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EXHIBIT 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is dated as of May 26, 1998,
and is entered into by and between ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("Executive") and ▇▇▇▇▇▇
Instrument Corporation, an Indiana corporation, including its divisions ▇▇▇▇▇▇
Technologies and White Microelectronics ("▇▇▇▇▇▇").
WHEREAS, ▇▇▇▇▇▇ desires to continue Executive's employment as the
President and Chief Executive Officer of the White Microelectronics division of
▇▇▇▇▇▇ ("White") and President and Chief Executive Officer of ▇▇▇▇▇▇, and the
Executive desires to be employed in those capacities;
WHEREAS, ▇▇▇▇▇▇ desires to provide severance benefits which will best
serve its interest in retaining key employees; and
WHEREAS, Executive will report to the ▇▇▇▇▇▇ Board of Directors;
NOW THEREFORE, Executive and ▇▇▇▇▇▇ hereby agree that Executive will
render services to ▇▇▇▇▇▇ on the following terms and conditions:
1. Employment/Director Consideration. Upon the terms and subject to the
conditions contained herein, Executive hereby agrees to provide full-time
services to ▇▇▇▇▇▇ as its President and Chief Executive Officer. During the term
hereof, Executive agrees to devote his best efforts to the business of ▇▇▇▇▇▇,
and shall perform his duties in a diligent, trustworthy, business-like manner,
all for the purpose of advancing the business of ▇▇▇▇▇▇. Executive shall not
work for or receive compensation from any other entity for services performed or
to be performed by him during the term of this Agreement, except with the prior
written consent of ▇▇▇▇▇▇'▇ Board of Directors.
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2. Duties. Executive shall perform the duties of President and Chief
Executive Officer of White, President and Chief Executive Officer of ▇▇▇▇▇▇, and
a member of the ▇▇▇▇▇▇ Board of Directors in accordance with the policies and
practices of ▇▇▇▇▇▇, as they may be amended from time to time. Those duties may
be changed or modified in the discretion of ▇▇▇▇▇▇'▇ Board of Directors.
3. Term of Agreement. This Agreement shall be effective beginning on
May 1, 1998 and shall continue until September 30, 1999, except as provided
herein. It shall thereafter renew automatically for a two-year term, unless
thirty (30) or more days prior to such renewal date either of the parties
notifies the other in writing of its intention not to renew.
4. Base Salary and Benefits. ▇▇▇▇▇▇ shall pay Executive a base salary
of One Hundred Eighty Thousand Dollars ($180,000) per annum, payable in
bi-weekly installments, less applicable tax withholding and salary deductions
("Base Salary"). The Base Salary will be subject to increase on October 1, 1998
in accordance with company policy. Executive shall be entitled to participate in
the fringe benefit programs generally available to senior executives of ▇▇▇▇▇▇,
as they may be modified from time to time.
5. Incentive Compensation. Executive shall be eligible to receive
incentive compensation in accordance with the terms of the White
Microelectronics/▇▇▇▇▇▇ Bonus Plan as it may be amended.
6. Stock Options. During the term of this Agreement, Executive shall
participate in ▇▇▇▇▇▇'▇ Employee Stock Option Plan in accordance with the terms
and conditions of the Plan, as it may be amended.
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7. Termination and Termination Benefits. The Executive's employment
hereunder shall terminate under the following circumstances:
(a) Termination by ▇▇▇▇▇▇ For Cause. ▇▇▇▇▇▇ may terminate the
employment of Executive for cause at any time upon written notice to Executive
specifying the cause for termination. For purposes of this Section, "for cause"
shall mean discharge resulting from a determination by ▇▇▇▇▇▇ that the Executive
has: (i) been convicted of a criminal offense involving dishonesty, fraud,
theft, embezzlement, breach of trust or moral turpitude; (ii) performed an act
or failed to act, which, if he were prosecuted and convicted, would constitute a
crime or offense involving money or property of ▇▇▇▇▇▇; or (iii) violated the
provisions of Section 8 pertaining to confidential information; or (iv)
willfully refused to perform the duties reasonably assigned to Executive and
consistent with his status as President and Chief Executive Officer of White and
Chief Executive Officer of ▇▇▇▇▇▇.
In the event of Executive's termination by ▇▇▇▇▇▇ under this
Section 7(a), ▇▇▇▇▇▇ shall have no further obligation to Executive except for
any amounts earned by, or accrued for, Executive under any employee benefit
plans in which the Executive is then a participant, earned and unpaid salary,
accrued and unused vacation pay, and any rights of Executive under any bonus or
stock option agreement, which right has been earned by Executive at the time of
such termination pursuant to the terms of such plan or agreement. Executive
shall not be entitled to any further Base Salary, Incentive Compensation,
Severance Pay, fringe benefits, additional stock options, or any other
compensation or benefits, except as otherwise provided herein. A termination by
▇▇▇▇▇▇ under this Section 7(a) shall not prejudice any remedy to which ▇▇▇▇▇▇
may be entitled, either at law or in equity or under this Agreement.
