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MANUFACTURERS'
SERVICES
June 25, 1996
Xxxx X. Xxxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Dear Xxxx:
As we discussed, in recognition of your performance as an executive of
Manufacturers' Services Limited ("MSL") and in consideration of your continuing
employment, MSL has agreed to the following severance terms:
If your employment is terminated by MSL (and for the purposes of this
letter MSL includes any successor in interest) other than for Cause, death or
Disability, you will be entitled to salary continuation payments during the
12-month period following termination. The total of all such payments, which
shall be payable in 26 equal installments in accordance with MSL's payroll
practices and procedures, shall be an amount equal to the sum of (i) your Base
Salary for the year of termination, plus (ii) your incentive compensation
(Target Bonus and Super Achievement Bonus) earned during the prior year,
provided that (x) the total amount payable to you hereunder shall not exceed two
times your Base Salary for the year of termination and (y) salary continuation
payments shall terminate upon your material breach of the Agreement with Respect
to Confidential Information and Inventions and Non-Competition (the
"Non-Competition Agreement") that you have entered into with MSL. For this
purpose:
(a) "Cause" means (i) your willful and continued failure
substantially to perform your duties as described herein (other than (x) as a
result of total or partial incapacity due to physical or mental illness, (y) for
Good Reason, or (z) as a result of MSL's material breach of its obligations
pursuant to this letter agreement) following written notice to you and a 60-day
cure period, (ii) your dishonesty in the performance of your duties, (iii) your
material breach of the Non-Competition Agreement or (iv) your conviction of, or
the entry of a plea of guilty by you to, a felony involving your personal
conduct under the laws
MANUFACTURERS' SERVICES LTD.
000 XXXXX XXXXXX
XXXXXXX, XXXXXXXXXXXXX XXX
00000-2121
000.000.0000
FAX 000.000.0000
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of the United States or any state thereof or conviction of, or the entry of a
plea of guilty to, a crime involving your personal conduct in any other
jurisdiction which crime would constitute a felony under the laws of the United
States or any state thereof if such crime had been committed within the
jurisdiction of the United States or any stare thereof.
(b) "Disability" means physical or mental incapacity resulting in
your being unable to perform your essential functions for an aggregate of more
than six months during any period of twenty-four consecutive months. Any
question as to the existence of your Disability as to which you and MSL cannot
agree will be determined in writing by a qualified independent physician
mutually acceptable to you and MSL. If you and MSL cannot agree as to a
qualified independent physician, each will appoint such a physician and those
two physicians will select a third, who will make such determination in writing.
Such determination of Disability made in writing to MSL and to you will be final
and conclusive for all purposes of your employment.
(c) "Good Reason" means:
(i) you are removed from your current position of Executive Vice
President and General Counsel for any reason other than for Cause or by
reason of your death or Disability;
(ii) you are assigned duties and responsibilities that are
inconsistent, in a material respect, with the scope of duties and
responsibilities associated with your position or you are required to
report directly to any person other than MSL's Chief Executive Officer or
any Chief Operating Officer;
(iii) breach by MSL of any of its material employment obligations to
you;
(iv) you are required to relocate outside the greater Boston area;
or
(v) your Base Salary or the percentage of your Base Salary used to
calculate your Incentive Compensation is reduced other than for reasons of
your performance after written notice and a reasonable opportunity to
cure.
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This letter is intended to be incorporated into and become an integral
part of your present employment agreement with MSL. Except as provided above,
all of the other terms and conditions of your present employment agreement will
continue in full force and effect. Please acknowledge your agreement and
acceptance by signing the enclosed copy of this letter and returning it to me
for MSL's files.
Very truly yours,
MANUFACTURERS' SERVICES LIMITED
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Chairman, CEO and President
Accepted and Agreed:
/s/ Xxxx X. Xxxxxxx
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Dated: 6/25/96
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