EXHIBIT 10.67
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of August 1, 1999, between SEMX Corporation, a
Delaware corporation ("SEMX" or the "Company"), and Xxxxxxx X. Xxxxx (the
"Executive"), an individual residing at 00 Xxxxxxx Xxxxx Xxxxx, Xxxxxxxxx, XX
00000.
WITNESSETH
WHEREAS, the Executive serves as an executive officer of the Company and as such
has had considerable experience in the direct management of the business and
operations of the Company, contributing, in part, to the Company's commercial
success;
WHEREAS, the Company wishes to extend the employment of the Executive as its
President and Chief Executive Officer;
WHEREAS, the Executive is not an at will employee in accordance with the
provisions of the Company's Employee handbook;
WHEREAS, the Executive is willing to accept such employment for the inducements
and upon the terms and conditions hereinafter set forth; and
WHEREAS, the Company has also bargained for the Executive simultaneously to
execute the Company's Intellectual Property Agreement, a copy of which is
annexed hereto as Exhibit A;
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Company and the Executive agree as follows:
Section 1. Employment:
(a) Term of Employment. Upon the terms and subject to the conditions set
forth in this Agreement, the Company hereby employs the Executive, and the
Executive agrees to be employed as the Company's President and Chief
Executive Officer. Subject to earlier termination as provided in Section 4
hereof, the term of the
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Executive's employment by the Company under this Agreement (the
"Employment Term"), shall commence as of the date hereof, and shall
continue for an initial term of three (3) years, up to and including July
31, 2002 (the "Initial Term"). The Employment Term shall continue beyond
the Initial Term on a year-to-year basis, which enables the Company and
the Executive to avoid renegotiations as the terms of this Agreement are
automatically extended until modified in writing or one of the parties
hereto terminates this Agreement as provided in section 4, or unless
either party gives written notice of termination to the other not less
than 90 days prior to the expiration of the Employment Term then in
effect. Any such extension of the Employment Term shall be upon the same
terms and conditions as set forth herein for the Employment Term hereunder
except that the Base Salary as hereinafter defined for any extensions
shall be no less than the amount in effect at the end of the previous
term.
(b) Duties. The Executive will serve as the Company's President and Chief
Executive Officer and will perform the services and duties for the Company
designated by the Company's Board of Directors, provided that such duties
are reasonably consistent with Executive's responsibilities and status as
the Company's President and Chief Executive Officer. The Executive shall
also, if elected in accordance with the By-Laws of the Company, serve as a
Director of the Company and/or as an Officer and/or Director of its
affiliates without additional compensation and the Company shall indemnify
Executive to the maximum extent allowable under law for his services as an
Officer and/or Director.
(c) Extent of Services. During the Employment Term, Executive agrees to:
(i) devote a significant amount of his business time, energy and skill to
the business of the Company; (ii) use his best efforts to promote the
interests of the Company; and (iii) discharge such executive and
administrative duties consistent with his position as may be assigned to
him by the Board of Directors. Executive agrees that he will not work for
any other profit making organization in a direct or indirect manner
without the written consent of the Board of Directors of the Company.
Section 2. Compensation
All compensation due Executive under this Agreement shall be payable by the
Company, whether the services rendered are for the Company or one of its
affiliates.
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(a) Base Salary. For services rendered by the Executive under this
Agreement, the Company shall pay the Executive an annual salary of Three
Hundred Twelve Thousand ($312,000) Dollars (the "Base Salary"). The Base
Salary shall be earned and shall be payable on the 15th and last day of
each month in accordance with the Company's normal accounting and payroll
practices and the Company may increase, but not decrease, the Base Salary
at any time. Effective August 1, 2000, and August 1, 2001 the Executive's
Base Salary shall be increased at the percentage increase of the Consumer
Price Index or Twelve Thousand ($12,000) Dollars per annum for the
subsequent year, whichever is higher
(b) Bonus.
(i) In addition to Executive's Base Salary, Executive shall be paid an
annual bonus by the Company for a calendar year period (the "Bonus
Period") in such amount (the "Bonus Amount") as may be determined by the
Compensation Committee of the Board of Directors of the Company.
