EXHIBIT 10.21
SERVICE CONTRACT
THIS AGREEMENT is made the 28th day of October, 1998
BETWEEN:
(1) EUROPEAN MICRO PLC (registered number 2663964) having its registered
office at Market Court, 00-00 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx XX00 0XX
(the "Company")
(2) XXXXXX XXXXX XXXXXXX X'XXXXXX of 00 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxx, XX00
0XX (the "Executive")
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1. In this Agreement the following words and expressions shall have the
following meanings:
"the Agreement" Means a contract between the Company
and the Executive and X. Xxxxxx dated
28th day of October, 1998
"the Board"
means the Board of Directors of the
Company and includes any committee of
the Board duly convened by it
"the Commencement Date" means the 28th day of October, 1998
"Sunbelt" means Sunbelt (UK) Limited
"EM Group Company" means the Company and any Company
which is a subsidiary or affiliate of
the Company
"the Employment" means the employment established by
this Agreement
"Intellectual Property" means (i) every invention discovery
design or improvement (ii) every work
in which copyright may subsist, and
(iii) moral rights as defined by s 77
and s 80 of the Copyright Design and
Patents Xxx 0000.
"Nova Products" Shall have the same meaning as in the
Agreement
"the Termination Date" means the termination date of the
Employment under this Agreement
howsoever terminated.
1.2. The headings in this Agreement shall not affect its interpretation
or construction.
1.3. Any reference in this Agreement to any statutory provision includes
any statutory modification or re-enactment of it or the provision
referred to.
2. EMPLOYMENT
The Company shall employ the Executive and the Executive also agrees to act as
Managing Director of Sunbelt on the terms set out in this Agreement.
3. FREEDOM TO TAKE UP THE APPOINTMENT
The Executive warrants that by virtue of entering into this Agreement he will
not be in breach of any express or implied terms of any contract or of any other
obligation binding upon him.
4. PERIOD
The Executive's Employment shall commence with effect from the Commencement Date
and shall (subject as hereinafter provided) be for an initial fixed term of 2
years and 3 months and shall continue thereafter until terminated by either
party giving to the other not less than 6 months' written notice to expire on or
any time after the expiry date for the initial fixed term.
5. DUTIES OF THE APPOINTMENT
5.1. The Executive shall faithfully and diligently perform those duties
of his appointment and exercise such powers consistent with them
which are from time to time assigned to or vested in him and shall
use his best endeavours to promote the interests of Sunbelt and any
EM Group Company for which he is required to perform duties.
5.2. The Executive shall (without further remuneration) if and for so
long as the Executive is so required by the Company:
(i) carry out the duties of his appointment on behalf of any EM
Group Company
(ii) act as a director of any EM Group Company or hold any other
appointment or office as nominee or representative of Sunbelt
or any EM Group Company.
2
(iii) carry out such duties and the duties attendant on any such
appointment as if they were duties to be performed by him on
behalf of the Company.
5.3 Use his reasonable endeavours to achieve the targets set out in the
Agreement.
6. OBEDIENCE AND REPORTING
The Executive shall obey all lawful and reasonable directions of the Board and
at all times keep the Board promptly and fully informed (in writing if so
requested) of his conduct of the business or affairs of Sunbelt and any EM Group
Company and provide such explanations as the Board may require.
7. DEVOTION TO DUTIES
7.1. The Executive shall during the term of this Employment devote
substantially the whole of his time, attention and abilities to the
business and affairs of Sunbelt unless prevented by ill health from
so doing and shall not during the Employment either on his own
account or as the employer of others or otherwise be engaged or
concerned in any business other than that of Sunbelt or any EM Group
Company or accept any other engagement or public office except with
the prior consent in writing of the Company but the Executive may
nevertheless be or become a minority holder of any securities which
are quoted on a recognized investment exchange.
7.2. The Executive shall not be prevented from having any shareholding in
a company which exists at the date of this Contract.
7.3. The Executive will be allowed to become a Shareholder in a company
which does not directly or indirectly compete with Sunbelt or any EM
Group Company provided that consent is first obtained from the
Company in writing such consent not to be unreasonably withheld.
