Exhibit 10.9
EMPLOYMENT AGREEMENT
This Employment Agreement (the "AGREEMENT") dated as of December
15, 1998 is entered into between PACIFIC CIRCUITS, INC., a Washington
corporation (the "COMPANY"), and Xxxxxx Xxxxxx (the "EMPLOYEE").
In consideration of the promises, covenants and agreements
contained herein, and for other good and valuable consideration the adequacy
and sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the parties hereto agree as follows:
Section 1. DEFINITIONS AND USAGE
1.1 DEFINITIONS. As used in this Agreement:
"CAUSE" means the Employee has (i) been convicted of, or
entered a plea of no contest to, a felony or other crime involving moral
turpitude, (ii) committed a material act of fraud or dishonesty, (iii)
materially breached his fiduciary duties to the Company in a manner
which results in a material financial or reputational loss to the
Company, (iv) failed to perform in a material manner his properly
assigned duties after at least one written warning specifically advising
the Employee of his failure and providing him with ten days to resume
performance in accordance with his assigned duties, or (v) materially
breached his other obligations under this Agreement and has failed to
remedy such failure within ten days after receipt of written notice from
the Company.
"DISABILITY" means a condition pursuant to which the Employee
becomes incapacitated due to physical or mental illness and, in the good
faith determination of the Board, is unable to perform his duties and
responsibilities hereunder and such condition continues, or, in the
opinion of a physician selected by the Board, is reasonably likely to
continue, for six consecutive months or for periods aggregating six
months during any twelve-month period.
"EFFECTIVE DATE" means the date of the consummation of the
transactions contemplated by the Stock Purchase Agreement.
"GOOD REASON" means a material breach by the Company of this
Agreement or a material reduction by the Company of the Employee's
duties, responsibilities or status within the Company, in each case after
the Employee has given the Company written notice of such breach or
reduction and a reasonable opportunity to cure.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement,
dated as of December 15, 1998, among Circuit Holdings, LLC, Xxxxx and
other stockholders of the Company.
1.2 USAGE.
(a) References to an individual or entity are also references
to its assigns and successors in interest (by means of merger,
consolidation or sale of all or substantially all the assets of such
individual or entity, as the case may be).
(b) References to a document are to it as amended, waived and
otherwise modified from time to time and references to a statute or
other governmental rule are to it as amended and otherwise modified from
time to time (and references to any provision thereof shall include
references to any successor provision).
(c) References to Sections are to sections hereof, unless the
context otherwise requires.
(d) The definitions set forth herein are equally applicable
both to the singular and plural forms and the feminine, masculine and
neuter forms of the terms defined.
(e) The term "including" and correlative terms shall be
deemed to be followed by "without limitation" whether or not followed by
such words or words of like import.
(f) The term "hereof" and similar terms refer to this
Agreement as a whole.
Section 2. TITLE; TERM. The Company hereby employs the Employee
as its Director of Quality and Technology, and the Employee shall serve in
such capacity for a period beginning on the Effective Date and ending on
December 31, 2001 (the "TERM"). Unless either party provides written notice
in accordance with the provisions hereof at least 30 days prior to the end of
the Term, the Term shall be extended for one year; PROVIDED, that the Term
may be extended pursuant to this Section 2 no more than twice.
Section 3. DUTIES. During the Term, the Employee shall have
supervision and control over and responsibility for such duties as are
assigned to the Employee from time to time by the Chief Executive Officer and
as are consistent with the Employee's position, and shall report to the Chief
Executive Officer. The Employee shall be required to devote substantially
all of his business time and energies to the business of the Company.
Section 4. COMPENSATION AND BENEFITS.
4.1 BASE SALARY. As compensation for the services rendered
pursuant to this Agreement, the Company shall pay the Employee a salary (the
"BASE SALARY") at the per annum rate set forth on Schedule A attached hereto,
payable in periodic installments.
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4.2 EMPLOYEE BENEFITS. The Employee shall be entitled to
participate in the retirement, health and welfare benefit programs available
generally to senior executives of the Company. The Employee acknowledges that
pursuant to the terms of the Stock Purchase Agreement, the Company's
qualified Profit Sharing Plan will be amended to exclude the Employee as an
eligible participant in employer profit sharing contributions made in plan
years after plan year 1998.
