EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 23rd
day of June, 1997, between GROUP TECHNOLOGIES CORPORATION, a Florida corporation
(the "Company") and XXXXXX X. XXXXXXXX, a current employee of the Company (the
"Employee").
WHEREAS, the Company is actively evaluating alternatives to improve the
financial condition of the Company, including, among other things, (i) the
potential sale of an interest in the Company, (ii) the potential sale of certain
assets of the Company, and (iii) the potential merger of the Company or one of
its business units with another entity that is not affiliated with the Company;
and
WHEREAS, the Company recognizes that the Employee fulfills an important
role in managing the affairs of the Company and, in order to relieve the
Employee of any apprehension concerning employment security during this period
of uncertainty within the Company and, therefore, help ensure that the Employee
remains dedicated and focused on managing the affairs of the Company, the
Company desires to enter into this Agreement with the Employee; and
WHEREAS, in recognition of the special efforts that may be required of the
Employee on behalf of the Company during the period of time covered by this
Agreement, the Company also desires to offer the Employee an opportunity to earn
a special cash bonus according to the terms and conditions specified in Section
II hereof; and
WHEREAS, the Employee: (i) has read and understands the terms and
conditions of this Agreement, and (ii) desires and intends to remain employed by
the Company in the Employee's present position, pursuant to the terms and
conditions hereof, and (iii) further intends to expend the Employee's time,
knowledge, expertise and energy while at work to help the Company successfully
improve the financial condition of the business.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
I. EMPLOYMENT PROVISIONS
1.1. Term. This Agreement shall be for a term of two years commencing
on July 1, 1997 and ending on June 30, 1999, unless the Employee's employment
with the Company ends before that date for any of the reasons which are
specified in Section 1.4 of this Agreement (the "Term").
1.2. Compensation and Benefits. As consideration for the services
rendered by the Employee pursuant to this Agreement, including the agreement to
devote the Employee's full business time and efforts to the performance of the
duties and responsibilities of the Employee's position or positions at the
Company, the Company will provide compensation and benefits to the Employee as
follows:
(a) Salary. A base salary of Two Hundred Thousand Dollars
($200,000), which will be dispersed in accordance with the standard payroll
practices of the Company for salaried personnel. During the Term of this
Agreement, the Company may increase the base salary of the Employee at the
Company's sole discretion.
(b) Vacation. Paid vacation of twenty (20) business days during the
Company's established vacation year.
(c) Additional Benefits. Participation (at the expense of the
Company, where lawful and consistent with Company policy) in any and all
employee retirement, medical, life and disability insurance and other benefits
made available to salaried employees of the Company.
1.3. Termination of Employment With Payment. If the Employee is terminated
by the Company during the Term of this Agreement without cause or for reasons
other than those described in Section 1.4 hereof, the Company will compensate
the Employee as follows:
(a) the Company will provide the Employee with pay continuance for a
period of two years from the date of termination. Pay continuance will be
calculated based upon an annual rate which is equal to the Employee's base
salary at the time of termination, less any applicable federal and state taxes,
and will be dispersed in accordance with the standard payroll practices of the
Company for salaried personnel;
(b) the Company will make a lump sum payment to the Employee at the
time of termination for all earned and/or accrued vacation days through the date
of termination;
(c) the Company will provide hospitalization and medical insurance
coverage, equal to the coverage provided to active salaried employees of the
Company under its employee health plan (prior to the exercise of COBRA rights),
for a period of one year from the date of termination;
(d) the Company will provide life insurance coverage equal to the
coverage provided by the Company's life insurance plan to active salaried
employees of the Company for a period of one year from the date of termination;
and
(e) the Company will provide for the Employee to retain all stock
options held by the Employee at the time of termination, which stock options
will continue to be exercisable by the Employee during the stated term of each
option in accordance with the terms and conditions of the applicable stock
option agreements entered into between the Employee and the Company, as such
terms may be amended from time-to-time.
1.4. Termination of Employment Without Payment. Should the Employee's
employment with the Company terminate prior to the expiration of the Term of
this Agreement upon the occurrence of any one or more of the following events,
the Company will be without any further obligation to the Employee and will be
under no obligation to provide the Employee with any compensation whatsoever
pursuant to this Agreement other than salary and/or vacation pay in accordance
with the then current policies of the Company:
(a) the voluntary resignation of the Employee;
(b) the death of the Employee;
(c) the material failure by the Employee to meet the performance
standards of the Employee's job, as determined by the Company, provided that
such material failure has not been cured within a reasonable time required to
cure such failure;
(d) gross negligence or willful misconduct by the Employee in the
performance of the Employee's duties for the Company;
(e) a material breach by Employee of any of the obligations of this
Agreement, including, specifically, but not limited to the confidentiality
provisions contained in Section 3.4 hereof;
(f) the conviction of the Employee (or the entering of a plea of
guilty or nolo contendere by the Employee) for fraud, misappropriation,
embezzlement, financial misconduct, or any other felony;
(g) the determination by the Company that the Employee has been
unable, for a continuous period of at least six (6) months or for shorter
periods totaling six (6) months during any 12-month period, to perform the
Employee's duties because of injury, illness, or other physical or mental
disability for which the Company was unable to make reasonable accommodation;
(h) the refusal by the Employee to accept an offer of employment by
the Company, any affiliate of the Company, or any successor to the Company, at a
base salary that is equal to or greater than the Employee's base salary at the
time the offer is made, unless such offer of employment is for a job at a
location that is greater than one hundred (100) miles from the Employee's
current place of employment; or
(i) the termination and subsequent employment of the Employee by the
Company, its affiliates or a successor to the Company that does not result in an
interruption in the years of credited service or a reduction in base salary of
the Employee.
