EXHIBIT 10.68
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of August 1, 1999, between SEMX Corporation, a
Delaware corporation ("SEMX"), Xxxxxx Company, Inc., a California corporation
("Xxxxxx Company" or the "Company") and Xxxxx X. Xxxxxx (the "Executive"), an
individual residing at 0000 Xxxxxx Xxxxxx, Xxx Xxxxx, XX 00000.
WITNESSETH
WHEREAS, the Company wishes to continue to employ the Executive as it's
President and Chief Executive Officer respectively, an executive who should have
influence in the direct management of the business and should contribute, in
part, to SEMX's and the Company's commercial success.
WHEREAS, the Executive is willing to accept such employment for the inducements
and upon the terms and conditions hereinafter set forth; and
WHEREAS, the Company has also bargained for the Executive simultaneously to
execute the Company's Intellectual Property Agreement, a copy of which is
annexed hereto as Exhibit A.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, SEMX, the Company and the Executive agree as
follows:
Section 1. Employment:
(a) Term of Employment. Upon the terms and subject to the conditions set
forth in this Agreement, the Company hereby employs the Executive, and the
Executive agrees to be employed as the Company's President and Chief
Executive Officer. Subject to earlier termination as provided in Section 4
hereof, the term of the Executive's employment by the Company under this
Agreement (the "Employment Term"), shall commence as of the date hereof,
and shall continue for an initial term of five (5) years, up to and
including June 30, 2004 (the "Initial Term"). The Employment Term shall
continue beyond the Initial Term on a year-to-year basis, which enables
the Company and the Executive to avoid renegotiations as the terms of this
Agreement are automatically extended until modified in writing or one of
the parties hereto terminates this Agreement as provided in section 4, or
unless either party gives written notice of termination to the other of
not less than 60 days prior to the expiration of the Employment Term
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then in effect. Any extension shall be upon the same terms and conditions
as set forth herein or as subsequently modified or amended for the
Employment Term hereunder except that the Base Salary as hereinafter
defined for any extensions shall be the amount in effect at the end of the
previous term.
(b) Duties. The Executive will serve as the Company's President and Chief
Executive Officer and will perform the services and duties for the Company
designated by SEMX's Chief Executive Officer and the Company's Chairman or
his designee (the "Supervisor"), provided that such duties are reasonably
consistent with Executive's responsibilities and status as the Company's
President and Chief Executive Officer. The Executive shall also, if
elected in accordance with the By-Laws of SEMX and the Company serve as an
Officer and/or Director of SEMX or the Company or their affiliates without
additional compensation and SEMX and the Company shall indemnify Executive
to the maximum extent allowable under law for his services as an Officer
and/or Director.
(c) Extent of Services. During the Employment Term, Executive agrees to:
(i) devote all of his/her business time, energy and skill to the business
of the Company; (ii) use his/her best efforts to promote the interests of
the Company; and (iii) discharge such executive and administrative duties
consistent with his/her position as may be assigned to him/her by the
Supervisor. Executive agrees that he/she will not work for any other
profit making organization in a direct or indirect manner without the
written consent of his Supervisor.
In consideration of the Executive agreeing to serve as an Officer of SEMX,
and his agreement to conduct additional assignments on behalf of SEMX, in
the event that the Executive is not paid his salary by the Company within
three business days of when Executive is entitled to same, at any time
during the period of this contract, and Executive gives written notice of
such failure to SEMX, SEMX guarantees the prompt and full payment to
Executive of all payments of salary not paid by the Company.
Section 2. Compensation
All compensation due Executive under this Agreement shall be payable by the
Company, whether the services rendered are for SEMX, the Company or one of their
affiliates.
(a) Base Salary. For services rendered by the Executive under the
Agreement, the Company shall pay the Executive an annual salary of Two
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Hundred Eighteen Thousand ($218,000), dollars (the "Base Salary"). The
Base Salary shall be earned and shall be payable in accordance with the
Company's normal accounting and payroll practices and the Company may
increase, but not decrease, the Base Salary at any time.
