Exhibit 10.10
Century
[LOGO]
Electronics Manufacturing, Inc.
KEY EMPLOYEE AGREEMENT
To: Xxxx Xxxxxxxx As of: July 1999
0000 Xxxxxxx Xx.
Xxxxxxx Xxxxx, Xxxxxxx 00000
The undersigned, Century Electronics Manufacturing, Inc., a company incorporated
in the State of Delaware, United States of America (the "Company") hereby agrees
with you as follows:
1. Position and Responsibilities.
1.1 You shall serve as Vice-President of the Company, and shall perform
the duties customarily associated with such position, including, but not limited
to, those set forth in section 1.2 herein, from time to time at the offices of
the Company presently located at 0000 Xxxxx Xxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx
00000 or at such place or places as are appropriated and necessary in connection
with such employment. However no relocation is required.
1.2 You shall be a Vice-President of the Company and, subject to the
direction of the Board of Directors of the Company, shall have general charge of
the business, affairs and property of the Florida Operations and general
supervision over Florida Personnel. In general, he shall perform all duties
incident to the office of Vice-President and shall see that all lawful and
reasonable orders of the Company's Board of Directors are carried into effect.
The Company's Board of Directors may from time to time confer like powers upon
any other person or persons.
1.3 You will, to the best of your ability, devote your full time and best
efforts to the performance of your duties hereunder and the business and affairs
of the Company. You agree to perform such duties as may be reasonably assigned
to you by the Company's Board of Directors from time to time.
1.4 You will duly, punctually and faithfully perform and observe any and
all lawful rules and regulations which the Company may now of shall hereafter
establish governing the conduct of its business.
2. Term of Employment
2.1 The appointment shall commence on July 1999(the date on which the
Company completes its acquisition of all of the outstanding stock of Amitek
Corporation ("Amitek") the ("Commencement Date") and shall continue (subject to
earlier
termination in accordance with Sections 2.2 or 2.4) for a fixed period ending
three (3) years from the Commencement Date (the "Fixed Term").
2.2 The Company shall have the right, upon written notice to you, to
terminate your employment at any time for cause.
2.3 For purposes of Section 2.2, the term "cause" shall mean the
following: (i) your involvement in any felony crime, severe arrestable criminal
offense (excluding road traffic offenses for which a fine or non-custodial
penalty is imposed), or any crime in connection with your employment (including
theft of Company assets); or (ii) gross insubordination or your failure to take
actions permitted by law and necessary to implement strategies or policies of
the Company and which are consistent with your positions and duties, following
written warning of such failure; or (iii) drunkenness or use of any drug or
narcotic which adversely affects your performance; or (iv) any knowing or
intentional misrepresentation of sales or operating status, or other significant
information important to the operating condition of the Company; or (v) acting
in serious or persistent breach or contravention of the non-competition,
non-disclosure or non-solicitation covenants hereof.
2.4 The Company shall have the right to terminate your employment at any
time without cause upon written notice, provided that the Company shall be
obligated to provide you as severance pay an amount equal to (a) your Base
Salary (as set forth in Exhibit A) for a period equal to the greater of(i) six
(6) months or (ii) the amount of time remaining in the Fixed Term at the time of
your termination, but in any event not less than three (3) months (the
"Severance Pay"), less (b) applicable taxes and other required witholdings, and
less (c) any amounts you may owe the Company ("Severance Pay"). The Company
shall also continue in full force and effect for the Severance Period, all
health and insurance benefits that you enjoyed at the time of termination, and
all other benefits which applicable law requires to be continued.
2.5 You shall have the right to terminate this Agreement for any reason
upon not less than six (6) months prior written notice to the Company.
