Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), made as of the 1ST day of May
2002, is by and between Micropac Industries, Inc., a Delaware corporation (the
"Company") and Xxxxxx Xxxx, an individual and resident of Texas (the "Employee")
(the Company and the Employee herein referred to collectively as the "Parties").
WHEREAS, Employee is the President and Chief Executive Officer of the
Company.
WHEREAS, the Company desires to retain the employment of the Employee
and the Employee desires to continue her employment with the Company under the
terms and conditions as hereinafter set forth,
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the Parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby employs the Employee in the capacity of
President and Chief Executive Officer, and the Employee hereby accepts such
employment upon the terms and conditions hereinafter set forth.
2. TERM. Subject to the provisions for termination hereinafter set forth in
Paragraph 13, the term of this Agreement ("Term") shall commence from the date
set forth above, and shall continue until termination occurs.
3. DUTIES.
(a) During the term of this Agreement, the Company agrees to
provide Employee with training and information (much, if not
all, of which is confidential and/or proprietary and/or
contains trade secrets of the Company) which will enable
Employee to perform her job duties.
(b) The Employee agrees to perform the duties normally performed
by the President and Chief Executive Officer of a Corporation
and to perform such duties as are assigned to her from time to
time by the Board of Directors of the Company, or any other
person authorized by the Board of Directors. The Employee
agrees to perform such duties faithfully and to the best of
her ability and to devote a reasonable portion of her time to
the conduct of the Company's business.
4. ACTIONS REQUIRING APPROVAL. The following actions by the Employee shall
require the prior written approval of the Board of Directors of the Company:
(a) the acquisition, disposal, mortgage or encumbrance of real
property or buildings (including any lease of such real
property);
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(b) the acquisition of any fixed asset at a cost exceeding
$50,000.00.
(c) contracting for the performance of building or construction
work at a cost exceeding $50,000.00.
(d) the establishment or closing down of branch offices of the
Company;
(e) the entering into, termination of or alteration of tenancy
agreements, leases or agreements to lease at costs exceeding
$50,000.00 per annum.
(f) the entering into, termination of or alteration of any
agreements under which the Company agrees to perform its
business, whether in whole or in part, for the benefit of
another person or company; beyond the normal conduct of the
business;
(g) the entering into guarantees not usual in the type of business
carried on by the Company from time to time.
(h) the drawing or accepting of drafts or promissory notes,
excluding checks;
(i) the granting or obtaining of credit or loans which are not
normal to the running of the business or which exceed the
credit limits granted to the Company;
(j) the entering into, termination or alteration of contracts of
employment involving Vice Presidents or Officers of the
Corporation.
(k) the granting of any payment, allowance or other benefit to any
employee where such grant is made upon, from or after the
termination through may cause of that employee's employment
with the Company; exceeding $50,000.00;
(l) the granting or withdrawal of the Company's Power of Attorney
to or from any person;
(m) the making to or with any person of a promise, agreement or
representation relating to participation of the person in the
turnover or profits of the Company;
(n) entering into financial transactions with a shareholder or
manager of the Company and establishing salaries and/or
remunerations of board members;
(o) the entering into consultancy agreements or agreements of a
similar nature;
(p) the purchase or disposal of shares in any company.
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(q) the purchase or disposal of an enterprise, as a whole or in
part.
(R)) new product development programs with budgets over $50,000.00
per year.
5. COMPENSATION AND BENEFIT PLANS. As compensation for the services to be
rendered by the Employee to the Company, the Company agrees to pay Employee a
base salary of $156,000 per year ("Base Salary"). Upon the request of Employee,
the Board of Directors of Company shall consider increasing Employee's Base
Salary by Twenty-Five Thousand Dollars ($25,000) per year.
BENEFIT PLANS
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Employee shall be entitled to participate (if Employee so elects) in
any group life, disability, health or similar insurance program established for
employees of Company or any retirement, pension and profit sharing plan for the
benefit of employees of the Company. The Company shall pay the Employee's
monthly disability insurance coverage premiums during the Term.
Employee shall be entitled each twelve (12) month period to five (5)
weeks vacation and all Company holidays during which vacation and holidays her
compensation shall be paid in full. If Employee does not utilize five (5) weeks
vacation in any twelve (12) month period (both prior to and subsequent to the
date of this Agreement), Employee may carry over any unused vacation time to
subsequent periods or elect to be paid for such unused vacation time. Employee
shall, if requested, notify the Company's Board of Directors in advance of the
dates of vacation times designated by Employee, which times shall be at
Employee's discretion.