4.3 VACATION AND OTHER LEAVE TIME. The Employee shall be entitled
during each year of the Term to three weeks of vacation time without
reduction in pay (which vacation time shall be pro-rated for any partial
year that the Employee is employed during the Term). The Employee shall be
entitled to time off for sick and personal leave and all legal holidays
without reduction in pay, in accordance with policies established by the
Company.
4.4 ANNUAL INCENTIVE COMPENSATION. The Employee shall be eligible
to participate in the Pacific Circuits, Inc. Cash Incentive Compensation Plan
and for 1999 shall be awarded not less than the number of units awarded
thereunder set forth on Schedule A attached hereto, subject to the terms of
such plan.
4.5 STOCK OPTIONS. The Employee shall be eligible to participate
in the Pacific Circuits, Inc. Management Stock Option Plan and shall be
awarded not less than the number of stock options awarded thereunder on the
Effective Date set forth on Schedule A attached hereto, subject to the terms
of such plan.
4.6 RETENTION BONUS. The Employee shall be eligible to participate
in the retention bonus plan to be established by the Company pursuant to the
terms of the Stock Purchase Agreement and shall be awarded a retention bonus
under such plan in the amount set forth on Schedule A attached hereto,
subject to the term of such plan.
Section 5. REIMBURSEMENT OF EXPENSES. The Company shall
reimburse the Employee for his reasonable and necessary out-of-pocket
expenditures incurred on behalf of the Company and in furtherance of the
Employee's duties hereunder, subject to reasonable record keeping and expense
guidelines established by the Company for all senior executives.
Section 6. CONFIDENTIAL INFORMATION. The Employee will hold in
strict confidence and not disclose to any person or entity without the
express prior authorization of the Company, any confidential proprietary
information, and manufacturing and marketing data, techniques, processes,
formulas, developmental or experimental work, work in progress, business
methods, and trade secrets relating to the products, services, customers,
sales or business affairs of the Company. The Employee further agrees that he
will not make use of any of the above at any time after termination of his
employment so long as such information is maintained confidential and secret
by the Company. The Employee acknowledges that all work product and
inventions generated by the Employee on behalf of the Company during the
Employee's employment is the property of the Company and the Employee hereby
agrees to assign all right,
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title and interest thereto to the Company. The preceding sentence shall not
apply to an invention that qualifies fully under Wash. Rev. Code Section
49.44.140(1). Upon termination of employment, the Employee shall deliver to
the Company all documents, records, notebooks, work papers and all similar
repositories containing any confidential and proprietary information
concerning the Company or any subsidiary, whether prepared by the Employee,
the Company or anyone else, received by the Employee in his capacity as an
officer or employee and not in respect of shares of the Company owned
directly or indirectly.
Section 7. CERTAIN COVENANTS. In consideration of his
employment hereunder, the Employee agrees as follows:
7.1 The Employee agrees that he will not (i) at any time
during or after the Term, make any claim that the Employee has any
ownership right or interest, of any kind or nature whatsoever, in or to
any products, methods, practices, processes, discoveries, ideas,
improvements, devices, creations, business plans or systems, or
inventions relating to the business of Company or any subsidiary, (ii)
during the Term and for a period of 18 months thereafter (the
"RESTRICTED PERIOD"), for himself or on behalf of or in conjunction with
any third party, hire any person who is then an employee of Company or
its subsidiaries or induce or entice any employee of Company or its
subsidiaries to leave his employment, or (iii) during the Restricted
Period, directly or indirectly, on his own behalf or in the service or
on behalf of others, solicit, divert or appropriate, or attempt to
solicit, divert or appropriate any customers of the Company or its
subsidiaries.
7.2 During the Restricted Period, the Employee will not
directly or indirectly, own, manage, operate, control or participate in
the ownership, management operation or control of, or be connected as an
officer, employee, partner, director or otherwise with, or have any
financial interest in, any business which is in competition with the
Company or any of its affiliates in any geographic areas where such
business is being conducted during such period. In the event that the
Employee's employment terminates pursuant to Section 8.2, the
"Restricted Period" for purposes of this Section 7.2 shall be twelve
months following the Employee's termination of employment.
