Exhibit 10.5
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), made as of the 2nd day of
February 2004, is by and between Micropac Industries, Inc., a Delaware
corporation (the "Company") and Xxxx X. 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 Executive Vice-President and Chief Operating
Officer of the Company.
WHEREAS, the Company desires to retain the employment of the Employee
and the Employee desires to continue his 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
Executive Vice-President and Chief Operating 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 10, the term of this Agreement ("Term") shall commence from the date
set forth above, and shall continue until termination occurs, or until a new
agreement mutually satisfactory to both parties is executed.
3. DUTIES.
(a) During the term of this Agreement, the Company agrees to
provide Employee with 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
his job duties.
(b) The Employee agrees to perform the duties normally performed
by the Executive Vice-President and Chief Operating Officer of
a Corporation, and as directed by the President and Chief
Executive Officer of the Company. The Employee agrees to
perform such duties faithfully and to the best of his ability
and to devote all of his time during normal business hours to
the conduct of the Company's business.
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4. 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 One Hundred Fifty Thousand Dollars ($150,000), paid weekly. The
base salary of Employee will be reviewed each year during the term of this
agreement by the Company's President and CEO. Salary may be adjusted based on
Employee's performance. In no event shall the base salary be reduced. Employee
will be eligible to participate in any bonus plan recommended by the CEO and
approved by the Board of Directors.
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 health, disability and life insurance coverage premiums during the Term;
and will contribute to the Employee's 401K Plan in accordance with the
provisions of that Plan.
Employee shall be entitled each twelve (12) month period to paid
vacation time in accordance with the Company's vacation policy. If Employee does
not utilize earned 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.
5. 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 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
requires.
6. EMPLOYEE LOYALTY. Employee shall devote his entire productive time, energy,
ability and attention to the performance of the duties expected to be performed
by Employee throughout the term of his 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 his
employment with the Company, without the prior, written consent of the
management of the Company.
7. EMPLOYEE'S BEST EFFORTS REQUIRED. Employee agrees that he at all times will
perform faithfully, industriously, and to the best of his 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. The President
and Chief Executive Officer may from time to time make reasonable modifications
to the Employee's duties and responsibilities so long as such modifications are
not unreasonably burdensome to employee.
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8. TRADE SECRETS. Employee acknowledges that, in the course of performing the
duties described herein, he 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 his 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 his 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 he 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 he 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.
9. 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 two (2) years 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 8 and Section 9 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 8 and Section 9 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 8 and Section 9 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 8 and Section 9 .
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 8 and Section 9 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 8 and Section 9 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 8 and
Section 9 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.
10. 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 his 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 one
hundred eighty (180) days written notice. Such notice will be effective
as of the end of such one hundred eighty (180) days. If Employee or
Company elects to terminate this Agreement his right to compensation
shall cease on the effective date of the termination.
11. 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.
12. 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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13. 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.
14. 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.
15. 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 expiration of such six
(6) months, except the provisions of Restrictive Covenants, Section 8 and 9
shall remain in force.
16. 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.
17. PAYMENT OF MONIES DUE EMPLOYEE. If Employee dies prior to the expiration of
the term of this Agreement, any monies that may be due him from the Company
under this Agreement as of the date of his death shall be paid to his executors,
administrators, heirs, personal representatives, successors and assigns pursuant
to the terms and conditions of this Agreement.
18. 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.
19. 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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20. 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.
21. 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.
22. 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 his 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/ Xxxx Xxxx By: /s/ Xxxxxx Xxxx
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Name: Xxxx X. Xxxx Name: Xxxxxx Xxxx
Title: Employee Title: CEO & President
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