Exhibit 10.9 (b)
December 2, 1998
Mr. Xxxxxxx Xxxxxxx
0 Xxxxxxxx Xxx
Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxxxxx 00000
Dear Rich:
This letter agreement sets forth the terms of your
("Executive") employment with MCMS, Inc., an Idaho corporation
(the "Company"), as follows:
1. Employment. The Company shall employ Executive, and
Executive hereby accepts employment with the Company to serve as
the President and Chief Operating Officer of the Company, upon
the terms and conditions as set forth in this letter agreement
for the period beginning as of Effective Time (as defined in
paragraph 8 hereof) and ending as provided in paragraph 4 hereof
(the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall
serve as the President and Chief Operating Officer of the Company
and shall have all responsibility and authority over the
Manufacturing, Operations, Engineering, Information Technology,
Purchasing, and Personnel Departments, subject to the power of
the Chief Executive Officer of the Company to expand or limit
such duties, responsibilities and authority within the confines
of the ordinary duties, responsibilities and authority of a
President and Chief Operating Officer and to override actions of
the President and Chief Operating Officer.
(b) Executive shall report to the Chief Executive
Officer of the Company, and Executive shall devote his best
efforts and his full business time and attention (except for
permitted vacation periods and reasonable periods of illness or
other incapacity) to the business and affairs of the Company and
its subsidiaries. Executive shall perform his duties and
responsibilities to the best of his abilities in a diligent,
trustworthy, businesslike and efficient manner. The foregoing
shall not preclude Executive from devoting reasonable time to the
supervision of his personal investments, civic and charitable
affairs and, at any time after the date six months after the
Effective Time, serving on a maximum of two boards other than the
Company's or any of its subsidiaries' board of directors,
provided that such activities do not interfere with the
performance of his duties hereunder.
(c) Location. Subject to customary business travel,
Executive shall be required to perform the services and duties
provided for in this paragraph 2 only at the location of the
principal executive offices of the Company, which shall be
located in the Boise, Idaho Standard Metropolitan Statistical
Area or such other location as the parties may mutually agree
upon (the "Geographical Employment Area").
3. Base Salary and Benefits.
(a) During the Employment Period, Executive's base
salary shall be in an amount set by the Board of Directors of the
Company (the "Board") or a Committee of the Board (the
"Compensation Committee"), and shall initially be $240,000 per
annum (the "Base Salary"), which salary shall be payable in
regular installments in accordance with the Company's general
payroll practices and shall be subject to customary withholding.
In addition, during the Employment Period, Executive shall be
entitled to participate in all of the Company's employee benefit
programs for which senior executive employees of the Company and
its subsidiaries are generally eligible including the Company's
Executive Bonus Plan and the 1998 Stock Option Plan, with any
awards under such Plans to be set by the Board or the
Compensation Committee.
(b) The Company shall reimburse Executive for all
reasonable expenses incurred by him in the course of performing
his duties under this letter agreement which are consistent with
the Company's policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and
documentation of such expenses.
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4. Term.
(a) Unless renewed by the mutual agreement of the
Company and Executive, the Employment Period shall end on the
second anniversary of the Effective Time; provided that (i) the
Employment Period shall terminate prior to such date upon
Executive's resignation (other than if the Company Constructively
Terminates Executive), death or permanent disability or
incapacity (as determined by the Board in its good faith judgment
or as provided in paragraph 4(e) hereof), (ii) the Employment
Period may be terminated by the Company at any time prior to such
date for cause or without cause and (iii) the Employment Period
shall terminate prior to such date upon Executive's resignation
if the Company Constructively Terminates Executive.
(b) If, prior to the second anniversary date of the
Effective Time, MCMS Constructively Terminates Executive, MCMS
will pay Executive severance equal to Executive's Base Salary for
(i) twelve (12) months after the date of the Constructive
Termination in the event the Constructive Termination occurs
prior to the first anniversary date of the Effective Time or (ii)
the period of time between the date of Constructive Termination
and the second anniversary of the Effective Time in the event
Executive is Constructively Terminated after the first
anniversary date of the Effective Time, in each case if, and only
if, Executive has not breached the provisions of paragraphs 5, 6
or 7 hereof.
(c) If the Employment Period is terminated for any
reason (including pursuant to clause (a)(i) above) other than as
set forth in paragraph 4(b) hereof, Executive shall be entitled
to receive his Base Salary through the date of termination.
(d) Except as provided in paragraph 4(b) above, all of
the Executive's rights to fringe benefits and bonuses hereunder
(if any) which accrue after the termination of the Employment
Period shall cease upon such termination. The Company may offset
any amount Executive owes it or its subsidiaries against any
amounts it owes Executive hereunder.
(e) Death or Disability. In the event of Executive's
death or disability during the Employment Period, the Company
shall continue to pay to Executive (or his spouse or other
designated beneficiary) the Base Salary Executive was receiving
immediately prior to his death or disability for twelve (12)
months following his death or disability. Executive's employment
shall be deemed terminated because of his disability if Executive
becomes entitled to benefits under the Company's long-term
disability insurance plan, and the periodic benefits payable
under that plan shall reduce, on a dollar-for-dollar basis, the
payments to Executive required under this paragraph 4(e).
(f) For purposes of this letter agreement,
"Constructive Termination" shall mean, without Executive's
express written consent, the Company materially reduces the scope
of Executive's responsibilities from the scope of such
responsibilities as of the Effective Time as a result of a
merger, acquisition, or other business combination.
