EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of the 1st day
of July, 2002, by and between Plexus Corp., a Wisconsin corporation
("Employer"), and Xxxx X. Xxxxx, a Wisconsin resident individual ("Employee").
WHEREAS, Employee has been for many years an officer of Employer; and
has been designated to become the President and Chief Executive Officer of
Employer as of the date of this Agreement;
WHEREAS, as an inducement to Employee to accept the new position,
Employer has agreed to employ Employee under the terms and conditions set forth
herein;
WHEREAS, Employee is willing to commit himself to serve Employer upon
the terms and conditions herein provided;
WHEREAS, Employer and Employee have agreed to restrict Employee's
ability to disclose confidential information and to compete with Employer with
respect to the type of business conducted by Employer and its subsidiaries
(collectively, the "Company");
WHEREAS, any breach of this Agreement by Employee will cause
irreparable injury to Employer;
WHEREAS, Employee has consulted with and obtained advice from
independent legal counsel concerning the terms and conditions of this Agreement,
or has had the opportunity to do so which he has declined; and
WHEREAS, in order to effect the foregoing, Employer and Employee wish
to enter into this Agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is hereby mutually agreed as follows:
1. Recitals. The recitals set forth above shall constitute and be
deemed to be an integral part of this Agreement.
2. Employment and Acceptance. During the Term (as hereinafter defined)
of this Agreement, Employer hereby agrees to employ Employee as President and
Chief Executive Officer upon the terms and conditions hereinafter set forth.
Employee hereby accepts such employment and agrees:
(a) Except for illness, vacation periods, and reasonable leaves of absence
as approved by the Board of Directors, to devote all of his working
time, attention and energy, using his best efforts, to the duties and
responsibilities as are customary for an employee of a business of like
size and nature to that of the Employer, as well as to any other duties
and
responsibilities that may be mutually agreed upon in writing between
Employer and Employee from time to time; provided, however, that Employee
shall be permitted to serve as a director of other noncompeting entities
and/or as a director and/or officer of a nonprofit or industry association
so long as such activities do not interfere with the performance of
Employee's duties hereunder;
(b) faithfully to serve and further the interests of Employer in every lawful
way, giving honest, diligent, loyal and cooperative service to Employer;
(c) to comply with all rules and policies which, from time to time, may be
reasonably and uniformly adopted by Employer, including, without
limitation, those rules and policies regarding disclosure of information
concerning Employer, its business, affairs, plans or customers; and
(d) to be responsible for duties, including but not limited to, acting as
President and Chief Executive Officer, as well as any of the other
operations requiring Employee's assistance.
During the Term it shall not be a violation of this Agreement for
Employee to manage personal investments, so long as such activities do not
significantly interfere with the performance of Employee's responsibilities as
an employee of Employer in accordance with this Agreement.
3. Compensation. As compensation for the services to be performed by
Employee under this Agreement, and the noncompetition covenant contained herein,
Employer agrees to pay to Employee, and Employee agrees to accept, an initial
base salary of $450,000 per year (reduced by 10% during the Salary Reduction
Program), payable at Employer's normal payroll intervals, subject to required
payroll withholding provisions. Employee shall be eligible for changes in future
years consistent with performance and Employer's evaluation criteria and
compensation policies.
4. Bonus/Incentive Compensation. Employee shall be immediately eligible
to participate in any bonus or incentive compensation plan of Employer on the
terms and conditions determined by the Compensation Committee of Employer, but
in a manner not less favorable than other executive officers of Employer.
5. Employee Benefits. Employee shall be immediately entitled to receive
benefits that are substantially similar to those offered under Employer's
benefit plans and programs for an executive officer, including, without
limitation, any medical, life, disability, vacation, and stock option plans;
provided that Employee shall not be eligible for severance pay under any such
plan or program solely because the term of this Agreement has ended when
Employee continues employment with Employer. In addition, in recognition of the
assumption of additional duties and responsibilities by Employee, Employee shall
receive concurrently an option under Employer's stock option plan for the
purchase of 130,000 shares of common stock (100,000 shares on April 27, 2002,
and 30,000 shares in January, 2003).
