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EXHIBIT 6.9
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), effective as of July 2, 2000,
between Micro-ASI, Inc., a Texas corporation (the "Company"), and Xxxx Xxxxxx,
an individual residing in Dallas, Texas (the "Employee").
WHEREAS, in connection with the purchase of substantially all of the
assets of EPI Technologies, Inc. by Employer (the "Acquisition"), and as partial
consideration for Employer entering into and closing the Acquisition, Employer
desires to employ Employee on the terms and conditions set forth herein,
including the non-competition and confidentiality provisions set forth in
Sections 11 and 8 hereto.
WHEREAS, the Officers of the Company desire to assure that key
personnel devote their time and attention to the Company without regard to
concerns about an involuntary loss of employment without cause, and to assure
the continuity and cooperation of management in the event of a change in
ownership and the continued attention of Employee to his duties without any
distraction arising out of the circumstances surrounding a change or potential
change in ownership; and,
WHEREAS, the Company and Employee desire to enter into this Agreement
to protect Employee against an involuntary termination of employment without
cause, to recognize the additional efforts of Employee that may be necessary to
assist in and prepare for any potential change in ownership, and to encourage
Employee to diligently perform his duties and responsibilities to ensure a
smooth transition for any change in ownership;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company and the Employee hereby agree as follows:
1. Employment. The Company agrees to employ the Employee and the
Employee agrees to be employed by the Company, for the period set forth in
Paragraph 2, in the position and with the duties and responsibilities set forth
in Paragraph 3, and upon the other terms and conditions herein provided.
2. Term. The employment of the Employee by the Company as provided in
Paragraph 1 shall be for a period of two (2) years commencing on the effective
date of this Agreement through and ending on June 30, 2002, unless sooner
terminated as herein provided (the "Employment Term"). Each twelve-month period
running from July 1 to June 30 during the Employment Term shall be referred to
herein as an "Annual Period".
3. Position and Duties.
(a) During the Employment Term, the Employee shall serve as Director of
R & D of the Company. In addition, the Employee shall have such other duties,
functions, responsibilities, and authority as are from time to time delegated to
the Employee by the Officers of the Company provided that such duties,
functions, responsibilities, and authority are reasonable and customary for a
person serving in the aforesaid position or office of an enterprise comparable
to the Company.
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(b) During the Employment Term, the Employee shall devote his full
time, skill, and attention and his best efforts to the business and affairs of
the Company to the extent necessary to discharge fully, faithfully and
efficiently the duties and responsibilities delegated and assigned to the
Employee herein or pursuant hereto, except for usual, ordinary, and customary
periods of vacation and absence due to illness or other disability. In this
Agreement, "full time" does not necessarily require that the Employee spend a
specific number of hours per working day or a specific number of days per week
at the Company's offices or otherwise in performing his duties and
responsibilities hereunder, but the Employee need only perform his duties and
responsibilities as such times as are necessary. In addition, nothing in this
Agreement prohibits the Employee's (i) serving as a director of other entities
that are not competitive with the Company, or (ii) involvement in community or
charitable activities.
(c) Employee's employment by the Company under this Agreement, may
require reasonable travel in the performance of the Employee's duties in the
business of the Company.
(d) All services that the Employee may render to the Company or any of
its subsidiaries or affiliates in any capacity during the Employment Term shall
be deemed to be services required by this Agreement and consideration for the
compensation provided for herein.
4. Compensation and Related Matters.
(a) Base Salary. During each Annual Period of the Employment Term, the
Company shall pay to the Employee for his services hereunder a base salary
("Base Salary") of $ 175,000. The Employee's Base Salary shall be payable in
installments in accordance with the general payroll practices of the Company, or
as otherwise mutually agreed upon. The Employee's Base Salary shall be subject
to such other increases as may be determined from time to time by the Officers
of the Company in their sole discretion, but in no event shall the Company pay
the Employee a Base Salary at a rate less than that set forth in the first
sentence of this Section 4(a).
(b) Employee Benefits. During the Employment Term, the Employee shall
be entitled to participate in all employee benefit plans, programs and
arrangements that are generally made available by the Company to its key
personnel, including, without limitation, the Company's life, long-term
disability and health/PPO plans and the Company's stock option and other equity
incentive plans. The Employee agrees to cooperate and participate in any medical
or physical examinations as may be required by any insurance company in
connection with the applications for such life and/or disability insurance
policies.
