EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement, made this 21st day of August, 2002 by and between Advanced
Photonix, Inc. a Delaware corporation (hereinafter call "Company"), and Xxxx X.
Xxxxxx, an individual (hereinafter called "Employee")
RECITALS:
1. The Company wishes to employ Employee and utilize his professional
experience, ability, services, background and know-how, and
2. Employee wishes to enter into the employ of the Company on the terms and
conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the covenants and conditions set forth
in this Agreement and for other good and valuable consideration, which has been
received and which is sufficient, the parties agree to the following terms:
A. Employment Term. Subject to the terms and conditions contained in
this Agreement, the Company employs Employee, and the Employee agrees to be
employed by the Company, for a three (3) year period from the date of this
Agreement unless this Agreement is terminated in accordance with the terms
hereof. The initial three-year term is referred to in this Agreement as the
"Employment Term"
B. Duties. Employee's position with the Company will be Vice President
and Chief Operating Officer ("COO"). As COO, Employee will be responsible
for Manufacturing Operations, Manufacturing and Design Engineering, Quality
Assurance, and have such other authority and responsibilities as the Board
of Directors reasonably may determine from time to time.
C. Time and Efforts. Employee shall devote his entire working time,
energy, skill, and best efforts to the performance of his duties hereunder
in a manner which will faithfully and diligently further the business and
interest of the Company. Notwithstanding the foregoing, Employee shall be
permitted to maintain memberships on the Boards of Directors and in
organizations identified to the Company in writing, provided that such
activities shall not, at any time, (i) conflict with Employee's
responsibilities hereunder or (ii) preclude the Company or any Subsidiary
(as hereinafter defined) of the Company, from obtaining contracts from any
such company or organization. For the purposes of this Agreement, any
corporation with respect to which Company has the ability to control more
than fifty percent of the voting power shall be a "Subsidiary" and all such
corporations shall be "Subsidiaries".
D. Place of Business. Unless the Company terminates operations at the
Facility , Employee shall perform his duties from and continue to occupy
the office he occupied as President of Silicon Sensors, L.L.C. at 000
Xxxxxx XX, Xxxxxxxxxx, Xxxxxxxxx (the "Facility"), and shall not be
required to change location or offices during the Employment Term or any
renewal term provided; however, that Employee shall spend whatever time is
reasonably necessary at other Company locations, including Camarillo,
California, in order to effectively discharge his duties as COO.
E. Compensation and Benefits. For the services rendered by the
Employee to the Company, Employee shall receive a base salary at a rate of
$160,000 per year ("Base Salary"), payable in reasonable installments in
accordance with Company's regular payroll practices in effect from time to
time. The ordinary and usual sums for taxes and withholding will be
deducted from this salary. Employee shall be eligible for additional salary
increases and stock options during the term of this Agreement at the
discretion of the Board of Directors. Employee shall be eligible for an
incentive cash bonus of (33-1/3% of Base Salary) or greater on an annual
basis. This incentive bonus will be based on measurable goals reasonably
set forth by the Chairman of the Board and Compensation Committee after
discussion with Employee. Employee will be entitled to take four (4) weeks
of paid vacation per year. Except as otherwise provided in the Company's
employee manual as from time to time in effect, no vacation time may be
carried over from one year to the next. Employee will be entitled to
participate in the group medical insurance and all other fringe benefit
plans generally provided to employees within the Company in accordance with
and subject to the terms of such plans.
F. Expenses. Company will reimburse Employee for all reasonable
expense incurred by Employee in connection with the performance of the
Employee's duties hereunder, upon receipt of appropriate documentation and
in accordance with Company's regular reimbursement procedures and practices
in effect from time to time.
G. Death or Disability.
(1) If Employee dies, all payments hereunder shall cease at the
end of the month in which the Employee's death occurs and Company
shall have no further obligations or liabilities hereunder.
(2) The Company may terminate the employment of the Employee
hereunder at any time upon the permanent disability of the Employee,
such termination to be communicated by written notice given by the
Company to the Employee. The Employee shall be considered to have
become permanently disabled if (i) because of ill health or physical
or mental disability, the Employee has been or is reasonably likely to
be continuously unable or unwilling to perform his duties
responsibilities hereunder for 120 consecutive days or (ii) within a
12-month period, because of ill health or physical or mental
disability, the Employee has been unable or unwilling to perform his
duties and responsibilities hereunder for a total of 120 days,
consecutive or not. In the event that the Employee's employment is
terminated by the Company by reason of his permanent disability, the
termination shall be treated as a termination by the Company without
cause and the Employee shall be entitled to the payments (and required
to execute the release) provided for in Section L (2) below; provided,
however, that there shall be deducted from such payments an amount
equal to 135% of the amount of any and all payments made to the
Employee pursuant to the terms of any disability insurance program
maintained by the Company.