8. COMPLIANCE/DEALINGS IN "SECURITIES"
The Executive shall during his Employment and for twelve (12) months after the
termination of his Employment comply and shall procure that his minor children
shall comply with all applicable rules of law, any recognized investment
exchange regulations including the "Model Code for Securities Transactions by
Directors of Listed Companies' issued by the International Stock Exchange of the
United Kingdom and the Republic of Ireland Limited and any Company policy issued
in relation to dealings in shares, debentures or other securities of the Company
and any EM Group Company or any unpublished price sensitive information
affecting the securities of any other company.
3
9. COMPLIANCE/PROPER USE OF FUNDS
9.1 The Executive shall not use any funds for any unlawful contribution,
endorsement, gift, entertainment or other unlawful expense relating
to political activity, or make any direct or indirect unlawful
payment to any foreign or domestic government official or employee
and shall comply with the United States Foreign Corrupt Practices
Act of 1977 and any other applicable law of the United States or any
other country in which the Executive is conducting business on
behalf of Sunbelt or any of its subsidiaries or affiliates relating
to improper payments to governmental representatives.
9.2 Failure to comply with clause 9.1 shall constitute gross misconduct
and may result in the termination of the Executives contract of
employment in accordance with clause 23 hereto.
10. PLACE OF WORK
10.1. The Executive shall initially work at the offices of the Sunbelt at
Strudwick House, Boundary Business Park, Church Road, Hitcham,
Surrey but the Executive shall if required to do so work in such
place or places within a twenty (20) mile radius of said offices as
the Board may reasonably require for the proper performance of his
duties hereunder.
10.2. The Executive shall not be required (except for travel on the
business of Sunbelt or any EM Group Company) to reside in other
parts of the world.
11. HOURS OF WORK
There are no normal fixed working hours for the Employment. The Executive is
expected to work at such times as the efficient and conscientious discharge of
his duties hereunder requires and it is hereby agreed that the provisions of
regulation 4 of the Working Time Regulations 1998 shall not apply.
12. REMUNERATION
12.1. During the Employment the Executive shall receive as remuneration a
basic salary at the rate of (pound)50,000 per annum to be paid by
equal monthly installments on the last day of each calendar month.
Any increase in remuneration shall be notified in writing to the
Executive and the details thereof shall be entered in the table in
Schedule 1 to the Company's signed copy of this Agreement and
initialed by an officer of the Company.
12.2. The Executives remuneration takes into account any provision for
pension payments into which the Executive may have been entitled
prior to the date of this Agreement.
12.3. In addition to the basic salary the Executive shall receive bonuses
equal to 3.75% of the pre-tax gross profits of the sale of Nova
Products through Sunbelt. Such bonuses to be paid monthly in
arrears.
4
12.4. During the first six months of this Agreement the Executive shall be
guaranteed bonus payments of (pound)1,666.00 per month. To be
eligible for the bonus the Executive must still be in service and
not under notice of termination unless such notice shall be wrongful
or unfair.
12.5. The remuneration and bonuses shall unless otherwise agreed in
writing by the Company be inclusive of any fees or other
remuneration which the Executive would otherwise be entitled to
receive from the Company or any EM Group Company in connection with
the performance of the duties delegated to him under this Agreement.
12.6. The provisions of this clause shall be reviewable annually by
agreement.
13. CAR
13.1. The Company shall pay the Executive a car allowance of (pound)8,235
per annum. In addition the Company shall pay for all fuel including
fuel consumed during private use of the car. The Executive shall
ensure that he has at all times a current valid license to drive
private motor cars.
13.2. The Company shall provide the Executive with a Mobile Telephone and
pay the rental and cost of calls.
14. EXPENSES
In addition to his basic salary hereunder the Executive shall be reimbursed the
amount of all reasonable traveling, hotel, entertainment and other expenses
properly and necessarily incurred and defrayed by him in the discharge of his
duties hereunder (including "professional fees"). The Executive shall produce to
the Company at its request all supporting vouchers and documents in respect of
such expenses. The Company will also pay any telephone expenses incurred by the
Executive in relation to this Contract of Employment upon production of
supporting bills in respect of such expenses.
