Exhibit 10.26
EMPLOYMENT CONTRACT
AMERICAN CUSTOM COMPONENTS, INC., a California Corporation, located at
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, hereinafter referred to as "ACC"
and EB (▇▇▇▇) ▇▇▇▇▇▇, hereinafter referred to as "▇▇▇▇▇▇" in consideration of
the mutual promises made herein, agree as follows:
ARTICLE 1: TERM OF EMPLOYMENT
1.1 ACC hereby employs ▇▇▇▇▇▇ and ▇▇▇▇▇▇ hereby accepts employment with
ACC for a period of thirty-six (36) months commencing May 1, 1998.
1.2 This agreement may be terminated earlier as herein provided.
ARTICLE 2: DUTIES AND OBLIGATIONS OF EMPLOYEE
2.1 ▇▇▇▇▇▇ shall serve as Chairman of the Board and Chief Financial
Officer of ACC. In that capacity, he shall do and perform all services, acts and
things necessary or advisable to fulfill his duties, including but not limited
to the planning, direction and implementation of business planning and strategic
initiatives for ACC, the duties of the Chief Financial Officer, and will preside
over all activities involving the Board Of Directors. ▇▇▇▇▇▇ shall at all times
be subject to the direction of the policies established by the Board of
Directors of ACC.
2.2 ▇▇▇▇▇▇ agrees that he shall devote his entire productive time,
ability and attention to the business of ACC during the term of this agreement
2.3 The parties acknowledge and agree that during the term of this
agreement and in the course of his duties at ACC, ▇▇▇▇▇▇ shall have access to
and become acquainted with information which is confidential and could be
constituted as ACC's trade secrets. ▇▇▇▇▇▇ agrees that during and after the term
of this Agreement, ▇▇▇▇▇▇ will not, directly or indirectly, disclose to any
third party, or use or authorize any third party to use, any information
relating to the business or interests of ACC that ▇▇▇▇▇▇ knows or has reason to
know is regarded as confidential and valuable to ACC. ▇▇▇▇▇▇ acknowledges that
such confidential information constitutes "trade secrets" of ACC as set forth in
Section 3126 of the California Civil Code which shall include, without
limitation, all methods, processes, formulae, compositions, inventions,
machines, computer programs, research projects, customer lists, pricing data,
sources of supply, marketing, production, merchandising systems or plans
associated with ACC's business and all information delivered to ACC or ▇▇▇▇▇▇ in
confidence by ACC's clients and customers. ▇▇▇▇▇▇ agrees to use his best efforts
and the utmost diligence to guard and protect such trade secrets and
confidential information. The parties acknowledge and agree that in determining
whether information is confidential information and/or a trade secret (as
defined herein), the fact that such information is not marked "confidential"
shall not adversely affect the confidentiality or trade secret status of the
same. ▇▇▇▇▇▇ agrees that if his relationship with ACC is terminated for any
reason, ▇▇▇▇▇▇ will return to ACC all records and papers and all matter of
whatever nature which bears secret or confidential information of ACC. In the
event of a breach or threatened breach of Section of this Agreement, ACC shall
be entitled to an injunction restraining such breach, without the requirement of
posting bond; but nothing here shall be construed as prohibiting ACC from
pursuing any other remedy available to it as a result of such breach or
threatened breach.
2.4 ▇▇▇▇▇▇ agrees and covenants that for a period of one (1) year
following the termination of this Agreement, he shall not be a major stock
holder or owner of a company that competes directly or indirectly with ACC.
Furthermore, ▇▇▇▇▇▇ agrees that he shall not directly or indirectly induce or
solicit, or directly or indirectly aid or assist any other entity, person or
otherwise to induce or solicit, current employees, salesmen, agents,
consultants, distributors, representatives, advisors, customers or suppliers of
ACC to terminate their employment or business relations with ACC. Nothing
contained in this Agreement shall prevent ▇▇▇▇▇▇ from purchasing less than one
percent (1%) of the issued and outstanding common stock of a corporation which
conducts such business if such stock is registered under the Securities Act of
1933.
ARTICLE 3: OBLIGATIONS OF EMPLOYER
3.1 ACC agrees to provide ▇▇▇▇▇▇ with the compensation, incentives,
benefits and business expense reimbursement specified elsewhere in this
agreement.
3.2 If a dispute or claim shall arise between the parties with respect
to any of the terms or provisions of this Agreement, or with respect to the
performance by any of the parties under this Agreement, then the parties agree
that the dispute shall be arbitrated in Orange County, California before a
single arbitrator, in accordance with the rules of either the American
Arbitration Association ("AAA") or Judicial Arbitration and Mediation Services,
Inc./Endispute ("JAMS/Endispute"). The selection between AAA and JAMS/Endispute
rules shall be made by the claimant first demanding arbitration. The arbitrator
shall have no power to alter or modify any express provisions of this Agreement
or to render any award which by its terms affects any such alteration or
modification. The parties to the arbitration may agree in writing to use
different rules and/or arbitrator(s). In all other respects, the arbitration
shall be conducted in accordance with the California Code of Civil Procedure, or
equivalent. The parties agree that the judgment award rendered by the arbitrator
shall be considered binding and may be entered in any court having jurisdiction
as stated elsewhere in this Agreement. The provisions of this Paragraph shall
survive the termination of this Agreement.