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(b) Termination by ▇▇▇▇▇▇ Without Cause. Executive's
employment under this Agreement may be terminated without cause at any time by
▇▇▇▇▇▇ upon written notice to Executive. For purposes of this Section 7(b), the
terms "terminated without cause" and "termination without cause" shall include,
without limitation, a material change in the nature or scope of Executive's
responsibilities, title, authority, reporting relationship, powers, functions or
duties as the President and Chief Executive Officer of a publicly traded
corporation: a decrease in the total annual compensation or benefits payable to
Executive other than as a result of a decrease in incentive-based compensation
payable to the Executive and to all other executive officers of ▇▇▇▇▇▇ on the
basis of ▇▇▇▇▇▇'▇ financial performance; or a requirement imposed by ▇▇▇▇▇▇ that
Executive relocate to an office that is more than fifty (50) miles distant from
the office at which he is employed or the home at which he presently resides.
Upon termination without cause, Executive shall be entitled to the following
benefits:
(i) Severance Payment. ▇▇▇▇▇▇ will pay
Executive a single, lump sum "Severance Payment" equal to 2.5 times the sum of
Executive's total current annual Base Salary, plus Incentive Compensation paid
for fiscal 1997 or fiscal 1998, whichever is higher, less all applicable taxes
and other withholding.
(ii) Benefit Continuation. ▇▇▇▇▇▇ will continue
benefit contributions (medical, dental, disability and life) on behalf of
Executive for the greater of: (a) the remaining term of this Agreement; or (b)
twelve (12) months; provided, however, that benefits will be terminated if
Executive becomes eligible for such benefits through reemployment or otherwise.
In the event that ▇▇▇▇▇▇ is unable to continue such contributions or secure
replacement coverage, then it shall pay to Executive the premium cost for such
coverage. Executive shall not participate in any other ▇▇▇▇▇▇ benefit plans
except for any amounts earned by, or accrued for, Executive
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under any employee benefit plans in which the Executive is then a participant,
earned and unpaid salary and accrued and unused vacation pay and any rights of
Executive under any bonus or stock option agreement, which right has been earned
by Executive at the time of such termination pursuant to the terms of such plan
or agreement.
(iii) Outplacement Assistance. ▇▇▇▇▇▇ will
provide executive-level outplacement services to Executive at the
outplacement provider of his choice for a period not to exceed twelve (12)
months in the maximum amount of $25,000.
(iv) Attorneys' Fees. ▇▇▇▇▇▇ will reimburse
Executive for all reasonable attorneys' fees incurred in connection with
enforcing the terms of this Agreement following termination of employment in
the maximum amount of $25,000, except as otherwise provided in Section 14.
(c) Termination by Executive Without Cause. Executive may
terminate this Agreement at any time upon thirty (30) days' prior written notice
to ▇▇▇▇▇▇. In the event of such termination, ▇▇▇▇▇▇ shall have no further
obligations to Executive under this Agreement except for any amounts earned by,
or accrued for, Executive under any employee benefit plans in which the
Executive is then a participant, earned and unpaid salary and accrued and unused
vacation pay and any rights of Executive under any bonus or stock option
agreement, which right has been earned by Executive at the time of such
termination pursuant to the terms of such plan or agreement. Executive shall not
after termination be entitled to Base Salary, Incentive Compensation, Severance
Pay, fringe benefits, additional stock options, or any other compensation or
benefits. ▇▇▇▇▇▇ may, in its sole discretion, accept Executive's resignation and
terminate his employment prior to the expiration of the thirty (30) day notice
period and pay Executive's compensation for the notice period (or remaining term
thereof).
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(d) Non-Renewal Severance Payment. In the event that ▇▇▇▇▇▇
gives notice of its intention not to renew this Agreement in accordance with
Section 3, it shall, upon the termination of Executive's employment, pay
Executive in a single lump sum an amount equal to the Severance Payment set
forth in Section 7(b)(i), and provide the other benefits set forth in Sections
7(b)(ii) to (iv). ▇▇▇▇▇▇ shall have no further obligations to Executive except
for any amounts earned by, or accrued for, Executive under any employee benefit
plans in which the Executive is then a participant, earned and unpaid salary and
accrued and unused vacation pay and any rights of Executive under any bonus or
stock option agreement, which right has been earned by Executive at the time of
such termination pursuant to the terms of such plan or agreement.