6. Term. The term of this Agreement (the "Term") shall commence on the
date hereof and shall continue until the earliest to occur of the following:
(a) the termination of Employee's employment for Cause upon ten (10) business
day's prior written notice to Employee;
(b) Employee's termination of employment for Good Reason upon ten (10)
business day's prior written notice to Employer;
(c) Employee's or Employer's termination of Employee's employment without
Cause or without Good Reason upon ninety (90) days' prior written notice
to the other;
(d) Employee's death or Disability; or
(e) June 30, 2005.
7. Cause. The term "Cause" as used herein with respect to the
termination of this Agreement shall mean:
(a) A good faith determination by Employer after reasonable investigation that
Employee has committed fraud, misappropriation, embezzlement, or theft
against or from Employer;
(b) Employee's conviction of a felony, or of any other crime that brings
discredit to Employer or materially impairs Employee's ability to perform
Employee's job;
(c) Employee's failure to carry out the reasonable directives of the Employer
or his material duties and responsibilities under this Agreement, after
written notice of such failure and a reasonable opportunity to cure; or
(d) Employee's material breach of Employee's obligations of noncompetition or
nondisclosure under Sections 11 and 12, respectively, of this Agreement;
8. "Good Reason" shall mean:
(a) Material reduction of Employee's base salary under Section 3 or benefits
under Sections 4 and 5, or other material breach by the Company of its
obligations under this Agreement;
(b) Assignment of Employee to duties inconsistent with and substantially
diminished from his responsibilities as holding the position specified in
Section 2; or
(c) Relocation of Employee to any location outside the Appleton metropolitan
area.
9. Disability. The term "Disability" as used herein with respect
to the termination of this Agreement shall mean the inability of Employee, as a
result of physical or mental incapacity, to substantially perform his duties
with Employer for a period of three consecutive months.
10. Compensation Upon Termination.
(a) In the event that the Employer terminates Employee for Cause (Section
6(a)), Employee voluntarily resigns without Good Reason during the term of
this Agreement (Section 6(c)), Employee dies or is Disabled (Section
6(d)), or in the event that this Agreement expires naturally at the
conclusion of the Term under Section 6(e), Employer shall have no further
obligation to pay to Employee or provide Employee with either salary or
other benefits, except those which may have accrued as of the date of such
termination or as available through any disability insurance or other
applicable plan or program.
(b) In the event that Employer terminates Employee without Cause (Section
6(c)), or Employee resigns with Good Reason (Section 6(b)), or Employer
fails to continue to employ Employee on substantially the same terms
hereof, Employee shall be entitled to Employee's base salary and benefits
through the remainder of the term of this Agreement or for one year,
whichever is greater. Employee shall also be entitled to a pro rata share
of any bonus or incentive compensation benefit based on the number of days
worked in the bonus period.
(c) The Change in Control Agreement dated as of August 1, 1998 between
Employer and Employee (the "Change in Control Agreement") shall remain in
full force and effect, and is not superceded by the terms of the
Agreement; provided, however, that in the event of a termination covered
by the Change in Control Agreement, Employee shall be entitled to the
greater of the benefits thereunder or hereunder, but not both.
(d) The amounts payable pursuant to subsection 10(b) above or pursuant to the
Change in Control Agreement shall be in lieu of any other severance
benefits during the Term or at the end of the Term.
11. Non-Competition.
(a) The parties agree that the profitability and reputation of the Company
depend on continued amicable relations with the Company's suppliers and
customers. Employee agrees that he will not cause, request, solicit, or
advise any suppliers or customers of the Company during Term or for two
years thereafter, to curtail or cancel their business with the Company.
