims for
punitive or liquidated damages, claims for attorney’s fees, costs and
disbursements, individual or class action claims, or demands of any kind
whatsoever, Kill has or might have against them or any of them, whether known
or unknown,

 

 

in law or equity, contract or
tort, arising out of or in connection with Kill’s employment with the Company,
or the termination of that employment, and however originating or existing,
from the beginning of time through the date of Kill signing this Agreement.

 

b.             This
release includes, without limiting the generality of the foregoing, any claims
Kill may have for wages, bonuses, commissions, penalties, compensation,
deferred compensation, vacation pay, paid time off, separation pay or benefits,
defamation, invasion of privacy, negligence, emotional distress, breach of
contract, estoppel, improper discharge (based on contract, common law, or
statute, including any federal, state or local statute or ordinance prohibiting
discrimination or retaliation in employment), violation of the United States
Constitution, the Minnesota Constitution, the Age Discrimination in Employment
Act, 29 U.S.C. § 621 et  seq., the Minnesota Human Rights Act,
Minn. Stat. § 363.01 et  seq., Title VII of the Civil Rights Act,
42 U.S.C. § 2000e et  seq., the Americans with Disabilities Act,
42 U.S.C. § 12101 et  seq., the Employee Retirement Income
Security Act of 1976, 29 U.S.C. § 1001 et  seq., the Family and
Medical Leave Act, 29 U.S.C. § 2601 et  seq., the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. 210l, et  seq.,
any claim arising under Minn. Stat. Chapters 177 and 181, Minn. Stat. § 176.82,
and any claim for retaliation, harassment or discrimination based on sex, race,
color, creed, religion, age, national origin, marital status, sexual
orientation, disability, status with regard to public assistance or any other
protected class, or sexual or other harassment. 
Kill hereby waives any and all relief not provided for in this Agreement.  By Kill’s signing this Agreement, Kill agrees
that the payments and benefits provided to Kill under this Agreement fully
compensates Kill for and extinguish any and all claims arising out of Kill’s
employment, separation from employment or otherwise with the Company.  Kill understands and agrees that, by signing
this Agreement, he waives and releases any past, present, or future claim to
employment with the Company and agrees not to seek employment with the Company.

 

c.             Kill
affirms that he has not caused or permitted, and to the full extent permitted
by law will not cause or permit to be filed, any charge, complaint, or action
of any nature or type against the Company, including but not limited to any
action or proceeding raising claims arising in tort or contract, or any claims
arising under federal, state, or local laws, including discrimination
laws.  If Kill files, or has filed on his
behalf, a charge, complaint, or action, Kill agrees that the payments and
benefits described above in Paragraphs 3, 4 and 5 are in complete satisfaction of
any and all claims in connection with such charge, complaint, or action and
Kill waives, and agrees not to take, any award of money or other damages from
such charge, complaint, or action.  In
the event there is outstanding a charge, complaint, or action, Kill agrees to
seek immediate withdrawal and dismissal with prejudice.  In the event that for any reason said charge,
complaint, or action is not withdrawn, Kill agrees not to testify, provide
documents, or otherwise participate, or to permit others to voluntarily
participate on Kill’s behalf, in any investigation or litigation arising there
from or associated therewith and to execute such other papers or documents as
the Company’s counsel determines may be necessary or desirable to have any such
charge, complaint or action dismissed with prejudice.  Kill and the Company acknowledge and agree
that this Paragraph will not prohibit either party from testifying or
responding pursuant to a court order or a subpoena issued by a government
agency and which appears valid in its face, or pursue or take any action as
otherwise required or permitted by law.

 

d.             Kill
is not, by signing this Agreement, releasing or waiving (1) any vested interest
he may have in any profit sharing plan or pension plan by virtue of his employment
with the Company, (2) any rights or claims that are not specifically released
herein or that may arise after the Agreement is signed, (3) the post-employment
benefits and payments specifically promised to Kill under this Agreement, or
(4) the right to institute legal action for the purpose of enforcing the
provisions of this Agreement.

 

e.             The
Company, as used in this Agreement, shall mean Ciprico Inc. and its parent,
subsidiaries, divisions, affiliated entities, insurers, and its and their present
and former officers, directors, shareholders, trustees, employees, agents,
attorneys, representatives and consultants, and the successors and assigns of
each, whether in their individual or official capacities, and the current and
former trustees or administrators of any pension or other benefit plan
applicable to the employees or former employees of Ciprico Inc., in their
official and individual capacities.

 

6.             Notice of Right to Consult Attorney and Twenty-One
(21) Day Consideration Period. 
By signing this Agreement, Kill acknowledges and agrees that the Company
has informed him that (1) he has the right to consult with an attorney of his
choice prior to signing this Agreement, and (2) he is entitled to twenty-one
(21) days from the receipt of this Agreement to consider whether the terms are
acceptable to him.  The Company
encourages Kill to use the full 21-day period to consider this Agreement but he
has the right, if he chooses, to sign this Agreement prior to the expiration of
the twenty-one (21) day period.

