EMPLOYMENT AGREEMENT
AGREEMENT
dated as of the 1st day of April, 2007 by and between Techprecision Corporation,
a Delaware corporation with its principal office at Xxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxxx 00000 (the “Company”),
and Xxxx
Xxxxxxx, residing at 000
Xxxxxxx Xxxxxx, Xxxxxxxxxx XX 00000 (the
“Executive”).
W
I T N E
S S E T H:
WHEREAS,
the Company has engaged Executive as its chief financial officer and desires
to
continue to obtain the benefits of Executive’s knowledge, skill and ability in
such capacity and to employ Executive on the terms and conditions hereinafter
set forth; and
WHEREAS,
Executive desires to provide his services to the Company and to accept
employment by the Company on the terms and conditions hereinafter set
forth;
NOW,
THEREFORE, in consideration of the mutual promises set forth in this Agreement,
the parties agree as follows:
1. Employment
and Duties.
(a) Subject
to the terms and conditions hereinafter set forth, the Company hereby employs
Executive as its Chief Financial Officer, and she shall have the duties and
responsibilities associated with the Chief Financial officer of a public
corporation. During the Term, as hereinafter defined, Executive shall report
to
the Company’s Chief Executive Officer and the audit committee of the board of
directors. Executive shall also perform such other duties and responsibilities
as may be determined by the Company’s board of directors, audit committee or
Chief Executive Officer, as long as such duties and responsibilities are
consistent with those of the Company’s Chief Financial Officer.
(b) Executive
shall serve as a director of the Company
and/or
any of its subsidiaries, if elected, and in such executive capacity or
capacities with respect to any affiliate of the Company to which he may be
elected or appointed, provided that such duties are consistent with those of
the
Company’s Chief Financial Officer. During the Term, Executive shall receive no
additional compensation for services rendered pursuant to this Section 1(b).
For
purposes of this Agreement, the term
“affiliate” shall mean an entity that is controlled by the Company.
(c) Unless
terminated earlier as provided in Section 5 of this Agreement, this Agreement
shall have an initial term (the “Initial Term”) commencing as of the date of
this Agreement and expiring on March 31, 2008, and continuing on a year-to-year
basis thereafter unless terminated by either party on not less than ninety
(90)
days notice prior to the expiration of the Initial Term or any one-year
extension. The Initial Term and the one-year extensions are collectively
referred to as the “Term.”
2. Executive’s
Performance.
Executive hereby accepts the employment contemplated by this Agreement. During
the Term, Executive shall devote substantially all of her business time to
the
performance of her duties under this Agreement, and shall perform such duties
diligently, in good faith and in a manner consistent with the best interests
of
the Company.
3. Compensation
and Other Benefits.
(a) (i) For
her
services to the Company during the Term, the Company shall pay Executive an
annual salary (“Salary”) at the rate of one hundred ten thousand dollars
($110,000).
All
Salary
payments shall be payable in such installments as the Company regularly pays
its
executive officers, but not less frequently than semi-monthly.
(ii) Executive’s
base salary as set forth in Paragraph 3(a)(i) above may be increased at the
discretion of the compensation committee of the Board of Directors.
(b) Executive
shall be eligible for bonus compensation and stock options or other equity-based
incentives at the discretion of the compensation committee of the Board of
Directors.
(c) Executive
shall receive the following benefits during the Term:
(i) Major
medical health and dental insurance for Executive and members of her immediate
family
at the
sole discretion of the Executive. Executive may elect not to accept such
insurance benefits at this point but reserves the right to accept such benefits
in the future at Executive’s sole discretion.
(ii) Vacation
in accordance with Company policy
which
shall provide for not less than four (4) weeks per year.
(iii) Eligibility
to participate in the Company’s 401(k) plan.
(d) In
the
event of a termination of Executive’s employment as a result of her death or
Disability, as hereinafter defined, the Company shall continue to pay to
Executive or her beneficiary, her Salary at the annual rate in effect at the
date of death or termination resulting from a Disability, until the earlier
of
(i) six (6) months from the date of death or such termination or (ii) the
expiration of the Term.