(b) Employee agrees that during Employee's employment with Employer and for a
period of one year thereafter, the Employee will not:
(i) Render services, either directly or indirectly, to any Competitor in
connection with the development, marketing, promotion, distribution, sale,
or licensing of any Competitive Services; or
(ii) Engage, either directly or indirectly, within the Restricted Area, either
on behalf of the Employee or as a representative, agent, employee,
officer, director, trustee, stockholder or partner, joint venturer or
investor, in the development, marketing, promotion, distribution, sale, or
licensing of any Competitive Services.
(iii) The capitalized terms used in this Section 11(b) shall have the meanings
as follows:
(A) Business. "Business" shall mean the business and operations of the
Company.
(B) Competitive Services. "Competitive Services" shall mean a service or
product, developed, marketed, distributed or provided by a Competitor,
which is the same as or is directly competitive with a service or product
constituting a part of the Business and with respect to which the Employee
has acquired confidential information by reason of the Employee's position
and duties with the Company.
(C) Competitor. "Competitor" shall mean (a) any person engaged in, or about to
become engaged in, the development, marketing, distribution or provision
of any Competitive Service on behalf of other parties, and (b) any
customer of the Company, as of the date of this Agreement or during the
Term, which begins to perform for itself services previously provided by
the Company.
(D) Restricted Area. "Restricted Area" shall mean, collectively: (a)
Outagamie, Winnebago and Xxxxx counties in the State of Wisconsin; and (b)
anywhere else within a twenty-five (25) mile radius of any location in any
U.S. city in which the Company had, at any time during the Term, a place
of business at or through which it engaged in the Business.
(iv) Nothing in Section 11(b) shall prohibit the Employee from owning or
acquiring securities of any corporation or other business enterprise that
may be engaged in activities described in this Section, provided that: (A)
the Employee is not an officer, director or employee of, or consultant to,
such corporation or business enterprise; (B) such securities are held by
the Employee for investment purposes only and represent less than five
percent (5%) of the total voting power and of the total equity interests
of such corporation or business enterprise; and (C) such securities are
listed on a national securities exchange or are regularly quoted in the
over-the-counter market by one or more members of the National Association
of Securities Dealers.
(v) It shall not be deemed a violation of this Section 11(b) if the Employee
accepts employment with a business entity which is diversified and made up
of separate divisions in which, as to parts of its business, is not a
Competitor, provided that Employer shall be furnished prior to such
employment definitive written assurances satisfactory to it, separately
from the Employee and such business entity, that the Employee will not be
expected, required or permitted to, and in fact does not, render services
directly or indirectly to a division or a part of such business entity
which division or part is a Competitor.
(c) The parties agree that the profitability and reputation of Employer also
depend on employment relationships with its employees. Employee agrees
that he will not cause, request, or advise any employees of Employer
during the Term to terminate or curtail their employment with the Company
during the Term (except for performance related terminations in accordance
with Employer standards, in consultation with Employer's Human Resources
Department) and for two years after the Term.
(d) During the Term, Employee shall not be an officer or employee of any other
business entity without Employer's prior written consent, except as
otherwise permitted herein.
12. Confidentiality. Employee recognizes that as a key member of the
staff of Employer, Employee occupies a position of trust with respect to
business information of a secret or confidential nature, which is the property
of the Company, and which was imparted to or developed by Employee from time to
time in the course of Employee's duties. Employee, therefore, agrees that:
(a) Employee will not at any time or in any manner, directly or indirectly,
use or disclose such information, except as specifically directed to do so
by Employer or a court of competent jurisdiction;
(b) immediately upon termination of employment with Employer, he will promptly
return to Employer, at its direction and expense, any and all copies of
records, drawings, writings, materials, memoranda, computer programs and
printouts and other data pertaining to such secret or confidential
information; provided, however, that Employee shall be permitted to retain
his personal property; and
(c) information of a secret or confidential nature is any information that
would constitute a "trade secret," including but not limited to, test
programs and systems relating to inventory control or any other aspect of
the business of the Company; patents and patent applications; copyrights
or copyright applications, inventions and improvements, whether patentable
or not; writings, whether copyrightable or not; development projects;
machines, policies, processes, formulas, techniques, normative data,
know-how, data, data bases, computer design, computer programs or software
and facts relating to development and implementation of inventory controls
relative to the business of the Company, requirements for systems and
programs, customer lists, customers' purchases or rentals, business
records, price lists, business plans and forecasts and other trade
secrets.
