Exhibit 10.12
EMPLOYMENT AGREEMENT
This Agreement, made this 10th day of February, 2003 by and between
Advanced Photonix, Inc. a Delaware corporation (hereinafter call "Company"), and
Xxxxxxx Xxxxx, an individual (hereinafter called "Employee")
RECITALS:
1. The Company wishes to employ Employee and utilize his professional
experience, ability, services, background and know-how, and
2. Employee wishes to enter into the employ of the Company on the terms and
conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the covenants and conditions set forth
in this Agreement and for other good and valuable consideration, which has been
received and which is sufficient, the parties agree to the following terms:
A. Employment Term. Subject to the terms and conditions contained in this
Agreement, the Company employs Employee, and the Employee agrees to be employed
by the Company, for a two (2) year period from the date of this Agreement unless
this Agreement is terminated in accordance with the terms hereof. The initial
two-year term is referred to in this Agreement as the "Employment Term"
B. Duties. Employee's position with the Company will be Chairman and Chief
Executive Officer ("CEO"). As CEO, Employee will be responsible for Corporate
Oversight, Investment Banking Relations, Strategic Planning, and have such other
authority and responsibilities as the Board of Directors reasonably may
determine from time to time.
C. Time and Efforts. Employee shall devote his entire working time, energy,
skill, and best efforts to the performance of his duties hereunder in a manner
which will faithfully and diligently further the business and interest of the
Company. Notwithstanding the foregoing, Employee shall be permitted to maintain
memberships on the Boards of Directors and in organizations identified to the
Company in writing, provided that such activities shall not, at any time, (i)
conflict with Employee's responsibilities hereunder or (ii) preclude the Company
or any Subsidiary (as hereinafter defined) of the Company, from obtaining
contracts from any such company or organization. For the purposes of this
Agreement, any corporation with respect to which Company has the ability to
control more than fifty percent of the voting power shall be a "Subsidiary" and
all such corporations shall be "Subsidiaries".
D. Place of Business. Unless the Company terminates operations at the
Facility , Employee shall perform his duties from 0000 Xxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxx (the "Facility"), and shall not be required to change location or
offices during the Employment Term or any renewal term provided; however, that
Employee shall spend whatever time is reasonably necessary at other Company
locations, including Dodgeville, Wisconsin, in order to effectively discharge
his duties as CEO.
E. Compensation and Benefits. For the services rendered by the Employee to
the Company, Employee shall receive a base salary at a rate of $160,000 per year
("Base Salary"), payable in reasonable installments in accordance with Company's
regular payroll practices in effect from time to time. The ordinary and usual
sums for taxes and withholding will be deducted from this salary. Employee shall
be eligible for additional salary increases and stock options during the term of
this Agreement at the discretion of the Board of Directors. Employee shall be
eligible for an incentive cash bonus of 40 % of Base Salary or greater on an
annual basis. This incentive bonus will be based on measurable goals reasonably
set forth by the and Compensation Committee of the Board of Directors after
discussion with Employee. Employee will be entitled to take four (4) weeks of
paid vacation per year. Except as otherwise provided in the Company's employee
manual as from time to time in effect, no vacation time may be carried over from
one year to the next. Employee will be entitled to participate in the group
medical insurance and all other fringe benefit plans generally provided to
employees within the Company in accordance with and subject to the terms of such
plans.
F. Expenses. Company will reimburse Employee for all reasonable expense
incurred by Employee in connection with the performance of the Employee's duties
hereunder, upon receipt of appropriate documentation and in accordance with
Company's regular reimbursement procedures and practices in effect from time to
time.
G. Death or Disability.
(1) If Employee dies, all payments hereunder shall cease at the end of
the month in which the Employee's death occurs and Company shall have no
further obligations or liabilities hereunder.
(2) The Company may terminate the employment of the Employee hereunder
at any time upon the permanent disability of the Employee, such termination
to be communicated by written notice given by the Company to the Employee.
The Employee shall be considered to have become permanently disabled if (i)
because of ill health or physical or mental disability, the Employee has
been or is reasonably likely to be continuously unable or unwilling to
perform his duties responsibilities hereunder for 120 consecutive days or
(ii) within a 12-month period, because of ill health or physical or mental
disability, the Employee has been unable or unwilling to perform his duties
and responsibilities hereunder for a total of 120 days, consecutive or not.
In the event that the Employee's employment is terminated by the Company by
reason of his permanent disability, the termination shall be treated as a
termination by the Company without cause and the Employee shall be entitled
to the payments (and required to execute the release) provided for in
Section L (2) below; provided, however, that there shall be deducted from
such payments an amount equal to 135% of the amount of any and all payments
made to the Employee pursuant to the terms of any disability insurance
program maintained by the Company.
