EXHIBIT 10.12
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
July 8, 1996, by and between Alyn Corporation ("Employer"), and Xxx Xxxxxxxx
("Employee").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, receipt of which
is hereby acknowledged, the parties agree as follows:
1. Employment: Employer hereby employs Employee, and Employee hereby
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accepts employment with Employer, on the terms and conditions set forth herein.
2. Duties:
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(a) So long as he shall be elected to such offices, Employee shall
continue to occupy the position of and perform all the acts and duties of
Director (Casting Division) of Employer. Employer's Board of Directors may
extend Employee's duties and titles from time to time; provided, however, that
during the term of this Agreement, Employee's responsibilities, shall be
commensurate with his current responsibilities as Director (Casting Division) of
Employer.
(b) Employee shall be required to devote his entire time, ability
and attention to the business of Employer.
3. Term: Subject to the provisions for termination as herein provided,
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the term of employment of Employee shall be twenty-four (24) months, beginning
July 8, 1996, and ending July 8, 1998. Thereafter, this Agreement shall
automatically be renewed for a renewal term of one (1) year after the expiration
of the initial term, and for successive one-year renewal terms thereafter,
unless either party gives the other written notice ("Notice") to terminate the
Agreement at the expiration of the initial term or of the first one-year renewal
term or any such successive one-year renewal term. In view of the significant
confidential information, including proprietary trade secrets, that will be
provided to Employee by Employer, the notice must be given by the Employee at
least six (6) months prior to the expiration of any such Term; Employer may give
Notice to Employee at least two (2) months prior to the expiration of any such
Term provided, however, Employer may shorten such Notice period in the event
Employer is terminating Employee's employment for Cause (in accordance with
section 14 hereof), and Employee may shorten such Notice period in the event
Employee is terminating Employee's employment hereunder for Employer's Breach
(in accordance with section 14(e) hereof). The Initial Term and any one-year
renewal term or subsequent successive renewal term shall be collectively
referred to as the "Term of Employment".
4. Compensation:
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(a) Base Salary. The compensation to be paid Employee by Employer
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for all services rendered to Employer during the term of this Agreement, or to a
parent or subsidiary of Employer, shall be determined by the Management of
Employer, but in no event shall such annual salary be less than One hundred
thousand dollars ($100,000.00) ("Base Salary"), payable in twenty-four (24)
equal semi-monthly installments in arrears, on the 1st and 15th days of the
month.rrr. The Base Salary shall be reduced by income tax and other applicable
withholdings, and may be payable by Employer, or by a parent or subsidiary of
Employer, at the Employer's discretion.
(b) Bonus. In addition to his Base Salary, the Employee shall be
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considered for an annual bonus in accordance with the Employer's bonus plan, and
based on company and individual performance, the minimum amount of which shall
be $10,000.
(c) Moving Expense. In addition to his Base Salary, Employee shall
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receive an additional amount of $17,000, within 2 days after Employee's signing
of Agreement. There shall be no additional compensation for moving beyond this
amount.
5. Vacation: Employee shall be entitled each year to a vacation of
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three (3) weeks, during which time his compensation shall be paid in full. For
vacation purposes, a year shall be deemed to run from July 8 to July 8.
Employee's entitlement to such paid vacation shall accrue ratably over each such
year.
6. Working Facilities: Employee shall be furnished with facilities,
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amenities and services as are presently or may be hereinafter furnished to
senior management officers of Employee and as are adequate for the performance
of their duties.
7. Other Benefits:
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(a) Employee shall be entitled to participate on a basis consistent
with other executive employees of Employer in stock option, deferred
compensation, savings, hospitalization, medical, disability, and life insurance
programs in accordance with such plans as Employer or its corporate parent may
now have in effect or may adopt from time to time, commensurate with the
Employee position.
(b) Employee shall also receive such other additional compensation,
rights and other benefits as the Management of Employer shall from time to time,
in its absolute and sole discretion, grant to him.
