1
EXHIBIT 00.xx
EMPLOYMENT AGREEMENT
SBS Technologies, Inc. ("Company") and Xxxxxxx Xxxxx ("Employee") agree,
effective March 9, 2001:
1. EMPLOYMENT. Company employs Employee for the period beginning on the date
of this Employment Agreement as set forth below, and ending six years from
its date or upon discharge or resignation of Employee in accordance with
the terms of this Agreement (the "Employment Period"). During the
Employment Period, Employee will serve in the position of President and
Chief Executive Officer of Company or other management position as
determined by the Company. Employee will devote sufficient time and
energies to the business of Company to accomplish the duties assigned, will
perform to the best of Employee's ability all duties assigned to Employee
by Company and will devote Employee's best efforts to advance the interests
of Company. Employee will have the power and authority determined by
Company.
2. COMPENSATION. For all services performed by Employee for Company during the
Employment Period, Company will pay Employee the salary and benefits set
forth on Appendix "A". Employee will be entitled to participate in employee
benefit programs established by Company and applicable to all full-time
employees. Employee will be entitled to vacation, national holidays and
paid sick leave in accordance with Company policy and Appendix A. During
vacation, national holidays, and paid sick leave, Employee will receive
Employee's usual compensation.
3. REIMBURSEMENT OF EXPENSES. Company recognizes that Employee, in performing
Employee's duties hereunder, may be required to spend sums of money in
connection with those duties for the benefit of Company. Employee may
present to Company an itemized voucher listing expenses paid by Employee in
the performance of Employee's duties on behalf of Company, and on
presentation of the itemized voucher, Company will reimburse Employee for
all reasonable expenses itemized, including but not limited to, travel,
meals, lodging, entertainment, and promotion with respect to all activities
approved in advance by Company. Employee may receive advances from Company
for anticipated expenses. Employee agrees that the amount by which an
advance exceeds actual expenses ("Amount") will be promptly refunded to
Company upon determination by Company that it is due, that the Amount may
be deducted from any payments of any nature (including without limitation
salary) owed by Company to employee, and that the Amount will constitute a
debt from Employee to Company, enforceable by Company in all respects as if
EMPLOYMENT AGREEMENT
PAGE 1
2
Employee had executed a promissory note or other instrument acknowledging
the debt, bearing interest at a rate of 10% per year from the date
repayment is due, and payable in full on demand without set-off or
deduction.
4. SICK LEAVE AND DISABILITY. Employee will be entitled to sick leave for the
number of days determined by Company ("Sick Leave"). Employee will be
considered to be disabled during any period in excess of Sick Leave during
which Employee is unable to work because of illness or incapacity
("Disability Period").Employee will be entitled to receive Employee's full
salary during Sick Leave and will be deemed to be on leave, without pay,
during the Disability Period. If Employee is unable to work for a period in
excess of 90 days, Employee, at the discretion of the Board of Directors of
company, will be considered to have resigned. In no event will Employee be
entitled to payment or other compensation for unused Sick Leave or
Disability Period, unless required by law or otherwise provided in a policy
or employment manual adopted by Company.
5. RESIGNATION AND DISCHARGE. Employee may resign or be discharged pursuant to
the terms of this paragraph. If Employee (i) resigns, Employee must give 30
days' notice to Company; (ii) is discharged for cause (as later defined),
Company may discharge Employee immediately, without notice; or (iii) is
discharged not for cause, Company must give 30 days' notice to Employee. If
Employee is discharged not for cause, Employee will be paid severance pay
equal to six months' base pay in effect at the time of termination and
payable either in one lump sum or in monthly installments, at the option of
Employee.
For purposes of this paragraph, "for cause" means that during the
Employment Period, Employee, unless otherwise provided by Company policy or
Company employment manual, (a) is reasonably believed by Company (i) to
have failed to comply with any law, regulation or policy, including without
limitation securities or employment or non-discrimination or similar laws,
regulations or policies, and that failure causes a significant financial,
regulatory, operational or public perception detriment to Company, (ii) to
abuse, as determined by the Company, alcohol or to use drugs, (other than
as prescribed by Employee's physician), or (b) refuses to submit to testing
for alcohol or drugs, or (c) is reasonably believed by Company to have
committed or is charged with any felony or misdemeanor involving moral
turpitude, or (d) through willful neglect, gross negligence, or malfeasance
causes a significant financial, regulatory, operational or public
perception detriment to Company. A determination by the Board of Directors
that Employee has
EMPLOYMENT AGREEMENT
PAGE 2
3
failed to perform Employee's responsibilities to the satisfaction of the
Board of Directors, without one or more of the other elements set out in
this paragraph, is not "for cause".
6. COMPETITION AND CONFIDENTIAL INFORMATION RESTRICTIONS.
A. COMPETITION RESTRICTIONS. Employee may not during the Employment
Period, and for a period of two years following the termination of the
Employment Period, anywhere in the United States, directly or
indirectly, own, manage, operate, invest in, control, be employed by,
participate in, be a financial sponsor of, or be connected in any
manner with the ownership, management, operation or control of any
business that competes with a business conducted by Company at any
time during the Employment Period or which Employee knows, during the
Employment Period, that Company intends to conduct. Employee
acknowledges that this restriction is necessary for Company's welfare
and protection in light of the responsibilities assigned to Employee
and Employee's status in Company, that Employee is fully and
adequately compensated for this restriction.