2.6 After receipt of notice from the Company of termination of your
employment hereunder pursuant to Section 2.2 or 2.4, you shall continue to be
available to the Company, at its sole discretion, for up to twenty (20) hours
per week for a period of up to four (4) weeks to assist in any necessary
transition (the "Transition Period"). If you are terminated for cause pursuant
to Section 2.2 and the Company exercises its rights under this Section, your
compensation for work performed during this Transition Period shall be
calculated pro rata based on your then current Base Salary (as set forth in
Exhibit A). If you are terminated without cause pursuant to Section 2.4 hereof,
you shall receive no further compensation for work performed during the
Transition Period beyond the Severance Pay described in Section 2.4.
3. Compensation. You shall receive the compensation and benefits set forth on
Exhibit A hereto ("Compensation") for all services to be rendered by you
hereunder and your
transfer of property rights pursuant to provisions relating to proprietary
information and inventions contained in the Stock Purchase and Sale Agreement
between the Company, you, "Amitek", and other shareholders of
4. Other Activities During Employment
4.1 Except for any outside employments and directorships currently held by
you as listed on Exhibit B hereto, if any, and except with the prior written
consent of the Company's Board of Directors (which approval shall not be
unreasonably withheld), you will not during the term of this Agreement undertake
or engage in any other employment, occupation or business enterprise other than
one in which you are an inactive investor.
4.2 You hereby agree that, except as disclosed on Exhibit B hereto, during
your employment hereunder, you will not, directly or indirectly, engage (a)
individually, (b) as an officer, (c) as a director (d) as an employee (e) as a
consultant (f) as an advisor (g) as an agent (whether a salesperson or
otherwise), (h) as a broker (i) as a partner, coventurer, stockholder or other
proprietor owning directly or indirectly more than five percent (5%) interest in
any firm, corporation, partnership, trust, association, or organization which is
engaged in any line of business engaged in or under demonstrable development of
the Company or any of its subsidiaries (such firm, corporation, partnership,
trust, association, or other organization being hereinafter referred to as a
"Prohibited Enterprise"). You hereby represent that you are not presently
engaged in any of the foregoing capacities (a) through (i) in any Prohibited
Enterprise.
5. Confidentiality, Proprietary Information and Inventions.
5.1 Confidentiality. Except to the extent otherwise required by law, you
agree to keep confidential, except as the Company may otherwise consent in
writing, and, except for the Company's benefit, not to disclose or make any use
of at any time either during or subsequent to your employment, information,
including without limitation, any inventions, trade secrets, confidential
information, knowledge, date or other information of the Company or any of its
affiliates relating to products, processes, know-how, designs, formulas, test
data, customer lists, business plans, marketing plans and strategies, pricing
strategies, or other subject matter pertaining to any business of the Company or
its affiliates (hereinafter known as "Confidential Information") which you may
produce, obtain or otherwise acquire during the Fixed Term hereof or in the
course of employment, except as herein provided. You further agree, except to
the extent otherwise required by law, not to deliver, reproduce, or in any way
allow any such trade secrets, Confidential Information, knowledge, data or other
information, or any documentation relating thereto, to be delivered to or used
by any third parties without specific direction or consent of the Company's
Board of Directors. You acknowledge and agree that your obligations under this
section shall survive the termination of your employment with the Company.
5.2 Trade Secrets of Others. You represent and warrant that your
performance of the terms of this Agreement and your position as an employee of
the Company do not and will not breach any agreement to keep confidential any
proprietary information, knowledge or data acquired by you in confidence or in
trust prior to your employment with the Company, and you 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 other. You agree
not to enter into any agreement either written or oral in conflict herewith.
5.3 Return of Confidential Information. In the event your employment with
the Company terminates for any reason whatsoever, you shall promptly surrender
and deliver to the Company all Confidential Information, records, materials,
equipment, drawings, documents and date which you may obtain or produce during
the course of your employment, and you will not take with you any description
containing or pertaining to any Confidential Information, knowledge or data of
the Company or any of its affiliates which you may produce or obtain during the
course of your employment.
