EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is entered into and made effective as of
June 13, 2006 by and between MODTECH HOLDINGS, INC., a Delaware corporation
(the
“Company”), and Xxxxxx Xxxxxxx (“Executive”).
R
E C I T A L S
WHEREAS,
Executive previously serving as the Company’s Senior Vice President of Finance
and Chief Financial Officer (CFO) being promoted to President and Chief
Executive Officer (CEO).
WHEREAS,
the Company desires to retain the services of Executive on the terms and
conditions provided herein, and Executive is willing to provide such services
on
such terms and conditions.
A
G R E E M E N T
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
of the parties contained herein, the parties agree as follows:
1. Term.
This
Agreement shall continue in full force and effect for a period which shall
commence on June 13, 2006 and shall continue until December 31, 2007 (the
“Term”), unless sooner terminated as hereinafter provided or extended by the
mutual agreement of the parties. On December 31, 2007, and on each one-year
anniversary of that date, this Agreement shall automatically be renewed for
a
period of one year, unless either party shall have given the other written
notice of their intent not to renew this Agreement at least thirty (30)
calendar days prior to the expiration of the Term or any extension.
2. Services
and Exclusivity of Services.
So long
as this Agreement shall continue in effect, Executive shall devote Executive’s
full business time, energy and ability exclusively to the business, affairs
and
interests of the Company and its direct and indirect subsidiaries
(“Subsidiaries), and matters related thereto, shall use Executive’s best efforts
and abilities to promote the Company’s interests, and shall perform the services
contemplated by this Agreement in accordance with policies established by and
under the direction of the Board of Directors of the Company (the “Board”).
Executive shall at all times perform Executive’s duties and obligations
faithfully and diligently and to the best of Executive’s ability.
Executive
may make and manage personal business investments of Executive’s choice and
serve in any capacity with any civic, educational or charitable organization
without seeking or obtaining approval by the Board or the CEO, provided that
such activities and services do not substantially interfere or conflict with
the
performance of duties hereunder or create any conflict of interest with such
duties. An investment that exceeds five percent (5%) of the equity securities
or
capitalization of a competitor, supplier or customer of the Company shall be
deemed to constitute such a conflict.
Executive
represents to the Company that Executive has no other outstanding commitments
inconsistent with any of the terms of this Agreement or the services to be
rendered hereunder.
3. Duties
and Responsibilities.
Executive shall serve as President and Chief Executive Officer of the Company
for the duration of this Agreement. In performance of Executive’s duties,
Executive shall report directly to the Chairman of the Board and shall be
subject to such limits on Executive’s authority as the Chairman of the Board may
from time to time impose. Executive agrees to observe and comply with the rules
and regulations of the Company as adopted by the Board respecting the
performance of Executive’s duties and agrees to carry out and perform directions
and policies of the Company and its Board as they may be stated, either orally
or in writing, from time to time. Executive shall have responsibilities, duties
and authority consistent with Executive’s position as assigned by the Board,
including day to day responsibility for the management of all of the Company’s
affairs and operations, including oversight of the operations and management
of
any Subsidiaries. In addition, Executive shall serve as a member of the
Company’s Board, and may serve on one or more committees thereof, but without
compensation other than as provided for in Section 4 below.
4. Compensation,
Benefits and Vacation.
As
compensation for the services provided by Executive hereunder, Executive shall
be entitled to receive such compensation, benefits and vacation as set forth
in
Exhibit
A
to this
Agreement, subject to the terms and conditions of this Agreement, and subject
to
all appropriate shareholder approvals.
5. Expenses.
During
the Term hereof, Executive shall be entitled to receive prompt reimbursement
of
all reasonable expenses incurred by Executive (in accordance with the policies
and procedures from time to time adopted by the Board for the Company’s senior
officers) in performing the services contemplated hereunder, provided that
Executive properly accounts therefor in accordance with the Company’s
policies.
6. Termination.
(a) Death.