H. Confidentiality. Employee knows that the Company has in its
possession business information which is confidential. During the
Employee's employment with the Company and after termination of Employee's
employment, Employee will not use or reveal, divulge or make known to any
person, company or any other third party, any Proprietary Information.
"Proprietary Information" is any and all information or data, whether in
writing, or learned by Employee orally, by observation or other sensory
detection, relating to any product, product design, service, research,
development, formula, process, method of distribution or delivery,
know-how, trade secret, customer list, contract term, customer pricing,
supplier list or price, business strategy, compensation, plan or practice,
operating records, software, technology, sales data, information or other
records, list or documents used by the Company in operating the Business or
otherwise. The Proprietary Information and all other information relating
to the Company belongs to and will remain the property of the Company. All
Proprietary Information, other information and property of the Company must
be returned to the Company by Employee upon termination of Employee's
employment.
I. Discoveries and Works. Any and all writings, inventions,
improvements, process and/or techniques which Employee may make, conceive,
discover or develop, either solely or jointly with any other person or
persons, at any time during the term of this Agreement, whether during
working hours or at any other time and whether at the request or upon the
suggestion of the Company or otherwise, which relate to or are useful in
connection with any business now or hereafter carried on or contemplated by
the Company, including developments or expansions of its present fields of
operations, shall be the sole and exclusive property of the Company.
Employee shall make full disclosure to Company of all such writings,
inventions, improvements, process, procedures and techniques, and shall do
everything necessary or desirable to vest the absolute title thereto in
Company. Employee shall write and prepare all specifications and procedures
regarding such inventions, improvements, process, procedures and
techniques, and otherwise aid and assist Company so the Company can prepare
and present applications for copyright or Letters of Patent wherever
possible, as well as reissues, renewals, and extensions thereof in all
countries in which it may desire to have a copyright or patent protection.
Employee shall not be entitled to any additional or special compensation or
reimbursement regarding any and all such inventions, improvements, process,
procedures and techniques.
J. Non Solicitation and Non-Competition. The services of the Employee
will be unique and extraordinary and essential to the business of the
Company, especially since the Employee shall have access to the Company's
customer lists, trade secrets and other privileged and confidential
information essential to the Company's business. Employee therefore agrees
that he will not, while he is an employee of the Company and for a period
of one (1) year thereafter, directly or indirectly solicit, induce,
encourage or attempt to influence any employee, client, customer, salesman
or supplier of Company to cease to do business with or to terminate his
employment with Company, and shall not utilize for any such purposes any
names and addresses of customers or clients of Company or any data on or
relating to past, present or prospective (at the time of termination of
Employee's employment) customers or clients of Company. Employee further
agrees that during such period he will not, without the prior written
approval of the Company, directly or indirectly, , whether as an owner,
partner, member, employee, officer, director or stockholder (other than as
the owner of less than 5% of the stock of a corporation registered under
the Securities and Exchange Act of 1934, as amended), or in any other
capacity, engage in any business activity competitive with the business of
the Company, which is the development, manufacture and distribution of
optoelectronic semiconductor based components, hybrid assemblies and other
proprietary solid state light and radiation detection devices. The Employee
agrees that his covenants contained in this Section J are given in
consideration of the purchase, by a subsidiary of the Company, of a
business partially owned by Employee.
K. Injunctive Relief. Employee acknowledges that the restrictions
contained herein are reasonable and necessary in order to protect the
legitimate interest of Company, and that any violation thereof would result
in irreparable injuries to Company, and Employee therefore acknowledges
that, in the event of his violation of any of these restrictions, Company
shall be entitled to obtain from any court of competent jurisdiction
preliminary and permanent injunctive relief, without the necessity of
posting bonds, as well as damages and an equitable accounting of all
earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies
to which Company may be entitled.
L. Termination. (1) This Agreement may be terminated by Company for
Cause as defined below upon written notice given to the Employee. As used
herein, "Cause" means; (i) any act or acts of Employee which would
constitute a felony or fraud; (ii) a continuing material breach by Employee
in performing the duties described in this Agreement which is not cured by
Employee within thirty (30) days after the Company gives Employee written
notice specifying the details of the breach; or (iii) gross neglect, gross
malfeasance, willful neglect, willful misconduct, or dishonesty in
performance of Employee's duties hereunder. If Employee's employment is
terminated by Company for Cause, the Company's obligations under this
Agreement will terminate and the Company will not be liable to Employee for
any payments of any kind under this Agreement, including without limitation
any claim to unpaid bonus amounts.