5.4 Proprietary Information. You agree that documents, files and tapes
containing software programs, or marketing, financial, production, employee
relations, legal or other information that could, if circulated, hurt the
Company's competitive position or its relationship with the public, customers,
vendors or others will be kept confidential. You agree that the Company's
information will be given special handling, including storage in a locked desk,
file or similar container when not in use. You agree that such information will
not be divulged to anyone outside the Company.
5.5 Assignment of Inventions. As used in this Agreement, "Invention" shall
include, but not be limited to, improvements, designs, discoveries,
developments, and works of authorship or artistry (including software,
integrated circuit, printed circuit board or computer design and documentation).
You hereby assign and transfer to the Company your entire right, title and
interest in all Inventions, whether or not protectable by patent, trademark,
copyright or mask work right and whether or not used by the Company, which are
reduced to practice, made or conceived by you (solely or jointly with others)
during the period of your employment with the Company, which relate in any
manner to the business, products, technologies, processes, services or research
and development of the Company or any of its affiliates. You agree that
Inventions shall be and remain the sole and exclusive property of the Company or
its nominee, whether or not used by the Company or protected by patent,
copyright, trademark, mask work right or trade secrecy. You agree to disclose
each Invention promptly in writing to the Board of Directors of the Company. You
agree to assist the Company, upon request and at its expense, during and after
your employment, in every reasonable way, to obtain for the company's own
benefit, patents, trademarks, copyrights, mask work rights or other rights or
other proprietary rights for Inventions in any and all countries. You agree to
execute such papers and perform such lawful acts as the Company deems to be
necessary to allow it to exercise all right, title and interest in such patents,
trademarks, copyrights and mask work rights, including executing, acknowledging,
and/or delivering to the Company, upon request and at its expense, applications
for and assignments of Inventions, and patents,
trademarks, copyrights, and mask rights to be issued therefor, in any and all
countries, and to vest title thereto in the Company or its nominee. You agree
that the obligations contained in this section 5.5 shall survive the termination
of your employment with the Company.
5.6 Former Employers. You hereby represent and warrant that your
employment by the Company will not conflict with and will not be constrained by
any prior or current employment, consulting agreement or relationship, whether
oral or written. You represent and warrant that, except for information relating
to he business of your former employers, you do not possess confidential
information arising out of any such employment, consulting agreement or
relationship which, in your best judgement, would be utilized in connection with
your employment by the Company (for these purposes, not including your former
employment with AMITEK. In the alternative, if you should find that confidential
information belonging to any other person or entity (other than AMITEK might be
usable in connection with the Company's business other than information to the
Company or use on behalf of the Company any confidential information belonging
to any of your former employers, but during your employment by the Company you
will use in your performance of your duties all information witch is generally
known and used by persons with training and experience comparable to your own,
all information which is common knowledge in the industry or otherwise legally
in the public domain.
6. Post Employment Activities.
6.1 You shall not for a period of two (2) years after termination of your
employment hereunder (howsoever occasioned), without the prior written consent
of the Company, directly or indirectly do any business with or have any dealings
with any person, firm or company who was a client, customer, supplier, agent or
distributor of the Company or any of its subsidiaries during the period of one
(1) year prior to the end of your employment hereunder and with whom you have
contact during the period of one (1) year prior to the end of your employment.
In addition, you shall not for a period of two (2) years after termination of
your employment of your employment (howsoever occasioned) render services or
reasonably related to those which you shall have rendered hereunder during the
one (1) year period prior to the end of your employment, to any person or entity
whether now existing or hereafter established which directly competes with (or
proposes or plans to directly compete with) the Company or any of its
subsidiaries ("Direct Competitor") in any line of business engaged in or under
development by the Company or any of its subsidiaries. Nor shall you entice,
induce or encourage any of the other employees of the Company or any of its
subsidiaries to engage in any activity which, were it done by you, would violate
any provision of the Assignment of Inventions and Confidentiality Agreement
which you have executed or this Section 6. As used by the Company or any of its
subsidiaries" shall be applied as at the date of termination of your employment.