Executive’s employment hereunder shall terminate immediately upon the death of
Executive. In the event that Executive’s employment is terminated by reason of
Executive’s death, the Company shall pay Executive’s estate or beneficiaries, as
applicable, the following amounts, after deducting any amounts lawfully owing
from Executive to the Company: (i) any Base Salary (as defined in Exhibit
A
to this
Agreement or bonuses earned but unpaid through the date of termination); (ii)
any vacation days accrued but unused prior to Executive’s termination; (iii) any
expense reimbursements owed to Executive prior to Executive’s termination; and
(iv) any unpaid vested amounts or benefits under the Company’s pension, deferred
compensation or other benefit plans, subject to the terms and conditions of
such
plans (the items described in clauses (i) through (iv) of this sentence shall
be
referred to herein collectively as the “Standard Termination Benefits”). After
such payments described in the preceding sentence, the Company shall have no
further obligation to Executive or Executive’s estate or beneficiaries, as
applicable, except to the extent that Executive’s estate or beneficiaries, as
applicable, may be entitled to exercise any vested stock options or other equity
compensation granted to Executive as contemplated in Exhibit
A
to this
Agreement or otherwise (subject to the terms and conditions of applicable option
plans and/or option agreements).
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(b) Disability.
In the
event that Executive shall be unable to perform the services contemplated
hereunder by reason of disability, illness or other incapacity for a period
of
at least 90 consecutive days or an aggregate of 120 days, whether or not
consecutive, during any 12 month period (“Disability”), the Company may
terminate Executive’s employment hereunder prior to the expiration of the Term.
In the event that Executive’s employment is terminated by reason of Executive’s
Disability the Company shall pay to Executive in a lump sum payment in an amount
equal to six (6) months of Executive’s Base Salary, less required withholding
and deductions (the “Severance Payment”). The Severance Payment shall be made in
full within thirty (30) days following the Date of Termination. After such
payments described in the preceding sentence, the Company shall have no further
obligation to Executive, except to the extent that Executive may be entitled
to
exercise any vested stock options or other equity compensation granted to
Executive as contemplated in Exhibit
A
to this
Agreement or otherwise (subject to the terms and conditions of applicable option
plans and/or option agreements).
(c) By
the Company, Without Cause.
Executive’s employment hereunder may be terminated by the Company at any time
prior to the expiration of the Term, for Cause (as defined below) or without
Cause.
(d) By
the Company, For Cause.
Executive’s employment hereunder may be terminated by the Company prior to the
expiration of the Term for “Cause.” For the purposes of this Agreement, “Cause”
means (i) other than as a result of incapacity due to Executive’s
Disability or Executive’s death, Executive’s failure or refusal to perform
Executive’s duties or responsibilities or to follow the lawful directions of the
CEO or the Board or Executive’s material breach of any of Executive’s duties and
responsibilities under this Agreement or under the Company’s policies with
respect to its employees or senior officers, in each case, after the Company
provides Executive with written notice of such failure, refusal or breach and
Executive fails to cure such failure, refusal or breach within 10 calendar
days
from the date of delivery of such notice to Executive; (ii) Executive’s
conviction by, or entry of a plea of guilty or nolo contendere in, a court
of
competent jurisdiction for a felony, or any crime which, in the Company’s sole
discretion, adversely affects the Company or its reputation in the community,
or
any crime which involves moral turpitude or is punishable by imprisonment;
(iii) Executive’s commission of an act of fraud or embezzlement with
respect to the Company or any personal dishonesty by Executive with respect
the
Company or Executive’s obligations to the Company; (iv) Executive’s
violation of Executive’s duty of loyalty to the Company or Executive’s breach of
Executive’s fiduciary duty to the Company; (v) Executive’s intentional or
knowing failure to comply with, or violation of, or causing the Company to
fail
to comply with or violate, any laws or regulations applicable to the Company,
including, without limitation, federal or state securities laws and regulations
issued by the Internal Revenue Service; (vi) Executive becoming barred or
prohibited by the Securities and Exchange Commission or another governmental
entity or a securities exchange or quotation system upon which the Company’s
securities are traded from holding Executive’s position with the Company; or
(vii) Executive’s use of illegal drugs or other illegal substances.
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In
the
event that Executive is terminated by the Company for Cause, the Company shall
pay Executive the Standard Termination Benefits (as defined above), after
deducting any amounts lawfully owing from Executive to the Company. After such
payments described in the preceding sentence, the Company shall have no further
obligation to Executive, except to the extent that Executive may be entitled
to
exercise any vested stock options or other equity compensation granted to
Executive as contemplated in Exhibit
A
to this
Agreement or otherwise (subject to the terms and conditions of applicable option
plans and/or option agreements).
