EXHIBIT 10.73
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 1, 1999 between American Silicon Products
Incorporated, a Rhode Island corporation "American Silicon Products" or (the
"Company"), and SEMX Corporation (the Corporation), and Xxxxxxx Xxxxx (the
"Executive"), an individual residing at 000 Xxxxxx Xxxxxx, Xxxxxxx, XX 00000.
WITNESSETH
WHEREAS, the Company wishes to employ the Executive as its President and Chief
Executive Officer, an executive who should have influence in the direct
management of the business and should contribute, in part, to 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 Executive has signed the Company's Intellectual Property Agreement
or 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, 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 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 one year, renewing daily
for a term of one year, 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 then in
effect. Any
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extension shall be upon the same terms and conditions as set forth
herein 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 the Corporation's Chief Executive Officer 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 the Company,
serve as an Officer and/or Director of the Company or its affiliates
without additional compensation and the Company shall indemnify
Executive to the maximum extent allowable under law for his services
as an Officer and/or a 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/her Supervisor and
the Chief Executive Officer of the Corporation.
SECTION 2. COMPENSATION
All compensation due Executive under this Agreement shall be payable by the
Company, whether the services rendered are for the Company or one of its
affiliates.
(a) BASE SALARY. For services rendered by the Executive under the
Agreement, the Company shall pay the Executive an annual salary of One
Hundred Fifty Thousand ($150,000.00) 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.
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(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 by the Board of Directors of the Corporation.
(ii) The Bonus Amount, shall be paid to Executive no later than
fifteen (15) days after the completion of the audit of the
Corporation'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 the Company 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:
(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
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Company for 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 or a $1,000 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, 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;
(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;
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(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.
c) TERMINATION UPON DISABILITY. If, during the Employment Term, the Board
of Directors of the Company 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 of SEMX Corporation or
the Company. 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. GENERAL
(i) This Agreement shall be binding upon and inure to the benefit of
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 the Company assigns this Agreement, the assignee
shall be required to expressly assume all obligations of the Company
under this Agreement.
(ii) The waiver by 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
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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 the
Company, to 0 Xxxxxxxx Xxxxx, Xxxxxx, Xxx Xxxx, 00000, attention
President.
(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 and the Employees' Stock Option Plan Agreement 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: American Silicon Products Incorporated
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By
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Xxxxxxx Xxxxx Xxxxxxx X. Xxxxx, Chairman
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SCHEDULE 4D
DEFINITIONS
(I) "Change in Control" is defined as the occurrence of any of the following
events:
(A) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14 (d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (collectively, a "person) of beneficial
ownership (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of more than fifty (50%) percent of
the then outstanding shares of common stock of SEMX (collectively, the
"Outstanding Common Stock"), or a transfer or sale of more than fifty (50%)
percent of the book value of the gross assets of SEMX measured at the time
of such transfer or sale in one or more transactions, or a transfer or sale
of more than fifty (50%) percent of the book value of the gross assets of
American Silicon Products (the "Company"); provided, however, that the
following shall not constitute a Change in Control:
(i) Any acquisition by an underwriter (as such term is defined in
Section 2 (11) of the Securities Act of 1934, as amended) for the
purpose of making a public offering;
(ii) Any acquisition by SEMX or by any entity controlled by SEMX;
(iii) Any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by SEMX or by any entity controlled by SEMX;
or
(iv) Any transfer of assets to SEMX or any entity controlled by SEMX.
(B) When individuals who are members of the Board of Directors of SEMX
("SEMX's Board") at any one time shall immediately thereafter cease to
constitute a majority of SEMX's Board, or when a majority of SEMX's Board
shall not consist of persons who were elected or nominated for election as
directors with the approval of a majority of the present members of SEMX's
Board in either case within two years of:
(i) The completion of a tender offer or exchange offer for the voting
stock of SEMX (other than a tender off or exchange offer by SEMX) or a
proxy contest in connection with the election of members of the SEMX's
Board; or
(ii) A merger or consolidation of SEMX (other than with SEMX or an
entity controlled by SEMX).
(II) Severance Benefits are defined as if, subsequent to a Change in Control,
this Agreement is terminated by the Company without Cause (and not for
Disability), or by the Executive, for any
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reason, then the Executive shall be entitled to the following Severance Benefits
in lieu of any other rights or alleged damages:
(A) The Company shall pay the Executive his full Base Salary through the
date of termination at the rate in effect at the time notice of termination
is given (or at the date of termination, if higher) and any bonus for a
past calendar year which has not yet been awarded or paid to the Executive
under any Incentive Plan;
(B) the Company shall pay the Executive an amount equal to the annual
incentive award earned by the Executive under any Incentive Plans in the
calendar year ending as of the December 31st immediately preceding the date
of termination, pro rated to the Date of Termination.
(C) In lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination, the Company shall pay as severance
to the Executive a lump sum amount equal to the Executive's Base Salary as
of the date of the Change in Control (or at the date of termination, if
higher) for a period of one (1) years;
(D) Except as otherwise provided herein, any Severance Benefits payable
under this paragraph shall be paid in full in a lump sum not more than
sixty (60) days following the date of termination. If the Company shall
default in the payment of any such sum when due, the interest shall accrue
on the balance of the payments due hereunder at the rate of fifteen (15%)
percent per annum and the Company shall reimburse Executive for all costs
and expenses incurred by him, including legal fees, in enforcing his rights
under this Section 4(d).
(i) If this Agreement is terminated on a date that is not at the end
of a calendar year and if the Executive is entitled to incentive
compensation, the Company will not be obligated to pay the incentive
compensation which may be due until thirty (30) days after the
computation by the Company of the amount which may be due.
(ii) The Executive shall not be required to mitigate the amount of any
payment contemplated herein (whether by seeking new employment or in
any other manner), nor shall any such payment be reduced by earning
that the Executive may receive from any other source.
(iii) The provisions of this Agreement, and any payments provided for
hereunder, shall not reduce any amounts otherwise payable, or in any
way diminish the Executive's existing rights, or rights which would
accrue solely as a result of the passage of time, under any Incentive
Plan, Benefit Plan, employment agreement or other contract, plan or
arrangement.
(iv) Notwithstanding anything contained elsewhere in this agreement.
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