(e) As
used
in this Agreement, the term “Cash Compensation” shall include Salary, any bonus
awarded Executive. One month’s Cash Compensation shall mean one twelfth (1/12)
of the sum of (i) the annual Salary, (ii) the bonus, if any, for previous year,
including the amount treated as compensation for Executive for stock options
or
other equity-based incentives, to the extent that such amount is reflected
as
current compensation in the Summary Compensation Table in the Company’s filings
with the Securities and Exchange Commission.
4. Reimbursement
of Expenses.
The
Company shall reimburse Executive, upon presentation of proper expense
statements, for all authorized, ordinary and necessary out-of-pocket expenses
reasonably incurred by Executive during the Term in connection with the
performance of her services pursuant to this Agreement hereunder in accordance
with the Company’s expense reimbursement policy.
5. Termination
of Employment.
(a) This
Agreement and Executive’s employment hereunder shall terminate immediately upon
the death of Executive.
(b) This
Agreement and Executive’s employment pursuant to this Agreement, may be
terminated by Executive or the Company on not less than thirty (30) days’
written notice in the event of Executive’s Disability. The term “Disability”
shall mean any illness, disability or incapacity of Executive which prevents
her
from substantially performing her regular duties for a period of three (3)
consecutive months or four (4) months, even though not consecutive, in any
twelve (12) month period. However, if Executive is covered by long-term
disability insurance, the Company may not terminate this
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Agreement
pursuant to this Section 5(b) unless Executive is eligible for disability
payments under her long-term disability insurance.
(c) The
Company may terminate this Agreement and Executive’s employment pursuant to this
Agreement for cause, in which event no further Cash Compensation shall be
payable to Executive subsequent to the date of such termination. The term
“cause” shall mean:
(i) Repeated
failure to perform material instructions from the Company’s board of directors
or executive committee, provided that such instructions are reasonable and
consistent with Executive’s duties as set forth in Section 1 of this Agreement
or any other failure or refusal by Executive to perform her duties required
by
said Section 1; provided, however, that Executive shall have received notice
from the Board specifying the nature of such failure in reasonable detail and
Executive shall have failed to cure the failure within ten (10) business days
after receipt of such notice;
(ii) a
breach
of Section 6, 7 or 8 of this Agreement;
(iii) a
breach
of trust whereby Executive obtains personal gain or benefit at the expense
of or
to the detriment of the Company;
(iv) Executive’s
use of illegal substances;
(v) Executive’s
abuse of alcohol continuing after written notice from the board of directors
or
executive committee;
(vi) any
fraudulent or dishonest conduct by Executive or any other conduct by Executive
which damages the Company or any of its affiliates or their property, business
or reputation;
(vii) a
conviction of or plea of nolo contendere by Executive of (A) any felony or
(B)
any other crime involving fraud, theft, embezzlement or use or possession of
illegal substances; or
(viii) the
admission by Executive of any matters set forth in Section 5(c)(vii) of this
Agreement.
(d) Executive’s
resignation prior to the expiration of the Term, other than for Good Reason,
as
hereinafter defined, shall be treated in the same manner as a termination for
cause.
(e) In
the
event that the Company terminates Executive’s employment other than as provided
in Sections 5(a), (b), (c) or (g) of this Agreement:
(i) The
Company shall pay to Executive as severance payments, within thirty (30) days
of
the termination of Executive’s employment, (A) her Salary at the rate in effect
on the date of termination for the balance of the Term, and (B) an amount equal
to any cash bonus paid to Executive for the previous year.
(ii) If,
at
the time of termination, the Executive is covered by the major medical and
dental insurance provided in Section 3(b)(i), the Company shall continue such
coverage until the earlier of (A) the date the Term would have expired if this
Agreement had not been terminated pursuant to this Section 5(e), or (B) the
date
Executive has insurance coverage provided by another employer.
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(iii) Any
options or other equity-based incentives held by Executive on the date of such
termination which shall not have vested on such date shall become fully
vested.
(iv) The
provisions of Section 7(a) of this Agreement shall terminate.
(f) The
term
“Good Reason” shall mean:
(i) Any
material breach by the Company of its obligations under this Agreement which
are
not cured within ten (10) business days after notice from Executive which sets
forth in reasonable detail the nature of the breach.
(ii) Any
change in Executive’s duties such that Executive is no longer the Company’s
Chief Financial Officer,
unless
such change was made with her consent.
(iii) Any
action on the part of the Company which impairs Executive’s ability to exercise
her duties as the Company’s Chief Financial Officer.