(e) By
Executive.
Executive shall be entitled to terminate Executive’s employment with the Company
hereunder upon thirty (30) days prior written notice. In the event that
Executive terminates Executive’s employment, the Company shall pay Executive the
Standard Termination Benefits (as described above), after deducting any amounts
lawfully owing from Executive to the Company. After such payments described
in
the preceding sentence, the Company shall have no further obligation to
Executive, except to the extent that Executive may be entitled to exercise
any
vested stock options or other equity compensation granted to Executive as
contemplated in Exhibit
A
to this
Agreement or otherwise (subject to the terms and conditions of applicable option
plans and/or option agreements).
(f) Form
of Notice.
Any
termination of Executive’s employment by the Company or by Executive shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a “Notice of Termination” shall mean a notice which
shall indicate the specific termination provision in this Agreement relied
upon,
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive’s employment under the provision so
indicated, and shall set forth the date upon which such termination is effective
(“Date of Termination”).
7. Compensation
with respect to Terminations by Company without Cause or by Executive for
Certain Reasons following Change of Control.
In the
event that (i) the Company terminates Executive’s employment without Cause
(other than by reason of Executive’s death or Disability), or (ii) the Company
declines to renew the Agreement at the expiration of the Term or any one year
renewal thereof (other than for Cause or by reason of Executive’s death or
Disability), or (iii) within one year following a Change of Control (as defined
below), Executive terminates Executive’s employment due to a significant
reduction in Executive’s duties, responsibilities and position relative to the
duties, responsibilities and position of Executive immediately prior to such
reduction (which such reduction continues without cure for a period of 30 days
following Executive providing written notice to the Board of such significant
reduction), Executive shall be entitled to the following severance benefits
(after deducting any amounts lawfully owing from Executive to the Company)
upon
execution by Executive of a general release (which must be acceptable to the
Company) of any and all claims relating to or arising from Executive’s
employment or termination of employment:
(a) Severance
Payment.
The
Company shall pay to Executive in a lump sum payment in an amount equal to
twelve (12) months of Executive’s Base Salary, less required withholding and
deductions (the “Severance Payment”). The Severance Payment shall be made in
full within thirty (30) days following the Date of Termination. Executive
is not required to mitigate the amount of the Severance Payment by seeking
other
employment or otherwise, nor shall any compensation earned by Executive in
other
employment or otherwise reduce the amount of the Severance Payment.
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(b) Pro-Rated
Earned Bonus.
The
Company shall pay Executive a pro-rated earned bonus for the period of time
during which Executive was employed by the Company during the applicable bonus
period (based on the number of days Executive worked during such period divided
by 365). Such pro-rated earned bonus shall be paid at such time as Executive
would have otherwise received Executive’s bonus.
(c) Equity
Compensation.
All
stock options, grants or other forms of equity compensation held by Executive
shall cease vesting as of the effective date of Executive’s termination.
Executive shall have the right to exercise vested stock options in accordance
with the terms and conditions of the applicable option plan. If Executive’s
termination occurs following a Change of Control (#8 below) equity compensation
previously granted to Executive shall vest immediately upon
termination.
(d) Medical
Benefits.
Provided that Executive timely elects continuation of Executive’s and
Executive’s eligible dependents medical and dental insurance coverage under
COBRA, and they remain eligible for the continuation of such coverage under
COBRA, the Company will cause to be continued medical and dental coverage
substantially equivalent to the coverage maintained by the Company or its
Subsidiaries for Executive and Executive’s eligible dependents prior to
Executive’s termination. The Company shall provide such coverage to Executive at
no premium cost to Executive, and it shall provide such coverage to Executive’s
eligible dependents under the same terms and conditions, including the
requirement of premium contributions, as applicable to the Company’s senior
officers in active employment status. Such coverage shall cease upon the
earliest of the following events: (i) expiration twelve (12) months from
the Date of Termination, or (ii) when Executive or Executive’s eligible
dependents cease to qualify for such extension of coverage under
COBRA.