8. Expenses: Employee is authorized to incur on behalf of Employer
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reasonable expenses in connection with the performance of his duties hereunder
or in promoting or furthering the business of Employer, including dues for
reasonable expenses for entertainment, travel, lodging and similar items, in
accordance with the standards and policies that the Management of Employer may
establish from time to time. Any such charges may be paid for directly by
Employee, who shall be reimbursed by Employer upon the submission to Employer's
Treasurer of an itemized account of such expenditures.
9. Confidentiality: Except as required in the ordinary course of
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Employer's Business (which currently is the design, development, manufacture and
marketing of advanced materials and industrial and consumer products for a
variety of selected markets, including, but not limited to, products and uses
based on the Employer's proprietary patented technology for the application of
boron carbide in lightweight metal matrix composites under the name Boralyn(R)
and silicon nitride blanks and finished shapes sold under the Ceralyn(TM) name),
Employee shall hold in confidence and not disclose to any person or entity
without the express prior written
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authorization of Employer, either during the term of this Agreement or any time
thereafter, the names or addresses of any of the Employer's customers;
Employer's past or prospective dealings with its customers; the parties, dates,
or terms if any of Employer's contracts; any information, trade secrets,
systems, processes or business methods, or any other secret or confidential
matter relating to the customers or the business affairs of Employer or any
companies affiliated with Employer. Employee acknowledges that in the course of
performing his duties he may have access to confidential information, the
ownership and confidential status of which are highly important to Employer and
he agrees to comply with all known policies and procedures of Employer for the
protection of said confidential information. The term "confidential information"
as used in this Agreement means (1) proprietary information of Employer
including, but not limited to, formulas, procedures, processes, materials,
client lists and vendor lists (2) information marked or designated by Employer
as confidential (3) information whether or not in written form which is known by
the Employee to be treated by Employer as confidential and (4) information
provided to employee by third parties which Employer is obligated to keep
confidential. Employee agrees as follows:
(a) Employee will not copy, transmit, reproduce, summarize quote or make
any commercial or other use whatsoever of Employer's confidential
information except as may be necessary in the performance of his
duties for Employer.
(b) Employee will exercise the highest degree of care in safeguarding
Employer's confidential information against loss, theft or other
inadvertent disclosure and agree generally to take all steps
necessary to ensure the maintenance of confidentiality.
(c) Upon termination of Employee's employment, or as otherwise requested
by Employer, Employee will deliver promptly to Employer all of
Employer's confidential information in whatever form that may be in
Employee's possession or under Employee's control.
(d) Employee will not to disclose Employer's confidential information
directly or indirectly under any circumstances or by any means to any
third person without the express written consent of Employer.
10. Non-Competition: During the Term of Employment and for a period of
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two (2) years after Employee's termination of employment, Employee shall not,
without the prior written consent of Employer, compete with Employer, its
subsidiaries, successors, or assigns, either directly or indirectly, as an
owner, member, partner, employee, officer, director or agent of any sole
proprietorship, association, partnership or corporation. For the purposes of
this paragraph, the terms "compete" and "competition" and "competitor" shall
refer to activities commercially similar to those that constitute all or any
reasonably material part of Employer's Business, in the manufacture and sales of
metal matrix composite materials, as such was constituted, or as Employee knew
or reasonably expected was contemplated, at any time during the Term of
Employment.
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Should any term or condition of these covenants against competition be
found to be unreasonable or excessive by any court of competent jurisdiction,
the parties agree to accept as binding in lieu thereof any lesser restrictions
which said court may deem reasonable.
Both Employer and Employee recognize that no adequate remedy at law
exists in which to enforce the terms and conditions of this Agreement.
Therefore, in the event Employee breaches the confidentiality or covenant
not-to-compete provisions of this Agreement, Employer shall be entitled to
injunctive relief prohibiting the continued breaches of the Agreement by the
Employee.