(ii) The Bonus Amount, if any, shall be paid to Executive no later than
fifteen (15) days after the completion of the audit of the Company's
financial statements for the Bonus Period, but no later than March 31.
(iii) The Bonus Amount is due and payable to Executive if and only if
Executive is in the employ of the Company on the last day of the Bonus
Period; provided, however, that the Executive (or his estate) shall be
entitled to a pro rated portion of the Bonus Amount (based on time
elapsed) or a multiple of the Bonus Amount if executive: (a) dies, (b)
becomes disabled, or (c) is terminated without Cause by the Company
(defined below) pursuant to the respective provisions of Section 4, or (d)
exercises the Change of Control provision of Section 4(d) prior to the end
of the Bonus Period.
Section 3. Other Benefits. During the Employment term, the Executive shall be
entitled to the following benefits, which are in addition to, and shall not be
credited against, Executive's Base Salary or Bonus Amount:
(a) vacation time, three (3) weeks annually in accordance with the
Company's policy for executives in effect as determined by the Company
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and consistent with the Executive completing his/her responsibilities,
said vacation to accrue if not used in the period earned;
(b) participation in all employee group life, group health and other
fringe benefit programs, including, but not limited to, any executive
officer insurance reimbursement plan, 401(k) plan, incentive compensation,
performance unit, bonus, stock purchase or stock appreciation plans now or
hereafter initiated or maintained by the Company for executive officers of
the Company for which Executive is eligible subject to the right of the
Company to amend or terminate such plans;
(c) reimbursement or direct payment for all software, hardware and home
computer and communication expenses for the Executive including, but not
limited to telephone, fax, computer and internet services and supplies
related thereto.
(d) reimbursement for all of Executive's expenses at the Greenwich Country
Club;
(e) reimbursement for all reasonable and properly documented expenses
incurred or paid by Executive in connection with the performance of his
duties hereunder and in accordance with the general expense reimbursement
policy of the Company then in effect; and
(f) use of a car to be leased by the Company, including automobile
insurance, maintenance expenses, gas, oil and operating expenses and
alternative transportation arrangements when said car is not available.
Section 4. Termination The Employment Term shall terminate upon any of the
following occurrences; provided, however, that upon such termination the
Executive shall be entitled to receive, as and when they would have been
received in the ordinary course if such termination had not occurred, the unpaid
portion of his Base Salary, Bonus and other employee benefits as they shall have
accrued and vested through the date of such termination for services rendered.
(a) Voluntary Termination by the Executive. Except as set forth in Section
4 (d) below, if the Executive voluntarily ceases to be employed by the
Company before the end of the Employment Term, with or without the consent
of the Company, then the Employment Term shall end without
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further action by either party hereto and all rights and obligations of
the parties under this Agreement, except those set forth in the
Intellectual Property Protection Agreement shall terminate as of such
date.
(b) Termination for Cause. The Company may not terminate the Employment
Term at any time other than for Cause. For the purposes of this Agreement,
"Cause" shall mean;
(i) conviction of a felony which has a material adverse impact on
the Company, or
(ii) Executive's use of narcotics, illegal drugs or controlled
substances other than as prescribed by a licensed physician.
c) Termination Upon Disability. If, during the Employment Term, the Board
of Directors of the Company reasonably determines that the Executive has
been or will be incapable of fulfilling his obligations hereunder because
of injury or physical or mental illness, for a period of more than four
(4) consecutive months or six (6) months in an aggregate during any period
of twelve (12) consecutive months, the Company may, upon written notice to
the Executive, terminate the Employment Term upon thirty (30) days'
written notice to the Executive, to the extent permitted by applicable
law.
Notwithstanding the termination of the Employment Term hereunder by reason
of disability, the Company shall pay to the Executive his Base Salary for
a period of two and one-half (2 1/2 ) years following the date of such
termination, such payment shall be made to the Executive in one (1) lump
sum payment. In the event of termination based upon disability, the
Company will not take any action which might adversely affect Executive's
disability benefits.
d) Termination by Death. The Employment Term shall automatically terminate
on the date of the Executive's death. Notwithstanding the termination of
the Employment Term hereunder by reason of the Executive's death, the
Company shall maintain a split dollar whole life insurance policy on
Executive in the face amount of Three Hundred Seventy Five Thousand
($375,000) Dollars with a total death benefit of Five Hundred Thousand
($500,000) Dollars naming Xxxxx Xxxxx as
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primary beneficiary of the policy. The Company shall be solely responsible
for making premium payments on said policy and shall receive a death
benefit share upon the Executive's death in accordance with the collateral
assignment section of said policy. The company shall not pledge said
policy or allow any party to have a lien or interest in said policy other
than the designated beneficiary.