B. CONFIDENTIAL INFORMATION. Employee acknowledges and recognizes that
Employee is, or will be, employed by Company in a confidential
relationship and may receive and have access to the confidential
business information, customer names, contracts and other customer
data, business methods, techniques and trade secrets of Company
("Confidential Information"). Employee may develop ideas, conceptions,
inventions, processes, methods, products and improvements; and
Employee may receive disclosures of ideas, conceptions, inventions,
processes, methods, products and improvements made by other employees
of Company ("Company Inventions"). Employee may participate with
Company in improving and developing Confidential Information and
Company Inventions. Confidential Information and Company Inventions
developed on behalf of Company are neither commonly known nor readily
accessible to others and are used by Company in its business to obtain
a competitive advantage over Company's competitors who do not know or
use the Confidential Information or Company Inventions. Protection of
the Confidential Information and Company Inventions against
unauthorized disclosure and use is of critical importance to Company
in maintaining its competitive position. Employee agrees that Employee
will not, at any time, during or after the Employment Period, make any
independent use of, or disclose to any other
EMPLOYMENT AGREEMENT
PAGE 3
4
person or organization, except as authorized by Company in writing,
any Confidential Information or Company Inventions. Upon termination
of the Employment Period for any reason, Employee shall promptly
deliver to Company all drawings, manuals, letters, notes, notebooks,
reports, customer lists, customer data, mailing lists, and all other
materials and records of any kinds, and all copies thereof, that may
be in the possession of, or under the control of, Employee pertaining
to Company's business including any that contain any Confidential
Information or Company Invention.
C. BUSINESS RELATIONSHIPS. Employee acknowledges Company's efforts to
establish valuable business relationships with its clients, customers
and suppliers. Employee recognizes that Company has invested resources
in the training and the professional development of Employee, and
Employee further recognizes Employee's responsibility to the Company
when Company entrusts Employee with Confidential Information. In view
of Company's efforts, Employee agrees that unless Company authorizes
Employee to do so in writing, Employee will not, for a period of one
year after termination of employment with Company, solicit the
purchase of products or services directly competing with products and
services of Company from any person, corporation, business
organization or enterprise which: (i) has made any purchase of
products or services from Company within the two years immediately
preceding termination of former Employee's employment ("Customer"); or
(ii) has been contacted by Employee during the last 12 months of
Employee's employment for the purpose of securing the purchase of
products or services from Company ("Prospective Customer").
D. NON-SOLICITATION OF EMPLOYEES. Employee is aware that Company has a
significant investment in its employees. For a period of twelve months
after termination for any reason of Employee's employment, neither
Employee nor any person or entity by whom Employee may be employed or
of which Employee may be an officer, director, partner, trustee or
control person, will directly or indirectly employ or solicit to
employ, or otherwise retain or solicit to retain, any person employed
by Company as of the date of Employee's termination of employment or
during the twelve month period thereafter, unless that person has been
terminated by Company without cause (as determined in good faith by
Company) before the time of the solicitation, employment or retention.
EMPLOYMENT AGREEMENT
PAGE 4
5
E. REMEDIES. Employee and Company recognize that irreparable injury may
result to Company in the event of breach or threatened breach of this
paragraph of this Agreement by Employee. If Employee commits a breach
or threatens to commit a breach of any of the provisions of this
paragraph, Company shall have the right and remedy, in addition to any
others that may be available, at law or in equity, to have the
provisions of this paragraph specifically enforced by any court having
equity jurisdiction, together with an accounting therefor, Employee
having specifically acknowledged that any such breach or threatened
breach will cause irreparable injury to Company and that money damages
will not provide an adequate remedy to Company.
7. INVALIDITY. If any provision of this Employment Agreement is later
construed to be unenforceable or invalid, the remaining provisions shall
not be affected but shall continue in full effect. If any term of this
Employment Agreement is found to be unenforceable or invalid by any court
having jurisdiction, that court shall have the power to reduce or revise
the term and the paragraph(s) shall then be fully enforceable.
8. ASSIGNMENT. Employee acknowledges that Employee's services are unique and
personal. Accordingly, Employee may not assign Employee's rights or
delegate Employee's duties or obligations under this Agreement. The
Employer's rights and obligations shall inure to the benefit of and shall
be binding upon Employer's successor and assigns.
9. PERSONNEL POLICIES. Company's written personnel policies apply to all of
Company's employees, including Employee, and describe additional terms and
conditions of employment of Employee. Those terms and conditions, as
Company may be revise them from time to time, are incorporated by reference
into this Employment Agreement. Company reserves the right to revise the
personnel policies from time to time, as Company deems necessary. If any
personnel policy provision conflicts with a provision of this Employment
Agreement, the terms of this Employment Agreement shall govern.