6.2 For a period of one (1) year after the termination of your employment
with the Company, the provisions of Section 4.2 shall be applicable to you and
you shall comply therewith. As applied to such one (1) year post-employment
period, the phrase "any other line of business engaged in or under development
by the Company or any of its subsidiaries," as used in Section 4.2, shall be
applies as at the date of termination of your employment with the Company.
6.3 No provision of this Agreement shall be construed to preclude you from
performing the same service which the Company hereby retains you to perform for
any person or entity which is not a Direct Competitor of the Company or any of
its subsidiaries upon the expiration or termination of your employment so long
as you do not thereby violate any term of the Assignment of Inventions and
Confidentiality Agreement.
6.4 You agree that for a period of one (1) year following the termination,
for any reason, of your employment with the Company, you shall not entice or
encourage any then-current employee of the Company or any of its subsidiaries to
leave his or her employment, nor shall you assist, directly or indirectly, any
company, entity, recruitment firm, employment agency, or other organization in
the hiring or recruitment of any then-current employee of the Company or any of
its subsidiaries for another position in the field of business in which the
Company or any of its subsidiaries is engaged without the prior knowledge and
written consent of the Company's officers and Board of Directors. You agree
that, in the event of a breach by you of this Section 6.4, you shall pay all
damages to the Company or any of its subsidiaries resulting therefrom,
including, but not limited to, the full amount of the fee paid to the executive
recruitment firm. If any, employed by the Company or any of its subsidiaries in
connection with the recruitment and hiring of the employee(s) lost as a result
of your breach of this Section 6.4.
7. Assignment of Inventions and Confidentiality Agreement. You agree to
execute, deliver and be bound by the provisions of the Assignment of
Inventions and Confidentiality Agreement attached hereto as Exhibit C.
8. Remedies. Your obligations under the provisions of Sections 4,5,6,7 and 9
of this Agreement (as modified by Section 10, if applicable) shall survive
the expiration or termination of your employment (whether through you
resignation or otherwise) with the Company. You acknowledge that a remedy
at law for any breach or threatened breach by you of the provisions of
Sections 4,5,6.1 through 6.3, and the provisions of the Assignment of
Inventions and Confidentiality Agreement would be inadequate and you
therefore agree that the Company shall be entitled to injunctive relief in
case of any such breach or threatened breach.
9. Assignment. This Agreement and the rights and obligations of the parties
hereto shall bind and inure to the benefit of any successor or successors
of the Company by reorganization, merger or consolidation and any assignee
of all or substantially all of its business and properties, but except as
to any such successor or assignee of the
Company, neither this Agreement nor any rights or benefits hereunder may
be assigned by the Company or by you, except by operation of law.
10. Interpretation. It is the intent of the parties that in case any one or
more of the provisions contained in this Agreement shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceable shall not affect the other
provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein. MOREOVER, it is the intent of the parties that in case any one or
more of the provisions contained in this Agreement shall for any reason be
held to be excessively broad as to duration, geographical scope, activity
or subject, such provision shall be construed by limiting or reducing it
as determined by a court of competent jurisdiction, so as to be
enforceable to the extent compatible with applicable law.
11. Notices. Any notice that the Company or you is required to or may desire
to give the other under this Agreement shall be deemed to have been duly
given if dispatched by the party hereto by registered post addressed to
the other party as in the case of the Company's registered office for the
time being and in the case of your last known address and such notice
shall be deemed to have been given on the day on which in the ordinary
course of post it would have been delivered. The date of personal delivery
of any notice under this Section 10 shall be deemed to be the date of
delivery thereof.
12. Waivers. If either party should waive any breach of any provision of this
Agreement, such party shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
13. Complete Agreement; Amendments. The forgoing, including Exhibits A, B and
C hereto, is the entire agreement of the parties with respect to the
subject matter hereof, superseding any previous oral or written
communications, representations, understandings, or agreements with the
Company or any officer or representative thereof. Any amendment to this
Agreement or waiver by the Company of any right hereunder shall be
effective only if evidenced by a written instrument executed by the
parties hereto, upon authorization of the Company's Board of Directors.
