Exhibit 10.9 (a)
MCMS, INC.
00000 XXXXXXXX XXXX
XXXXX, XXXXX 00000
October 12, 1998
Xxxxx Xxxxxx
00000 Xxxxxxxxxx Xxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Dear Xxxxx:
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 Vice President, Sales and Marketing 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 Vice President, Sales and Marketing of the Company
and shall have the normal duties, responsibilities and authority
of the Vice President, Sales and Marketing, subject to the power
of the Board of Directors of the Company (the "Board") to expand
or limit such duties, responsibilities and authority within the
confines of the ordinary duties, responsibilities and authority
of a Vice President, Sales and Marketing and to override actions
of the Vice President, Sales and Marketing.
(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
and frequent travel to the principal executive offices of the
Company now located in Nampa, Idaho, Executive shall perform the
services and duties provided for in this paragraph 2 in the San
Francisco, California 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 or a Committee of
the Board (the "Compensation Committee"), and shall initially be
$225,000 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.
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(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.
4. Term.
(a) Unless renewed by the mutual agreement of the
Company and Executive, the Employment Period shall end on the
third 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(f) hereof), (ii) the Employment
Period may be terminated by the Company at any time prior to such
date for Cause (as defined below) 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 the Employment Period is terminated by the
Company without Cause or the Company Constructively Terminates
Executive, Executive shall be entitled to receive his Base Salary
plus all fringe benefits which Executive is receiving on the
termination date (but no bonuses) for ten (10) months after the
date of such termination, if and only if, Executive has not
breached the provisions of paragraph 5, 6, and 7 hereof.
(c) If the Employment Period is terminated by the
Company for Cause or is terminated pursuant to clause (a)(i)
above, 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) For purposes of this letter, "Cause" shall mean
(i) the commission of a felony or a crime involving moral
turpitude or the commission of any other act or omission
involving dishonesty, disloyalty or fraud with respect to the
Company or any of its subsidiaries, or any of their customers or
suppliers, (ii) conduct tending to bring the Company or any of
its subsidiaries into substantial public disgrace or disrepute,
(iii) substantial and repeated failure to perform duties as
reasonably directed by the Board, provided that such failure has
continued for more than 15 days after the Company has given
written notice to Executive of such failure and of the Company's
intention to terminate Executive's employment because of such
failure, (iv) gross negligence or willful misconduct with respect
to the Company or any of its subsidiaries or (v) any other
material breach of this letter agreement which is not cured
within 15 days after written notice thereof to Executive.
(f) 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(f).
(g) For purposes of this letter agreement,
"Constructive Termination" shall mean, without Executive's
express written consent, the Company materially reduces the
nature, scope, level or extent of Executive's responsibilities
from the nature, scope, level or extent of such responsibilities
as of the effectiveness of this Agreement, or fails to provide
Executive with adequate office facilities and support services to
perform such responsibilities.
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
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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.
7. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be
paid to Executive hereunder, Executive acknowledges that in the
course of his employment with the Company he shall become
familiar with the Company's trade secrets and with other
Confidential Information concerning the Company and its
subsidiaries and that his services shall be of special, unique
and extraordinary value to the Company and its subsidiaries.
Therefore, Executive agrees that, during the Employment Period
and for six (6) months thereafter (the "Noncompete Period"), he
shall not directly or indirectly own any interest in, manage,
control, participate in, consult with, render services for, or in
any manner engage in any business competing with the business of
the Company or any of its subsidiaries, as such businesses exist
or are in process at any time during the period beginning on the
date hereof and ending on the date of the termination of
Executive's employment, within any geographical area in which the
Company or its subsidiaries engage in such businesses, which
shall include the geographical area in which the Company's
customers are located.. The foregoing shall not prohibit
Executive from owning directly or indirectly capital stock or
similar securities that are listed on a securities exchange or
quoted on the National Association of Securities Dealers
Automated Quotation System which do not represent more than two
percent (2%) of the outstanding capital stock of any business
competing with the business of the Company.
(b) During the Noncompete 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,
(ii) hire any person who was an employee of the Company or any of
its subsidiaries during the Employment Period, (iii) 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.
(c) If, at the time of enforcement of this paragraph
7, a court shall hold that the duration, scope or area
restrictions stated herein are unreasonable under circumstances
then existing, the parties agree that the maximum duration, scope
or area reasonable under such circumstances shall be substituted
for the stated duration, scope or area and that the court shall
be allowed to revise the restrictions contained herein to cover
the maximum period, scope and area permitted by law. Executive
agrees that the restrictions contained in paragraph 7 are
reasonable.
(d) 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.
(e) 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.
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8. Effectiveness. Notwithstanding anything to the
contrary contained herein, this letter agreement shall be
effective as of Executive's first day of hire with the Company
(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.
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: President and Chief
Executive Officer
EXECUTIVE:
/s/ Xxxxx Xxxxxx
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