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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
Agreement, made as of the 1st day of January 1997, by and between The
DII Group, Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxx
(the "Executive").
RECITALS
A. The Company desires to continue to employ Executive as Vice President
and President, Multilayer Technology, Inc.; and
B. Executive is willing to accept such employment on the terms and
conditions set forth in this Agreement.
THE PARTIES AGREE as follows:
1. Position and Term of Employment. Executive's employment hereunder
shall commence as of January 1, 1997 and shall end December 31, 2000, unless
terminated sooner pursuant to Section 7 of this Agreement or extended by the
mutual agreement of the parties. During the term hereof, Executive shall be
employed as Vice President (and President, Multilayer Technology, Inc.) of the
Company and shall devote his full business time, skill, attention and best
efforts in carrying out his duties and promoting the best interests of the
Company. Executive shall also serve as a director and/or officer of one or more
of the Company's subsidiaries as may be requested from time to time by the Board
of Directors. Subject always to the instructions and control of the Board of
Directors of the Company, Executive shall report to the Chief Executive Officer
of the Company and shall be responsible for the duties of the Vice President and
President, Multilayer Technology, Inc.
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Executive shall not at any time while employed by the Company or any of
its affiliates or for a period of one (1) year following the later of (i)
termination of employment for any reason or (ii) the date on which the last
payment is required to be made under Section 2.1(a)(ii) hereof, without the
prior consent of the Board of Directors, knowingly acquire any financial
interests, directly or indirectly, in or perform any services for or on behalf
of any business, person or enterprise which undertakes any business in
competition with the business of the Company and its affiliates or sells to or
buys from or otherwise transacts business with the Company and its affiliates;
provided that Executive may acquire and own not more than five percent (5%) of
the outstanding capital stock of any public corporation or mutual fund.
Executive shall not at any time while employed by the Company or any of its
affiliates or for a period of two (2) years following termination of employment
for any reason, directly or indirectly, solicit for employment, employ or enter
into any business or contractual relationship with any employee of the Company
or any of its affiliates.
2.1 Base Salary. (a) (i) Executive shall be paid an initial salary at
the monthly rate of Twenty-Two Thousand Five Hundred Dollars ($22,500), which
shall be paid in accordance with the Company's normal payroll practice with
respect to salaried employees, subject to applicable payroll taxes and
deductions (the "Base Salary"). Executive's Base Salary shall be subject to
review and possible change in accordance with the usual practices and policies
of the Company. However, Executive's base annual salary shall not be reduced
unless such reduction is part of a Company-wide reduction in pay scale and such
reduction is proportionate to reductions imposed on the Company's and its
subsidiaries' employees; however, in no event may Executive's then current Base
Salary be reduced by more than 10%.
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(ii) If for any reason other than Executive's voluntary resignation or
termination pursuant to Sections 7(a), (b) or (c) hereof, Executive does not
continue to be employed by the Company, Executive shall continue to receive an
amount equal to his then current Base Salary plus an annual performance bonus
equal to the highest annual bonus payment Executive has received in the previous
three years for the then remaining balance of the term of this Agreement. In no
event shall such payment be less than one year's base salary plus such highest
annual bonus. The foregoing amounts shall be paid to Executive over the
remaining term of this Agreement or one year (whichever is applicable) in
accordance with the Company's payroll and bonus payment policies.
Notwithstanding the foregoing, no payments under this subparagraph (ii) shall be
made if the Company makes all payments to Executive required to be made under
the Executive's Senior Executive Severance Agreement (the "Severance Agreement")
in the event of a Change in Control. For purposes of this Agreement, a Change in
Control shall be deemed to have taken place upon the occurrence of any of the
following events:
(A) any corporation, person, other entity or group (other than the
trustee of any qualified retirement plan maintained by the Company) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934), directly or indirectly, of securities representing twenty percent
(20%) or more of the combined voting power of the Company's then outstanding
securities; or
(B) during any period of twenty-four consecutive months,
individuals who at the beginning of such consecutive twenty-four month period
constitute the Board of Directors cease for any reason (other than retirement
upon reaching normal retirement age, disability or death) to constitute at least
a majority thereof, unless the election or the nomination for election by the
Company's stockholders of each new director was approved by a vote of at
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least two-thirds of the directors then still in office who were directors at the
beginning of such twenty-four month period; or
(C) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets; or
(D) there shall occur a transaction or series of transactions which
the Board of Directors shall determine to have the effect of a Change in
Control.