7.3 In the event any court or arbitrator shall refuse to
enforce any portion of the covenants in this Section 7, then such
unenforceable portion shall be deemed eliminated and severed from said
covenant for the purpose of said court's proceedings to the extent
necessary to permit the remaining portions of the covenants to be
enforced.
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Section 8. TERMINATION OF EMPLOYMENT
8.1 TERMINATION BY THE COMPANY FOR CAUSE OR BY THE EMPLOYEE OTHER
THAN FOR GOOD REASON. The Company may terminate the Term and this Agreement
for Cause at any time without prior notice to the Employee. The Employee may
terminate the Term and this Agreement other than for Good Reason at any time
upon three months' notice to the Board. Upon termination of the Employee's
employment (i) by the Company for Cause or (ii) by the Employee other than
for Good Reason, the Company shall have no further obligations to the
Employee hereunder.
8.2 TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY THE EMPLOYEE
FOR GOOD REASON. The Company may elect to terminate the Term and this
Agreement without Cause and the Employee may terminate the Term and this
Agreement for Good Reason. In the event that the Employee's employment is
terminated under this Section 8.2, the Employee shall be entitled to receive
(a) the continued payment of his Base Salary until the first anniversary of
the date of termination; PROVIDED, HOWEVER, that any amount of severance
payable under this Section 8.2 shall be reduced by any other compensation
received by the Employee prior to the first anniversary of the date of
termination, and (b) the continuation for a period of one year of welfare
benefits to the Employee and his family on a basis substantially equivalent to
those which would have been provided to them in accordance with the welfare
plans, programs and arrangements of the Company had the Employee's employment
not terminated; PROVIDED, HOWEVER, that such benefit continuation shall cease
in the event that the Employee and his family obtain comparable welfare
benefit coverage from any subsequent employer. On or prior to the date that
the Company commences payment or continuation of benefits under this Section
8.2, the Employee shall execute and deliver a release of claims in favor of
the Company in form and substance satisfactory to the Company and all
applicable revocation periods shall expire.
8.3 TERMINATION DUE TO DEATH OR DISABILITY. This Agreement shall
terminate automatically upon the Employee's death and may be terminated in the
discretion of the Company in the event of Employee's Disability and, upon
either such termination, the Company shall have no further obligations to the
Employee hereunder. In the even of termination due to Disability, the
Employee shall be entitled to long-term disability benefits under any such
policy maintained by the Company in which the Employee participates at the
time of termination.
Section 9. TAX MATTERS.
9.1 WITHHOLDING. All payments required to be made by the Company
hereunder to the Employee or his estate or beneficiaries shall be subject to
the withholding of such amounts as the Company may reasonably determine
should be withheld pursuant to any applicable federal, state or local law or
regulation now applicable or that may be enacted and become applicable in the
future.
9.2 TAX CONSEQUENCES. The Company shall have no obligation to any
person entitled to the benefits of this Agreement with respect to any tax
obligation any such person may
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incur as a result of or attributable to this Agreement or arising from any
payments made or to be made hereunder. Nothing contained herein shall be
construed as a warranty or representation of any kind by the Company to the
Employee with respect to the tax consequences of matters contemplated by this
Agreement.
Section 10. NOTICES. All notices given pursuant to this
Agreement shall be in writing and shall be made by hand-delivery, first-class
mail (registered or certified, return receipt requested), telecopier, or
overnight air courier guaranteeing next business day delivery to the relevant
address specified in this Section 10. Except as otherwise provided in this
Agreement, each such notice shall be deemed given: (a) at the time delivered,
if personally delivered or mailed; (b) when receipt is acknowledged, if
telecopied; and (c) the next business day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next business day
delivery.
Pacific Circuits, Inc.
00000 X.X. 00xx Xxxxx
Xxxxxxx, XX 00000
Attn.: Board of Directors
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Shearman & Sterling
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to Employee, to the address set forth on the
signature page hereof.
Any party may change its address by written notice to the other party hereto
given in the manner provided above.
