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Exhibit 10.21
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") dated as of August 1, 1997 is
by and between Continental Circuits Corp., a Delaware corporation
("Continental"), and Xxxxxxxxx X. XxXxxxx, III, an individual ("Employee").
A. Continental is engaged in the business of manufacturing complex
multilayer circuit boards.
B. Employee is presently employed by Continental and both parties wish to
continue and redefine the nature of the employment relationship.
C. The parties wish to set forth in this Agreement the terms and
conditions of such employment.
In consideration of the recitals and mutual agreements hereinafter set
forth, the parties agree as follows:
1. Employment and Duties. Continental agrees to employ Employee on a
full-time basis, subject to the terms and conditions provided herein, and
Employee agrees to accept such full-time employment upon said terms and
conditions. Employee's initial title shall be Chairman of the Board, President
and Chief Executive Officer of Continental, in which capacity Employee shall
have general responsibility for the activities and operations of Continental,
subject to the direction and control of Continental's Board of Directors (the
"Board"). Although Employee understands that his duties will include a
substantial amount of business travel, during the entire term of employment, he
shall be based in the Phoenix, Arizona, Area. A transfer of Employee's primary
office assignment outside the Phoenix Area (a "Reassignment") shall constitute a
termination without cause for purposes of Section 6(b). Employee shall have
responsibility for serving as the Company's principal spokesperson to the
financial community and shareholders, and shall report directly to the Board.
Without limiting the generality of the foregoing, Employee initially shall, in
part, have the following responsibilities:
a. Develop the Company's annual budget during the fourth quarter of
each year.
b. Assemble and motivate an appropriate management team.
c. Hire, fire and control all Company relations with all other
Company employees.
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d. Establish annual goals for each member of the management team;
manage each member for optimum performance; and recommend compensation
adjustments for each member annually, for action by the Compensation Committee
of the Board (the "Compensation Committee").
e. Ensure compliance with all applicable laws and governmental
rules, regulations and orders.
f. Report all material events to the Board on a timely basis.
g. Without Board approval, execute contracts (i) with exposure to
the Company of up to $500,000 and (ii) for purchases of product in the ordinary
course of business and consistent with the annual budget approved by the board
of directors.
h. Provide to the Board a comprehensive report and any other reports
as requested by the Board from time to time.
2. Term. The term of employment under this Agreement shall commence on
August 1, 1997 (the "Effective Date") and shall continue for a period of two
years, unless earlier terminated as set forth in Section 6 below. Thereafter,
this Agreement shall automatically renew for additional one-year terms unless
either party gives the other notice of non-renewal at least 30 days prior to the
expiration of the initial term or any renewal term.
3. Compensation.
a. Base Salary. Continental agrees to pay Employee a base salary,
before deducting all applicable withholdings, at the annual rate of $235,000
(the "Base Salary"), which shall be payable in accordance with Continental's
standard executive payroll policies as they may be revised from time to time.
Continental's Compensation Committee shall consider increases in the annual rate
of pay to be effective on August 1 of each year, commencing on August 1, 1998.
b. Incentive Bonus. Continental's Compensation Committee shall
design and present to the Board for review, adjustment and adoption, an
incentive compensation program for key employees, which will include cash and
stock option incentives, and will provide for participation by Employee.
c. Stock Options. Continental shall grant to Employee options to
purchase 150,000 shares of Continental's common stock, with an exercise price
equal to the fair market value of the stock on the day this Agreement is
executed. 2,500 of such options shall vest on August 31, 1997, and so long as
Employee is still employed by Continental, an additional 2,500 options shall
vest on the last day of each calendar month thereafter.
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4. Benefits.
a. While Employee is employed hereunder, Continental shall pay for
and provide Employee and his dependents with the same amount and type of health,
medical, dental and life insurance as is provided from time to time to senior
executive officers of Continental during the term of this Agreement. The manner
of implementation of such benefits with respect to such items as procedures and
amounts is discretionary with the Company but shall be commensurate with
Employee's executive status
b. During his employment, Continental will also provide Employee
with a reasonable automobile expense allowance (including lease, parking, fuel,
maintenance and insurance payments) in an amount consistent with that furnished
from time to time to other executive officers of Continental.