11. Right to Employer Materials: Employee agrees that all documents
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relating to Employer's Business, including, but not limited to the following;
advertising literature, drawings, blueprints, notes, memorandum, specification,
devices, mechanical parts, formula, lists, materials, books, files, reports,
correspondence, records and other documents or similar electronic material
("Employer Materials"), shall remain the property of Employer. Employer
Materials constitute trade secrets of Employer and shall not be disclosed to any
other party except as expressly authorized by Employer. Upon termination of
employment, for any reason, all Employer Materials shall be returned immediately
to Employer, and Employee shall not make or retain any copies thereof. Employee
acknowledges and agrees that any knowledge, information and materials in
Employee's possession relating Employer's Business which Employee possessed at
any time, shall also be deemed to constitute part of Employer Materials for
purposes of this Section.
12. Inventions and Patents: Employee agrees that he will promptly and
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from time to time fully inform and disclose to Employer all inventions, designs,
improvements, and discoveries which he now has or may hereafter have during the
term of this Agreement which pertain to or relate to the Business of Employer or
to any experimental work carried on by Employer, whether conceived by the
Employee alone or with others and whether or not conceived during regular
working hours. All such inventions, designs, improvement and discoveries shall
be the exclusive property of Employer. Employee shall assist Employer to obtain
patents on all such inventions, designs,improvements, and discoveries deemed
patentable by Employer and shall execute all documents and do all things
necessary to obtain letters patent, vest Employer with full and exclusive title
thereto, and protect the same against infringement by others. This provision
shall apply with equal force and effect to any items that may be subject to
copyright or trademark protection. Should a patent be obtained based on Employee
conceptions and effort, a bonus for this effort shall be provided in accordance
with an approved company bonus program. This provision does not apply to an
invention for which no equipment, supplies, facility or trade secret information
of the Employer was used and which was developed entirely on the Employee's own
time, and (a) which does not relate, at the time the invention is conceived or
reduced to practice, to (1) the Business of Employer, or (2) actual or
demonstrably related anticipated research or development of Employer; or (b)
which does not result from any work performed by the Employee for the Employer.
The provisions set forth in the preceding sentence shall not, however, in any
way authorize Employee to engage in any such activities set forth therein in
contravention of the provisions of his duties and obligations hereunder.
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13. Termination:
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(a) The Employer may terminate the employment of Employee hereunder
for Cause at any time and without prior Notice or for any other reason on
six (6) months' Notice in writing to the Employee. Employee may terminate
his employment hereunder at the time on six (6) months' written Notice to
the Employer, or on two (2) weeks' notice after the last period provided
in Section 14(e) hereof.
(b) If the Employer terminates Employee's employment for "Cause" (as
defined below) or Employee terminates his employment for any reason other
than an Employer's Breach (as defined herein) then the Employer shall pay
Employee all accrued and unpaid Base Salary and benefits (including
accrued but unused vacation time) through the termination date and
Employer shall have no further obligations hereunder.
(c) If the Employer terminates Employee's employment other than for
Cause, or if Employee terminates his employment on account of an
Employer's Breach or as a result of Employee's death or disability, then
the Employer shall, subject to the Employee's compliance with Sections 10,
11, 12, and 13 hereof, pay Employee (i) all accrued and unpaid Base Salary
and benefits (including accrued but unused vacation time) through the
termination date and (ii) continued Base Salary until the earlier of (A)
the expiration of the then current Term without any further extensions
thereof or (B) the date which is six (6) months after the termination date
and thereafter Employer shall have no further obligations hereunder. Any
amount paid pursuant to this Section 14(c) shall be reduced by the amount
of any disability benefits or life insurance proceeds paid to Employee or
Employee's beneficiary pursuant to a policy maintained by Employer.