ARTICLE 4: COMPENSATION OF EMPLOYEE
4.1 Subject to the termination of this Agreement as provided herein, as
compensation for the services to be rendered by ▇▇▇▇▇▇ hereunder, ACC shall pay
▇▇▇▇▇▇ an Annual Salary at the annual rates as set forth below. Said sum shall
commence to be earned by ▇▇▇▇▇▇ on April, 1998 and shall be paid in a timely
manner in accordance with the payroll policies of ACC, less normal payroll
deductions.
c. April 1, 1998 through December 31, 1998: $175,000.00
4.2 Further increases to ▇▇▇▇▇▇'▇ salary beyond stated amounts shall be
at the sole discretion of the Board of Directors, and are subject to the cash
flow and profitability of ACC's operations.
4.3 As additional compensation to ▇▇▇▇▇▇, ACC agrees to issue a stock
warrant ▇▇▇▇▇▇, wherein ▇▇▇▇▇▇ is to receive, a warrant to
purchase ONE MILLION SHARES of ACC common stock at the price to be determined.
The specific terms of the grant will be included in the STOCK WARRANT AGREEMENT.
4.4 ▇▇▇▇▇▇ shall be entitled to 30 days of paid personal time off per
year.. Accrued vacation time may be exchanged for cash at the termination of
▇▇▇▇▇▇'▇ employment with ACC at the amount equal to his pay rate. ▇▇▇▇▇▇ shall
be given reasonable time for court related requirements and commitments.
4.5 ACC shall provide ▇▇▇▇▇▇ and his dependents with a fully paid
executive medical and dental insurance policy comparable to those provided to
other executives in Orange County.
4.6 ACC shall provide to ▇▇▇▇▇▇ a life insurance policy during the term
of this Agreement in the amount of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00).
4.7 ACC shall pay all reasonable and necessary business expenses for
▇▇▇▇▇▇. In reimbursing ▇▇▇▇▇▇ for expenses, the ordinary and usual business
guidelines and documentation requirements shall be adhered to by ACC and ▇▇▇▇▇▇.
ARTICLE 5: TERMINATION OF EMPLOYMENT
5.1 ▇▇▇▇▇▇ may terminate this agreement at any time by rendering sixty
(60) days notice to ACC. ACC shall have the option of retaining the services of
▇▇▇▇▇▇ for such sixty (60) day period or immediately discharging him. In any
event, ACC shall be obligated to pay ▇▇▇▇▇▇ his salary for the sixty (60) day
period unless otherwise agreed to by ▇▇▇▇▇▇.
5.2 ACC may terminate this agreement at any time for cause which shall
include a willful breach or neglect of professional duty and responsibility by
▇▇▇▇▇▇ under this agreement, or, any act of fraud, misrepresentation or moral
turpitude which would prevent the effective performance of ▇▇▇▇▇▇'▇ duties at
ACC.
5.3 Any termination of this agreement by ACC shall be in writing and
shall state the grounds for termination.
5.4 ACC reserves the right to suspend ▇▇▇▇▇▇ from his duties. Notice of
any suspension shall be in writing and shall state the cause for suspension. In
the event, ACC suspends ▇▇▇▇▇▇ from his duties without terminating him, ACC
shall be obligated to continue ▇▇▇▇▇▇'▇ salary.
ARTICLE 6: MISCELLANEOUS PROVISIONS
6.1 In the event of ▇▇▇▇▇▇'▇ death, ACC agrees to pay to the designated
beneficiary or to ▇▇▇▇▇▇'▇ estate the remaining balance due for ▇▇▇▇▇▇'▇ salary
for the following six months including all options to shares of stock due under
this contract which shall vest during such period.
6.2 In the event of merger of ACC with another business entity, or of
the sale of ACC, this contract shall survive and become the responsibility of
the surviving business entity. In such an event, if ▇▇▇▇▇▇ and other ACC
management are not in positions with the surviving business entity which are
substantially similar to their positions immediately prior to said event, and if
▇▇▇▇▇▇ elects to terminate this employment agreement following said event, then
ACC, or its surviving entity, shall pay to ▇▇▇▇▇▇ an amount equal to three (3)
times the remaining balance due for ▇▇▇▇▇▇'▇ salary hereunder for the remaining
term of this agreement.
6.3 If any provision in this agreement is held to be unenforceable in a
court of law, the remaining provisions shall nevertheless continue in full force
without being impaired or invalidated in any way.
6.4 The failure of either party to insist on strict compliance with any
of the terms or conditions of this agreement shall not be deemed a waiver or
relinquishment of any rights or power by that party.
6.5 This agreement shall be governed by the laws of the State of
California.
6.6 If any legal action is necessary to enforce the terms of this
agreement, the prevailing party shall be entitled to reasonable attorney's fees
and costs in addition to any other relief to which that party may be entitled.
6.7 This agreement supersedes any and all other agreements either oral
or in writing between the parties hereto and contains all of the covenants and
agreements between the parties with respect to the employment of ▇▇▇▇▇▇ by ACC.
6.8 Any modification of this agreement will be effective only if it is
in writing and signed by the party to be charged.
6.9 Any dispute between the parties shall be subject to binding
arbitration.
IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement as
of May 1, 1998:
/s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
American Custom Components, Inc.
▇▇▇▇ ▇▇▇▇▇
President and Chief Executive Officer