(e) Other
Payments.
Executive shall be entitled to receive (i) any vacation days accrued but unused
prior to Executive’s termination; (ii) any expense reimbursements owed to
Executive prior to Executive’s termination; and (iii) any unpaid vested amounts
or benefits under the Company’s pension, deferred compensation or other benefit
plans, subject to the terms and conditions of such plans. After such payments
described in this Section 7, the Company shall have no further obligation to
Executive, except to the extent that Executive may be entitled to exercise
any
vested stock options granted to Executive as contemplated in Exhibit
A
to this
Agreement or otherwise (subject to the terms and conditions of applicable option
plans and/or option agreements).
8. Change
of Control.
For
purposes of this Agreement, a “Change of Control” shall be deemed to have taken
place if: (i) any person or entity or group of affiliated persons or
entities, including a group which is deemed a “person” by Section
13(d)(3) of the Securities Exchange Action of 1934, as amended (the
“Exchange Act”), after the date hereof first acquires in one or more
transactions, at least one of which is after the date of this Agreement,
Ownership (as defined below) of fifty percent (50%) or more of the outstanding
shares of stock entitled to vote in the election of directors of the Company,
and (ii) as a result of, or in connection with, any such acquisition or any
related proxy contest, cash tender or exchange offer, merger or other business
combination, sale of all or substantially all of the assets of the Company
or
any combination of the foregoing transactions, hereinafter referred to as a
“Transaction,” the persons who were directors of the Company immediately before
the Transaction shall cease to constitute three-fourths of the membership of
the
Board or any successor to the Company during the period commencing with the
consummation of the Transaction and ending on the first to occur of the first
anniversary of such date or the conclusion of the next meeting of shareholders
to elect directors. For purposes of this Agreement, “Ownership” means beneficial
or record ownership, directly or indirectly, other than (i) by a person
owning such shares merely of record (such as a member of a securities exchange,
a nominee, or a securities depository system); (ii) by a person as a bona
fide pledge of shares prior to a default and determination to exercise powers
as
an owner of the shares, (iii) by a person who is not required to file
statements on Schedule 13D by virtue of Rule 13d-1(b) of the Securities and
Exchange Commission under the Exchange Act, or (iv) by a person who owns or
holds shares as an underwriter acquired in connection with an underwritten
offering pending and for purposes of their public resale or planned private
placement in increments of less than such amount.
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9. Indemnification.
The
Company shall indemnify Executive to the fullest extent permitted by law, for
all amounts, (including, without limitation, judgments, fines, settlement
payments that the Company has expressly approved in writing, litigation expenses
and attorneys’ fees), incurred or paid by Executive in connection with any
action, suit, investigation or proceeding, or threatened action, suit,
investigation or proceeding, arising out of or relating to the performance
by
Executive of services for, or the acting by Executive as a director, officer
or
employee of, the Company or any Subsidiary. Any fees or other necessary expenses
incurred by Executive in defending any such action, suit, investigation or
proceeding shall be paid by the Company in advance, subject to the Company’s
right to seek repayment from Executive if a determination is made that Executive
was not entitled to indemnity. During the Term of this Agreement and for twenty
four (24) months following Executive’s Date of Termination, the Company or its
successor shall maintain general liability and directors and officers liability
insurance covering Executive for claims and other amounts set forth in this
Section 9. Nothing in this Section 9 or elsewhere in this Agreement is intended
to prevent the Company from indemnifying Executive to any greater extent than
is
required by this Section 9.
10. Proprietary
Information.
(a) Confidential
Information.
As used
in this Agreement “Confidential Information” means (i) information (A) that
is not known by actual or potential competitors of Company or is not generally
known to the public, (B) that has been created, discovered, developed, or
otherwise become known to the Company, or in which property rights have been
assigned or otherwise conveyed to the Company, and (C) that has economic
value to the Company’s present or future business and (ii) trade secrets (as
defined under California Civil Code Section 3426.1) and all other discoveries,
developments, designs, improvements, inventions, formulas, methods, software
programs, processes, techniques, marketing materials, know-how, data, research,
technical data, customer lists (past and present), customer preferences,
financial information, contacts, lead sources, marketing materials, and
personnel information, and any modifications or enhancements of any of the
foregoing, and all program, marketing, sales, personnel, or other financial
or
business information, disclosed to Executive by the Company, either directly
or
indirectly, in writing or orally or by drawings or observation, which has actual
or potential economic value to the Company, its Subsidiaries, divisions and
affiliates.