15. PENSION AND OTHER BENEFITS
15.1 No pension contributions shall be paid by the Company on behalf of the
Executive. The Executive will however be entitled to private health
insurance for the benefit of himself his spouse and dependent children if
any.
15.2 The Executive shall have the right to subscribe for up to 5,000 EMCC
Shares as defined in the Agreement at the mid-price for the same on NASDAQ
at the date of this agreement at any time after 3 years. This option shall
lapse if the Executive shall terminate this agreement before the option is
exercised.
5
16. HOLIDAYS
16.1. The Executive shall be entitled (in addition to normal bank and
other public holidays) to twenty (20) days paid holiday in each
calendar year at such times as shall be convenient to Sunbelt and
such additional holidays as the Board shall approve.
16.2. The Executive shall not be entitled to carry forward any unused
holiday entitlement from one holiday year to the next without the
written consent of the Company.
17. SICKNESS OR INJURY
17.1. The Executive agrees that at any time during the course of the
Employment he shall at the request of the Company submit himself to
a medical examination by a registered medical practitioner nominated
by the Company. The purpose of such medical examination shall be to
determine whether there are any matters which might impair the
Executive's ability to perform his duties under this Agreement and
accordingly the Executive shall give such authority as is required
for the Company's nominated doctor to disclose to the Company the
findings. All expenses associated with obtaining the report will be
borne by the Company.
17.2. In the event that the Executive is unable to perform his duties
under this Agreement by reason of sickness or injury for a period of
seven (7) days or more, the Executive shall if required to do so by
the Company provide the Company with a medical certificate in
respect of the whole period of the absence. Immediately following
his return from any period of absence the Executive shall complete a
self-certification form detailing the reason for the absence.
17.3. During the Executive's first ten (10) weeks of absence he will
receive ninety percent (90%) of his average weekly earnings
calculated by taking the total of his earnings over the previous
twelve months and dividing the same by fifty two (52). At the end of
such ten (10) week period any further payment will only be made to
the Executive at the discretion of the Board.
17.4. The Company shall have the right to deduct from the remuneration
paid to the Executive any statutory sick pay or other social
security benefits which he is entitled to claim in consequence of
sickness or accident or payable to him under any scheme for the time
being in force of which by virtue of his employment by the Company
he is a non-contributory member.
17.5. In the event that the Executive is incapable of performing his
duties by reason of injury sustained wholly or partially as a result
of actionable negligence or breach of any statutory duty on the part
of any third party all payments made to the Executive by the Company
by way of remuneration shall to the extent that compensation is
recoverable from that third party constitute loans by the Company to
6
the Executive (notwithstanding that as an interim measure income tax
has been deducted from payments as if they were emoluments of
employment) and shall be repaid when and to the extent that the
Executive recovers compensation for loss of earnings from that third
party by action or otherwise.
17.6. The Company will maintain on behalf of the Executive the permanent
health insurance scheme currently in place during the term of this
Agreement.
18. CONFIDENTIALITY
The Executive shall not, either during the Employment, otherwise than in the
proper course of his duties, or thereafter, without the consent in writing of
the Company being first obtained, use directly or indirectly, divulge to any
person, firm or company and shall during the continuance of the Employment use
his best endeavours to prevent the publication, disclosure or non-authorized use
of any confidential information of Sunbelt or any EM Group Company or any of its
or their secrets, dealings or transactions whatsoever which may have come or may
come to his knowledge during his Employment or previously or otherwise and which
include but are not limited to the following matters:
(i) the working of any manufacturing process or invention or any
other methods, formulae, technical data and know-how used by
or which relate to the business of Sunbelt or any EM Group
Company;
(ii) lists of customers and potential customers or of suppliers and
potential suppliers to Sunbelt and any EM Group Company and
any other information collected by Sunbelt and any EM Group
Company in relation to those customers or suppliers;
(iii) the dealings or transactions or other business affairs of
Sunbelt or any EM Group Company and its or their finances or
management accounts.
The restriction shall cease to apply to information or knowledge which may
(otherwise than by reason of the default of the Executive ) become available to
the public generally without requiring a significant expenditure of labour,
skill or money.