c. During the term of Employee's employment, the Company shall
provide and pay for the following insurance plans (i) A short-term disability
policy that pays at the rate of 80% of Employee's base salary for a period of up
to the 91st through 180th day of disability; (ii) A long-term disability policy
that pays at the rate of 60% of Employee's base salary for an indefinite period
beginning on the 181st day of disability; provided that Employee shall be
entitled to purchase and pay for reasonable additional long-term coverage at
group rates; (iii) Term life insurance in the face amount of $1 million, payable
to beneficiaries designated by Employee; and (iv) Accidental death and
dismemberment insurance in a face amount of $500,000 for loss of life, payable
to Employee or beneficiaries designated by Employee.
d. Continental shall, upon receipt of appropriate documentation,
reimburse Employee each month for his reasonable travel, lodging and other
ordinary and necessary business expenses consistent with Continental's policies
as in effect from time to time.
5. Vacation. Employee shall be entitled to four weeks of vacation, with
pay, per year. In addition, Employee shall be entitled to such holidays as
Continental may approve for its executive personnel.
6. Termination. The Board may terminate Employee's employment by
Continental prior to the expiration of the initial term of employment or any
extension thereof, in the manner provided in either Section 6(a), Section 6(b)
or Section 6(c). Additionally, if notice of non-renewal is given pursuant to
Section 2, the term of employment shall expire at the end of the then current
term and Employee shall be entitled to compensation as provided in Section 6(e).
Employee may terminate his employment with Continental upon delivery of
reasonable written notice.
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a. For Cause. Continental may terminate this Agreement for cause
upon written notice to the Employee stating the facts constituting such cause,
provided that Employee shall have 60 days following such notice to cure any
conduct or act, if curable, alleged to provide grounds for termination for cause
hereunder. In the event of termination for cause, Continental shall be obligated
to pay the Base Salary at the current rate through a period of one year from the
date of termination. Cause shall include material neglect of duties, willful
failure to abide by ethical and good faith instructions or policies from or set
by the Board, commission of a felony or serious misdemeanor offense or pleading
guilty or nolo contendere to same, the commission by Employee of an act of
dishonesty or moral turpitude involving Continental, Employee's material breach
of this Agreement, the filing of bankruptcy proceedings by or against Employee,
or breach by Employee of any other material obligation to Continental.
b. Without Cause. Continental may terminate this Agreement at any
time immediately, without cause, by giving written notice to Employee. Upon a
termination without cause or upon a Reassignment, Continental shall (i) pay to
Employee the Base Salary through the date of termination plus an amount equal to
two years Base Salary or the remaining term of the Agreement, whichever is
longer, less applicable withholdings; and (ii) within 90 days after the end of
the fiscal year in which termination pursuant to this Section 6(b) occurs,
Employee shall be entitled to receive a bonus payment (calculated and payable in
the manner described in Section 3[b]), if any, based upon Continental's
financial performance for such fiscal year or the average of the bonuses earned
by Employee in previous years, whichever is higher, which shall be prorated to
the extent that Employee's employment during such fiscal year was for a period
of less than the full year.
c. Disability. If during the term of this Agreement, Employee fails
to perform his duties hereunder because of illness or other incapacity for a
period of three consecutive months, Continental shall have the right to
terminate this Agreement without further obligation hereunder except for any
bonus amount payable in accordance with this Section 6(c) and any amounts
payable pursuant to disability plans generally applicable to executive
employees. Within 90 days after the end of the fiscal year in which termination
pursuant to this Section 6(c) occurs, Employee shall be entitled to receive a
bonus payment as set forth in Section 6(b).
d. Death. If the Employee dies during the term of this Agreement,
this Agreement shall terminate immediately, and the Employee's legal
representatives shall be entitled to receive the Base Salary due the Employee
for 60 days following death, and any other death benefits generally applicable
to executive employees. In addition, within 90 days after the end of the fiscal
year in which Employee's death occurs, Employee's legal representative shall be
entitled to receive a bonus payment as set forth in Section 6(b).
e. Non-Renewal. If Employee's term of employment is not renewed by
Continental as contemplated by Section 2 at the end of the initial term or any
subsequent term, Continental shall, (i) pay to Employee the Base Salary through
the end of the term plus an amount equal to two years Base Salary, less
applicable withholdings; and (ii) within 90 days after the end
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of the fiscal year in which the termination of employment pursuant to this
Section occurs, Employee shall be entitled to receive a bonus payment as set
forth in Section 6(b).
f. Resignation. Employee shall give Continental at least 90 days
notice before the effective date of any resignation of his employment.