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(b) Duty
of Trust and Confidentiality.
Executive’s employment with the Company creates a duty of trust and
confidentiality to the Company with respect to the Confidential Information,
or
any other information: (a) related, applicable, or useful to the business
of the Company, including its anticipated research and development; or
(b) resulting from tasks assigned to Executive by the Company; or
(c) resulting from the use of equipment, supplies, or facilities owned,
leased, or contracted for by the Company; or (d) related, applicable, or
useful to the business of any of the Company’s customers, which may be made
known to Executive by the Company or by such customers, or learned by Executive
during the course of Executive’s employment. Without limiting the generality of
the foregoing, Executive agrees that while employed by the Company he will
not
divert or attempt to divert any business of the Company to any other competitive
business by direct or indirect inducement or otherwise.
(c) Nondisclosure
of Proprietary Information.
At all
times, both during employment and after termination of employment, whether
termination is voluntary or involuntary: (a) Executive will keep in
strictest confidence and trust all Confidential Information; and
(b) Executive will not disclose, use, or induce or assist in the use or
disclosure of any Confidential Information without the Company’s prior express
written consent, except as may be necessary in the ordinary course of performing
Executive’s duties for the Company. Executive will take reasonable measures to
prevent unauthorized persons or entities from having access to, obtaining,
or
being furnished with any Confidential Information.
(d) Confidential
and Proprietary Information of Third Parties.
The
Company has received and in the future will receive from third parties their
confidential or proprietary information, subject to a duty to maintain the
confidentiality of such information and to use it only for certain limited
purposes. Executive agrees to hold all such confidential or proprietary
information in strictest confidence, and will not disclose, use, or induce
or
assist in the use or disclosure of any such confidential or proprietary
information without the Company’s prior express written consent, except as may
be necessary in the ordinary course of performing Executive’s job duties for the
Company, consistent with its agreement with such third party.
(e) Return
of Documents Upon Termination.
All
records, files, lists, drawings, documents, equipment and similar items relating
to the Company’s business which Executive will prepare for or receive from the
Company, during the course of Executive’s employment hereunder, shall remain the
Company’s sole and exclusive property and Executive shall not acquire any
interest therein. Upon termination of employment, and in any event at the
request of the Company at any time, Executive shall promptly return to the
Company all property of the Company in Executive’s possession and all documents,
records, diskettes, hard drives, notebooks, work papers, and all similar
material containing any Confidential Information, whether prepared by Executive,
the Company or anyone else.
(f) Non-solicitation
of Employees Following Termination.
During
the term of this Agreement and for a period of twenty-four (24) months after
the
termination of employment for any reason, whether for or without Cause,
Executive shall not directly or indirectly, either alone or in concert with
others, solicit or in any way entice any employee of or consultant to the
Company to leave the Company or work for anyone in competition with the
Company.
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(g) Non-solicitation
of Customers Following Termination.
During
the term of this Agreement and for a period of twenty-four (24) months after
the
termination of employment for any reason, whether for or without Cause,
Executive shall not directly or indirectly, either alone or in concert with
others, (a) contact any of the customers of the Company for the purpose of
soliciting, inducing or encouraging such customers to divert or direct their
business away from the Company, or (b) in any way attempt to disrupt the
relationship between the Company and any of its customers, vendors or
suppliers.
(h) Reasonableness
of Restrictions; Equitable Remedies.
Executive agrees that the periods of restriction and the geographical areas
of
restriction imposed by the provisions of this Agreement are fair and reasonable
and are reasonably required for the protection of the Company. Executive agrees
that irreparable injury will result to the Company from Executive’s violation of
any of the provisions set forth in Sections 10(a) through 10(g) of
this Agreement. Executive expressly agrees that the Company will be entitled,
in
addition to damages and any other remedies provided by law, to an injunction
or
other equitable remedy respecting any such violation or continued
violation.
11. Parachute
Payments.
