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Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this 9th day of
August, 1999, is entered into by ECC International Corp., a Delaware corporation
(the "Company"), and Xxxxx Xxxxxx (the "Executive").
The Company desires to employ the Executive, and the Executive desires
to be employed by the Company. In consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive in such
position and capacity as the Executive and the Company shall from time to time
determine, and the Executive accepts such employment. The Executive shall have
the duties, responsibilities and authority as are delegated to him by the
Company.
2. PERFORMANCE. The Executive agrees to devote his entire
business time, attention and energies to the business and interests of the
Company during the term of this Agreement (the "Employment Term"). The Executive
agrees to abide by the rules, regulations, instructions, personnel practices and
policies of the Company and any changes therein which may be adopted from time
to time by the Company. The Executive acknowledges receipt of copies of all such
rules and policies committed to writing as of the date of this Agreement.
3. EMPLOYMENT TERM. The Executive shall be deemed to be an
at-will employee of the Company and the Executive's employment with the Company
may be terminated by the Company at any time for any reason or no reason, with
or without cause.
4. COMPENSATION AND BENEFITS.
4.1 SALARY. During the Employment Term, the Company shall
pay the Executive an annual base salary, payable in accordance with the
Company's normal payroll practice, subject to withholding and other applicable
taxes, at the annualized rate determined from time to time by the Board of
Directors.
4.2 ADDITIONAL BENEFITS. The Executive shall be entitled
to participate in all bonus and benefit programs that the Company establishes
and makes available to its executive officers, to the extent that Executive's
position, tenure, salary, age, health and other qualifications make him eligible
to participate.
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4.3 REIMBURSEMENT OF EXPENSES. The Company shall
reimburse the Executive for all reasonable expenses incurred or paid by the
Executive in connection with the performance of his duties, responsibilities or
services under this Agreement, upon presentation by the Executive of
documentation, expense statements, vouchers and/or such other supporting
information as the Company may require.
5. NON-COMPETITION AND NON-SOLICITATION AGREEMENT. On the date
hereof, the Company and the Executive shall enter into a Non-Competition and
Non-Solicitation Agreement substantially in the form attached hereto as EXHIBIT
A, and such agreement shall be incorporated herein by this reference and made a
part hereof as if set forth herein in its entirety.
6. CHANGE IN CONTROL.
6.1 Notwithstanding any other provision of this
Agreement, if a Change in Control (as such term is defined below) shall have
occurred, upon the termination of employment of the Executive after such Change
in Control (i) by the Company other than for cause or (ii) by the Executive for
good reason, the following severance payments and arrangements (less applicable
deductions for social security, payroll and other applicable taxes) shall be
made for the benefit of the Executive:
(a) cash payments in bi-weekly installments at
the Executive's current bi-weekly base salary at the time of termination (less
applicable deductions) for a period equal to 24 months, commencing with the
month immediately succeeding the month during which the termination occurred;
(b) normal employee medical benefits shall be
continued for the Executive for a period equal to 24 months, commencing with the
month immediately succeeding the month during which the termination occurred;
(c) a lump sum cash payment in an amount equal
to 24 times the current monthly value of the other benefits otherwise payable to
the Executive at the time of termination;
(d) payment of bonuses otherwise earned but not
yet paid to the Executive under Section 4 through the date of termination; and
(e) all stock options granted to the Executive
which shall not have vested as of the time of termination shall thereupon
automatically vest and be immediately exercisable in full, provided that any
such acceleration of vesting shall in every event be subject to the terms of any
stock option plan under which such stock options are granted.
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Notwithstanding the foregoing, the severance payments and
arrangements set forth in paragraphs (a) and (b) above shall cease in the event
the Executive commences alternate employment with (i) base salary equal to or
greater than the Executive's base salary at the time of termination and (ii)
comparable employee medical benefits.
For the purposes of this Section 6, cause shall mean any
willful misconduct by the Executive which affects the business reputation of the
Company or willful failure by the Executive to perform his material
responsibilities to the Company (including, without limitation, breach by the
Executive of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the Executive
and the Company). For the purposes of this Section 6, good reason shall mean any
significant diminution in the Executive's title, authority or responsibilities
or any reduction in the Executive's base salary.
6.2 For purposes of this Agreement, a "Change in Control"
shall mean:
(a) any merger or consolidation which results in
the voting securities of the Company outstanding immediately prior thereto
representing immediately thereafter (either by remaining outstanding or by being
converted into voting securities of the surviving or acquiring entity) less than
50% of the combined voting power of the voting securities of the Company or such
surviving or acquiring entity outstanding immediately after such merger or
consolidation;
(b) individuals who, as of July 1, 1999,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequently to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board
(except that this proviso shall not apply to any individual whose initial
assumption of office as a director occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents other than by or on
behalf of the Board); or
(c) any sale of all or substantially all of the
assets of the Company.
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7. PROPRIETARY INFORMATION AND DEVELOPMENTS.