14. Headings. The headings of the Sections hereof are inserted for convenience
only and shall not be deemed to constitute a part hereof nor to affect the
meaning of this agreement.
15. Counterparts. This Agreement may be signed in two counterparts, each of
which shall be deemed an original and both of which shall together
constitute one agreement.
16. Governing Law. This Agreement shall be governed by and construed under the
laws of the Commonwealth of Massachusetts. The parties consent to the
jurisdiction of the courts of the Commonwealth of Massachusetts, and any
federal court located therein, and to the appropriateness of the venue of
such courts, in connection with any dispute which may arise pursuant to
this Agreement.
If you are in agreement with the foregoing, please sign your
name below, whereupon this Agreement shall become binding in
accordance with its terms. Please then return this Agreement to the
Company. (You may retain for your records the accompanying
counterpart of this Agreement enclosed herewith.)
Very truly yours,
CENTURY ELECTRONIC
MANUFACTURING INC.
By: /s/Xxx Xxxxxxxxx
------------------------
Xxx Xxxxxxxxx
President & CEO
Century Electronics Mfg. Inc.
Accepted and Agreed:
/s/ Xxxx Xxxxxxxx 6/30/99
--------------------------
Xxxx Xxxxxxxx
Century
[LOGO]
Electronics Manufacturing, Inc.
Exhibit A
EMPLOYMENT TERM, COMPENSATION, STOCK OPTIONS AND BENEFITS
XXXX XXXXXXXX
1. Term. The term of the Agreement to which this Exhibit A is annexed and
incorporated shall be until 3 years from date of Amitek Merger. (See Special
Notes)
2. Compensation. Your Base salary shall be $150,000 per annum which shall accrue
day to day and be payable by equal monthly installments in arrears in accordance
with the payroll policies of the Company then in effect.
3. Company Stock. Upon acceptance of this Agreement, you shall be granted an
incentive stock option to purchase 30,000 shares of common stock of the Company
at the fair market value determined by the Board of Directors of the Company.
The options shall vest in accordance with the attached Stock Option letter
labeled schedule A-1. Notwithstanding the foregoing, upon a declaration of
effectiveness by the Securities and Exchange Commission of a registration
statement filed in connection with an Initial Public Offering of the shares of
the Company, all options granted herein shall become fully vested and the
Exercise Period shall begin.
4. Bonus Plan. Your Bonus Plan will consist of two elements. a) Cash
b) StockOptions.
a) The Company operates a Senior Management Bonus Scheme that incentives
and rewards Management for achieving annually set targets for revenue and
profit, it is envisaged that you should earn $50,000 per annum under the
Scheme.
b) You will be offered 30,000 Options annually, which will be split into 2
elements.
i) 60% (18,000 Options) will be awarded upon achieving 85% of the
Companies annual Bonus Scheme Target(100%).
ii) 40% (12,000 Options) will be awarded for fulfilling / achieving
a set of mutually agreed goals and objectives.
5. Car Allowance. The Company will reimburse you $650.00 per month for a motor
vehicle necessary to carry out your duties on behalf of the Company.
6. Vacation. You shall be entitled to all public holidays in accordance with the
Company policy, and three (3) weeks paid vacation per annum. You will not be
permitted to carry over unused holiday entitlements into a following year except
with the prior written consent of the Company. Any holiday entitlement
unutilized when permission has not been given for it to be carried forward will
be forfeited.
7. Insurance and Benefits. You shall be eligible for participation in any
health, other group insurance plan, or pension insurance and benefits scheme
that may be established by the Company or which the Company is required to
maintain by law. You shall also be eligible to receive any other benefits that
are provided to any of the executive officers of the Company.
Special Notes
Your current Base Salary and Commission / Bonus Scheme will be honored by
Century and will remain in force until December 31, 1999. Thereafter Century's
offer of Base Salary and Bonus Plan will be effective from January 1, 2000.