(d) Provided, however, that subparagraphs (a) and (c) above shall not apply to
any such information which (1) was or is in the public domain or (2)
hereafter through an act or failure becomes information generally
available to the public.
(e) In addition, the terms of the Employer's Agreement with Regard to
Proprietary Information Including Inventions, Patents, Copyrights, Trade
Secrets, and Confidential Information, dated as of June 1, 1990 between
Employer and Employee (the "Trade Secrets Agreement") shall remain in full
force and effect.
13. Remedies. In addition to other remedies provided by law or equity,
upon a breach by Employee of any of the covenants contained in Sections 11 and
12 hereof, Employer shall be entitled to seek an injunction against Employee
prohibiting any further breach of the covenants contained herein. The parties
agree that it is impossible to measure in money the damages that may accrue to
the Company by reason of Employee's failure to perform any of his obligations
under this Agreement. Therefore, in the event of any controversy concerning
rights or obligations under this Agreement, such rights or obligations may be
enforceable in a court of competent jurisdiction at law or equity by a decree of
specific performance or, if the Company elects, by obtaining damages or such
other relief as the Company may elect to pursue. Such remedies, however, shall
be cumulative and nonexclusive and shall be in addition to any other remedies
which the Company may have.
14. Assignment. The rights, duties and obligations hereunder may not be
assigned or delegated by either party without the other's written consent.
15. Notice. Any notice (including notice of change of address)
permitted or required to be given pursuant to the provisions of this Agreement
shall be made as provided in the Purchase Agreement.
16. Waiver. The failure to enforce any provision of this Agreement by
either party shall not operate or be construed as a waiver of any provision or
obligation of either party.
17. Invalidity of Any Provision. The provisions of this Agreement are
severable, it being the intention of the parties hereto that should any
provisions hereof be invalid or unenforceable, such invalidity or
unenforceability of any provision shall not affect the remaining provisions
hereof, but the same shall remain in full force and effect as if such invalid or
unenforceable provisions were omitted.
18. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Wisconsin.
19. Headings. Headings in this Agreement are for informational purposes
only and shall not be used to construe the intent of this Agreement.
20. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement.
21. Reasonableness of Restrictions. EMPLOYEE HAS HAD THE OPPORTUNITY TO
CONSULT COUNSEL, HAS READ THIS AGREEMENT AND AGREES THAT THE CONSIDERATION
PROVIDED BY EMPLOYER IS FAIR AND REASONABLE AND FURTHER AGREES THAT THE
POST-EMPLOYMENT RESTRICTIONS ON EMPLOYEE'S ACTIVITIES ARE LIKEWISE FAIR AND
REASONABLE.
22. Amendment. This Agreement may be amended or canceled by mutual
agreement of the parties in writing without the consent of any other person and,
so long as Employee lives, no person, other than the parties hereto, shall have
any rights under or interest in this Agreement or the subject matter hereof.
23. Entire Agreement. This Agreement, together with the Change in
Control Agreement and the Trade Secrets Agreement and the other documents and
materials referred to herein or therein (collectively, the "Effective
Agreements"), constitute the entire understanding of the parties with respect to
the subject matter hereof. There are no restrictions, promises, warranties,
covenants or undertakings other than those expressly set forth herein and
therein. The Effective Agreements supersede all prior negotiations, agreements
and undertakings between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
PLEXUS CORP.
By:
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EMPLOYEE:
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