5. Confidential Information. Executive acknowledges that
the information, observations and data obtained by him while
employed by the Company and its subsidiaries concerning the
business or affairs of the Company or any of its subsidiaries
("Confidential Information") are the property of the Company or
such subsidiary. Therefore, Executive agrees that he shall not
disclose to any unauthorized person or use for his own purposes
any Confidential Information without the prior written consent of
the Board, unless and to the extent that the aforementioned
matters become generally known to and available for use by the
public other than as a result of the Executive's acts or
omissions. Executive shall deliver to the Company at the
termination of the Employment Period, or at any other time the
Company may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the
Confidential Information, Work Product (as defined below) or the
business of the Company or any subsidiary which he may then
possess or have under his control.
6. Inventions and Patents. Executive acknowledges that
all inventions, innovations, improvements, developments, methods,
designs, analyses, drawings, reports and all similar or related
information (whether or not patentable) which related to the
Company's or any of its subsidiaries' actual or anticipated
business, research and development or existing or future products
or services and which are conceived, developed or made by
Executive while employed by the Company and its subsidiaries
("Work Product") belong to the Company or such subsidiary.
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7. Non-Solicitation.
(a) For a period of twelve (12) months after
Executive's Employment Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce
any employee of the Company or of any of its subsidiaries to
leave the employ of the Company or any such subsidiary, or in any
way interfere with the relationship between the Company or any of
its subsidiaries and any employee thereof, and (ii) induce or
attempt to induce any customer, supplier, licensee, licensor,
franchisee or other business relation of the Company or any of
its subsidiaries to cease doing business with the Company or any
such subsidiary, or in any way interfere with the relationship
between any such customer, supplier, licensee or business
relation and the Company or any such subsidiary.
(b) In the event of the breach or threatened breach by
Executive of any of the provisions of this paragraph 7, the
Company, in addition and supplementary to other rights and
remedies existing in its favor, may apply to the court of law or
equity of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any
violations of the provisions hereof.
(c) Executive represents and warrants that he is not
bound by any non-compete agreement with any third party that
would restrict or could potentially restrict his ability to work
for the Company as contemplated hereby. Any breach of this
paragraph by Executive shall render this Agreement null and void
and Company shall have no obligations under this Agreement
whatsoever.
8. Effectiveness. Notwithstanding anything to the
contrary contained herein, this letter agreement shall be
effective as of December 7, 1998 (the "Effective Time").
9. Choice of Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this
letter agreement shall be governed by, and construed in
accordance with, the laws of the State of Idaho, without giving
effect to any choice of law or conflict of law rules or
provisions that could cause the applications of the laws of any
jurisdiction other than the State of Idaho.
10. Mitigation and Set-Off. Executive shall not be
required to mitigate Executive's damages by seeking other
employment or otherwise. The Company's obligations under this
letter agreement shall not be reduced in any way by reason of any
compensation or benefits received (or foregone) by Executive from
sources other than the Company after the termination of the
Employment Period or any amounts that might have been received by
Executive in other employment had Executive sought such other
employment. Executive's entitlement to benefits and coverage
under this letter agreement shall continue after, and shall not
be affected by, Executive's obtaining other employment after the
termination of the Employment Period, provided that any such
benefit or coverage shall not be furnished if Executive expressly
waives the specific benefit or coverage by giving written notice
of waiver to the Company.
11. Litigation Expenses. The Company shall pay to Executive
all out-of-pocket expenses, including attorney's fees, incurred
by Executive in the event Executive successfully enforces any
provision of this letter agreement in any action, arbitration or
lawsuit.
12. Indemnification. The Company will indemnify and hold
harmless Executive from and against any and all costs, liability
and expenses from any claim by any person with respect to, or in
any way related to, Executive's employment with the Company as
contemplated by this letter agreement (including reasonable
attorney's fees) (collectively, "Claims") resulting from any act
or omission of Executive that relate to Executive's employment
with the Company, to the maximum extent permitted by law other
than for Claims which shall be proven to be the result of gross
negligence, bad faith or willful misconduct by Executive.
Notwithstanding this Agreement or any termination of his
employment by the Company pursuant to this Agreement or
otherwise, the Executive shall be entitled to coverage under the
directors' and officers' liability coverage maintained by the
Company, as in effect from time to time, to the same extent as
other officers and directors of the Company.
13. Amendment or Termination. This Agreement may be amended
at any time by written agreement between the Company and
Executive.
14. Counterparts. This Agreement may be executed in one or
more counterparts, all of which together shall constitute but one
Agreement.
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15. No Waiver. No failure or delay on the part of the
Company or Executive in enforcing or exercising any right or
remedy hereunder shall operate as a waiver thereof.
16. No Representations. Executive represents that he has
had the opportunity to consult with an attorney, and has
carefully read and understands the scope and effect of the
provisions of this Agreement. Neither party has relied upon any
representations or statements made by the other party hereto
which are not specifically set forth in this Agreement.
17. Entire Agreement. This Agreement represents the entire
agreement and understanding between the Company and Executive
concerning Executive's employment with the Company, and
supersedes and replaces any and all prior agreements and
understandings, written or oral.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
letter agreement as of the date first written above.
MCMS, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Chief Executive
Officer
EXECUTIVE:
/s/ Xxxxxxx Xxxxxxx
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