7. Non-competition; Non-solicitation.
a. Confidential Information. Employee acknowledges that Employee may
receive, or contribute to the production of, Confidential Information. For
purposes of this Agreement, Employee agrees that "Confidential Information"
shall mean information or material proprietary to Continental or designated as
Confidential Information by Continental and not generally known by
non-Continental personnel, which Employee develops or of or to which Employee
may obtain knowledge or access through or as a result of Employee's relationship
with Continental (including information conceived, originated, discovered or
developed in whole or in part by Employee). Confidential Information includes,
but is not limited to, the following types of information and other information
of a similar nature (whether or not reduced to writing) related to Continental's
business: Discoveries, inventions, ideas, concepts, research, development,
processes, procedures, "know-how", formulae, marketing techniques and materials,
marketing and development plans, business plans, customer names and other
information related to customers, price lists, pricing policies, methods of
operation, financial information, employee compensation, and computer programs
and systems. Confidential Information also includes any information described
above which Continental obtains from another party and which Continental treats
as proprietary or designates as Confidential Information, whether or not owned
by or developed by Continental. Employee acknowledges that the Confidential
Information derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use.
Information publicly known without breach of this Agreement that is generally
employed by the trade at or after the time Employee first learns of such
information, or generic information or knowledge which Employee would have
learned in the course of similar employment or work elsewhere in the trade,
shall not be deemed part of the Confidential Information. Employee further
agrees:
(1) To furnish Continental on demand, at any time during or
after employment, a complete list of the names and addresses of all present,
former and potential suppliers, customers and other contacts gained while an
employee of Continental in Employee's possession, whether or not in the
possession or within the knowledge of Continental.
(2) That all notes, memoranda, electronic storage,
documentation and records in any way incorporating or reflecting any
Confidential Information shall belong exclusively to Continental, and Employee
agrees to turn over all copies of such materials in
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Employee's control to Continental upon request or upon termination of Employee's
employment with Continental.
(3) That while employed by Continental and thereafter Employee
will hold in confidence and not directly or indirectly reveal, report, publish,
disclose or transfer any of the Confidential Information to any person or
entity, or utilize any of the Confidential Information for any purpose, except
in the course of Employee's work for Continental.
(4) That any idea in whole or in part conceived of or made by
Employee during the term of his employment, consulting, or similar relationship
with Continental which relates directly or indirectly to Continental's current
or planned lines of business and is made through the use of any of the
Confidential Information of Continental or any of Continental's equipment,
facilities, trade secrets or time, or which results from any work performed by
Employee for Continental, shall belong exclusively to Continental and shall be
deemed a part of the Confidential Information for purposes of this Agreement.
Employee hereby assigns and agrees to assign to Continental all rights in and to
such Confidential Information whether for purposes of obtaining patent or
copyright protection or otherwise. Employee shall acknowledge and deliver to
Continental, without charge to Continental (but at its expense) such written
instruments and do such other acts, including giving testimony in support of
Employee's authorship or inventorship, as the case may be, necessary in the
opinion of Continental to obtain patents or copyrights or to otherwise protect
or vest in Continental the entire right and title in and to the Confidential
Information.
b. Non-solicitation. During the term of Employee's employment by
Continental and for a period of one year thereafter, Employee agrees that he
shall not (for the purpose of or which results in competition with Continental
or any of its affiliates or subsidiaries) either solicit any past or existing
customers, clients, suppliers, or business patronage of Continental or any of
its predecessors, affiliates or subsidiaries or use any Confidential Information
(as defined in Section 7[a]); nor will he solicit for any purpose the employment
of any employees of Continental or any of its affiliates or subsidiaries.
c. Injunctions. It is agreed that the restrictions contained in this
Section 7 are reasonable, but it is recognized that damages in the event of the
breach of any of the restrictions will be difficult or impossible to ascertain;
and, therefore, Employee agrees that, in addition to and without limiting any
other right or remedy Continental may have, Continental shall have the right to
an injunction against Employee issued by a court of competent jurisdiction
enjoining any such breach without showing or proving any actual damage to
Continental.
d. Part of Consideration. Employee also agrees, acknowledges,
covenants, represents and warrants that he is fully and completely aware that,
and further understands that, the foregoing restrictive covenants are an
essential part of the consideration for Continental entering into this Agreement
and that Continental is entering into this Agreement in full reliance on these
acknowledgments, covenants, representations and warranties.