(g) The
following provisions shall apply in the event that a change of control, as
hereinafter defined, shall occur.
(i) In
the
event that, following a change of control, Executive is dismissed other than
pursuant to Sections 5(a), (b) or (c) of this Agreement, the Company shall
pay
Executive severance pay in an amount (determined at the rate in effect on the
date of dismissal or resignation) equal to the sum of twelve (12) months’ Cash
Compensation, which shall be paid to Executive on the date of the termination
of
her employment.
(ii) A
change
of control shall occur or be deemed to have occurred if (A) any “person” (as
such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange
Act
of 1934, as amended) is or becomes the beneficial owner, directly or indirectly,
of securities of the Company representing forty percent (40%) or more of the
combined voting power of the Company’s then outstanding securities.
Notwithstanding the foregoing, a change of control shall not result from the
issuance of stock upon conversion of the Company’s series A convertible
preferred stock or upon the exercise or conversion of the warrants issued in
the
Company’s February 2006 private placement.
(h) In
the
event of any termination of Executive’s employment, including termination for
cause, Executive shall be entitled to all rights under the Company’s benefit
plans which had vested as of the date of termination of her
employment.
6. Trade
Secrets and Proprietary Information.
Executive recognizes and acknowledges that the Company, through the expenditure
of considerable time and money, has developed and will continue to develop
in
the future information concerning customers, clients, marketing, products,
services, business, research and development activities and operational methods
of the Company and its customers or clients, contracts, financial or other
data,
technical data or any other confidential or proprietary information possessed,
owned or used by the Company, the disclosure of which could or does have a
material adverse effect on the Company, its business, any business it proposes
to engage in, its operations, financial condition or prospects and that the
same
are confidential and proprietary and considered “confidential information” of
the Company for the purposes of this Agreement. In consideration of her
employment and engagement as a consultant, Executive agrees that she will not,
during or after the Term, without the consent of the Company’s Chief Executive
Officer, make any disclosure of confidential information
now or hereafter possessed by the Company, to any person, partnership,
corporation or entity either during or after the term here of, except that
nothing in this
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Agreement
shall be construed to prohibit Executive from using or disclosing such
information (a) if such disclosure is necessary in the normal course of the
Company’s business in accordance with Company policies or instructions or
authorization from the board of directors or executive committee, (b) such
information shall become public knowledge other than by or as a result of
disclosure by a person not having a right to make such disclosure, (c) complying
with legal process; provided, that in the event Executive is required to make
disclosure pursuant to legal process, Executive shall give the Company prompt
notice thereof and the opportunity to object to the disclosure, or (d)
subsequent to the Term, if such information shall have either (i) been developed
by Executive independent of any of the Company’s confidential or proprietary
information or (ii) been disclosed to Executive by a person not subject to
a
confidentiality agreement with or other obligation of confidentiality to the
Company. For the purposes of Sections 6, 7 and 8 of this Agreement, the term
“Company” shall include the Company, its parent, its subsidiaries and its
affiliates.
7. Covenant
Not To Solicit or Compete.
(a) During
the period from the date of this Agreement until one (1) year following the
date
on which Executive’s employment is terminated, Executive will not, directly or
indirectly:
(i) Persuade
or attempt to persuade any person or entity which is or was a customer, client
or supplier of the Company to cease doing business with the Company,
or to
reduce
the amount of business it does with the Company (the terms “customer” and
“client” as used in this Section 7 to include any potential customer or client
to whom the Company submitted bids or proposals, or with whom the Company
conducted negotiations, during the term of Executive’s employment hereunder or
during the twelve (12) months preceding the termination of her
employment);
(ii) solicit
for herself or any other person or entity other than the Company the business
of
any person or entity which is a customer or client of the Company, or was a
customer or client of the Company within one (1) year prior to the termination
of her employment; or
(iii) persuade
or attempt to persuade any employee of the Company, or any individual who was
an
employee of the Company during the one (1) year period prior to the lawful
and
proper termination of this Agreement, to leave the Company’s employ, or to
become employed by any person or entity other than the Company.