(2) If the Company for reasons other than Cause terminates Employee's
employment under this Agreement, Company will continue to pay the remaining
Base Salary that Employee would have received under this Agreement,
including payments in respect of any fringe benefit plans of the Company in
which the Employee was a participant (to the extent that Employee continues
to be eligible to participate in such plans and to the extent that he is
not eligible to participate therein, Company shall make a cash payment to
Employee in an amount equal to the amount that Company would have paid in
respect of Employee's participation therein had he been eligible to
participate) plus any on-plan bonus Employee would have been entitled to
had Employee remained an Employee through the end of the employment year
during which he was terminated without cause, provided that Employee
executes a release of the Company for and against any and all claims by the
Employee except for the obligations of the Company under this Section L
(2). Such release shall be in such form as may be reasonably required by
the Company, but shall include a provision requiring that in the event of
any litigation between the parties with respect to their respective rights
under this Section L (2), the prevailing party shall be entitled to an
award of legal fees and other costs and expenses relating to the
litigation.
(3) Employee may voluntarily terminate his employment by the Company
under this Agreement at any time by giving ninety (90) days advance written
notice to the Company. In the event of such a voluntary termination of
employment by Employee, Employee shall continue to render services as
provided in this Agreement for such period of time not exceeding ninety
(90) days as may be requested by the Company, during which period he shall
be paid the amounts described in Section E above; and with the exception of
the covenants contained in Sections H, I, J and K, neither the Company nor
Employee shall thereafter have any further obligations or liability under
or in respect to this Agreement.
(4) In the event that fifty-one percent (51%) or more of the Company's
stock or all or substantially all of the Company's assets are sold to a
third party (the "Sale") and the Company terminates the Employee's
employment hereunder in connection therewith, Employee shall be entitled to
receive the payments (subject to his executing the release) provided for
under Section L(2), above, and all stock options granted to the Employee
shall immediately vest. In the event that Employee voluntarily resigns his
employment with the Company following the date of the Sale, Section L(3)
shall not apply; however, Employee shall be entitled to receive the
payments (subject to his executing the release) provided for under Section
L(2) above, except that (i) Employee shall not be entitled to receive any
bonus for the year in which he resigns, and (ii) in the event that the
Employee secures other employment, all payments made to him pursuant to the
provision of Section L (2) shall be reduced by the amounts received by him
shall be reduced by the amount, if any, that Employee may receive in
connection with such other employment.
M. Validity. If any provision contained in this Agreement, or the
application of any provision, is held invalid or unenforceable by a court
of competent jurisdiction, that provision will be deemed to be modified in
a manner to make it consistent with the intent of the original provision,
so that as revised, the provision will be valid and enforceable, and this
Agreement, and the application of the provision to persons or circumstances
other than those for which it would be invalid or unenforceable, will not
be affected by the revision.
N. Binding Nature of Agreement. This Agreement shall be binding upon
and inure to the benefit of Company and its successors and assigns and
shall be binding upon Employee, heirs and legal representatives.
O. Construction. Words and phrases defined in the plural shall also be
used in the singular and vice versa and be construed in the plural or
singular as appropriate and apparent in the context used. Unless otherwise
specifically provided herein, accounting terms shall be given and assigned
their usual meaning and effect as defined.
P. Paragraph Headings. The paragraph headings in this Agreement are
for convenience only; they form no part of this Agreement and shall not
affect its interpretation.
Q. Notices. All notices, request, demands and other communication
required or permitted under this Agreement shall be in writing. Addresses
for such parties are as set forth below:
If to the Employee:
Xx. Xxxx Xxxxxx
0000 Xxxxx Xxxx Xx.
Xxxxxxx, Xxxxxxxxx 00000
Fax (000) 000-0000
With a copy to:
Holland & Knight LLC
Xxx Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax (000) 000-0000
If to the Company:
Advanced Photonix, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: President
Fax (000) 000-0000
With a copy to:
Xxxxxxxx Xxxxxx Xxxxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
R. Governing Law and Attorneys' Fees. This Agreement shall be governed
by, and construed in accordance with, the domestic laws of the State of
Wisconsin without reference to the conflicts of laws provisions thereof. In
the event of any action at law or suit in equity in relation to this
Agreement the prevailing party in such action or suit shall be entitled to
receive its attorneys' fees and all other costs and expenses of such action
or suit.
S. Submission to Jurisdiction and Venue. The parties hereto hereby
irrevocably and unconditionally each submits for itself and its property in
any legal action or proceeding relating to this Agreement, or for
recognition and enforcement of any judgment in respect thereof, to the
exclusive general jurisdiction of the State of Wisconsin and its courts and
the courts of the United States of America for the Western District of
Wisconsin; consents that any such action or proceeding shall be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same; and agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law.
T. Parties in Interest. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any persons other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision given any
third persons any right of subrogation or action over or against any party
to this Agreement.
U. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts
together shall constitute one and the same instrument.
V. Entire Agreement. This Agreement supersedes all previous agreements
between Employee and the Company, contains the entire understanding and
agreement between the parties regarding the Employee's employment with the
Company. This Agreement cannot not be amended, modified or supplemented in
any respect except by subsequent written agreement signed by both the
Company and Employee.
ADVANCED PHOTONIX, INC.
By:
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Xxxxxxx Xxxxx, Chairman
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Xxxx X. Xxxxxx
