EXHIBIT 10.13
SMTC Corporation
May 18, 2000
Xxxxxx X. Xxxxxxx
00000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Re: Employment Agreement
Dear Xx. Xxxxxxx:
This letter sets forth the terms and conditions of your employment with
SMTC Corporation, a Delaware corporation (together with its subsidiaries, the
"Company") to be effective as of May 18, 2000 (the "Effective Date").
1. Employment and Services. You shall be employed by the Company for the
period beginning on the Effective Date and ending on the first anniversary of
the Effective Date or on such earlier date as your employment is terminated
pursuant to paragraph 4 hereof (the "Employment Period"). The Employment Period
shall automatically be extended for successive one-year terms on each
anniversary of the Effective Date, unless (i) either party has given written
notice of non-renewal (a "Non-Renewal Notice") to the other party at least 30
days prior to the scheduled expiration date of the Employment Period or (ii)
your employment has been terminated pursuant to paragraph 4 hereof.
During the Employment Period, you shall render such services to the Company
and its affiliates and shall have such powers, duties and responsibilities as
may from time to time be prescribed by the Company's Chief Executive Officer
(the "CEO") or its Board of Directors (the "Board"). You shall perform and
discharge, faithfully, diligently and competently, such services, duties and
responsibilities. You shall devote all of your business time and attention and
your best efforts and ability to the business and affairs of the Company and
shall not engage in other business activities (whether or not compensated)
during the term of this Agreement without prior written consent of the CEO or
the Board.
2. Compensation. As compensation for your services performed under this
Agreement during the Employment Period, the Company shall pay you a base salary
at the rate of $225,000 per year. Such salary shall be payable in installments
in accordance with the Company's regular payroll practices. During the
Employment Period, you will be eligible to participate in any bonus compensation
program generally made available to the Company's management as determined by
the Board in its sole discretion.
3. Benefits. During the Employment Period, you shall be entitled to
participate in or receive benefits under any life insurance plan, health and
accident insurance plan, retirement plan and all other benefit arrangements
generally available to the Company's executive officers and employees (other
than severance plans or arrangements) as in effect from time to time. In
addition, the Company will reimburse your reasonable out-of-pocket expenses
incurred in connection with the performance of your services hereunder, in each
case subject to and consistent with Company policy. During the Employment
Period you shall be entitled to 15 paid vacation days in each fiscal year and
shall also be entitled to all paid holidays given by the Company to its
employees. Your paid vacation days shall be prorated for any period of service
hereunder less than a full year. Except as set forth in paragraph 4 below, you
will not be entitled to cash compensation for any vacation time not taken during
the term hereof.
4. Termination and Severance. The Employment Period shall terminate
prior to its scheduled expiration date on the first to occur of (i) your death
or permanent disability (defined as your actual inability to perform normal
duties for a period of 20 consecutive days or for a total of 30 days in any one-
year period or your prospective inability to perform such duties for such period
as determined in good faith by the Board), (ii) a vote of the Board directing
such termination for Cause, or (iii) a vote of the Board directing such
termination without Cause. In the event (a) the Employment Period is terminated
pursuant to clause (iii) above or (b) the Company gives you a Non-Renewal
Notice, and so long as you comply and in consideration of your compliance with
the restrictions set forth in paragraphs 5 and 6 below, the Company shall (i)
continue to pay your base salary for six months following the date of such
termination or the expiration of the Employment Period, as applicable, and (ii)
pay you in cash for any vacation days that shall have accrued and shall not have
been taken by you during the fiscal year of the Company in which the Employment
Period is so terminated or the Company gives you such Non-Renewal Notice, which
number of vacation days shall be determined as of the date of such termination
or the expiration of the Employment Period, as applicable. Except as set forth
in this paragraph 4, you shall not be entitled to any compensation or other
payment from the Company or any of its affiliates in connection with the
termination of your employment. For purposes of this agreement, (x) "Cause"
shall mean (i) your failure to comply with the lawful directives of the CEO or
the Board, (ii) any criminal act or act of dishonesty, disloyalty, misconduct or
moral turpitude by you that is injurious to the property, operations, business
or reputation of the Company, (iii) your failure to perform, or material
negligence in the performance of, your duties and responsibilities to the
Company, or (iv) your material breach of this agreement that is not cured within
5 days after written notice thereof to you by the Company.
5. Confidential Information. You acknowledge that information obtained
by you during your employment with the Company (including during the term of
your employment by HTM Holdings, Inc. or Hi-Tech Manufacturing, Inc.) concerning
the business or affairs of the Company ("Confidential Information") is the
property of the Company. You shall not at any time during or after the
Employment Period, without the prior written consent of the Board, disclose to
any unauthorized person or use for your own account or for the account of any
person other than the Company and its subsidiaries any Confidential Information,
except to the extent necessary to comply with applicable laws or to the extent
that such information becomes generally known to and available for use by the
public other than as a result of your acts or
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omissions to act. Upon termination or expiration of the Employment Period or at
the request of the Board at any time, you shall deliver to the Board all
documents containing Confidential Information or relating to the business or
affairs of the Company that you may then possess or have under your control.