(c) Expenses. During the Employment Term, the Employee shall be
entitled to receive prompt reimbursement upon a timely basis (according to the
then-current practices of the Company) for all reasonable expenses incurred by
the Employee in performing his duties and responsibilities hereunder upon the
presentation by the Employee of an accounting of such expenditures, including
receipts where required by Company policy or federal income tax regulations.
(d) Vacations. During the Employment Term, the Employee shall be
entitled to four (4) weeks of paid vacation each year. The Employee shall also
be entitled to all paid holidays given by the Company to its key personnel. The
Employee agrees to utilize his vacation at such time or times as are
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(i) consistent with the proper performance of his duties and responsibilities
hereunder and (ii) mutually convenient for the Company and the Employee.
(e) Indemnification. The Employee, in any capacity on behalf of the
Company or any of its subsidiaries or affiliates, shall be entitled to
exculpation, indemnification, and advancement of expenses to the fullest extent
not prohibited by law.
5. Termination of Employment.
(a) Death. The Employee's employment hereunder shall terminate
automatically upon his death.
(b) Total Disability. If the Total Disability (as defined below) of the
Employee occurs during the Employment Term, the Company may notify the Employee
of the Company's intention to terminate the Employee's employment hereunder for
Disability. In such event, the Employee's employment hereunder shall terminate
effective on the 15th day following the date such notice of termination is
received by the Employee (the "Disability Effective Date"). For purposes of this
Agreement a total disability occurs if the Employee is determined to be "totally
disabled" as specified in the Company's health care plan.
(c) Termination by Company.
(i) For Cause Termination. The Company may terminate the
Employee's employment hereunder for Cause (as defined below) in
accordance with the following procedure (a "For Cause Termination"):
(A) Cause Defined. "Cause" shall only mean: (1) the
employee is convicted of fraud, embezzlement, theft or other
criminal conduct against the Company and such conviction is
final and non-appealable, or (2) willful misconduct or gross
negligence in the performance of, or willful neglect of, the
Employee's duties, which has caused demonstrable and serious
injury to the Company.
(B) Required Notice. A termination for Cause shall
not take effect unless the following has occurred:
(1) the Officers of the Company have given
Employee written notice of its intention to terminate
Employee for Cause, specifying with particularity the
grounds on which the proposed termination for Cause
is contemplated, which shall be acts or failures to
act on the part of Employee which occurred no more
than six months prior to the Officers of the Company
having knowledge of such acts or failures to act;
(2) the Employee shall have 30 days after
such written notice to cure such conduct;
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(3) if Employee fails to cure such conduct,
Employee shall have the right to request, by notice
to the Secretary of the Company given within ten days
after Employee receives notice from the Officers that
Employee has not cured the conduct within the period
described in subsection (b) above, a hearing before
the Officers of the Company, with his counsel; and
(4) if, within five days after Employee's
hearing by the Officer, Employee receives a certified
copy of a resolution duly adopted by a majority of
the Officers confirming that in its judgment the
grounds for termination for Cause described in the
initial notice given under subsection (a) above are
justified, the Employee's employment shall be
terminated.
(ii) Without Cause. The Company may terminate the Employee's
employment hereunder without cause for any or no reason. For purposes
of this Agreement, a "Without Cause Termination" shall mean a
termination by the Company of the Employee's employment hereunder other
than pursuant to (x) a For Cause Termination, or (y) Disability.
(d) Termination by Employee For Good Reason. The Employee may terminate
his employment hereunder if, without Employee's prior written consent
specifically referring to this Agreement:
(i) Any reduction in the amount of Employee's annual salary,
guaranteed incentive compensation or aggregate incentive compensation
opportunities (which reduction may also occur pursuant to any
assignment of performance goals and corresponding awards which are
inconsistent with prior performance goals and awards).