(b) Executive
acknowledges that the restrictive covenants (the “Restrictive Covenants”)
contained in Sections 6 and 7 of this Agreement are a condition of her
employment are reasonable and valid in geographical and temporal scope and
in
all other respects. If any court determines that any of the Restrictive
Covenants, or any part of any of the Restrictive Covenants, is invalid or
unenforceable, the remainder of the Restrictive Covenants and parts thereof
shall not thereby be affected and shall remain in full force and effect, without
regard to the invalid portion. If any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable because
of the geographic or temporal scope of such provision, such court shall have
the
power to reduce the geographic or temporal scope of such provision, as the
case
may be, and, in its reduced form, such provision shall then be
enforceable.
8. Inventions
and Discoveries.
Executive agrees promptly to disclose in writing to the Company any invention or
discovery made by her during the period of time that this Agreement remains
in
full force and effect, whether during or after working hours, in any business
in
which the Company is then engaged or which otherwise relates to any product
or
service dealt in by the Company and such inventions and discoveries shall be
the
Company’s sole property. Executive acknowledges that any such invention or
discovery developed by her and any intellectual property rights relating thereto
shall be
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considered
as “work performed for hire.” In the event that any such intellectual property
rights are not, for any reason, deemed work performed for hire, Executive hereby
assigns to the Company any and all of her right, title and interest therein
to
the Company. Upon the Company’s request, Executive shall execute and assign to
the Company all applications for copyrights and letters patent of the United
States and such foreign countries as the Company may designate, and Executive
shall execute and deliver to the Company such other instruments as the Company
deems necessary to confirm the Company’s sole ownership of all rights, title and
interest in and to such inventions and discoveries, as well as all copyrights
and/or patents. If services in connection with applications for copyrights
and/or patents are performed by Executive at the Company’s request after the
termination of her employment hereunder, the Company shall pay her reasonable
compensation for such services rendered after termination of this
Agreement.
9. Injunctive
Relief.
Executive agrees that her violation or threatened violation of any of the
provisions of Sections 6, 7 or 8 of this Agreement shall cause immediate and
irreparable harm to the Company. In the event of any breach or threatened breach
of any of said provisions, Executive consents to the entry of preliminary and
permanent injunctions by a court of competent jurisdiction prohibiting Executive
from any violation or threatened violation of such provisions and compelling
Executive to comply with such provisions. This Section 9 shall not affect or
limit, and the injunctive relief provided in this Section 9 shall be in addition
to, any other remedies available to the Company at law or in equity or in
arbitration for any such violation by Executive. In the event an injunction
is
issued against any such violation by Executive, the period referred to in
Section 7 of this Agreement shall continue until the later of the expiration
of
the period set forth therein or one (1) month from the date a final judgment
enforcing such provisions is entered and the time for appeal has lapsed. Subject
to Section 5(e)(iv) of this Agreement, the provisions of Sections 6, 7, 8 and
9
of this Agreement shall survive any termination of this Agreement and
Executive’s employment pursuant to this Agreement.
10. Indemnification.
The
Company shall provide Executive with payment of legal fees and indemnification
to the maximum extent permitted by the Company’s Certificate of Incorporation,
By-Laws, and the Delaware General Corporation Law.
11. Miscellaneous.
(a) Executive
represents, warrants, covenants and agrees that she has a right to enter into
this Agreement, that he is not a party to any agreement or understanding, oral
or written, which would prohibit performance of her obligations under this
Agreement, and that he will not use in the performance of her obligations
hereunder any proprietary information of any other party which he is legally
prohibited from using.
(b) If
requested by the Company, Executive will cooperate with the Company in
connection with the Company’s application to obtain key-man life insurance on
her life, on which the Company will be the beneficiary. Such cooperation shall
include the execution of any applications or other documents requiring her
signature and submission of insurance applications and submission to a
physical.
(c) Any
notice, consent or communication required under the provisions of this Agreement
shall be given in writing and sent or delivered by hand, overnight courier
or
messenger service, against a signed receipt or acknowledgment of receipt, or
by
registered or certified mail, return receipt requested, or telecopier or similar
means of communication if receipt is acknowledged or if transmission is
confirmed by mail as provided in this Section 11(c), to the parties at their
respective addresses set forth at the beginning of this Agreement or by
telecopier to the Company at (000) 000-0000 or to Executive at 610)
444-0778,
with
notice to the Company being sent to the attention of the individual who executed
this Agreement on behalf of the Company. Either party may, by like notice,
change the person, address or telecopier number to which notice is to be sent.
If no telecopier number is provided for Executive, notice to her shall not
be
sent by telecopier.