(d) The phrase "Cause" means any of the following:
(i) breach by Employee of Sections 10, 11, 12 or 13 of
this Agreement;
(ii) material breach of any other provision of this
Agreement by Employee (other than any such breach resulting from
Employee's incapacity due to physical or mental illness), if that
breach is not remedied within 30 days after written notice to
Employee describing the acts alleged to constitute Cause;
(iii) any act of fraud, misappropriation, embezzlement or
similar willful and malicious conduct by Employee against the
Employer; or
(iv) indictment of Employee for a felony or any conviction
of, or guilty plea by Employee to, a crime involving moral turpitude
if that crime or moral turpitude tends or would reasonably tend to
bring the Employer into disrepute.
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(e) The phrase "Employer's Breach" shall mean Employer's material
breach of the terms of this Agreement if such breach is not remedied within
45 days after written notice to Employer describing the acts alleged to
constitute such material breach. Notwithstanding anything herein to the
contrary, Employee's termination shall not be on account of Employer's
Breach unless it occurs within five (5) days after the expiration of the
45-day period referred to in this paragraph.
(f) The phrase "disability" shall mean a physical or mental
disability which renders Employee incapable of satisfactory performing his
duties under the Agreement for a period of 90 days out of any 180
consecutive days.
14. Successors and Assigns: The rights and obligations of Employer under
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this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of Employer, and the rights and obligations of Employee under this
Agreement shall inure and be binding upon his heirs, executors and
administrators.
15. Definitions: For purposes of this Agreement unless the context
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indicates otherwise, the term "Employer" shall be deemed to also include any
corporation which is in control of, controlled by or under common control with
Employer, whether or not Employee is directly employed by such other corporation
or corporations.
16. Notices: Any notice to be given to Employer under the terms of this
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Agreement shall be addressed to the President of the Employer at 00000 Xxxx
Xxx., Xxxxxx, XX 00000, with a copy to the Chief Operating Officer, and any
notice to be given to Employee shall be addressed to him at his home address
last shown on the records of Employer, or at such other address as either party
may hereafter designate in writing to the other. Any such notice (except notice
of a change of address) shall have been deemed duly given when enclosed in a
properly sealed envelope or wrapper addressed as aforesaid, registered or
certified, and deposited (postage and registry or certification fee prepaid) in
a post office or branch post office regularly maintained by the United States
Government. Notice of a change of address shall be deemed given only when
received.
17. Waiver: Except as provided in Section 14(e), either party's failure
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to enforce any provision or provisions of this Agreement shall not in any way be
construed as a waiver of any such provision or provisions, or prevent that party
thereafter from enforcing each and every other provision of this Agreement. The
rights granted both parties herein are cumulative and shall not constitute a
waiver of either party's right to assert all other legal remedies available to
it under the circumstances.
18. Governing Law and Binding Effect: This Agreement shall be
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interpreted and construed in accordance with the laws of the State of California
and shall inure to the benefit of and be binding upon the parties hereto and
their heirs, personal representatives, successors and assigns.
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19. Captions and Paragraph Headings: Captions and paragraph headings used
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herein are for convenience only, are not a part of this Agreement, and shall not
be used in construing it.
20. Severability: The invalidity or unenforceability of any provision
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hereof or any part of any provision hereof shall in no way affect the validity
or enforceability of any other provision or part hereof, and this Agreement
shall be interpreted, construed and enforced as though the invalid or
unenforceable provision were not contained herein.
21. Counterparts: This Agreements may be executed in counterparts, each of
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which shall be deemed and original, but all of which taken together shall
constitute one and the same instrument.
22. Entire Agreement: This Agreement supersedes all prior agreements and
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understandings between the parties and may not be modified or terminated orally.
No modification, termination, or attempted waiver shall be valid unless in
writing and signed by the party against whom the same is sought to be enforced.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
day and year first set forth above.
EMPLOYER: Alyn Corporation
A Delaware Corporation
By:
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Title:
EMPLOYER:
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx 6-20-96
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