Notwithstanding anything to the contrary in this Agreement, if any payment
or
benefit Executive would receive from the Company pursuant to this Agreement
or
otherwise (“Payment”) would (i) constitute a “parachute payment” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), and (ii) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to
the Reduced Amount. The “Reduced Amount” shall be either (1) the largest portion
of the Payment that would result in no portion of the Payment being subject
to
the Excise Tax or (2) the Payment or a portion thereof after payment of the
applicable Excise Tax, whichever amount after taking into account all applicable
federal, state and local employment taxes, income taxes and the Excise Tax
(all
computed at the highest applicable marginal rate), results in Executive’s
receipt, on an after-tax basis, of the greatest amount of the Payment. If a
reduction in payments or benefits constituting “parachute payments” is necessary
so that the Payment equals the Reduced Amount, reduction shall occur in the
order of payments Executive elects in writing, provided,
however,
that
such election shall be subject to Company approval if made on or after the
date
on which the event that triggers the Payment occurs. The Company’s principal
outside accounting firm will make all determinations hereunder and shall provide
its calculations, together with detailed supporting documentation, to the
Company and Executive within fifteen (15) calendar days after the date on which
Executive’s right to a Payment is triggered (if requested at that time by the
Company or Executive) or such other time as requested by the Company or
Executive. If the accounting firm determines that no Excise Tax is payable
with
respect to a Payment, either before or after the application of the Reduced
Amount, it shall furnish the Company and Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to
such
Payment. The Company shall be entitled to rely upon the accounting firm’s
determinations, which shall be final and binding on all persons.
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12. Taxes
and Deductions.
Executive agrees and acknowledges that any and all payments and compensation
(in
any form) that Company makes or pays to Executive pursuant to this Agreement
shall be subject to withholding taxes, employment taxes and such other
deductions as the Company determines to be required by applicable law.
13. General
Provisions.
(a) Any
notice, request, demand or other communication required or permitted hereunder
shall be deemed to be properly given when personally served in writing, when
deposited in the United States mail, postage prepaid, addressed to the Company
or Executive at their respective last known address, or when hand delivered
to
the intended recipient. Either party may change its address by written notice
given in accordance with this subparagraph.
(b) This
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective executors, administrators, successors and assigns;
provided,
however,
that
Executive may not assign any or all of Executive’s rights or duties hereunder
without the prior written consent of the Company.
(c) This
Agreement is made and entered into, is to be performed primarily within, and
shall be governed by and construed in all respects in accordance with the laws
of the State of California.
(d) Captions
and Section headings used herein are for convenience only and are not a part
of
this Agreement and shall not be used in interpreting or construing
it.
(e) Should
any provision of this Agreement for any reason be declared invalid, void, or
unenforceable by a court of competent jurisdiction, the validity and binding
effect of any remaining portions shall not be affected, and the remaining
portions of this Agreement shall remain in full force and effect as if this
Agreement had been executed with said provision eliminated.
(f) This
Agreement contains the entire agreement of the parties, and supersedes any
and
all other agreements, either oral or in writing, between the parties hereto
with
respect to the employment of Executive by the Company. Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by any party, or anyone acting
on
behalf of any parry, which are not embodied herein, and that no other agreement,
statement or promise not contained herein shall be relied upon or be valid
or
binding. This Agreement may not be modified or amended by oral agreements,
but
only by an agreement in writing signed by the Company, on the one hand, and
by
Executive, on the other hand.
(g) If
any
legally actionable controversy, claim or dispute arises, which cannot be
resolved by mutual discussion between Executive and the Company, each agrees
to
resolve that dispute through binding arbitration before an arbitrator
experienced in employment law. The arbitration shall be conducted by a single
arbitrator, in Riverside County, California, administered by the American
Arbitration Association under its employment arbitration rules. The Company
and
Executive further agree that this agreement includes any disputes that the
Company may have against Executive, or that Executive may have against the
Company and/or its related entities and/or employees, arising out of or relating
to Executive’s employment or termination of employment or this Agreement or the
breach, termination, enforcement, interpretation or validity thereof, including
determination of the scope or applicability of this agreement to arbitrate.