(ii) Any significant reduction in the aggregate value of
Employee's benefits as such benefits may be increased from time to time
(unless such reduction is pursuant to a general change in benefits
applicable to all similarly situated employees of the Company and its
Affiliates) or
(iii) Any material and wilful breach of the Company of any
provision of this Agreement or any written employment agreement with
Employee;
(iv) (A) assignment to Employee of any duties inconsistent
with his status as Director of R & D of the Company, (B) the removal of
Employee from his position as Director of R & D of the Company, (C) the
failure to retain Employee as Director of R & D of any successor of the
Company (whether by merger, consolidation, or sale or disposition of
all or substantially all of the assets of the Company) or any entity
which directly or indirectly owns twenty five percent (25%) or more of
any class of securities of the Company or any successor to the Company
(whether by merger, consolidation, or sale or disposition of all or
substantially all of the assets of the Company) or (D) any significant
change in the nature or status of Employees duties or responsibilities;
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(v) A significant adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or duties attached to
the Employee's position with the Company.
(vi) Transfer of Employee's principal place of employment to a
location more than 50 miles away from the Company's current
headquarters.
(vii) Any Change of Control of the Company. In this Agreement
a "Change of Control" is any of the following:
A. A merger, consolidation, share exchange, or other
reorganization in which the Company is not a continuing or
surviving corporation or as a result of which shares of the
Company's capital stock are converted into or exchanged for
cash, securities of another entity, or other property, unless
(in any case) the holders of the Company's outstanding shares
of Common Stock immediately before that transaction own more
than 50% of the combined voting power of the outstanding
securities of the continuing or surviving entity immediately
after that transaction.
B. A sale or other transfer for value, in one
transaction or a series of related transactions, of all or
substantially all of the Company's assets.
C. The Company's stockholders approve a plan or
proposal to liquidate or dissolve the Company.
D. A person or group, hereafter acquires the
beneficial ownership of more than 25% of the outstanding
voting securities of the Company (all within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder), unless
that acquisition is approved by the Employee.
(e) Notice of Termination. Any termination of the Employee's employment
hereunder by the Company or by the Employee (other than a termination pursuant
to Paragraph 5(a) and other than expiration of the Employment Term) shall be
communicated by a Notice of Termination (as defined below) to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) in the case of a termination for Disability or a For
Cause Termination or a Good Reason Termination, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated, and (iii) specifies the
Employment Termination Date (as defined in Paragraph 5(f) below). The failure by
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Disability or Cause shall not waive any right
of the Company hereunder or preclude the Company from asserting such fact or
circumstance in enforcing the Company's rights hereunder.
(f) Employment Termination Date. For purposes of this Agreement,
"Employment Termination Date" shall mean the effective date of termination of
the Employee's employment
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hereunder, which date shall be (i) if the Employee's employment is terminated by
his death, the date of his death, (ii) if the Employee's employment is
terminated because of his Disability, the Disability Effective Date, (iii) if
the Employee's employment is terminated by the Company pursuant to a For Cause
Termination or a Without Cause Termination, the date specified in the Notice of
Termination, which date shall in no event be earlier than the date such notice
is given, (iv) if the Employee's employment is terminated by the Employee
pursuant to a Good Reason Termination, the date on which the Notice of
Termination is given, and (v) June 30, 2002, if the Employee's employment is
terminated due to expiration of the Employment Term.
(g) Resignation. In the event of termination of the Employee's
employment hereunder (for any reason other than the death of the Employee), the
Employee agrees that if at such time he is a member of the Board of Directors or
officer of the Company or a director or officer of any of its subsidiaries, he
will promptly deliver to the Company his written resignation from all such
positions, such resignation to be effective as of the Employment Termination
Date.
6. Company Obligations Upon Termination of Employment.
(a) Death. If the Employee's employment hereunder is terminated by
reason of the Employee's death, his estate or designated beneficiaries shall be
entitled to the following:
(i) Base salary in effect on and payable through, the
Employee's date of death in accordance with the Company's standard
payroll policies;
(ii) The Employee's annual bonus for the year in which the
Employee's death occurs based on the maximum target award opportunity
for such year, payable on the date it otherwise would have been
payable;
(iii) The balance of any incentive awards earned but not yet
paid, payable on their standard payment dates;
(iv) The right to exercise any stock option held by Employee
on the date of death for the remainder of its term, whether or not
exercisable by Employee on the date of death;
(v) Any amounts payable on death pursuant to any plans or
policies of the Company; and
(vi) Any other amounts due but not yet paid from the Company
to Employee.