(b) Bonus.
(i)In addition to Executive's Base Salary, Executive may be paid an annual
bonus by the Company for a calendar year period (the "Bonus Period") in
such amount (the "Bonus Amount") as may be determined in the sole and
absolute discretion of the Compensation Committee of the Board of
Directors of SEMX.
(ii) The Bonus Amount, if any, shall be paid to Executive no later than
fifteen (15) days after the completion of the audit of SEMX and the
Company's financial statements for the Bonus Period.
(iii) The Bonus Amount is due and payable to Executive if and only if
Executive is in the employ of the Company on the last day of the Bonus
Period; provided, however, that the Executive (or his/her estate) shall be
entitled to a pro rated portion of the Bonus Amount (based on time
elapsed) if executive: (a) dies, (b) becomes disabled (c) is terminated
without Cause by the Company (defined below), or (d) exercises the Change
of Control provision of Section 4(d) prior to the end of the Bonus Period.
Executive shall not be entitled to any Bonus Amount for a calendar year in
which Executive did not perform services for the Company or any affiliate
regardless of the reason therefore or if the Board of Directors of SEMX
determines that performance targets established by it with sole discretion
(subject to a test of reasonableness) were not accomplished for the period
in question.
Section 3. Other Benefits. During the Employment term, the Executive shall be
entitled to the following benefits:
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(a) vacation time, three (3) weeks annually in accordance with the
Company's policy for executives in effect as determined by the Company
and consistent with the Executive completing his/her responsibilities;
(b) participation in all employee group life, group health and other
fringe benefit programs, including, but not limited to, any 401K plan,
incentive compensation, performance unit, bonus, stock purchase or stock
appreciation plans now or hereafter initiated or maintained by the Company
for executive officers of the Company for which Executive is eligible
subject to the right of the Company to amend or terminate such plans;
(c) reimbursement for all reasonable and properly documented expenses
incurred or paid by Executive in connection with the performance of
his/her duties hereunder and in accordance with the general expense
reimbursement policy of the Company then in effect; and
(d) use of a car to be leased by the Company (said lease payment not to
exceed $1,500.00 per month) or $1,500.00 per month car allowance.
Section 4. Termination The Employment Term shall terminate upon any of the
following occurrences; provided, however, that upon such termination the
Executive shall be entitled to receive, as and when they would have been
received in the ordinary course if such termination had not occurred, the unpaid
portion of his Base Salary and other employee benefits as they shall have
accrued and vested through the date of such termination for services rendered.
(a) Voluntary Termination by the Executive. Except as set forth in Section
4 (d) below, if the Executive voluntarily ceases to be employed by the
Company before the end of the Employment Term, with or without the consent
of the Company, subject to paragraph 4D, then the Employment Term shall
end without further action by either party hereto and all rights and
obligations of the parties under this Agreement, except those set forth in
the Intellectual Property Protection Agreement shall terminate as of such
date.
(b) Termination for Cause. The Company may terminate the Employment Term
at any time for Cause. For the purposes of this Agreement, "Cause" shall
mean;
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(i) the failure of Executive to perform his duties in all material
respects provided that prior to termination Executive has been given
an opportunity to remedy such dissatisfaction within thirty (30)
days or, if such dissatisfaction is not subject to cure, the
repetition of the act or omission which dissatisfied his/her
Supervisor is repeated by Executive after Executive received such
notice;
(ii) conviction of (A) any serious crime or serious offense
involving misappropriation of money or other property of the
Company, or (B) any felony; or
(iii) Executive's use of narcotics, illegal drugs or controlled
substances other than as prescribed by a licensed physician.