H. Confidentiality. Employee knows that the Company has in its
possession business information which is confidential. During the
Employee's employment with the Company and after termination of Employee's
employment, Employee will not use or reveal, divulge or make known to any
person, company or any other third party, any Proprietary Information.
"Proprietary Information" is any and all information or data, whether in
writing, or learned by Employee orally, by observation or other sensory
detection, relating to any product, product design, service, research,
development, formula, process, method of distribution or delivery,
know-how, trade secret, customer list, contract term, customer pricing,
supplier list or price, business strategy, compensation, plan or practice,
operating records, software, technology, sales data, information or other
records, list or documents used by the Company in operating the Business or
otherwise. The Proprietary Information and all other information relating
to the Company belongs to and will remain the property of the Company. All
Proprietary Information, other information and property of the Company must
be returned to the Company by Employee upon termination of Employee's
employment.
I. Discoveries and Works. Any and all writings, inventions,
improvements, process and/or techniques which Employee may make, conceive,
discover or develop, either solely or jointly with any other person or
persons, at any time during the term of this Agreement, whether during
working hours or at any other time and whether at the request or upon the
suggestion of the Company or otherwise, which relate to or are useful in
connection with any business now or hereafter carried on or contemplated by
the Company, including developments or expansions of its present fields of
operations, shall be the sole and exclusive property of the Company.
Employee shall make full disclosure to Company of all such writings,
inventions, improvements, process, procedures and techniques, and shall do
everything necessary or desirable to vest the absolute title thereto in
Company. Employee shall write and prepare all specifications and procedures
regarding such inventions, improvements, process, procedures and
techniques, and otherwise aid and assist Company so the Company can prepare
and present applications for copyright or Letters of Patent wherever
possible, as well as reissues, renewals, and extensions thereof in all
countries in which it may desire to have a copyright or patent protection.
Employee shall not be entitled to any additional or special compensation or
reimbursement regarding any and all such inventions, improvements, process,
procedures and techniques.
J. Non Solicitation and Non-Competition. The services of the Employee
will be unique and extraordinary and essential to the business of the
Company, especially since the Employee shall have access to the Company's
customer lists, trade secrets and other privileged and confidential
information essential to the Company's business. Employee therefore agrees
that he will not, while he is an employee of the Company and for a period
of one (1) year thereafter, directly or indirectly solicit, induce,
encourage or attempt to influence any employee, client, customer, salesman
or supplier of Company to cease to do business with or to terminate his
employment with Company, and shall not utilize for any such purposes any
names and addresses of customers or clients of Company or any data on or
relating to past, present or prospective (at the time of termination of
Employee's employment) customers or clients of Company. Employee further
agrees that during such period he will not, without the prior written
approval of the Company, directly or indirectly, , whether as an owner,
partner, member, employee, officer, director or stockholder (other than as
the owner of less than 5% of the stock of a corporation registered under
the Securities and Exchange Act of 1934, as amended), or in any other
capacity, engage in any business activity competitive with the business of
the Company, which is the development, manufacture and distribution of
optoelectronic semiconductor based components, hybrid assemblies and other
proprietary solid state light and radiation detection devices. The Employee
agrees that his covenants contained in this Section J are given in
consideration of the purchase, by a subsidiary of the Company, of a
business partially owned by Employee.
K. Injunctive Relief. Employee acknowledges that the restrictions
contained herein are reasonable and necessary in order to protect the
legitimate interest of Company, and that any violation thereof would result
in irreparable injuries to Company, and Employee therefore acknowledges
that, in the event of his violation of any of these restrictions, Company
shall be entitled to obtain from any court of competent jurisdiction
preliminary and permanent injunctive relief, without the necessity of
posting bonds, as well as damages and an equitable accounting of all
earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies
to which Company may be entitled.
L. Termination. (1) This Agreement may be terminated by Company for Cause
as defined below upon written notice given to the Employee. As used herein,
"Cause" means; (i) any act or acts of Employee which would constitute a felony
or fraud; (ii) a continuing material breach by Employee in performing the duties
described in this Agreement which is not cured by Employee within thirty (30)
days after the Company gives Employee written notice specifying the details of
the breach; or (iii) gross neglect, gross malfeasance, willful neglect, willful
misconduct, or dishonesty in performance of Employee's duties hereunder. If
Employee's employment is terminated by Company for Cause, the Company's
obligations under this Agreement will terminate and the Company will not be
liable to Employee for any payments of any kind under this Agreement, including
without limitation any claim to unpaid bonus amounts.