(b) Disability. If the Employee's employment hereunder is terminated by
reason of the Employee's Disability, Employee or his legal representative shall
be entitled to the following:
(i) Base salary in effect on and payable through, the
Employee's date of disability in accordance with the Company's standard
payroll policies;
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(ii) The Employee's annual bonus for the year in which the
termination for disability occurs based on the maximum target award
opportunity for such years, payable on the date it otherwise would have
been payable;
(iii) The balance of any incentive awards earning but not yet
paid, payable on their standard payment dates;
(iv) The right to exercise any stock option held by Employee
on the Employment Termination Date for the remainder of its term,
whether or not exercisable by Employee on the Employment Termination
Date;
(v) Any amounts payable on disability pursuant to any plans or
policies of the Company; and
(vi) Any other amounts due but not yet paid from the Company
to Employee.
(c) For Cause Termination. If the Employee's employment hereunder is
terminated pursuant to a For Cause Termination, Employee shall receive:
(i) Base Salary in effect on and payable through, Employment
Termination Date in accordance with the Company's standard payroll
policies;
(ii) The portion of the Employee's annual bonus for the year
in which the Employment Termination Date occurs based on the award he
would have earned for such year if employment had not terminated,
prorated for the number of days in the calendar year prior to the
Employment Termination Date, payable on the date it otherwise would
have been payable;
(iii) Any other amounts due but not yet paid from the Company
to Employee; and
(iv) Any other amounts payable by the Company under applicable
plans or programs.
(d) Without Cause Termination or Good Reason Termination. If the
Employee's employment hereunder is terminated by the Company by reason of a
Without Cause Termination, or by the Employee for Good Reason, Employee shall be
entitled to the following:
(i) Continuation of installments of the Base Salary amount for
the balance of the Employment Term or for two years after the
Employment Termination Date, whichever is greater;
(ii) Annual bonus for the balance of the Employment Term
payable on the date such payments would have been payable;
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(iii) The balance of any incentive awards earned but not yet
paid, payable on their standard payment dates;
(iv) The right to exercise any stock option for the remainder
of its term, whether or not exercisable by Employee on the Employment
Termination Date; and
(v) Any other amounts due but not yet paid from the Company to
Employee.
The Employee shall not be obligated to seek or secure new employment or
to become self-employed after termination of his employment with the Company,
but shall be obligated to report promptly to the Company any actual employment
obtained during the period for which Employee benefits continue. There shall be
no offset against any amounts due to Employee under this Agreement on account of
any remuneration or benefits attributable to any subsequent employment
(including, without limitation, any self-employment) that he may obtain.
8. Confidentiality. The Employee recognizes and acknowledges that the
Company's trade secrets and other confidential or proprietary information, as
they may exist from time to time, are valuable, special, and unique assets of
the Company's business, access to and knowledge of which are essential to the
performance of the Employee's duties hereunder. The Employee confirms that all
such trade secrets and other information constitute the exclusive property of
the Company. During the Employment Term and thereafter without limitation of
time, the Employee shall hold in strict confidence and shall not, directly or
indirectly, disclose or reveal to any person, or use for his own personal
benefit or for the benefit of anyone else, any trade secrets, and other
confidential or proprietary information of any kind, nature, or description
(whether or not acquired, learned, obtained, or developed by the Employee alone
or in conjunction with others during the Employment Term) that has been obtained
by or disclosed to, him as a result of his employment by the Company, except (i)
with the prior written consent of the Company duly authorized by its Board of
Directors, (ii) in the course of the proper performance of the Employee's duties
hereunder, (iii) for information (x) that becomes generally available to the
public other than as a result of unauthorized disclosure by the Employee or his
affiliates or (y) that becomes available to the Employee subsequent to the
termination of his employment hereunder and on a nonconfidential basis from a
source other than the Company or its subsidiaries who is not bound by a duty of
confidentiality, or other contractual, legal, or fiduciary obligation, to the
Company or such customers, clients, or others having a business relationship, or
(iv) as required by applicable law or legal process. The provisions of this
Paragraph 8 shall continue in effect notwithstanding termination of the
Employee's employment hereunder for any reason.