6. REIMBURSEMENT OF EXPENSES. The Employee is authorized to incur reasonable
business expenses, subject to approval by the Company, for promoting the
business of the Company, including expenditures for entertainment, gifts and
travel. The Company will reimburse the Employee periodically, in accordance with
the policy of the Company; for all such expenses approved by the Company
provided that the Employee presents to the Company such documentation as the
Company may from time to time require.
7. EMPLOYEE LOYALTY. Employee shall devote her entire productive time, energy,
ability and attention to the performance of the duties expected to be performed
by Employee throughout the term of her employment with the Company. Employee
shall not directly or indirectly render any services, or become interested in or
associated with any individual, business, corporation, partnership or other
entity, or any other organization which is in any manner in competition with the
Company, whether for compensation or otherwise, during the term of her
employment with the Company, without the prior, written consent of the
management of the Company.
8. EMPLOYEE'S BEST EFFORTS REQUIRED. Employee agrees that she at all times will
perform faithfully, industriously, and to the best of her ability, experience
and talent, all duties that may be required of Employee pursuant to the express
and implicit terms of this Agreement. Such duties may be set out in the
Company's rules, regulations or instructions from time to time.
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9. TRADE SECRETS. Employee acknowledges that, in the course of performing the
duties described herein, she shall have access to and may be entrusted with
certain information pertaining to the present and contemplated business
activities of the Company. Employee acknowledges that this information is of
great value and necessary for Employee to perform her services effectively, and
that the disclosure of such information to any other party would be detrimental
to the interests of the Company, which information includes, but may not be
limited to, all files, records, documents, training and operational manuals,
research, policies, plans, systems, lists, charts, names, addresses and
telephone numbers of clients of the Company, compilations of information
relating to the business of the Company, whether said information was generated
by a third party or by the Company , and similar items relating to the business
of the Company, whether prepared by Employee during the term of this Agreement
or otherwise coming into her possession ("Trade Secrets"). Employee acknowledges
and agrees with the Company that such Trade Secrets are the sole proprietary
information of the Company and shall be treated by Employee as confidential
information of the Company, and that none of said Trade Secrets or the facts
contained therein shall be transmitted verbally or in writing by Employee except
in the ordinary course of conducting business for the Company. Employee
covenants and agrees with the Company that she will not, during the term of this
Agreement, disclose such Trade Secrets to any person or entity, nor use the
Trade Secrets other than as may reasonably be required in the normal course of
employment under this Agreement; and that she will not, after termination of
this Agreement, disclose or make use of such Trade Secrets without the prior
written consent of the Company. Employee agrees that the Trade Secrets shall
remain the exclusive property of the Company and shall not be copied or
reproduced in any manner whatsoever without the prior written consent of the
Company and shall be returned to the Company upon termination of this Agreement.
10. RESTRICTIVE COVENANTS.
a. Noncompetition by Employee. During the term of this Agreement,
Employee shall not, directly or indirectly, either as an
employee, independent contractor, consultant, agent,
principal, partner, stockholder, corporate officer, director
of any entity, or in any other individual or representative
capacity, without the prior written consent of the Company,
(1) engage, either directly or indirectly, in any business
which is in competition in any manner with that of the Company
or any Group Company or (2) attempt to influence any person or
entity not to do business with the Company or any Group
Company.
b. Solicitation of Other Employees of the Company. Employee
agrees, for a period of one (l) year following the termination
of this Agreement, not to directly or indirectly, or by act in
concert with others, employ or attempt to employ or solicit
for employment to any business which is in competition with
that of the Company or any Group Company, any other employees
of the Company or any of the Group Companies or their
affiliates, or seek to influence any such persons to terminate
their employment with the Company, any of the Group Company or
their affiliates.
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c. Enforcement of Covenants. Employee expressly acknowledges and
agrees that the provisions contained in Section 10 and Section
11 hereof are reasonable and necessary for the protection and
continued viability of the business of the Company and that a
breach by Employee of any of the provisions contained in
Section 10 and Section 11 hereof would cause the Company
serious loss and damage and that the business of the Company
would be irreparably harmed. If this Agreement is terminated
for any reason, and thereafter Employee violates any of the
provisions contained in Section 10 and Section 11 of this
Agreement, Employee acknowledges and agrees that the Company
shall have the right to immediately cease making payments that
may be due and owing to Employee pursuant to this Agreement,
and shall have the right to continue to withhold such payments
until such time as Employee fully complies with the terms and
conditions set forth in Section 10 and Section 11. Employee
and the Company both acknowledge and agree that exact monetary
and other damages in the event of such violations of the
Agreement are difficult of ascertainment, though great and
irreparable, and, as such, Employee further acknowledges and
agrees with the Company that in the event of a real or
threatened breach by Employee of any of the provisions
contained in Section 10 and Section 11 hereof, the Company
shall be entitled to commence proceedings in any court of
competent jurisdiction for and be entitled to obtain
preliminary or permanent injunctive relief or other
appropriate equitable remedies, which rights and remedies
shall be in addition to any other rights or remedies to which
the Company may be justly entitled at law. If any portion of
Section 10 and Section 11 shall be adjudicated to be invalid
or unenforceable, then the Sections shall be deemed amended to
make the portion comply with law or, if this is not possible,
to delete therefrom the portion thus adjudicated to be invalid
or unenforceable, but such deleted portion of this Agreement
shall remain in effect with respect to the operation of the
Sections in all jurisdictions other than the jurisdiction
which invalidates the portion deleted, without limitation.