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e. Time and Territory Reduction. If the period of time and/or
territory described above are held to be in any respect an unreasonable
restriction, it is agreed that the court so holding may reduce the territory to
which the restriction pertains or the period of time in which it operates or may
reduce both such territory and such period, to the minimum extent necessary to
render such provision enforceable.
f. Survival. The obligations described in this Section 7 shall
survive any termination of this Agreement or any termination of the employment
relationship created hereunder.
8. Governing Law and Venue. Arizona law shall govern the construction and
enforcement of this Agreement and the parties agree that any litigation
pertaining to this Agreement shall be in courts located in Maricopa County,
Arizona.
9. Construction. The language in all parts of this Agreement shall in all
cases be construed as a whole according to its fair meaning and not strictly for
nor against any party. The Section headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. All terms used in one number or gender shall
be construed to include any other number or gender as the context may require.
The parties agree that each party has reviewed this Agreement and has had the
opportunity to have counsel review the same and that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not apply in the interpretation of this Agreement or any amendment or any
exhibits thereof.
10. Nondelegability of Employee's Rights and Continental Assignment
Rights. The obligations, rights and benefits of Employee hereunder are personal
and may not be delegated, assigned or transferred in any manner whatsoever, nor
are such obligations, rights or benefits subject to involuntary alienation,
assignment or transfer. Upon reasonable notice to Employee, Continental may
transfer Employee to an affiliate of Continental, which affiliate shall assume
the obligations of Continental under this Agreement. This Agreement shall be
assigned automatically to any entity merging with or acquiring Continental or
its business.
11. Severability. If any term or provision of this Agreement is declared
by a court of competent jurisdiction to be invalid or unenforceable for any
reason, this Agreement shall remain in full force and effect, and either (a) the
invalid or unenforceable provision shall be modified to the minimum extent
necessary to make it valid and enforceable or (b) if such a modification is not
possible, this Agreement shall be interpreted as if such invalid or
unenforceable provision were not a part hereof.
12. Attorneys' Fees. Except as otherwise provided herein, if any party
hereto institutes an action or other proceeding to enforce any rights arising
out of this Agreement, the party prevailing in such action or other proceeding
shall be paid all reasonable costs and attorneys' fees
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by the non-prevailing party, such fees to be set by the court and not by a jury
and to be included in any judgment entered in such proceeding.
13. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed duly given, upon receipt, if either personally
delivered, sent by certified mail, return receipt requested, or sent by a
nationally-recognized overnight courier service, addressed to the parties as
follows:
If to Continental: Continental Circuits Corp.
Attention: Board of Directors
0000 Xxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
With a copy to: Xxxxxxx & Xxxxx
Attention: P. Xxxxxx Xxxx
Xxx Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to Employee: Xxxxxxxxx X. XxXxxxx, III
Continental Circuits Corp.
0000 Xxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
or to such other address as either party may provide to the other in accordance
with this Section.
14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof (i.e., Employee's
employment by Continental) and supersedes all prior or contemporaneous
employment agreements and understandings or agreements in regard to Employee's
employment by the Company; provided, however, that (except as specifically set
forth herein) this Agreement shall not affect or supersede any rights of
Continental or Employee under or relating to the Company's Stock Option Plans or
under or relating to the Transition Compensation Plan dated as of July 1, 1997.
No modification or addition to this Agreement shall be valid unless in writing,
specifically referring to this Agreement and signed by all parties hereto. No
waiver of any rights under this Agreement shall be valid unless in writing and
signed by the party to be charged with such waiver. No waiver of any term or
condition contained in this Agreement shall be deemed or construed as a further
or continuing waiver of such term or condition, unless the waiver specifically
provides otherwise.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
August 1, 1997.
CONTINENTAL: EMPLOYEE:
CONTINENTAL CIRCUITS CORP.
a Delaware corporation /s/ Xxxxxxxxx X. XxXxxxx, III
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Xxxxxxxxx X. XxXxxxx, III
By: /s/ Xxxxxx X. Xxxxxxxx
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Its: Vice President and Chief Financial Officer
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