Notwithstanding any of the foregoing, should the Employee's employment with
the Company terminate prior to the expiration of the Term of this Agreement
because of the occurrence of an event described in either Section 1.4(h) or
Section 1.4(i), the Employee will not become ineligible to receive the Special
Bonus solely as a result of being terminated in accordance with the provisions
of Sections 1.4(h) or 1.4(i).
II. SPECIAL BONUS PROVISIONS
2.1 Eligibility for Special Bonus. The Company hereby agrees to pay
to the Employee a one-time, lump sum cash bonus in the amount of Seventy-Five
Thousand Dollars ($75,000), less any applicable taxes or other required
withholding amounts (the "Special Bonus"), subject to the terms and conditions
of this Agreement.
2.2 Payment of the Special Bonus. The Company's obligation to pay the
Employee the Special Bonus hereunder shall be completely null and void unless
each of the following conditions is met:
(a) the Board of Directors of the Company shall have approved the
payment of the Special Bonus;
(b) the Company shall have successfully concluded its efforts to
improve the financial condition of the Company through either (i) the sale of an
interest in the Company, (ii) the sale of certain assets of the Company, (iii)
the merger of the Company or one of its business units with another entity that
is not affiliated with the Company, or (iv) the completion of some other
transaction that results in a similar improvement to the Company's financial
condition; and
(c) on the date the Company's obligation to pay the Special Bonus
arises, the Employee must either be (i) employed with the Company or any of its
affiliates, or (ii) employed and on active status with a successor to the
Company.
The Special Bonus shall be paid to the Employee by the Company in the form
of a check payable to the Employee no later than ten (10) business days after
the Special Bonus has been approved by the Company's Board of Directors.
III. GENERAL PROVISIONS
3.1. Representations by the Employee. The Employee hereby represents and
warrants to the Company that:
(a) the Employee's execution and delivery of this Agreement and the
performance of the Employee's duties and obligations hereunder will not conflict
with, cause a breach or default under, or give any party a right to damages
under (or to terminate) any other agreement to which the Employee is party or by
which Employee is bound; and
(b) there are no restrictions, agreements or understandings that
would make unlawful the Employee's execution or delivery of this Agreement or
the Employee's employment hereunder.
3.2. Right of Offset. The parties hereto agree that the Company may
reduce any compensation otherwise payable to the Employee under this Agreement
by any amounts payable by the Employee to the Company or an affiliate of the
Company.
3.3. Noncompetition.
(a) The Employee agrees that, during the Term of this Agreement, he
will refrain from directly or indirectly (i) engaging or participating, as a
principal, officer, director, employee, shareholder, investor, consultant,
advisor, partner, joint venturer, broker, agent, equity owner, or in any other
capacity whatsoever, in any business enterprise (regardless of whether it is a
sole proprietorship or a corporation, partnership, trust, business association,
or other equity) that engages (in the United States), directly or indirectly, in
providing electronic contract manufacturing services for commercial customers or
for agencies of the United States government, including the provision of design,
engineering, manufacturing and test services on a contract basis to original
equipment manufacturers; or (ii) causing or attempting to cause (A) any person
or entity to whom or for whom the Company or any subsidiary of the Company sells
or distributes any product to terminate or reduce its relationship or dealings
with the Company or such subsidiary, or (B) any company whose products are sold
by or through the Company or any subsidiary of the Company to terminate or
reduce its relationship or dealings with the Company or such subsidiary; (iii)
causing or attempting to cause any employee, agent, consultant, or independent
contractor of the Company or of any subsidiary of the Company to cease serving
the Company in such capacity; or (iv) hiring or otherwise retaining or
soliciting any person who is employed by the Company as an employee, consultant
or other contractor of the Company.
(b) The Employee acknowledges that the geographic boundaries, scope
of prohibited activities, and the Term of Noncompetition contained in this
Section 3.3 of the Employment Agreement (i) are reasonable and no broader than
necessary to protect the Company and its ongoing business interests, and (ii) do
not and will not impose any unreasonable burden upon the Employee.