6. Non-Solicitation.
a. Non-Solicitation of Employees, Suppliers and Customers. During
the Employment Period and for a period of six months following the date of
termination or expiration of your employment, you shall not (i) interfere with
the relationship between the Company and any of its employees, or induce or
attempt to induce any employee of the Company to terminate his or her
employment, (ii) hire directly or through another entity any person who was an
employee of the Company at any time during the Employment Period, (iii) induce
or attempt to induce any independent contractor providing services to the
Company or any of its subsidiaries to terminate or diminish its relationship
with the Company, (iv) conduct with any customer, supplier, licensee or other
business relation of the Company any business or activity that such customer,
supplier, licensee or business relation conducts or could conduct with the
Company, or induce or attempt to induce any such customer, supplier, licensee or
business relation to cease doing business with the Company, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company.
b. Scope of Restriction. If, at the time of enforcement of this
paragraph 6, a court shall hold that the duration or scope restrictions stated
herein are unreasonable under circumstances then existing, you agree that the
maximum duration or scope reasonable under such circumstances shall be
substituted for the stated duration or scope. You further agree and acknowledge
that any severance compensation paid to you by the Company pursuant to paragraph
4 above shall be paid in consideration of your compliance with the restrictions
set forth in this paragraph 6.
c. Necessity of Restraints. You acknowledge that the restraints
imposed by this paragraph 6 and by paragraph 5 above are reasonable and
necessary for the protection of the Company, and that the Company would be
irreparably harmed by a breach by you of these provisions.
7. Withholding; Currency. All payments made by the Company under this
Agreement shall be net of any tax or other amounts required to be withheld by
the Company under any applicable law or legal requirement. All amounts set
forth in this agreement are denominated in US Dollars.
8. Prior Agreements. With the exception of terms that relate to your
employment in each of (i) the Grant of Stock Purchase Options, dated July 30,
1999, delivered to you by the Company, (ii) the Operating Agreement of J&L
Investments, LLC and (iii) the
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Stockholders Agreement of the Company, dated July 30, 1999, all prior
agreements, arrangements or understandings, written or oral, with respect to
your employment with the Company, HTM Holdings, Inc. or any subsidiary or
affiliate thereof, including without limitation the Employment Agreement, dated
July 30, 1999, between you and the Company, are superseded by this Agreement and
shall be of no further force and effect.
9. Survival. The provisions of paragraphs 5 and 6 hereof will survive
any termination of this Agreement in accordance with their respective terms.
10. Governing Law. All questions concerning the construction, validity
and interpretation of this Agreement shall be governed by the laws of the State
of Delaware without giving effect to any choice or conflict of laws provision or
rule that would cause the application of the domestic substantive laws of any
other jurisdiction.
11. Notices. All notices, requests and demands to or upon the parties
hereto to be effective shall be in writing, by facsimile, by overnight courier
or by registered or certified mail, postage prepaid and return receipt
requested, and shall be deemed to have been duly given or made upon: (i)
delivery by hand, (ii) one business day after being sent by overnight courier;
or (iii) in the case of transmission by facsimile, when confirmation of receipt
is obtained. Such communications shall be addressed and directed to the parties
as follows (or to such other address as either party shall designate by giving
like notice of such change to the other party):
If to you, at the address first stated above.
If to the Company:
SMTC Corporation
c/o EMSIcon Investments, LLC
c/o Bain Capital, Inc.
Two Xxxxxx Xxxxx
Xxxxxx, XX 00000
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Facsimile: 000-000-0000
with a copy to:
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XXXX Xxxxxxxxxxx
000 Xxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
12. Amendment; Waiver. No provision of this Agreement may be amended,
modified, waived or discharged unless such amendment, waiver, modification or
discharge is approved by the Board and agreed to in writing signed by you and
such officer as may be specifically authorized by the Board in connection with
such approval. No waiver of any condition or provision of this Agreement shall
be deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.
13. Assignment. This Agreement shall inure to the benefit of and be
binding upon (i) you, your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees and (ii)
the Company and its successors (including, without limitation, by means of
reorganization, merger, consolidation or liquidation) and permitted assigns.
The Company may assign this Agreement to any of its subsidiaries or to any
successor of the Company by reorganization, merger, consolidation or liquidation
and any transferee of all or substantially all of the business or assets of the
Company or of any division or line of business of the Company with which you are
at any time associated. The Company requires your personal services hereunder
and you may not assign this Agreement.
* * * * *
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Please execute the extra copy of this letter Agreement in the space below
and return it to the undersigned at the address set forth above to confirm your
understanding and acceptance of the agreements contained herein.
Very truly yours,
SMTC Corporation
By: /s/ [signature appears here]
--------------------------------
Name: Xxxx Xxxxxx
Title: President
Accepted and agreed to:
Employee
/s/ [signature appears here]
-----------------------------
Xxxxxx X. Xxxxxxx
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