19. INTELLECTUAL PROPERTY
19.1. The Executive shall forthwith communicate to the Company in
confidence all intellectual property which the Executive may make or
originate either solely or jointly with another or others during the
Employment (hereinafter referred to as "Intellectual Property").
19.2. In the case of such Intellectual Property as is made or originated
hereunder wholly or substantially in the course of his normal duties
or in the course of duties specifically assigned to him and which
relate to the affairs of Sunbelt or any EM Group Company the
following subclauses of this clause shall apply.
7
19.3. Such Intellectual Property (or in the case of the Intellectual
Property made or originated by the Executive jointly with another or
others to the full extent of the Executive's interest therein so far
as the law allows) shall be and become the exclusive property of the
Company and shall not be disclosed to any other person, firm or
company without the consent of the Company being previously obtained
which if given may be subject to conditions. The provisions of this
subclause shall not entitle the Executive to any compensation beyond
the salary hereinafter mentioned except that in the case of any
invention on which a British Patent has been granted or assigned to
the Company and the Company has derived outstanding benefit from
such patent, the Executive may be entitled by virtue of s 40 of the
Patents Xxx 0000.
19.4. The Executive shall if and when required by the Company and at the
expense of the Company do and/or combine with others in doing all
acts and sign and execute all applications and other documents
(including Powers of Attorney in favour of nominees of the Company)
necessary or incidental to obtaining, maintaining or extending
patent or other forms of protection for such Intellectual Property
in the UK and in any other part of the world or for transferring to
or vesting in the Company or its nominees the Executive's entire
right, title and interest to and in such Intellectual Property or to
and in any application, patent or other form of protection to
copyright as the case may be including the right to file
applications in the name of the Company or its nominees for patent
or other forms of protection or for registration of copyright in any
country claiming priority from the date of filing of any application
or other date from which priority may run in any other country.
19.5. The provisions of this clause shall remain in full force and effect
notwithstanding that after the Executive has made or originated any
such Intellectual Property the Employment may have ceased or been
determined for any reason whatsoever with the intention that the
same shall bind the heirs of an/or assigns of the Executive.
20. COPYRIGHT
The Executive shall promptly disclose to the Company all works in which
copyright or design rights may exist which the Executive may make or originate
either solely or jointly with others during the Employment. Any such copyright
works or designs created by him in the normal course of his Employment or in the
course of carrying out duties specifically assigned to him which relate to the
affairs of the Company shall be the property of the Company whether or not the
work was made by direction of the Company or was intended for the Company and
the copyright in it and the rights in any design shall belong to the Company and
to the extent that such copyright or design rights are not otherwise vested in
the Company the Executive hereby assigns the same to the Company.
8
21. POST-TERMINATION OBLIGATIONS
21.1. The Executive shall not during the period of 2 years after
termination of the Employment solicit or endeavour to entice away
from or discourage from being employed by Sunbelt or any EM Group
Company any employee or director employed by Sunbelt or any EM Group
Company and who to his knowledge was an employee thereof at the date
of such termination or whom to his knowledge has at that date agreed
to be engaged as an employee of Sunbelt or any EM Group Company and
with whom the Executive has dealt or had contact in the normal
course of his duties.
21.2. The Executive shall not for a period of 6 months after the
termination of the Employment (without the previous consent in
writing of the Company) and whether on his own account or for any
other person, firm or company directly in connection with any
business similar to or in competition with the business of Sunbelt
solicit or endeavour to entice away from Sunbelt any person, firm or
company (a) who or which in the twelve (12) months prior to the end
of his Employment shall have been a customer of or in the habit of
dealing with Sunbelt and (b) with whom or which the Executive had
personal dealings in the course of his employment in the twelve (12)
months prior to the end of his Employment.
21.3. The Executive shall not for a period of 6 months after the
termination of his Employment (without the previous consent in
writing of the Company) and whether on his own account or for any
other person, firm or company directly or indirectly in connection
with any business similar to or in competition with the business of
Sunbelt do any business with, accept orders from, or have any
business dealings with any person, firm or company (a) who or which
in the twelve (12) months prior to the end of his Employment was a
customer of Sunbelt and (b) with whom or which the Executive had
personal dealings in the course of his Employment in the twelve (12)
months prior to the end of his Employment.