When you wish to exercise this stock option, please refer to the provisions of
this letter and then correspond, in writing, with the Secretary of the Company.
Further, please indicate your acknowledgement and acceptance of this option by
signing the enclosed copy of this letter and returning it to the undersigned.
Very Truly Yours, Acknowledgement & Consent
/s/ Xxx Xxxxxxxxx
Xxx Xxxxxxxxx
President & CEO
Century Electronics Mfg. Inc.
Schedule A-1
Xxxx Xxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Subject: Stock Options
Dear Xxxx,
Further to our recent meeting and discussions, I hope the following clarifies
your stock options plan.
Century Electronics Manufacturing, Inc. (The Company) has granted you an
incentive stock option to purchase thirty thousand (30,000) shares of the common
stock, $.01 per value per share of The Company, at a price of $6.34 per share,
for a total exercise price of ($190,200). Regardless of your decision whether or
not to buy, you are requested to keep the number shares that you are eligible to
purchase strictly confidential.
The following term and conditions are applicable with respect to this option,
and your signature shall constitute your acknowledgement and acceptance of same:
A) This option shall not be transferable under any circumstances accept by
operation of law.
B) The price at which this option may be exercised shall be $6.34 per share,
for a total of $190,200.
C) This option in the first part is exercisable commencing July 1, 2000. It
may be exercised at any time thereafter prior to June 30, 2003 subject to
the following terms and vesting provisions.
1) Should your employment with the company, (or a parent or subsidiary
of The Company) terminate for any reason, all unexercised options
that have not vested as set forth in Paragraph F shall terminate
immediately.
2) In the event of termination of your employment other than by death
or disability, you may exercise the outstanding options exercisable
by you at the date of your termination by you until three (3) months
from the date of your termination.
3) In the event of your termination as a result of death or disability
that lasts for more than ninety (90) days, all outstanding options
exercisable by you at the day of such termination, may be exercised
until the date of expiration of this option or one (1) year from the
date of your employment terminates.
D) The option may be exercised in whole or in part from time to time,
provided, however, that an option may be exercised as to less than 100
shares at any one time unless it is being exercised in full and the
balance of the shares subject to option is less than 100.
E) The shares of common stock underlying this option and the exercise price
therefore shall be appropriately adjusted from time to time for stock
splits, reverse splits, stock dividends, and reclassification of shares.
F) In the event of a sale or acquisition of substantially all stock assets of
The Company, The Company shall give thirty (30) days notice of such an
event to you and you may exercise up to 100% of the vested portion of this
option. If you do not exercise the option within thirty (30) days of such
notice, all unexercised portions of this option shall terminate and be of
no further force of effect.
G) Notwithstanding anything contained herein to the contrary, the maximum
number of options that may be exercised as follows:
Vesting Period Number of Options
-------------- -----------------
July 1, 1999 to June 30, 2000 0
July 1, 2000 to June 30, 2001 10,000
July 1, 2001 to June 30, 2002 10,000
July 1, 2002 to June 30, 2003 10,000
The terms of any sale of the above described provisions shall be void if the
incursion of such provisions causes this option not to qualify as an incentive
stock option under section 422 of the code.
This opportunity to purchase stock in the Company is being offered because of
the Company's desire to reward key employees.
Exercising options may not be a prudent business decision for some employees.
Therefore we urge you to review this opportunity carefully, consult a tax
advisor, and make a decision to exercise options only if your personal financial
situation makes this a wise choice.
When you wish to exercise this stock option, please refer to the provisions of
this letter and then correspond, in writing, with the Secretary of the Company.
Further, please indicate your acknowledgement and acceptance of this option by
signing the enclosed copy of this letter and returning it to the undersigned.
Very Truly Yours, Acknowledgement & Consent
/s/ Xxx Xxxxxxxxx /s/ Xxxx X. Xxxxxxxx
6/30/99
Xxx Xxxxxxxxx
President & CEO
Century Electronics Mfg. Inc.
