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Exhibit 10.85
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, executed as of December , 1995 between SpecTran
Corporation, a Delaware corporation (hereinafter referred to as the
"Corporation"), and Xxxxx Xxxxx (hereinafter referred to as "Executive").
W I T N E S S E T H:
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WHEREAS, the Corporation wishes to employ Executive and
Executive wishes to be employed by the Corporation;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree with each other as follows:
1. EMPLOYMENT. The Corporation agrees to and does hereby employ
Executive, and Executive agrees to and does hereby accept employment by the
Corporation, as President and Chief Executive Officer of the Corporation, or in
any other executive capacity as determined by its Board of Directors, subject to
the supervision and direction of its Board of Directors, for the two-year period
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commencing January 1, 1996 and ending at midnight two years later (the "Base
Term"). The Base Term shall be automatically extended for successive one-year
periods unless either party provides notice to the other to the contrary at
least five (5) business days prior to the end of the Base Term or any extension
thereof, subject to prior termination in accordance with the provisions of
Article 14 hereof. The Base Term and any extensions thereof shall be referred to
in this Agreement as the "Employment Period".
2. SCOPE OF DUTIES. Executive agrees that he will devote his full
time and effort during the Employment Period to the performance of the duties of
his office. Executive shall make his business headquarters at Sturbridge,
Massachusetts, and shall relocate should the Corporation change its
headquarters. Executive shall undertake such travel as the Corporation may
request.
3. Employment Period - Compensation.
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(a) EXECUTIVE COMPENSATION. For the services and duties
to be rendered and performed by Executive during the Employment Period, the
Corporation agrees to pay Executive compensation at the rate of Fourteen
Thousand Five Hundred Eighty Three Dollars and Thirty Three Cents ($14,583.33)
per month (this amount to be
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referred to as "Executive Compensation"). Executive Compensation shall be
payable in equal semi-monthly installments. The Corporation shall reimburse
Executive for all expenses reasonably and necessarily incurred in connection
with his employment by the Corporation, including traveling expenses while
absent on the Corporation's business from its business headquarters. The Board
of Directors of the Corporation may increase Executive's Executive
Compensation at such time or times and in such amount or amounts as it may in
its sole discretion determine.
(b) Other Compensation.
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i. INCENTIVE COMPENSATION. Executive will
participate in incentive compensation plans for key employees adopted by the
Corporation from time to time. Executive understands that compensation under any
incentive compensation plan adopted by the Corporation will be based upon the
Corporation's performance, with targets established by the Corporation's Board
of Directors annually and with those targets often varying from year to year.
Executive's participation in an incentive compensation plan will permit
Executive to earn a bonus or up to thirty percent (30%) of Executive's Executive
Compensation.
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ii. STOCK OPTIONS. Executive will receive an
initial grant of fifty thousand (50,000) options to purchase shares of the stock
of the Corporation under the Corporation's Incentive Stock Option Plan, subject
to the approval of the Incentive Stock Option Committee of the Board of
Directors, which will consider such grant at it first meeting following the
commencement of the Employment Period. The exercise price of those options will
equal the market price of the Corporation's stock on the date of grant and will
be subject to the terms of the Corporation's Incentive Stock Option Plan and
related Agreement. Executive will be eligible for consideration for additional
grants of stock options on an annual basis beginning in 1997.
iii. AUTOMOBILE ALLOWANCE. Executive will
receive a car allowance of $800 per month.
4. VACATION. Executive shall be entitled to a vacation each
year equal to one (1) month which may be taken all at once or weekly in the sole
discretion of Executive.
5. RELOCATION EXPENSES. The Corporation will pay all of the costs
incurred by Executive in moving his household and family
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members from Harrisburg, Pennsylvania to Sturbridge, Massachusetts. The
Corporation will also pay Executive Ten Thousand Dollars ($10,000) upon the
commencement of the Employment Period to cover temporary living expenses and
transportation costs between Harrisburg and Sturbridge, and an additional Ten
Thousand Dollars ($10,000) after Executive completes his relocation to
Sturbridge, to cover closing costs and other incidental expenses.