(iv) violation of the terms and conditions for employment as set
forth in the Company's Employee Handbook.
c) Termination Upon Disability. If, during the Employment Term, the Board
of Directors of SEMX reasonably determines that the Executive has been or
will be incapable of fulfilling his obligations hereunder because of
injury or physical or mental illness, for a period of more than three (3)
consecutive months or six (6) months in an aggregate during any period of
twelve (12) consecutive months, the Company may, upon written notice to
the Executive, terminate the Employment Term upon thirty (30) days'
written notice to the Executive, to the extent permitted by applicable
law.
(d) Termination after Change in Control. This Agreement may be terminated
by the Executive, if there is a Change in Control. If, after a Change in
Control, the Executive terminates this Agreement, the Executive will be
entitled to the Severance Benefits. The terms Change in Control, and
Severance Benefits are defined in Schedule 4D (attached hereto).
Section 5. Non-Competition
During the Employment Term and for a period of one (1) year thereafter (the
"Non-Compete Period"), the Executive shall not, directly or indirectly, engage
in, own, manage,
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operate, join or control, or participate in the ownership, management, operation
or control of any Restricted Enterprise or associate with any entity,
incorporated or otherwise (other than the Company or its affiliates), which
engages or plans to engage in a Restricted Enterprise anywhere in the United
States, whether as a director, officer, employee, agent, consultant,
shareholder, partner, owner, independent contractor or otherwise. As used
herein, a "Restricted Enterprise" shall be any activity that competes with the
business of the Company as constituted or as realistically contemplated during
the Employment term in the United States.
Section 6. General
(i) This Agreement shall be binding upon and inure to the benefit of
SEMX and the Company and its successors and assigns and shall be
binding upon and inure to the benefit of the Executive and his
heirs, executors and administrators. If SEMX or the Company assigns
this Agreement, the assignee shall be required to expressly assume
all obligations of SEMX and the Company under this Agreement.
(ii) The waiver by SEMX or the Company or the Executive of a breach
of any provision of this Agreement by the other party shall not be
construed as a waiver of any subsequent breach of the same provision
or of any other provision of this Agreement.
(iii) All notices, requests, demands and other communications
submitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or by commercial overnight
delivery service or if mailed by first class, registered mail,
return receipt requested, postage and registry fees prepaid; and
addressed; if to the Executive, to the address set forth in the
first paragraph hereof, and if to SEMX, to 0 Xxxxxxxx Xxxxx, Xxxxxx,
Xxx Xxxx, 00000, attention Chairman, and if to the Company, 00000
Xxxxxxx Xxxxxx Xxxx, Xxx Xxxxx, XX 00000, attention Chairman.
(iv) This Agreement shall be construed and enforced in accordance
with, and governed by, the laws of the State of New York without
regard to the conflict of laws principles thereof.
(v) This Agreement together with the Intellectual Property
Protection Agreement, the Employees' Stock Option Plan Agreement,
the Amended
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Stock Option Plan Agreement, the Company's Employee Handbook, and
the Asset Purchase Agreement dated April 3, 1999 incorporates the
entire understanding of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements relating
to such subject matter. The invalidity of any section, provision or
portion of this Agreement shall not affect the validity of any other
section, provision or portion of this Agreement, and each such
section, provision or portion shall be enforced to the full extent
permitted by law. This Agreement may not be modified or amended, or
any term or provision hereof waived or discharged, except by a
written instrument signed by the party against whom such amendment,
modification, waiver, or discharge is sought to be enforced. The
headings of this Agreement are for the purposes of reference only
and shall not limit or otherwise affect the meaning hereof. This
Agreement may be executed in several counterparts, all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have dully executed this Agreement as of
the day and year first above written.
Dated: July 28, 1999 SEMX Corporation
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/s/ Xxxxx X. Xxxxxx By /s/ Xxxxxxx X. Xxxxx
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Executive Xxxxxxx X. Xxxxx, Chairman
Xxxxxx Company, Inc.
By /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Chairman
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