(2) If the Company for reasons other than Cause terminates Employee's
employment under this Agreement, Company will continue to pay the remaining Base
Salary that Employee would have received under this Agreement, including
payments in respect of any fringe benefit plans of the Company in which the
Employee was a participant (to the extent that Employee continues to be eligible
to participate in such plans and to the extent that he is not eligible to
participate therein, Company shall make a cash payment to Employee in an amount
equal to the amount that Company would have paid in reapect of Employee's
participation therein had he been eligible to participate) plus any on-plan
bonus Employee would have been entitled to had Employee remained an Employee
through the end of the employment year during which he was terminated without
cause, provided that Employee executes a release of the Company for and against
any and all claims by the Employee except for the obligations of the Company
under this Section L (2). Such release shall be in such form as may be
reasonably required by the Company, but shall include a provision requiring that
in the event of any litigation between the parties with respect to their
respective rights under this Section L (2), the prevailing party shall be
entitled to an award of legal fees and other costs and expenses relating to the
litigation.
(3) Employee may voluntarily terminate his employment by the Company under
this Agreement at any time by giving ninety (90) days advance written notice to
the Company. In the event of such a voluntary termination of employment by
Employee, Employee shall continue to render services as provided in this
Agreement for such period of time not exceeding ninety (90) days as may be
requested by the Company, during which period he shall be paid the amounts
described in Section E above; and with the exception of the covenants contained
in Sections H, I, J and K, neither the Company nor Employee shall thereafter
have any further obligations or liability under or in respect to this Agreement.
(4) In the event that fifty-one percent (51%) or more of the Company's
stock or all or substantially all of the Company's assets are sold to a third
party (the "Sale") and the Company terminates the Employee's employment
hereunder in connection therewith, Employee shall be entitled to receive the
payments (subject to his executing the release) provided for under Section L(2),
above, and all stock options granted to the Employee shall immediately vest. In
the event that Employee voluntarily resigns his employment with the Company
following the date of the Sale, Section L(3) shall not apply; however, Employee
shall be entitled to receive the payments (subject to his executing the release)
provided for under Section L(2) above, except that (i) Employee shall not be
entitled to receive any bonus for the year in which he resigns, and (ii) in the
event that the Employee secures other employment, all payments made to him
pursuant to the provision of Section L (2) shall be reduced by the amounts
received by him shall be reduced by the amount, if any, that Employee may
receive in connection with such other employment.
M. Validity. If any provision contained in this Agreement, or the
application of any provision, is held invalid or unenforceable by a court of
competent jurisdiction, that provision will be deemed to be modified in a manner
to make it consistent with the intent of the original provision, so that as
revised, the provision will be valid and enforceable, and this Agreement, and
the application of the provision to persons or circumstances other than those
for which it would be invalid or unenforceable, will not be affected by the
revision.
N. Binding Nature of Agreement. This Agreement shall be binding upon and
inure to the benefit of Company and its successors and assigns and shall be
binding upon Employee, heirs and legal representatives.
O. Construction. Words and phrases defined in the plural shall also be used
in the singular and vice versa and be construed in the plural or singular as
appropriate and apparent in the context used. Unless otherwise specifically
provided herein, accounting terms shall be given and assigned their usual
meaning and effect as defined.
P. Paragraph Headings. The paragraph headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
Q. Notices. All notices, request, demands and other communication required
or permitted under this Agreement shall be in writing. Addresses for such
parties are as set forth below:
If to the Employee:
Xx. Xxxxxxx X. Xxxxx
0000 Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
If to the Company:
Advanced Photonix, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: President
Fax (000) 000-0000
With a copy to:
Xxxxxxxx Xxxxxx Xxxxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
R. Governing Law and Attorneys' Fees. This Agreement shall be governed by,
and construed in accordance with, the domestic laws of the State of California
without reference to the conflicts of laws provisions thereof. In the event of
any action at law or suit in equity in relation to this Agreement the prevailing
party in such action or suit shall be entitled to receive its attorneys' fees
and all other costs and expenses of such action or suit.
S. Submission to Jurisdiction and Venue. The parties hereto hereby
irrevocably and unconditionally each submits for itself and its property in any
legal action or proceeding relating to this Agreement, or for recognition and
enforcement of any judgment in respect thereof, to the exclusive general
jurisdiction of the State of California and its courts and the courts of the
United States of America for the District of California; consents that any such
action or proceeding shall be brought in such courts, and waives any objection
that it may now or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same; and agrees that
nothing herein shall affect the right to effect service of process in any other
manner permitted by law.
T. Parties in Interest. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provision given any third persons any right of
subrogation or action over or against any party to this Agreement.
U. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts together
shall constitute one and the same instrument.
V. Entire Agreement. This Agreement supersedes all previous agreements
between Employee and the Company, contains the entire understanding and
agreement between the parties regarding the Employee's employment with the
Company. This Agreement cannot not be amended, modified or supplemented in any
respect except by subsequent written agreement signed by both the Company and
Employee.
ADVANCED PHOTONIX, INC.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, President
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