6. SECRETS. Executive agrees that any trade secrets or any
other proprietary information (whether in written, verbal or any other form)
relating to the existing or contemplated business and/or field of interest of
the Corporation or any of its Affiliates (as defined below), or of any
corporation or other legal entity in which the Corporation or any of its
Affiliates has an ownership interest of more than twenty-five percent (25%), and
any proprietary information (whether in written, verbal or any other form) of
any of the Corporation's customers, suppliers, licensors or licensees,
including, but not limited to, information relating to inventions, disclosures,
processes, systems, methods, formulae, patents, patent applications, machinery,
materials, notes, drawings, research activities and plans, costs of production,
contract forms, prices, volume of sales, promotional methods, list
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of names or classes or customers, which he has heretofore acquired or which he
may hereafter acquire during his employment with the Corporation or any of its
Affiliates, in both cases whether during or outside business hours, whether or
not on the Corporation's premises, as the result of any disclosures to him, or
in any other way, shall be regarded as held by him in a fiduciary capacity
solely for the benefit of the Corporation and/or its Affiliates, its successors
or assigns, and shall not at any time, either during the term of this Agreement
or thereafter, be disclosed, divulged, furnished, or made accessible by him to
anyone, or be otherwise used by him, except in the regular course of business of
the Corporation or its Affiliates. Upon termination of his employment, Executive
shall return or deliver to the Corporation all tangible forms of such
information in his possession or control, and shall retain no copies thereof.
Information shall, for purposes of this Agreement, be considered to be secret if
not known by the trade generally, even though such information may have been
disclosed to one or more third parties pursuant to any business discussion or
agreement, including distribution agreements, joint research agreements or other
agreements entered into by the Corporation or any of its Affiliates. For the
purposes of this Agreement, "Affiliates" shall mean any corporation,
partnership, joint
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venture, other entity of any type or individual that directly or indirectly,
through one or more intermediaries, controls or is controlled, or is under
common control with the Corporation.
7. PATENTS. Executive agrees to and does hereby sell, assign,
transfer and set over to the Corporation, its successors, assigns, or
Affiliates, as the case may be, all his right, title, and interest in and to any
inventions, improvements, processes, patents or applications for patents which
he develops or conceives individually or in conjunction with others during his
employment by the Corporation, or, having possibly conceived same prior to his
employment, may complete while in the employ of the Corporation or any of its
Affiliates, in both cases whether during or outside business hours, whether or
not on the Corporation's premises, which inventions, improvements, processes,
patents or applications for patents are (i) in connection with any matters
within the scope of the existing or contemplated business of the Corporation or
any of its Affiliates, or (ii) aided by the use of time, materials, facilities
or information paid for or provided by the Corporation, all of the foregoing to
be held and enjoyed by the Corporation, its successors, assigns or Affiliates,
as the case may be, to the full extent of the term for which any Letters Patent
may be granted and
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as fully as the same would have been held by Executive, had this Agreement not
been made. Executive will make, execute and deliver any and all instruments and
documents necessary to obtain patents for such inventions, improvements and
processes in any and all countries. Executive hereby irrevocably appoints the
Corporation to be his attorney in fact in the name of and on behalf of Executive
to execute all such instruments and do all such things and generally to use the
Executive's name for the purposes of assuring to the Corporation (or its
nominee) the full benefit of its rights under the provisions of Articles 6 and
7.
8. DISABILITY. (a) In the event Executive becomes partially
disabled, or becomes totally disabled (as determined in accordance with Article
8(c) below) and such total disability has continued for less than six (6) full
consecutive calendar months but Executive remains partially disabled, then the
Corporation shall continue during the Employment Period to pay Executive at the
rate of his Executive Compensation as set forth in Article 3 and continue the
benefits provided for him in Articles 9 and 10 hereof. The Corporation's
obligations in the event of Executive's partial disability shall terminate upon
the end of the Employment Period.
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(b) In the event Executive becomes totally disabled (as
determined in accordance with Article 8(c) below), and such total disability has
continued for six (6) full consecutive calendar months or more, then for so long
thereafter during the Employment Period as such total disability shall continue
or for a period of one (1) year, whichever is longer, Executive shall be paid at
seventy-five percent (75%) of the rate of his Executive Compensation as set
forth in Article 3 hereof.