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(d) This
Agreement shall in all respects be construed and interpreted in accordance
with,
and the rights of the parties shall be governed by, the laws of the State of
Delaware applicable to contracts executed and to be performed wholly within
such
State, without regard to principles of conflicts of laws.
(e) Except
for actions, suits, or proceedings taken pursuant to or under Section 6, 7,
8 or
9 of this Agreement, any dispute concerning this Agreement or the rights of
the
parties hereunder shall be submitted to binding arbitration in Wilmington,
Delaware before a single arbitrator under the rules of the American Arbitration
Association. The award of the arbitrator shall be final, binding and conclusive
on all parties, and judgment on such award may be entered in any court having
jurisdiction. The arbitrator shall have the power, in his or her discretion,
to
award counsel fees and costs to the prevailing party. The arbitrator shall
have
no power to modify or amend any specific provision of this Agreement except
as
expressly provided in Section 7(b) of this Agreement.
(f) Notwithstanding
the provisions of Section 11(e) of this Agreement, with respect to any claim
for
injunctive relief or other equitable remedy pursuant to Section 9 of this
Agreement or any claim to enforce an arbitration award or to compel arbitration,
each of the parties hereby (i) consents to the exclusive jurisdiction of the
United States District Court for the State of Delaware and state courts of
the
State of Delaware, in the County of New Castle, (ii) agrees that any process
in
any action commenced in such court under this Agreement may be served upon
her
personally, either (A) by certified or registered mail, return receipt
requested, or by overnight courier service which obtains evidence of delivery,
with the same full force and effect as if personally served upon her in New
Castle County, Delaware, as the case may be, or (B) by any other method of
service permitted by law, and (iii) waives any claim that the jurisdiction
of
any such court is not a convenient forum for any such action and any defense
of
lack of in personam
jurisdiction with respect thereof.
(g) If
any
term, covenant or condition of this Agreement or the application thereof to
any
party or circumstance shall, to any extent, be determined to be invalid or
unenforceable, the remainder of this Agreement, or the application of such
term,
covenant or condition to parties or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each
term, covenant or condition of this Agreement shall be valid and be enforced
to
the fullest extent permitted by law, and any court or arbitrator having
jurisdiction may reduce the scope of any provision of this Agreement, including
the geographic and temporal restrictions set forth in Section 7(a) of this
Agreement, so that it complies with applicable law.
(h) This
Agreement constitutes the entire agreement of the Company and Executive as
to
the subject matter hereof, superseding all prior or contemporaneous written
or
oral understandings or agreements, including any and all previous employment
agreements or understandings, all of which are hereby terminated, with respect
to the subject matter covered in this Agreement. This Agreement may not be
modified or amended, nor may any right be waived, except by a writing which
expressly refers to this Agreement, states that it is intended to be a
modification, amendment or waiver and is signed by both parties in the case
of a
modification or amendment or by the party granting the waiver. No course of
conduct or dealing between the parties and no custom or trade usage shall be
relied upon to vary the terms of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on any occasion
shall
not be considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Agreement.
(i) Neither
party hereto shall have the right to assign or transfer any of its or her rights
hereunder except in connection with a merger of consolidation of the Company
or
a sale by the Company of all or substantially all of its business and
assets.
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(j) This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors, executors, administrators and permitted
assigns.
(k) The
headings in this Agreement are for convenience of reference only and shall
not
affect in any way the construction or interpretation of this
Agreement.
(l) No
delay
or omission to exercise any right, power or remedy accruing to either party
hereto shall impair any such right, power or remedy or shall be construed to
be
a waiver of or an acquiescence to any breach hereof. No waiver of any breach
hereof shall be deemed to be a waiver of any other breach hereof theretofore
or
thereafter occurring. Any waiver of any provision hereof shall be effective
only
to the extent specifically set forth in an applicable writing. All remedies
afforded to either party under this Agreement, by law or otherwise, shall be
cumulative and not alternative and shall not preclude assertion by such party
of
any other rights or the seeking of any other rights or remedies against any
other party.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first above
written.
TECHPRECISION
CORPORATION
By:
/s/
Xxxxx
X. Xxxxxxx
Xxxxx
X.
Xxxxxxx
Chairman,
Compensation Committee
/s/
Xxxx
Xxxxxxx
Xxxx
Xxxxxxx
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