This
agreement to arbitrate includes all common law and statutory claims that may
arise from the Agreement or termination of the Agreement, including but not
limited to, claims for breach of contract, breach of an implied covenant of
good
faith and fair dealing, wrongful termination, failure to pay wages or other
compensation, and harassment, discrimination or retaliation in alleges violation
of state and/or federal discrimination statutes. The Company and Executive
further agree that this is the exclusive and binding remedy for all such
disputes and will be used instead of any court action, which is hereby expressly
waived, except for any request by either party for temporary or preliminary
injunctive relief pending arbitration in accordance with applicable law or
an
administrative claim with an administrative agency. Judgment on the award
rendered by the arbitrator may be entered in any court having competent
jurisdiction.
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(h) This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original for all purposes. This Agreement may be executed by a party’s
signature transmitted by facsimile (“fax”), and copies of this Agreement
executed and delivered by means of faxed signatures shall have the same force
and effect as copies hereof executed and delivered with original signatures.
All
parties hereto agree that a faxed signature page may be introduced into evidence
in any proceeding arising out of or related to this Agreement as if it were
an
original signature page.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
By:
/s/
Xxxxxxx X. XxXxxxxxxx
Xxxxxxx
X. XxXxxxxxxx
Chairman
of the Board, Modtech Holdings, Inc.
By:
/s/
Xxxxxx X. Xxxxxxx
Xxxxxx
X.
Xxxxxxx
President
and Chief Executive Officer, Modtech Holdings, Inc.
.
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EXHIBIT
A
COMPENSATION,
BENEFITS AND VACATION
Base
Salary:
During
the Term, the Company shall pay Executive a base salary at the annual rate
of
not less than $345,000. Base salary shall be payable in accordance with the
usual payroll practices of the Company. Executive's base salary shall be subject
to annual review by the Board or the Company's Compensation Committee
("Compensation Committee) during the Term and may be increased, but not
decreased, from time to time by the Board or the Compensation Committee. The
base salary as determined as aforesaid from time to time shall constitute "Base
Salary" for purposes of this Agreement.
Incentive
Compensation:
(a)
Bonus:
In
addition to the Base Salary above, Executive shall be eligible to participate
in
any annual bonus plans, including incentive, performance and discretionary,
the
Company may implement at any time during the Term for senior executives at
a
level commensurate with his position.
(b)
Equity
Compensation:
Subject
to any required stockholder approval and in accordance with the Company's 2002
Stock Option Plan, as amended, Executive shall be entitled to a grant of 65,144
shares of restricted stock which will vest on July 1, 2008, a grant of 68,876
shares of restricted stock which will vest on July 1, 2009 and a grant of 71,098
shares of restricted stock which will vest on July 1, 2010. There shall be
no
partial vesting of the shares in any of the three grants prior to their vesting
dates. Executive shall have no rights of ownership in any of the shares in
any
grant prior to the vesting date for such grant and Executive shall forfeit
all
rights to the shares in any grant if Executive's employment with the Company
terminates for any reason, except change of control as defined in the employment
agreement, with or without cause, prior to the vesting date for such grant.
Executive
shall be eligible to participate at a level commensurate with his position
in
such other equity compensation programs including, without limitation, stock
option grants or additional grants of restricted stock as the Board or
Compensation Committee may determine.
(c)
Automobile Allowance. During the term of this Agreement, Executive will receive
an automobile allowance of $800.00 per month, plus fuel.
(d)
Long
Term Compensation. For each fiscal year or portion thereof during the Term,
Executive shall be eligible to participate in any long-term incentive
compensation plan generally made available to senior executives of the Company
at a level commensurate with his position in accordance with and subject to
the
terms of such plan.
(e)
Other
Compensation. The Company may, upon recommendation of the Compensation
Committee, award to the Executive such other bonuses and compensation as it
deems appropriate and reasonable.
Employee
Benefits and Vacation:
(a)
During the Term, Executive shall be entitled to participate in all benefit
plans
and arrangements and fringe benefits and perquisite programs generally provided
to comparable senior executives of the Company.
(b)
During the Term, Executive shall be entitled to vacation each year in accordance
with the Company's policies in effect from time to time, but in no event less
than four (4) weeks paid vacation per calendar year. The Executive shall also
be
entitled to such periods of sick leave as is customarily provided by the Company
for its senior executive employees.
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