(c) For purposes of this Agreement, determination of
whether Executive is or is not totally disabled shall be made as follows:
(i) Executive's inability, physical or mental,
for whatever reason, to be able to perform
his duties to the Corporation shall be total
disability; and
(ii) If any difference shall arise between the
Corporation and Executive as to whether he
is totally disabled, such difference shall
be resolved as follows: Executive shall be
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examined by a physician appointed by the
Corporation and a physician appointed by
Executive. If said two physicians shall
disagree concerning whether Executive is
totally disabled, that question shall be
submitted to a third physician, who shall be
selected by such two physicians. The medical
opinion of such third physician, after
examination of Executive and consultation
with such other two physicians, shall decide
the question.
(d) Should Executive become totally disabled then he may
by action of the Board of Directors be removed from his position and employment
with the Corporation.
9. DEATH. In the event of the death of Executive during the
Employment Period, the Corporation shall continue to pay Executive's Annual
Executive Compensation for a period of one (1) year from the date of death. The
salary payment will be made to the wife of Executive or if no wife shall survive
Executive, to his Estate.
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10. EMPLOYEE BENEFITS. (a) Executive may participate in all
benefit plans to the extent, if any, that he may be eligible to do so under the
provisions of such plan or program. Those benefit plans may include medical and
insurance, life and accidental death/dismemberment insurance, short- and
long-term disability, tuition reimbursement, 401(k) plan, stock purchase plan,
vacation and pension plans. The Corporation may terminate, modify, or amend any
such plan or program, in the manner and to the extent permitted therein, and the
rights of Executive under any such plan or program shall be subject to any such
right of termination, modification, or amendment. To the extent any payments
under any such plan or program are made to Executive because he is disabled,
such amounts shall be credited against amounts due to Executive under Article 8.
(b) For the sake of clarification, and notwithstanding
any other provision of this Agreement, it is understood and agreed that all
benefits provided to Executive under this Agreement shall be provided to the
extent that they exceed any employee benefit provided to Executive other than
specifically through this Agreement, such as the programs, plans, etc. referred
to in Article 10(a) above. The benefits provided under this Agreement shall be
supplemental to benefits provided otherwise to Executive by the
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Corporation, and shall not be provided to the extent that they are duplicative.
For example, if a disability benefit is available under a program referred to in
Article 10(a) above and it provides the same or greater benefit than provided in
Article 8 hereof, then no benefit will be paid out under Article 8 hereof. If a
disability benefit available under Article 10(a) above is less than that
provided in Article 7 hereof, then supplemental payments would be available
under Article 7 hereof to the extent that the total of the payment would equal
the aggregated benefits provided by Article 7.
11. COVENANT NOT TO COMPETE. During the Employment Period,
Executive agrees not to compete with the Corporation either directly, or by
stock interest exceeding five percent (5%), or otherwise in any way in any
business in which it or its Affiliates is then engaged anywhere in the world. No
later than thirty (30) days immediately following termination of Executive's
employment with the Corporation (the "Termination Date"), the Corporation may,
by written notice, exercise the right to retain Executive as a consultant during
the one year period immediately following the Termination Date and to require
that Executive will not (a) engage, directly or indirectly, or by stock interest
exceeding five percent
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(5%), or otherwise in any way, in any business in which the Corporation or any
of its Affiliates was engaged during the term of his employment or which the
Corporation or any of its Affiliates planned, during the term of his employment
to enter, (b) solicit any past, present or future customers of the Corporation
or any of its Affiliates in any way relating to any business in which the
Corporation or any of its Affiliates was engaged during the term of his
employment, or which the Corporation or any of its Affiliates planned during the
term of his employment, to enter, or (c) induce or actively attempt to influence
any other employee or consultant of the Corporation or any of its Affiliates to
terminate his or her employment or consultancy with the Corporation or any of
its Affiliates. During this one-year period, Executive will receive compensation
and employee benefits paid or maintained in the same fashion and in amounts not
less than those he received during the last year of employment with the
Corporation. In the event that Executive violates any provision of this Article
11 or of Article 6, then in addition to any other remedies available to the
Corporation (which can include obtaining injunctive relief as the parties
acknowledge that irreparable damage not compensable by money can result), the
Corporation shall have the right immediately to terminate any payments or
benefits provided or to be provided to
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Executive under this Agreement. For the purposes of this Article 11, the phrase
"the Corporation" shall mean the Corporation and its Affiliates.