7.1 PROPRIETARY INFORMATION.
(a) The Executive agrees that all information,
whether or not in writing, of a private, secret or confidential nature
concerning the Company's business, business relationships or financial affairs
(collectively, "Proprietary Information") is and shall be the exclusive property
of the Company. By way of illustration, but not limitation, Proprietary
Information may include inventions, products, processes, methods, techniques,
formulas, compositions, compounds, projects, developments, plans, research data,
clinical data, financial data, personnel data, computer programs, customer and
supplier lists, and contacts at or knowledge of customers or prospective
customers of the Company. The Executive will not disclose any Proprietary
Information to any person or entity other than employees of the Company or use
the same for any purposes (other than in the performance of his duties as an
employee of the Company) without written approval by an officer of the Company,
either during or after his employment with the Company, unless and until such
Proprietary Information has become public knowledge without fault by the
Executive.
(b) The Executive agrees that all files,
letters, memoranda, reports, records, data, sketches, drawings, laboratory
notebooks, program listings, or other written, photographic, or other tangible
material containing Proprietary Information, whether created by the Executive or
others, which shall come into his custody or possession, shall be and are the
exclusive property of the Company to be used by the Executive only in the
performance of his duties for the Company. All such materials or copies thereof
and all tangible property of the Company in the custody or possession of the
Executive shall be delivered to the Company, upon the earlier of (i) a request
by the Company or (ii) termination of his employment. After such delivery, the
Executive shall not retain any such materials or copies thereof or any such
tangible property.
(c) The Executive agrees that his obligation not
to disclose or to use information and materials of the types set forth in
paragraphs (a) and (b) above, and his obligation to return materials and
tangible property, set forth in paragraph (b) above, also extends to such types
of information, materials and tangible property of customers of the Company or
suppliers to the Company or other third parties who may have disclosed or
entrusted the same to the Company or to the Executive.
7.2 DEVELOPMENTS.
(a) The Executive will make full and prompt
disclosure to the Company of all inventions, improvements, discoveries, methods,
developments, software, and works of authorship, whether patentable or not,
which are created, made, conceived or reduced to practice by him or under his
direction or jointly with others during his employment by the Company, whether
or not during normal working hours or on the premises of the Company (all of
which are collectively referred to in this Agreement as "Developments").
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(b) The Executive agrees to assign and does
hereby assign to the Company (or any person or entity designated by the Company)
all his right, title and interest in and to all Developments and all related
patents, patent applications, copyrights and copyright applications. However,
this Section 7.2(b) shall not apply to Developments which do not relate to the
present or planned business or research and development of the Company and which
are made and conceived by the Executive not during normal working hours, not on
the Company's premises and not using the Company's tools, devices, equipment or
Proprietary Information. The Executive understands that, to the extent this
Agreement shall be construed in accordance with the laws of any state which
precludes a requirement in an employee agreement to assign certain classes of
inventions made by an employee, this Section 7.2(b) shall be interpreted not to
apply to any invention which a court rules and/or the Company agrees falls
within such classes. The Executive also hereby waives all claims to moral rights
in any Developments.
(c) The Executive agrees to cooperate fully with
the Company, both during and after his employment with the Company, with respect
to the procurement, maintenance and enforcement of copyrights, patents and other
intellectual property rights (both in the United States and foreign countries)
relating to Developments. The Executive shall sign all papers, including,
without limitation, copyright applications, patent applications, declarations,
oaths, formal assignments, assignments of priority rights, and powers of
attorney, which the Company may deem necessary or desirable in order to protect
its rights and interests in any Development. The Executive further agrees that
if the Company is unable, after reasonable effort, to secure the signature of
the Executive on any such papers, any executive officer of the Company shall be
entitled to execute any such papers as the agent and the attorney-in-fact of the
Executive, and the Executive hereby irrevocably designates and appoints each
executive officer of the Company as his agent and attorney-in-fact to execute
any such papers on his behalf, and to take any and all actions as the Company
may deem necessary or desirable in order to protect its rights and interests in
any Development, under the conditions described in this sentence.
7.3 OTHER AGREEMENTS. The Executive hereby represents
that, except as the Executive has disclosed in writing to the Company, the
Executive is not bound by the terms of any agreement with any previous employer
or other party to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of his employment with the
Company or to refrain from competing, directly or indirectly, with the business
of such previous employer or any other party. The Executive further represents
that his performance of all the terms of this Agreement and as an employee of
the Company does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by the Executive in
confidence or in trust prior to his employment with the Company, and the
Executive will not disclose to the Company or induce the Company to use any
confidential or proprietary information or material belonging to any previous
employer or others.
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8. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.
9. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.
10. GOVERNING LAW. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of Delaware.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Executive are personal and shall not be assigned by him.
12. MISCELLANEOUS.
(a) No delay or omission by the Company or the Executive
in exercising any right under this Agreement shall operate as a waiver of that
or any other right. A waiver or consent given by the Company or the Executive on
any one occasion shall be effective only in that instance and shall not be
construed as a bar or waiver of any right on any other occasion.
(b) The captions of the sections of this Agreement are
for convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.
(c) In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
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ECC INTERNATIONAL CORP.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: President
EXECUTIVE
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
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