9. Business Records. Given the competitive environment in which the
Company does business and the fiduciary relationship that the Employee will have
with the Company hereunder, the Employee agrees to promptly deliver to the
Company, upon termination of his employment hereunder, or at any other time when
the Company so requests, all memoranda, notes, records, drawings, manuals, and
other documents (and all copies thereof and therefrom) in any way relating to
the business or affairs of the Company or any of its subsidiaries or any of
their clients, whether made or compiled by the Employee or furnished to him by
the Company or any of its employees, customers, clients, consultants, or agents,
which the Employee may then possess or have under his control. The Employee
confirms that all such memoranda, notes, records, drawings, manuals, and other
documents (and all copies thereof and
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therefrom) constitute the exclusive property of the Company. The obligation of
confidentiality set forth in Paragraph 8 shall continue notwithstanding the
Employee's delivery of any such documents to the Company. The provisions of this
Paragraph 9 shall continue in effect notwithstanding termination of the
Employee's employment hereunder for any reason.
10. Assistance in Litigation. During the Employment Term and for a
period of three years thereafter, the Employee shall, upon reasonable notice,
furnish such information and proper assistance to the Company as may reasonably
be required by the Company in connection with any litigation in which the
Company or any of its subsidiaries or affiliates is, or may become, a party. The
Company shall reimburse the Employee for all reasonable out-of-pocket expenses
incurred by the Employee, including attorneys' fees incurred by Employee, in
rendering such assistance. The provisions of this Paragraph 10 shall continue in
effect notwithstanding termination of the Employee's employment hereunder for
any reason.
11. Noncompetition and Related Matters.
(a) The Employee acknowledges that during the term of his employment
with the Company, the Company will provide him, and he will receive from the
Company, special training and knowledge. The Employee acknowledges that included
in the special knowledge received is the confidential information identified in
paragraph 8. The Employee acknowledges that this confidential information is
valuable to the Company and, therefore, its protection and maintenance
constitutes a legitimate interest to be protected by the Company by enforcement
of this covenant not to compete. Therefore, the Employee agrees that, in
consideration of the foregoing, during the Employment Term and for the greater
of the period of time during which the Company shall pay to the Employee any
amount due under the terms of this Agreement or twelve (12) months following the
Employment Termination Date, unless otherwise extended pursuant to the terms of
this paragraph 11, the Employee will not, directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, shareholder,
corporate officer, director, or in any other individual or representative
capacity, engage or participate in any Competitive Business (as hereinafter
defined) within any state in which the Company or any subsidiary thereof is
conducting or has conducted its Competitive Business during the Employment Term;
provided that nothing in this paragraph 11 shall be construed to prevent the
Employee from owning beneficially, as an investment, up to an aggregate of 5% of
a class of equity securities that is publicly traded and registered under
Section 12 of the Securities Exchange Act of 1934. For purposes of this
paragraph 11, "Competitive Business" shall mean any business entity whose
primary or principal business consists of designing and manufacturing electronic
products using flip chip assembly processing. The Employee represents to the
Company that the enforcement of the restriction contained in this paragraph 11
would not be unduly burdensome to the Employee and that in order to induce the
Company to employ the Employee, the Employee further represents and acknowledges
that the Employee is willing and able to compete in other geographical areas not
prohibited by this paragraph 11 (a).
(b) The Employee agrees that a breach or violation of this covenant not
to compete by the Employee shall entitle the Company, as a matter of right, to
an injunction issued by any court of competent jurisdiction, restraining any
further or continued breach or violation of this covenant. Such right to an
injunction shall be cumulative and in addition to, and not in lieu of, any other
remedies to
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which the Company may show itself justly entitled. Further, during any period in
which the Employee is in breach of this covenant not to compete, the time period
of this covenant shall be extended for an amount of time that the Employee is in
breach hereof.
(c) In addition to the restrictions set forth in paragraph 11 (a), the
Employee shall not, during the Employment Term and for a greater period of time
during which the Company shall pay to the Employee any amounts due under the
terms of this Agreement or twelve (12) months after the Employment Termination
Date, either directly or indirectly, (i) make known to any person or entity the
names and addresses of any of the customers of the Company or contacts of the
Company or any other information pertaining to such customers or contacts, (ii)
call on, solicit, or take away, or attempt to call on, solicit, or take away,
any of the customers of the Company who were customers during the Employee's
association with the Company, whether for the Employee or for any other person
or entity, or (iii) recruit or attempt to recruit, directly or by assisting
others, any other employee of the Company or any of its affiliates.
(d) The parties to this Agreement agree that the limitations contained
in this paragraph 11 with respect to time, geographical area, and scope of
activity are reasonable. However, if any court shall determine that the time,
geographical area, or scope of activity of any restriction contained in this
paragraph 11 is unenforceable, it is the intention of the parties that such
restrictive covenant set forth herein shall not thereby be terminated but shall
be deemed amended to the extent required to render it valid and enforceable.