21.4. The Executive shall not for a period of 6 months after the
termination of his Employment and within the United Kingdom (without
the previous consent in writing of the Company) directly or
indirectly be engaged concerned or interested (whether as principal,
servant, agent, consultant or otherwise) in any trade or business
which is in competition with any trade or business being carried on
by Sunbelt at the end of the Employment or during a period of twelve
(12) months prior to the end of his Employment and with which the
Executive was concerned in the course of his Employment, provided
always that during such period the Company will pay the Executive a
further 6 month salary and bonus even though his Employment has been
terminated but only in circumstances where no summary termination
has occurred in accordance with Clause 22 of this Agreement and the
Executive is not in breach of the covenants contained in Clause 20.
Bonuses will be calculated by dividing the previous 12 months bonus
total by 12.
9
21.5. The Executive shall not at any time after the Termination Date
represent himself as being employed by or connected with Sunbelt or
any EM Group Company.
21.6. The Executive acknowledges:
(i) that each of the foregoing subclauses of this clause
constitutes an entirely separate and independent restriction
on him; and
(ii) while at the date of this Agreement the duration, extent
and application of each of the restrictions are considered
by the parties no greater than is necessary for the
protection of the interests of Sunbelt and any EM Group
Company and reasonable in all the circumstances it is
acknowledged that restrictions of such a nature may become
invalid because of changing circumstances and accordingly
if any of the restrictions shall be adjudged to be void or
ineffective for whatever reason but would be adjudged to be
valid and effective if part of the wording thereof were
deleted or the periods thereof reduced or the area thereof
reduced in scope they shall apply with such modifications
as may be necessary to make them valid and effective.
22. DELIVERY OF DOCUMENTS AND PROPERTY
The Executive shall upon request at any time and in any event upon the
termination of the Executive's Employment immediately deliver up to the Company
or its authorized representative all keys, security passes, credit cards, plans,
statistics, documents, records, papers, magnetic disks, tapes or other software
storage media and all property of whatsoever nature which may be in his
possession or control or relate in any way to the business affairs of Sunbelt or
any EM Group Company and the Executive shall not, without the written consent of
the Company, retain any copies thereof.
23. REMEDIES
It is expressly agreed by the Executive and the Company that the provisions of
clauses 18, 19, 20, 21 and 22 are reasonable for purposes of preserving for the
Company its business, goodwill and proprietary information. In the event any
breach of the aforementioned provisions by the Executive, the parties recognize
and acknowledge that a remedy at law will be inadequate and the Company may
suffer irreparable injury. The Executive acknowledges that the services to be
rendered by him are of a character giving them peculiar value, the loss of which
cannot be adequately compensated for in damages; accordingly the Executive
consents to injunctive and other appropriate equitable relief upon the
institution of proceedings therefor by the Company in order to protect the
Company's rights. Such relief shall be in addition to any other relief to which
the Company may be entitled at law or in equity.
24. SUMMARY TERMINATION
In any of the following cases the Company may terminate the Executive's
Employment by written notice taking effect on the date of its service in which
10
case the Executive shall not be entitled to any further payment from the Company
except such sums as shall then have accrued due;
(i) if the Executive shall be guilty of any gross misconduct or
any repeated breach of any of the terms of this Agreement;
(ii) if the Executive shall be convicted of a criminal offense
(except for a road traffic offense or an offense not involving
a custodial sentence);
(iii) if the Executive be adjudged bankrupt or makes any composition
or enters into any deed of arrangement with his creditors;
(iv) if the Executive is prohibited by law from being or acting as
a director;
(v) if the Executive shall become of unsound mind or become a
patient under the Mental Health Xxx 0000;
(vi) if the Executive resigns as a director of Sunbelt otherwise
than at the request of the Company
25. NO RIGHT TO WORK
25.1. The Company shall be under no obligation to provide any work for the
Executive during any period of notice either given by the Company or
the Executive to terminate the Executive's Employment under this
Agreement. The Company may at any time during the said period
suspend the Executive from his Employment or exclude him from any
premises of Sunbelt or any EM Group Company. Provided that during
such period the Executive shall continue to receive salary and all
other contractual benefits.