(c) The Employee and the Company agree that (i) any breach by the
Employee of any of the provisions contained in this Section 3.3 of this
Agreement would cause irreparable damage to the Company for which monetary
damages and other remedies at law may be inadequate, and (ii) the Company will
be entitled as a matter of right to obtain, without posing any bond whatsoever
and without proof of actual damage, a restraining order, an injunction, specific
performance, or other form of equitable or extraordinary relief from any court
or competent jurisdiction to restrain any threatened or further breach of this
Section 3.3 or to require such Employee to perform his obligations under this
Section 3.3 which right to equitable or extraordinary relief will not be
exclusive but will be in addition to all other remedies to which the Company may
be entitled under this Agreement, at law, or in equity (including, without
limitation, the right to recover monetary damages).
The parties hereto agree that the provisions contained in Section 3.3 shall
survive the termination of this Agreement and shall remain in full force and
effect until June 30, 1999.
3.4. Confidentiality.
(a) General Information. The Employee shall refrain from
disclosing to any other person or entity any confidential documents or
confidential information concerning the Company or its affiliates obtained by
the Employee at any time. "Confidential Information" shall include but not be
limited to communications with customers and active prospective customers,
prices, contracts, financial information, marketing strategies, customer
programs, computer programs, intellectual property and any other such
information that would not otherwise be generally known by or available to a
third party.
(b) Information Regarding this Agreement. Except as may be
necessary to enforce the terms of this Agreement or as may otherwise be required
by law, the Employee shall not disclose to any other person or entity: (i) any
of the contents of this Agreement, (ii) any of the contents of the discussions,
negotiations, or correspondence leading up to this Agreement, or (iii) any
information regarding a potential or actual transaction concerning the business.
The parties hereto agree that the provisions contained in Section
3.4(a) shall survive the termination of this Agreement and shall remain in force
for a period of three (3) years thereafter.
3.5. Expenses. Except as otherwise specifically provided in this Agreement,
each party hereto will pay its own expenses respectively incurred or to be
incurred by it in performing its obligations under this Agreement, or in
consummating the transactions contemplated by this Agreement.
3.6. Notices. Any notice or communication given pursuant to this Agreement
must be in writing and (a) delivered personally, (b) sent by telefacsimile or
other similar facsimile transmission, (c) delivered by overnight express, or (d)
sent by registered or certified mail, postage prepaid, as follows:
(i) If to the Employee:
Xxxxxx X. Xxxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
(ii) If to the Company:
Group Technologies Corporation
00000 Xxxxxxx XxXxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Legal Counsel
Facsimile number: (000) 000-0000
All notices and other communication required or permitted under this
Agreement that are addressed as provided in this Section 3.6 will (a) if
delivered personally or by overnight express, be deemed given upon delivery; (b)
if delivered by telefacsimile or similar facsimile transmission, be deemed given
when electronically confirmed; and (c) if sent by registered or certified mail,
be deemed given when received. Any party from time to time may change its
address for the purpose of notices to that party by giving a similar notice
specifying a new address, but no such notice will be deemed to have been given
until it is actually received by the party sought to be charged with the
contents thereof.
3.7. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior communications, agreements, understandings,
representations, and warranties whether oral or written, between the parties
hereto with respect to the subject matter hereof. There are no oral or written
agreements, understandings, representations, or warranties between the parties
hereto with respect to the subject matter hereof other than those set forth in
this Agreement.
3.8. Assignment and Amendment of Agreement. This Agreement will be binding
upon the parties hereto and their respective successors and permitted assignees.
Because the Employee's duties hereunder are special, personal and unique in
nature, the Employee may not transfer, sell or otherwise assign the Employee's
rights, obligations or benefits under this Agreement (and any attempt to do so
will be void). The Company may assign its rights and obligations under this
Agreement at its sole discretion. This Agreement may be modified or amended
only by a writing duly executed on behalf of each party hereto.
3.9. Governing Law. This Agreement will be governed by and construed and
enforced in accordance with the laws of the state of Florida (without regard to
the principles of conflict of laws) applicable to a contract executed and to be
performed in such state.
3.10. No Third Party Rights. Except as specifically provided in this
Agreement, this Agreement is not intended and may not be construed to create any
rights (including third party beneficiary rights) in any parties other than the
Employee and the Company and their respective successors and permitted
assignees.
3.11. Waiver and Remedies. Any term or condition of this Agreement
may be waived at any time by the party that is entitled to the benefit thereof.
Any such waiver will be in writing and will be executed by such party. A waiver
on one occasion will not be deemed to be a waiver of the same or any other
breach on a future occasion. All remedies, either under this Agreement or by
law or otherwise afforded, will be cumulative and not alternative.
3.12. Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under any present or future law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part hereof, (c) the
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid, or unenforceable provision or by its
severance herefrom, and (d) in lieu of such illegal, invalid, or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible.
3.13. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the date first above written.
COMPANY:
GROUP TECHNOLOGIES CORPORATION
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Chairman
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