12. Withholding Taxes. The Company shall withhold from any payments to
be made to the Employee hereunder such amounts (including social security
contributions and federal income taxes) as shall be required by federal, state,
and local withholding tax laws.
13. No Effect on Other Contractual Rights. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable to the Employee, or in any way diminish the Employee's rights
as an employee of the Company, whether existing now or hereafter, under any
employee benefit plan, program, or arrangement or other contract or agreement of
the Company providing benefits to the Employee.
14. Arbitration. The Company and the Employee agree to submit to final
and binding arbitration any and all disputes, claims (whether in tort, in
contract, statutory, or otherwise) and/or disagreements concerning the
interpretation or application of this Agreement; provided, however,
notwithstanding the foregoing, in no event shall any dispute, claim, or
disagreement arising under Paragraphs 8 and 11 be submitted to arbitration
pursuant to this Paragraph 14 or otherwise. Any dispute, claim, and/or
disagreement subject to arbitration pursuant to the terms of this Paragraph 14
shall be resolved by arbitration in accordance with the National Rules for the
Resolution of Employment Dispute of the American Arbitration Association or any
successor organization (the "Association") then in effect. Arbitration under
this provision must be initiated within 30 days of the action, inaction, or
occurrence about which the party initiating the arbitration is complaining.
Within ten days of the initiation of an arbitration hereunder, each party will
designate an arbitrator from a panel list provided by the Association. The
appointed arbitrators will appoint a neutral arbitrator from the panel list. The
Employee and the Company agree that the decision of the arbitrators selected
hereunder will be final
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and binding on both parties. This arbitration provision is expressly made
pursuant to and shall be governed by the Federal Arbitration Act, 9 U.S.C.
Sections 1-14. The parties hereto agree that pursuant to Section 9 of such Act a
judgment of the United States District Court for the Northern District of
Dallas, Texas shall be entered upon the award made pursuant to the arbitration.
15. Injunctive Relief. In recognition of the fact that a breach by the
Employee of any of the provisions of Paragraphs 8 and 11 will cause irreparable
damage to the Company for which monetary damages alone will not constitute an
adequate remedy, the Company shall be entitled as a matter of right (without
being required to prove damages or furnish any bond or other security) to obtain
a restraining order, an injunction, an order of specific performance, or other
equitable or extraordinary relief from any court of competent jurisdiction
restraining any further violation of such provisions by the Employee or
requiring him to perform his obligations hereunder. Such right to equitable or
extraordinary relief shall not be exclusive but shall be in addition to all
other rights and remedies to which the Company may be entitled at law or in
equity, including without limitation the right to recover monetary damages for
the breach by the Employee of any of the provisions of this Agreement.
16. Excise Tax.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution to or for the benefit of the Employee (whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional
payments required under this Section 16) (a "Termination Payment")
would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), or any interest
or penalties are incurred by the Employee with respect to such excise
tax (such excise tax, together with any such interest and penalties,
hereinafter collectively referred to as the "Excise Tax"), then the
Employee shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the
Employee of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Employee retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(b) For purposes of determining the amount of the Gross-Up
Payment, Employee shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar year
in which the Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the state and
locality of Employee's residence on the Termination Date, net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. If the Excise Tax is
subsequently determined to be less than the amount taken into account
hereunder at the time of Employee's termination of employment, Employee
shall repay to the Company, at the time that the amount of such
reduction in Excise Tax is finally determined, the portion of the
Gross-Up Payment attributable to such reduction (plus that portion of
the Gross-Up Payment attributable to the Excise Tax and federal, state
and local income tax imposed on the Gross-Up Payment
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being repaid by Employee to the extent that such repayment results in a
reduction in Excise Tax and/or a federal, state or local income tax
deduction) plus interest on the amount of such repayment at the rate
provided in section 1274(b)(2)(B) of the Code. If the Excise Tax is
determined to exceed the amount taken into account hereunder at the
time of the termination of Employee's employment (including by reason
of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest,
penalties or additions payable by Employee with respect to such excess)
at the time that the amount of such excess is finally determined.