Section 11. WAIVER. No waiver of any default under this
Agreement shall constitute or operate as a waiver of any subsequent default,
and no delay, failure or omission in exercising or enforcing any right,
privilege or option hereunder shall constitute a waiver, abandonment or
relinquishment thereof. No waiver of any provision hereof by any party hereto
shall be deemed to have been made unless or until such waiver shall have been
reduced to a writing signed by th party making such waiver. Failure by any
party to enforce any of the terms, covenants or conditions of this Agreement
for any length of time or from time to time shall not be deemed to waive or
decrease the rights of such party to insist thereafter upon strict
performance by the other parties.
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Section 12. AMENDMENTS. This Agreement may not be amended or
terminated other than by a written instrument signed by each of the parties
hereto. No amendment to this Agreement or interpretation hereof or any
waiver or modification of any of the provisions hereof may be made on behalf
of Company without the approval of its Board of Directors
Section 13. INJUNCTIVE RELIEF. The Employee acknowledges that
in the event of his breach of any provision in Section 6 or 7 hereof, the
Company will be without an adequate remedy at law. The Employee therefore
agrees that in the event of such a breach, the Company may elect to institute
and prosecute proceedings in any court of competent jurisdiction to enforce
specific performance or to enjoin the continuing breach, by seeking or
obtaining any such relief, and the Company will not be precluded from seeking
or obtaining any other relief to which it may be entitled.
Section 14. ARBITRATION. Subject to the Company's right to
pursue injunctive relief pursuant to Section 13, any dispute about the
validity, interpretation, effect or alleged violation of this Agreement (an
"arbitrable dispute") must be submitted to confidential arbitration in
Seattle, Washington. Arbitration shall take place before an experienced
employment arbitrator licensed to practice law in Washington and selected in
accordance with the Model Employment Arbitration Procedures of the American
Arbitration Association. Arbitration shall be the exclusive remedy of any
arbitrable dispute. Should any party to this Agreement pursue any arbitrable
dispute by any method other than arbitration, the other party shall be
entitled to recover from the party initiating the use of such method all
damages, costs, expenses and attorney's fees incurred as a result of the use
of such method. Notwithstanding anything herein to the contrary, nothing in
this Agreement shall purport to waive or in any way limit the right of any
party to seek to enforce any judgement or decision on an arbitrable dispute
in a court of competent jurisdiction.
Section 15. SUCCESSORS AND ASSIGNS. This Agreement shall inure
to the benefit of and be binding upon the respective successors and assigns
of the parties hereto.
Section 16. GOVERNING LAW. This agreement shall be governed by
and construed in accordance with the laws of the State of Washington, without
giving regard to the conflict of laws principles thereof.
Section 17. SECTION HEADINGS. Section headings are for
convenience of reference only and shall not affect the meaning of any
provision of this Agreement.
Section 18. ENTIRE AGREEMENT. This Agreement supersedes all
prior agreements between or among any of the parties hereto with respect to
the subject matter contained herein, and this Agreement together with the
other agreements referred to herein embodies the entire understanding among
the parties relating to such subject matter.
Section 19. SEVERABILITY. The invalidity or unenforceability of
any provision of this Agreement in any circumstance shall not affect the
validity or enforceability of such provision in any other circumstance or the
validity or enforceability of any other provision of this
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Agreement, and, except to the extent such provision is invalid or
unenforceable, this Agreement shall remain in full force and effect. Any
provision in this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be effective only to the extent
of such prohibition or unenforceability without invalidating or affecting the
remaining provisions hereof in such jurisdiction, any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction..
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first written above.
PACIFIC CIRCUITS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Secretary
EMPLOYEE
/s/ XXXXXX X. XXXXXX
---------------------------------
Name: Xxxxxx Xxxxxx
Print Address: 00000 XX 00xx Xx, Xxx. X-000
Xxxxxxx, Xx 00000
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SCHEDULE A
Compensation
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Base Salary $107,500
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Cash Incentive Compensation Plan 1999 Award: 9.5
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(in number of units awarded for 1999)
Management Stock Option Plan 577.50
----------------------------
(in number of options granted on the Effective Date)
Retention Bonus $1,250,000
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