d. Survival of Covenants. The covenants contained in Section 10
and Section 11 shall be construed as covenants and agreements
independent of any other provision in this Agreement and shall
continue to bind the parties to this Agreement and survive any
termination of this Agreement.
13. TERM
The Term of this Agreement shall be two (2) years commencing on the
effective date of this Agreement, and thereafter from year to year unless
otherwise terminated as hereinafter provided.
(a) Absence from employment or inability to perform services
hereunder, caused by illness or incapacity of Employee, shall not be
deemed a violation by Employee of her obligations under Paragraph 1 of
this Agreement, subject, however, to the following terms and
conditions:
(i) If Employee is so absent or unable to perform
such services by reason of illness or incapacity for a
continuous period exceeding one hundred fifty (150) days,
then, anything herein to the contrary notwithstanding, Company
may terminate this Agreement and all obligations of Company to
Employee hereunder shall cease.
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(b) In the event of Employee's death during the Term of this
Agreement, this Agreement shall terminate, provided, however, Company
shall pay to Employee's heirs and assigns the Base Salary for six (6)
months after Employee's death, such Base Salary to be paid at the times
specified in Paragraph 2 herein. The amount of any salary payments paid
while the Employee is disabled shall be subtracted from such six (6)
months.
(c) This Agreement may be terminated by Company without
liability prior to the expiration of the Term in the event:
(i) of a gross continual and intentional failure of
Employee to perform any of the material terms and conditions
of this Agreement; or
(ii) Employee is convicted of a felony (as defined in
the Texas Penal Code) or a crime involving moral turpitude
resulting in a non-appealable conviction by a court of law for
such offense.
(d) This Agreement may also be terminated by either Employee
or the Company at any time after the initial two (2) year term by sixty
(60 days written notice. Such notice will be effective as of the end of
such sixty (60) days. If Employee or Company elects to terminate this
Agreement her right to compensation shall cease on the effective date
of the termination.
14. NOTICE. Any notice required or permitted to be given hereunder shall be
deemed given and sufficient if addressed in writing and hand delivered or mailed
or faxed to:
in the case of Company:
000 X. Xxxxxx Xx.
Xxxxxxx, Xxxxx 00000
in the case of Employee:
000 X. Xxxxxx Xx.
Xxxxxxx, Xxxxx 00000
Each party may change its address by written notice in accordance with
this paragraph.
15. AMENDMENT AND MODIFICATION. This Agreement sets out the entire agreement and
the understanding of the Parties and is in substitution for any previous
contracts or understandings, whether oral or in writing, of employment between
the Company and the Employee, which shall be deemed to have been terminated by
mutual consent. This Agreement contains all of the covenants and agreements
between the Parties with respect to such employment in any manner whatsoever.
This Agreement may be amended or modified at any time by a subsequent written
agreement by and between the Parties hereto.
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16. WAIVER. The failure of the Parties hereto to insist, in any one or more
instances, upon the performance of any of the terms and conditions of this
Agreement, shall not be construed as a waiver or relinquishment of any right
granted hereunder or the future performance of any such term, covenant or
condition.
17. SEVERABILITY. In the event that any portion of this Agreement may be held to
be invalid or unenforceable for any reason, it is agreed that any invalidity or
unenforceability shall not affect the remainder of this Agreement and the
remaining provisions shall remain in full force and effect and any court of
competent jurisdiction may so modify any invalid or unenforceable provision of
this Agreement so as to render it valid, reasonable, and enforceable.
18. BENEFIT. Neither this Agreement nor the Parties' obligations hereunder are
assignable. Provided, however, that in the event that all or substantially all
of the assets and liabilities of the Company are transferred to any third party
at any time during the term of this Agreement, any such third party shall be
bound by the provisions hereof; provided, Employee may terminate this agreement
at any time after such transfer without liability. In the event of a sale of a
majority of the outstanding shares of the common stock, the Employee may, on the
giving of six(6) months advance notice, terminate this Agreement, in which event
neither party shall have any obligations hereunder at the expectation of such
six (6) months.