(b) If Executive resigns voluntarily or ceases to be employed by the
Company (or any affiliate) for any reason described in Section 7(a) or (c) of
this Agreement, all benefits described in Sections 2 and 4 hereof shall
terminate (except to the extent previously earned or vested).
(c) If Executive's employment shall have been terminated pursuant to
Section 7(b), the Company shall pay in equal monthly installments for the then
remaining balance of the term of this Agreement to Executive (or his
beneficiaries or personal representatives, as the case may be) disability
benefits at a rate per annum equal to one hundred percent (100%) of his then
current Base Salary, plus amounts equal to the highest annual bonus as provided
in clause (ii) of
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Section 2.1(a), less payments and benefits, if any, received under any
disability plan or insurance provided by the Company and less any "sick leave"
payments received from the Company for the applicable period.
2.2 Bonuses. Executive shall be eligible for an annual performance
bonus for calendar years beginning after December 31, 1996, in accordance with
the Company's Senior Executive Performance Bonus Plan. The Company shall
administer such bonus plan on a basis consistent with the past.
2.3 Expenses. During the term hereof, the Company shall pay or
reimburse Executive in accordance with the Company's normal practices any
travel, hotel and other expenses or disbursements reasonably incurred or paid by
Executive in connection with the services performed by Executive hereunder, in
each case upon presentation by Executive of itemized accounts of such
expenditures or such other supporting information as the Company may require.
3.1 Stock Options; Performance Shares. Executive shall be eligible for
grants of stock options and performance share awards under the Company's 1994
Stock Incentive Plan (the "Plan"), as may hereafter be determined by the
Compensation Committee of the Board of Directors of the Company under the Plan.
3.2 Effect of Termination of Employment; Change in Control. (a)
Notwithstanding the provisions of Executive's options, if Executive shall resign
voluntarily or cease to be employed by the Company (or an affiliate) other than
as a result of death or disability, Executive shall be entitled to exercise such
options to the extent such options could
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otherwise have been exercised immediately prior to the time of termination at
any time up to and including 90 days after the date of termination, but not
beyond the expiration date of an option. This provision is not intended to limit
any other rights that Executive may have with respect to the vesting or exercise
of options.
(b) If Executive shall die or become disabled, all options and
performance shares which have not vested will accelerate and vest immediately,
and, in the event of Executive's death, all option rights will transfer to
Executive's representative. All then unexercised options will be cancelled one
year after Executive dies or becomes disabled.
(c) If there is a Change in Control, all options and performance
shares which have not vested will accelerate and vest immediately.
4. Other Benefits. Executive shall be entitled to (i) participate in
medical, dental, hospitalization, disability and life insurance benefit plans
made available by the Company to its senior executives and shall also be
eligible to participate in existing retirement or pension plans offered by the
Company to its senior executives, subject in each case to the terms and
requirements of each such plan or program, (ii) reimbursement for country club
dues at one country club, (iii) reimbursement for automobile lease payments up
to $700 per month and non-routine maintenance costs, and (iv) an annual
financial and tax-planning allowance up to 1% of base salary.
5. Confidential Information. Except as specifically permitted by this
Section 5, and except as required in the course of his employment with the
Company, while in the employ of the Company or thereafter, Executive will not
communicate or divulge to or use for the benefit of himself or any other person,
firm, association, or corporation without the prior
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written consent of the Company, any Confidential Information (as defined herein)
owned, or used by the Company or any of its affiliates that may be communicated
to, acquired by or learned of by Executive in the course of, or as a result of,
Executive's employment with the Company or any of its affiliates. All
Confidential Information relating to the business of the Company or any of its
affiliates which Executive shall use or prepare or come into contact with shall
become and remain the sole property of the Company or its affiliates.
"Confidential Information" means information not generally known about
the Company and its affiliates, services and products, whether written or not,
including information relating to research, development, purchasing, marketing
plans, computer software or programs, any copyrightable material, trade secrets
and proprietary information, including, but not limited to, customer lists.
Executive may disclose Confidential Information to the extent it (i)
becomes part of the public domain otherwise than as a result of Executive's
breach hereof or (ii) is required to be disclosed by law. If Executive is
required by applicable law or regulation or by legal process to disclose any
Confidential Information, Executive will provide the Company with prompt notice
thereof so as to enable the Company to seek an appropriate protective order.
Upon request by the Company, Executive agrees to deliver to the Company
at the termination of Executive's employment, or at such other times as the
Company may request, all memoranda, notes, plans, records, reports and other
documents (and all copies thereof) containing Confidential Information that
Executive may then possess or have under his control.