Employee and the Company shall each reasonably cooperate with the other
in connection with any administrative or judicial proceedings
concerning the existence or amount of liability for Excise Tax with
respect to the Termination Payments.
(c) All determinations required to be made under this
Section 16, including (without limitation) whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the
assumptions to be used in arriving at such determination, shall be made
by a certified public accounting firm selected by the Company and
reasonably acceptable to Employee (the "Accounting Firm"), which shall
be retained to provide detailed supporting calculations both to the
Company and Employee within 15 business days of the receipt of notice
from Employee that there has been a Termination Payment, or such
earlier time as is requested by the Company. All fees and expenses of
the Accounting Firm shall be paid solely by the Company. Any Gross-Up
Payment, as determined pursuant to this Section 16, shall be paid by
the Company to Employee within five (5) days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting
Firm shall be binding upon the Company and Employee. As a result of the
uncertainty in the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the
Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. If Employee thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the
benefit of Employee.
17. Survival. Neither the expiration or the termination of the term of
the Employee's employment hereunder shall impair the rights or obligations of
either party hereto which shall have accrued hereunder prior to such expiration
or termination. The provisions of Paragraphs 8, 9, 10, 11, 15, 25, and 26 and
the rights and obligations of the parties thereunder, shall survive the
expiration or termination of the term of the Employee's employment hereunder.
18. Notices. All notices, requests, demands, and other communications
required or permitted to be given or made hereunder by either party hereto shall
be in writing and shall be deemed to have been duly given or made (i) when
delivered personally, or (ii) when deposited in the United States mail, first
class registered or certified mail, postage prepaid, return receipt requested,
to the party for which intended at the following addresses (or at such other
addresses as shall be specified by the parties by like notice, except that
notices of change of address shall be effective only upon receipt):
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If to the Company, at:
Micro ASI, Incorporated
Attention: President
00000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
If to the Employee, at:
Xxxx Xxxxxx
0000 Xxxxxx Xxx
Xxxxxx, XX 00000
19. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto concerning the subject matter hereof and supersedes
all prior agreements and understandings, both written and oral, between the
parties with respect to such subject matter.
20. Binding Effect; Assignment; No Third Party Benefit. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors, and assigns; provided,
however, that the Employee shall not assign or otherwise transfer this Agreement
or any of his rights or obligations hereunder without the prior written consent
of the Company (except that any rights that the Employee may have hereunder at
the time of his death may be transferred by will or pursuant to the laws of
descent and distribution). Nothing in this Agreement, express or implied, is
intended to or shall confer upon any person other than the parties hereto, and
their respective heirs, legal representatives, successors, and permitted
assigns, any rights, benefits, or remedies of any nature whatsoever under or by
reason of this Agreement.
21. Nonalienation of Benefits. The Employee shall not have any right to
pledge, hypothecate, anticipate, or in any way create a lien upon any payments
or other benefits provided under this Agreement; and no benefits payable
hereunder shall be assignable in anticipation of payment either by voluntary or
involuntary acts, or by operation of law, except by will or pursuant to the laws
of descent and distribution.
22. Amendment. This Agreement may not be modified or amended in any
respect except by an instrument in writing signed by both of the parties hereto.
23. Waiver. Any term or condition of this Agreement may be waived at
any time by the party hereto which is entitled to have the benefit thereof, but
such waiver shall only be effective if evidenced by a writing signed by such
party, and a waiver on one occasion shall not be deemed to be a waiver of the
same or any other type of breach on a future occasion. No failure or delay by a
party hereto in exercising any right or power hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right or power.
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24. Authority. No person, other than the Officers of the Company, shall
have authority on behalf of the Company to agree to modify, amend, or waive any
provision of this Agreement or take any action in reference hereto.
25. Severability. If any provision of this Agreement is held to be
unenforceable, (a) this Agreement shall be considered divisible, (b) such
provision shall be deemed inoperative to the extent it is deemed unenforceable,
and (c) in all other respects this Agreement shall remain in full force and
effect; provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by applicable law.
26. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
27. Counterparts. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its duly authorized officer, and the Employee has
executed this Agreement, effective as of the date first set forth above.
MICRO-ASI, INC.
By: /s/ XXXX X. XXXXXXXXX, CEO /s/ XXXX X. XXXXXX
------------------------------ --------------------------------
XXXX X. XXXXXXXXX, EMPLOYEE NAME
Chief Executive Officer
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