19. GOVERNING LAW AND AGREEMENT TO ARBITRATE. This Agreement shall be governed
by and construed in accordance with the law of the State of Texas, except to the
extent such law would require reference to the laws of another jurisdiction.
Venue shall be in Dallas, Dallas County, Texas. Any disagreement, controversy or
dispute between the Company and Employee arising out of, or relating to, this
Agreement or the breach thereof, or to Employee's employment with the Company or
termination therefrom shall be resolved through arbitration in accordance with
the rules of the American Arbitration Association, Dallas, Texas. Any
arbitration award of the arbitrators appointed to hear the dispute, or of a
majority of them, shall be final and binding, and a judgment upon the award
rendered may be entered in any court, state or federal, having jurisdiction.
20. PAYMENT OF MONIES DUE EMPLOYEE. If Employee dies prior to the expiration of
the term of this Agreement, any monies that may be due her from the Company
under this Agreement as of the date of her death shall be paid to her executors,
administrators, heirs, personal representatives, successors and assigns pursuant
to the terms and conditions of this Agreement.
21. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
22. OTHER INSTRUMENTS. Each Party shall, upon the request of the other Party,
execute, acknowledge and deliver any and all instruments, documents or
agreements reasonably necessary or appropriate to carry into effect the
intention of the Parties as expressed in this Agreement.
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23. GENDER. Whenever the contact shall so require, all words herein in any
gender shall be deemed to include the male, female or neuter gender; all
singular words shall include the plural, and all plural words shall include the
singular.
24. SURVIVAL OF PERFORMABLE PROVISIONS. Any provision of this Agreement
performable or to be performed after termination of this Agreement shall survive
this Agreement and shall continue to be in effect until fully performed or
consummated.
25. RULE OF CONSTRUCTION. The Parties to this Agreement acknowledge that each
Party and its counsel have reviewed the Agreement and that the normal rule of
construction, to the effect that any ambiguities that are to be resolved against
the drafting Party, shall not be employed in the interpretation of this
Agreement or any amendments to this Agreement.
Signature Page Follows
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IN WITNESS WHEREOF, the Employee has hereunto set her signature, and
the Company has caused this Agreement to be executed in its corporate name by
its officer, duly authorized.
EMPLOYEE: EMPLOYER:
An Individual Micropac Industries, Inc.
By: /s/ Xxxxxx Xxxx By: /s/ Xxxxxxxx Nodolsky
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Name: Xxxxxx Xxxx Name: Xxxxxxxx Nodolsky
Title: Employee Title: Chairman of the Board
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FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This first amendment ("First Amendment") is entered into between Xxxxxx
Xxxx ("Employee") and Micropac Industries, Inc. ("Company") for the purpose of
amending that certain employment agreement between Employee and Company dated
May 1, 2002 (the "Employment Agreement").
1. Employee Compensation. Effective May 1, 2004, Employee's Annual
Compensation shall be One Hundred Eighty Thousand Dollars ($180,000.00)
to be paid weekly.
2. Cost of Living Increases. Beginning on May 1, 2005, the Employee's
annual compensation for the subsequent twelve (12) month period shall
be increased by the same percentage as any percentage increase in the
Index ("Index") (as defined herein) for each twelve (12) month period
beginning on April 31 of each year and ending on May 1 of the
subsequent year. The Index shall mean the Consumer Price Index for
Urban Consumers (all items) Dallas-Fort Worth, Texas area published by
the United States Department of Labor, Bureau of Labor statistics for
the month of April, 2004.
3. Term. The Term of the Employment Agreement is hereby extended for three
(3) years beginning on May 1, 2004, subject to early termination as
provided in the Employment Agreement. After the expiration of such
three (3) years, either the Employee or the Company may terminate the
Employment Agreement, at any time, by giving the other party hereto
ninety (90) days written notice.
Paragraph 13(a)(1) of the Employment Agreement is hereby deleted and
the following new paragraph 13(a)(1) is substituted therefore:
(1) If Employee is absent or unable to perform such services by reason of
illness or incapacity for a continuous period exceeding twelve (12)
months, then, anything herein to the contrary notwithstanding, Company
may terminate this Agreement at any time after the expiration of such
twelve (12) months and all obligations of Company to Employee hereunder
shall cease.
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4. Entire Agreement. Except as expressly amended hereby, the remaining
terms and conditions of the Employment Agreement shall remain in full
force and effect.
Company:
Micropac Industries, Inc.
By: /s/ Xxxxxxxx Nodolsky
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Name: Xxxxxxxx Nodolsky
Title: Chairman of the Board
Employee:
By: /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx
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