12. ASSIGNMENT. This Agreement may be assigned by the Corporation
as part of the sale of substantially all of its business; provided, however,
that the purchaser shall expressly assume (and the Corporation shall be relieved
of) all obligations of the Corporation under this Agreement. Further, this
Agreement may be assigned by the Corporation to an Affiliate, provided that any
such Affiliate shall expressly assume all obligations of the Corporation under
this Agreement, and provided further that the Corporation shall then fully
guarantee the performance of the Agreement by such Affiliate. Executive agrees
that if this Agreement is so assigned, all the terms and conditions of this
Agreement shall remain between such assignee and himself with the same force and
effect as if said Agreement had been made with such assignee in the first
instance.
13. NON-VIOLATION OF AGREEMENTS WITH PRIOR EMPLOYER. Executive
represents that prior to accepting employment with the Corporation, he was
employed by AMP Incorporated ("AMP") and party
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to a Confidentiality Agreement, an Intellectual Property Agreement and a Limited
Non-Competition Agreement. Executive represents that he has discussed accepting
employment as President and Chief Executive Officer of the Corporation with AMP
executives to whom he reports and that he will not be in violation of any of
those agreements by accepting such employment.
14. Termination.
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(a) FOR CAUSE. The Corporation may terminate Executive's
employment and this Agreement for Cause by delivering written notice to
Executive, setting forth the reason for termination. For the purpose of this
Agreement, "Cause" shall mean (i) the arrest of the Executive on charges of
having committed any felony, (ii) stealing from the Corporation, (iii) a willful
breach by Executive of a material provision of this Agreement and (iv) if
Executive engages in gross misconduct, such as fraud, dishonesty, gross
negligence or gross insubordination. If this Agreement is terminated for Cause,
the Corporation's obligation to Executive hereunder shall be limited to the
Executive Compensation and benefits earned up to the date notice of termination
is delivered to Executive.
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(b) TERMINATION WITHOUT CAUSE. If the Corporation
dismisses Executive without Cause, the Corporation shall continue to fulfill its
obligations under this Agreement until the later of (A) the date six months
following Executive's dismissal, or (B) the end of the Employment Period.
(c) TERMINATION BY EXECUTIVE. If Executive elects to
terminate his employment with the Corporation, the Corporation's obligations to
Executive under this Agreement shall be limited to the Executive Compensation
and benefits earned up to the date of Executive's departure. Nonetheless, the
Corporation may notify Executive that it wishes Executive not to compete and to
be available as a consultant in accordance with and for the compensation set out
in Article 11.
15. SURVIVAL. The provisions of Articles 6, 7, 11, 15, 16, and 17
shall survive the termination of this Agreement.
16. NOTICES. All notices required or permitted to be given
hereunder shall be mailed by registered mail or delivered by hand to the party
to whom such notice is required or permitted to be given hereunder. If mailed,
any such notice shall be deemed to
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have been given when mailed as evidenced by the postmark at point of mailing. If
delivered by hand, any such notice shall be deemed to have been given when
received by the party to whom notice is given, as evidenced by written and dated
receipt of the receiving party.
Any notice to the Corporation or to any assignee of the Corporation
shall be addressed as follows:
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SpecTran Corporation
00 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Chairman of the Board
Any notice to Executive shall be addressed to the address appearing on
the records of the Corporation at the time such notice is given.
Either party may change the address to which notice to it is to be
addressed, by notice as provided herein.
17. APPLICABLE LAW. This Agreement shall be interpreted and
enforced in accordance with the laws of Massachusetts governing contracts made
in and to be performed solely in such State.
18. EFFECTIVE DATE. This Agreement shall become effective as of
the date first mentioned in this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed the above
Agreement as of the day and year first above written.
SPECTRAN CORPORATION
By
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Xxxxxxx X. Xxxxxx
Chairman of the Board
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Xxxxx Xxxxx
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