Notwithstanding the termination of the Employment Term hereunder by reason
of the death of the Executive, the Company shall pay to the Executive's
estate his Base Salary and prorated Bonus for a period of two (2) years
following the date of such termination, such payment shall be made in one
(1) lump sum. This payment shall be in addition to, and shall not be
credited against, the split dollar life insurance proceeds set forth
above.
(e) Termination after Change in Control. This Agreement may be terminated
by written notice to the Company by the Executive, if there is a Change in
Control. If, after a Change in Control, the Executive terminates this
Agreement within ninety (90) days of the date of such Change in Control,
the Executive will be entitled to the Severance Benefits. The terms Change
in Control, and Severance Benefits are defined in Schedule 4D (attached
hereto).
Section 5. Non-Competition
During the Employment Term and for a period of one (1) year thereafter (the
"Non-Compete Period"), the Executive shall not, directly or indirectly, engage
in, own, manage, operate, join or control, or participate in the ownership,
management, operation or control of any Restricted Enterprise or associate with
any entity, incorporated or otherwise (other than the Company or its
affiliates), which engages or plans to engage in a Restricted Enterprise
anywhere in the United States, whether as a director, officer, employee, agent,
consultant, shareholder, partner, owner, independent contractor or otherwise. As
used herein, a "Restricted Enterprise" shall be any activity that competes with
the business of the Company as constituted or as realistically contemplated
during the Employment term in the United States.
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Section 6. General
(i) The Company hereby indemnifies and holds Executive harmless from any
and all expenses or losses, including taxes, incurred by him in
connection with the performance of his duties under this Agreement.
The Company further agrees to pay all legal fees and expenses
related to Executive's enforcing his rights hereunder.
(ii) This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns and shall be binding upon and
inure to the benefit of the Executive and his heirs, executors and
administrators. The Company may not assign this Agreement without
the consent of the Executive and the assignee.
(iii) The waiver by the Company or the Executive of a breach of any
provision of this Agreement by the other party shall not be
construed as a waiver of any subsequent breach of the same provision
or of any other provision of this Agreement.
(iv) All notices, requests, demands and other communications submitted
hereunder shall be in writing and shall be deemed to have been duly
given if delivered by hand or by commercial overnight delivery
service or if mailed by first class, registered mail, return receipt
requested, postage and registry fees prepaid; and addressed; if to
the Executive, to the address set forth in the first paragraph
hereof, and if to the Company, to 0 Xxxxxxxx Xxxxx, Xxxxxx, Xxx
Xxxx, 00000, attention Chairman of the Compensation Committee of the
Board of Directors.
(v) This Agreement shall be construed and enforced in accordance with,
and governed by, the laws of the State of New York without regard to
the conflict of laws principles thereof.
(vi) This Agreement, together with the Intellectual Property Protection
Agreement and the Employees' Stock Option Plan Agreement
incorporates the entire understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements relating to such subject matter. The invalidity of any
section, provision or portion of this Agreement shall not affect the
validity of any other section, provision or portion of this
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Agreement, and each such section, provision or portion shall be
enforced to the full extent permitted by law. This Agreement may not
be modified or amended, or any term or provision hereof waived or
discharged, except by a written instrument signed by the party
against whom such amendment, modification, waiver, or discharge is
sought to be enforced. The headings of this Agreement are for the
purposes of reference only and shall not limit or otherwise affect
the meaning hereof. This Agreement may be executed in several
counterparts, all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have dully executed this Agreement as of
the day and year first above written.
Dated: July 28, 1999 SEMX Corporation
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/s/ Xxxxxxx X. Xxxxx By /s/ Xxxx X. Xxxxxxxx XX
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Executive Xxxx X. Xxxxxxxx XX,
Chairman of the Compensation
Committee of the Board of Directors
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