25.2. If the Contract is terminated by notice in accordance with Clause 4
then the period referred to in Clause 20.1 to 20.4 shall start to
run from the date of such notice. This proviso will not apply should
the Contract be terminated in accordance with Clause 23.
26. SHORT NOTICE
If the Executive shall at any time become or be unable properly to perform his
duties hereunder by reason of ill health accident or otherwise for a period or
periods aggregating at least one hundred eighty (180) days in any period of
twelve (12) consecutive calendar months the Company may by not less than three
(3) month's notice in writing determine this Agreement.
27. RESIGNATION OF OFFICE
Upon the termination of the Employment the Executive shall at any time or from
time to time thereafter upon the request of the Company resign without claim for
compensation from all offices held by him in Sunbelt and any EM Group Company
and should he fail to do so the Company is hereby irrevocably authorized to
11
appoint some person in his name and on his behalf to sign and execute all
documents or things necessary or requisite to give effect thereto.
28. RETIREMENT
The Employment shall automatically terminate on the Executive reaching his 65th
birthday.
29. PRIOR RIGHTS
The termination of the Employment shall be without prejudice to any right that
the Company may have in respect of any breach by the Executive of any of the
provisions of this Agreement which may have occurred prior to such
determination.
30. NOTICES
Any notice given under this Agreement shall be deemed to have been duly given if
dispatched by either party hereto by registered post addressed to the other
party in the case of the Company to its registered office for the time being and
in the case of the Executive to his last known address and such notice shall be
deemed to have been given on the day on which in the ordinary course of post it
would be delivered.
31. PRIOR AGREEMENTS
This Agreement is in substitution for all previous contracts of employment
express or implied between Sunbelt or any EM Group Company and the Executive
which shall be deemed to have been terminated by mutual consent as from the
Commencement Date.
32. DISCIPLINARY AND GRIEVANCE PROCEDURE
There are no fixed rules for the resolution of grievance or disciplinary
problems. In the event of the Executive being dissatisfied with any decision
taken against him, or have any grievance relating to the Employment, he should
apply in the first instance to the Chairman of the Board who will either propose
a solution or refer the matter to the Board for a final decision.
33. THE COMPANY'S STAFF HANDBOOK
The terms of the Company's standard terms and conditions and employment policies
and procedures which are set out in the Company's staff handbook shall be the
terms of the Executive Employment save to the extent that they are inconsistent
with this Agreement.
34. RECONSTRUCTION OR AMALGAMATION
If before the termination of this Agreement the Employment shall be determined
by reason of the liquidation of Sunbelt for the purposes of reconstruction or
amalgamation and the Executive shall be offered employment with any concern or
undertaking resulting from such reconstruction or amalgamation on terms and
conditions no less favorable than the terms of this Agreement then the Executive
12
shall have no claim against the Company in respect of the determination of the
Employment.
35. EMPLOYMENT RIGHTS XXX 0000
Schedule 2 to this Agreement sets out the particulars of employment not
contained in the Agreement that must be given to the Executive in accordance
with the terms of the said Employment Right Xxx 0000.
SCHEDULE 1
TABLE OF SALARY INCREASES
Date of
Current Increase commencement New salary Signed
salary of new salary
13
SCHEDULE 2
EMPLOYMENT RIGHTS ACT 1996
The following information is given to supplement the information given in the
Agreement in order to comply with the requirements of section 1 of the
Employment Rights Act of 1996.
1. The Executive's job title is Managing Director of Sunbelt (UK) Limited.
2. The Executive's continuous period of employment with the Company commenced
on 1st July 1992 and is not continuous with any previous period of
employment with any other employer.
3. There are no collective agreements in force which affect the terms and
conditions of the Executive's employment.
4. There is no Pension Provision applicable to the employment.
14
IN WITNESS WHEREOF the parties hereto have executed this Agreement as a Deed the
day and year first above written.
Signed by Xxxxxxxx Xxxxxxx ) /s/ Xxxxxxxx Xxxxxxx
for and on behalf of the )
Employer )
Signed by the Executive ) /s/ Xxxxxx X'Xxxxxx
)
)
15