 

7.             Notification of Rights under the Minnesota Human
Rights Act (Minn. Stat. Chapter 363) and the Federal Age Discrimination in
Employment Act (29 U.S.C. § 621 et seq.).  Kill is hereby notified of his right to
rescind the release of claims contained in Paragraph 6 with regard to claims
arising under the Minnesota Human Rights Act, Minnesota Statutes Chapter 363,
within fifteen (15) calendar days of Kill signing this Agreement, and with
regard to Kill’s rights arising under the federal Age Discrimination in
Employment Act, 29 U.S.C. § 621 et  seq., within seven (7)
calendar

 

 

days of Kill signing this
Agreement.  The two rescission periods
shall run concurrently.  In order to be
effective, the rescission must (a) be in writing; (b) delivered to Thomas
S. Wargolet, Vice President of Finance, Ciprico Inc., 17400 Medina Road, Suite
800, Plymouth, MN 55447 by hand or mail within the required period; and (c) if
delivered by mail, the rescission must be postmarked within the required
period, properly addressed to Thomas S. Wargolet, as set forth above, and sent
by certified mail, return receipt requested. 
This Agreement will be effective upon the expiration of the 15-day
period without rescission.  Kill
understands that if he rescinds any part of this Agreement in accordance with
this Paragraph 7, he will not receive the separation pay and other benefits
described in Paragraphs 3 and 4 and he will be obligated to return any such
benefits and payments if already received.

 

8.             Remedies.  If Kill breaches any term of this Agreement,
the Company shall be entitled to its available legal and equitable remedies,
including but not limited to suspending and recovering any and all payments and
benefits made or to be made under this Agreement.  If the Company seeks and/or obtains relief
from an alleged breach of this Agreement, all of the provisions of this
Agreement shall remain in full force and effect.

 

9.             Non-Admission.  It is expressly understood that this
Agreement does not constitute, nor shall it be construed as, an admission by
the Company of any liability or unlawful conduct whatsoever.  The Company specifically denies any liability
or unlawful conduct.

 

10.           Successors and Assigns.  This Agreement is personal to Kill and may
not be assigned by Kill without the written agreement of the Company.  The rights and obligations of this Agreement
shall inure to the successors and assigns of the Company.

 

11.           Enforceability.  If a court finds any term of this Agreement to
be invalid, unenforceable, or void, the parties agree that the court shall
modify such term to make it enforceable to the maximum extent possible.  If the term cannot be modified, the parties
agree that the term shall be severed and all other terms of this Agreement
shall remain in effect.

 

12.           Entire Agreement.  Except as noted with regard to the surviving
provisions of Kill’s Employment Agreement, this Agreement states the entire
Agreement of the parties with respect to the subject matter hereof.  No modification, release, discharge or waiver
of any provision of this Agreement shall by of any force or effect unless made
in writing and signed by the parties hereto. 
The parties acknowledge that they have not relied on any representations
or statements, whether oral or written, other than the express statements of
this Agreement, in signing this Agreement.

 

13.           Law Governing.  This Agreement shall be governed and construed
in accordance with the laws of the State of Minnesota.

 

14.           Claims Involving the Company.  At the Company’s request, Kill will cooperate
with the Company in any future claims or lawsuits involving the Company, where
Kill has knowledge of the underlying facts. 
In addition, Kill will not voluntarily aid, assist, or cooperate with
any claimants or plaintiffs or their attorneys or agents in any claims or
lawsuits commenced in the future against the Company; provided, however, that
nothing in this Agreement will be construed to prevent Kill from testifying at
an administrative hearing, a deposition, or in court in response to a lawful
subpoena or as otherwise required by law, in any litigation or proceeding
involving the Company.

 

15.           Acknowledgement of Reading and Understanding;
Consultation with Counsel. 
Kill, by signing this Agreement, acknowledges and agrees that Kill has
carefully read and understood all provisions of this Agreement, and that Kill
has entered into this Agreement knowingly and voluntarily.  Kill further acknowledges that the Company
has advised Kill to consult with counsel prior to signing this Agreement, and
Kill acknowledges that Kill has consulted with or had the opportunity to
consult with legal counsel.

 

IN WITNESS HEREOF, the parties have executed this Agreement in the
manner appropriate for each on the dates written below.

 

 

	
   

  	
  CIPRICO
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   James
  W. Hansen

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Chief
  Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
  Dated:

  	
  09/30/04

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   /s/ Robert H. Kill

  	
   

  	
   

  
	
   

  	
  Robert H.
  Kill

  	
   

  
	
   

  	
  Dated:

  	
  09/30/04

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]