6. Assignment of Patents and Copyrights. Executive shall assign to the
Company all inventions and improvements within the existing or contemplated
scope of the Company's business made by Executive while in the Company's employ,
together with any such
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patents or copyrights as may be obtained thereon, both domestic and foreign.
Upon request by the Company and at the Company's expense, Executive will at any
time during his employment with the Company and after termination regardless of
the reason therefor, execute all proper papers for use in applying for,
obtaining and maintaining such domestic and foreign patents and/or copyrights as
the Company may desire, and will execute and deliver all proper assignments
therefor.
7. Termination.
(a) This Agreement shall terminate upon Executive's death.
(b) The Company may terminate Executive's employment hereunder upon
fifteen (15) days' written notice if in the opinion of the Board of Directors,
Executive's physical or mental disability has continued or is expected to
continue for one hundred and eighty (180) consecutive days and as a result
thereof, Executive will be unable to continue the proper performance of his
duties hereunder. For the purpose of determining disability, Executive agrees to
submit to such reasonable physical and mental examinations, if any, as the Board
of Directors may request and hereby authorizes the examining person to disclose
his findings to the Board of Directors of the Company.
(c) The Company may terminate Executive's employment hereunder "for
cause" (as hereinafter defined). If Executive's employment is terminated for
cause, Executive's salary and all other rights not then vested under this
Agreement shall terminate upon written notice of termination being given to
Executive. As used herein, the term "for cause" means the occurrence of any of
the following:
(i) Executive having willfully and continually failed to perform
substantially his duties with the Company (other than such failure
resulting from incapacity due to physical or mental illness, death or
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disability) after a written demand for substantial performance has been
delivered to the Executive by the Board or the President of the Company
which specifically identifies the manner in which the Executive is not
substantially performing his duties; or (ii) Executive having willfully
engaged in conduct which is materially demonstrably injurious to the
Company. For purposes of this section, no act, or failure to act, on
the part of the Executive shall be considered "willful" unless done, or
omitted to be done, by the Executive in bad faith and without
reasonable belief that such action or omission was in, or not opposed
to, the best interests of the Company. Any act or failure to act based
upon authority given pursuant to a resolution duly adopted by the Board
or based upon the advice of counsel to the Company shall be
conclusively presumed to be done or omitted to be done by the Executive
in good faith and in the best interests of the Company. Notwithstanding
the foregoing, the Executive shall not be deemed to have been
terminated for cause unless and until there shall have been delivered
to the Executive a copy of a written resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting called and held for that purpose
after reasonable notice to and opportunity for the Executive and the
executive's counsel to be heard by the Board, finding that in the good
faith opinion of the Board the Executive was guilty of the conduct set
forth above in (i) or (ii) and specifying the particulars thereof in
detail.
8. Additional Remedies. Executive recognizes that irreparable injury
will result to the Company and to its business and properties in the event of
any breach by Executive of the non-compete or non-solicitation provisions of
Section 1, the confidentiality provisions of Section 5 or the assignment
provisions of Section 6 and that Executive's continued employment is predicated
on the covenants made by him pursuant to such Sections. In the event of any
breach by Executive of his obligations under said provisions, the Company shall
be entitled, in addition to any other remedies and damages available, to
injunctive relief to restrain any such breach by Executive or by any person or
persons acting for or with Executive in any capacity whatsoever and other
equitable relief.
9. Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive and the Company and their
respective legal
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representatives, successors and assigns. Neither this Agreement nor any of the
duties or obligations hereunder shall be assignable by Executive.
10. Governing Law; Jurisdiction. This Agreement shall be interpreted
and construed in accordance with the laws of the State of Colorado. Each of the
Company and Executive consents to the jurisdiction of any state or federal court
sitting in Colorado, in any action or proceeding arising out of or relating to
this Agreement.
11. Headings. The paragraph headings used in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any purpose or in any way affect the interpretation of this Agreement.
12. Severability. If any provision, paragraph or subparagraph of this
Agreement is adjudged by any court to be void or unenforceable in whole or in
part, this adjudication shall not affect the validity of the remainder of this
Agreement. In addition, to the extent possible, a like valid term which meets
the objective of the void or unenforceable term shall be substituted for any
such void or unenforceable term.
13. Complete Agreement. This document embodies the complete agreement
and understanding among the parties, written or oral, which may have related to
the subject matter hereof in any way and shall not be amended orally, but only
by the mutual agreement of the parties hereto in writing, specifically
referencing this Agreement.
14. Counterparts. This Agreement may be executed in one or more
separate counterparts, all of which taken together shall constitute one and the
same Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THE DII GROUP, INC.
By:
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Title:
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XXXXXX X. XXXXXXX
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