10. ALCOHOL AND DRUG TESTING. Employee agrees to comply with and submit to any
Company program or policy for testing for alcohol abuse or use of drugs
and, in the absence of such a program or policy, to submit to such testing
as may be required by Company and administered in accordance with
applicable law and regulations.
11. BINDING EFFECT. This Employment Agreement constitutes the entire
understanding of the parties, may be modified only in writing, is governed
EMPLOYMENT AGREEMENT
PAGE 5
6
by laws of California, and will bind and inure to the benefit of Employee
and Employee's personal representative and Company and Company's successors
and assigns.
EMPLOYMENT AGREEMENT
PAGE 6
7
DATED: May 21, 2001.
COMPANY:
SBS TECHNOLOGIES, INC.
BY: /s/ XXXXXXXXXXX X. XXXXXXX
--------------------------------------
ITS: Chairman of the Board
-------------------------------------
EMPLOYEE:
/s/ XXXXXXX X. XXXXX
-----------------------------------------
XXXXXXX X. XXXXX
EMPLOYMENT AGREEMENT
PAGE 7
8
APPENDIX A
TO
EMPLOYMENT AGREEMENT
XXXXXXX XXXXX
EMPLOYEE
POSITION: President and Chief Executive Officer of Company, reporting directly
to the Board of Directors. In addition, Employee will be appointed to the Board
of Directors to serve until the next annual meeting of shareholders.
COMPENSATION: $500,000 base salary, plus participation in SBS Management
Incentive Plan as described below.
BENEFITS:
Standard Employee
Benefits: Medical insurance
Dental insurance
Life Insurance
Long and short-term disability insurance
Ten holidays per year
Sick leave
Optional Benefits: 401(k) Plan
Flexible Spending Account Program
Supplemental Life Insurance
All Standard and Optional Benefits will be as provided by Company to employees
generally, and are subject to modification from time to time by Company.
Additional Benefits: Four weeks paid vacation per year
Immediate, full vesting under any
employee plans in effect at signing
that require vesting
Privileges of a corporate golf membership
at a club in the Carlsbad area
SIGNING BENEFITS:
Company will provide the following signing benefits to Employee, to attract and
retain Employee and to further align Employee's interests with those of Company:
Stock Option Grant: Nonqualified stock options for 300,000 shares of common
stock, with exercise, termination and other terms as provided in an Option
Agreement ("Option
EMPLOYMENT AGREEMENT
PAGE 8
9
Agreement") and the 1993 Director and Stock Option Plan under which it is
issued, including the following:
The Options will vest in five installments of 60,000 each, vesting as
follows:
60,000 March 9, 2002
60,000 March 9, 2003
60,000 March 9, 2004
60,000 March 9, 2005
60,000 March 9, 2006
The Options will terminate ten years from the date of grant, and the exercise
price for the options will be the Nasdaq closing price on March 8, 2001.
Costs due previous employer: A pretax cash bonus of $200,000 to assist Employee
in repayment of costs due to Employee's immediate past employer.
Additional compensation: Pretax compensation of $2.4 million, payable in at
least 30,000, but not more than 50,000, restricted SBS shares (under the 2000
Long-Term Equity Incentive Plan), a loan, and other elements, all to be
structured by agreement of Company and Employee in consultation with Company's
compensation consultant. Removal of restrictions on restricted shares, and
forgiveness of the loan, will occur in six equal annual installments, beginning
on March 9, 2002. If Employee is discharged not for cause (as defined in this
Agreement), restrictions on restricted stock awarded to Employee pursuant to
this Employment Agreement which are to be removed on the next anniversary date
will be automatically removed, and the next installment of the loan will
forgiven. Any remaining restricted stock will be returned to Company, and any
remaining loan balance will be repaid to Company, and Company will have no
further liability to Employee with respect to them. The award of the restricted
shares will be in accordance with and subject to the terms and conditions of the
2000 Long-Term Equity Incentive Plan. If during any time before March 9, 2007,
Company is acquired by or merged into another entity so that the other entity
becomes the parent of Company or is the surviving entity, the restrictions not
previously removed on any restricted stock will be removed, and the outstanding
unpaid balance on the note will be forgiven, effective immediately before the
effective time of the acquisition or merger.
Moving Expenses: Company will pay moving expenses in accordance with its current
moving policy for Employee's move from Employee's current residence in
Cupertino, California, to Carlsbad, California. Company will give Employee a
short-term loan in the amount of the equity in Employee's Cupertino house,
secured by a second mortgage on the Cupertino house and repayable upon sale of
that house. Beginning upon Employee's purchase of a house in Carlsbad and
continuing until Employee sells Employee's Cupertino house, Company will
reimburse Employee for the cost of maintaining Employee's Cupertino house,
including, for instance, the monthly mortgage payment, normal maintenance,
utilities, taxes, and insurance.
EMPLOYMENT AGREEMENT
PAGE 9
10
Employee will participate in the SBS MIP programs for Fiscal Years during
Employee's employment, upon such terms and conditions as determined by SBS Board
of Directors, in its sole discretion, and if MIP programs are authorized by SBS
Board of Directors.
EMPLOYMENT AGREEMENT
PAGE 10