(e) Illness, Incapacity, or Death. In the event of illness or
incapacity of Executive, ▇▇▇▇▇▇ shall continue Executive's Base Salary for a
period of ninety (90) days or such time as the Executive is eligible for
consideration for long-term disability benefits, whichever occurs last. If
Executive is unable to perform the essential elements of his job due to illness
or incapacity for a period greater than ninety (90) days, ▇▇▇▇▇▇ may elect, in
its sole determination, to terminate this Agreement with no further obligation
to Executive, except for any amounts earned by, or accrued for, Executive under
any employee benefit plans in which the Executive is then a participant, earned
and unpaid salary and accrued and unused vacation pay and any rights of
Executive under any bonus or stock option agreement, which right has been earned
by Executive at the time of such termination pursuant to the terms of such plan
or agreement. If Executive should die during the term of this Agreement,
Executive's heir shall be paid by ▇▇▇▇▇▇ a total amount equal to ninety (90)
days' Base Salary, be entitled to whatever rights the heir may have under
Executive's stock option plan and be granted applicable COBRA rights; ▇▇▇▇▇▇'▇
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remaining obligations hereunder shall terminate as of the end of the month in
which Executive's death occurs.
8. Confidential Information. In view of the fact that Executive's work
for ▇▇▇▇▇▇ will bring him into close contact with many confidential affairs and
plans of ▇▇▇▇▇▇ not readily available to the public, Executive agrees to keep
secret and retain in the strictest confidence all confidential matters of
▇▇▇▇▇▇, including, without limitation, trade "know-how," secrets, customer and
prospect lists, pricing policies, prices, costs, operational and development
methods, and other business affairs of ▇▇▇▇▇▇ (but excluding all information in
the public domain) learned by him heretofore or hereafter, and not to disclose
them to anyone outside of ▇▇▇▇▇▇, either during or after his employment with
▇▇▇▇▇▇, except in the course of performing his duties hereunder or with ▇▇▇▇▇▇'▇
express written consent. Executive further agrees to deliver promptly to ▇▇▇▇▇▇,
on termination of his employment, or at any time ▇▇▇▇▇▇ may so request, all
memoranda, notes, records, reports, manuals, drawings, blueprints, computer
records and other documents (and all copies thereof) relating to ▇▇▇▇▇▇'▇
business and all property associated therewith, which he may then possess or
have under his control. Executive acknowledges and understands that his
obligations with respect to confidential information shall survive the
termination of this Agreement.
9. Violation of Covenants. If Executive violates any of his covenants
under Section 8, Executive agrees and acknowledges that such violation or
threatened violation will cause irreparable injury to ▇▇▇▇▇▇ and that ▇▇▇▇▇▇
will be entitled to injunctive relief without the necessity of proving actual
damages.
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10. Automobile Allowance. ▇▇▇▇▇▇ shall pay an automobile allowance to
Executive in the amount of $850.00 per month, as it may be changed from time to
time, during the term of this Agreement.
11. Vacation. ▇▇▇▇▇▇ will provide Executive with annual paid vacation
consistent with the policies of ▇▇▇▇▇▇ applicable to senior executive staff, as
they may be changed from time-to-time.
12. Company Expenses. During the term of this Agreement, ▇▇▇▇▇▇ will
reimburse Executive for reasonable authorized business expenses incurred on
behalf of ▇▇▇▇▇▇ in accordance with ▇▇▇▇▇▇ policies, as they may be amended.
13. Assistance with Litigation. Executive shall make himself available,
upon the request of ▇▇▇▇▇▇ or its counsel, to testify or otherwise assist in
litigation, arbitration or other disputes involving ▇▇▇▇▇▇ during and following
the termination of this Agreement, so long as Executive receives reimbursement
for his reasonable out-of-pocket expenses. Executive will also make himself
available to the attorneys representing ▇▇▇▇▇▇ for such purposes as they
reasonably deem necessary, including but not limited to, the review of
documents, discussion of the cases and preparation for trial. This Agreement is
not intended to and shall not be construed so as to in any way limit or affect
the testimony which Executive gives in any such litigation; it is understood and
agreed Executive will at all times testify fully, truthfully and accurately,
whether in deposition, trial or otherwise.
14. Arbitration. Any dispute, controversy, or claim arising out of or
relating to this Agreement or breach thereof, or arising out of or relating in
any way to the employment of Executive or the termination thereof, shall be
submitted to arbitration in Phoenix, Arizona, in accordance with the National
Rules for the Resolution of Employment Disputes of the American
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Arbitration Association. Judgment upon the award rendered by the arbitrator may
be entered in any court in the State of Arizona, or in any other court of
competent jurisdiction. In reaching his or her decision, the arbitrator shall
have no authority to ignore, change, modify, add to or delete from any provision
of this Agreement, but is instead limited to interpreting this Agreement. The
fees and expenses of the arbitrator shall initially be shared equally by the
parties and the prevailing party shall be entitled to recover its fees and
expenses incurred in connection with the arbitration.
15. Governing Law. This Agreement has been entered into and shall be
interpreted in accordance with the laws of the State of Arizona.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties respecting the employment of Executive and there are no
representations, warranties or commitments other than those set forth herein.
This Agreement may be amended or modified only by an instrument in writing
executed by both of the parties hereto. This is an integrated agreement.
17. Effect of Agreement. This Agreement shall be binding upon the
parties and their respective heirs, executors, administrators, successors and
assigns. Executive shall not assign any rights or duties under this Agreement
without the written consent of the ▇▇▇▇▇▇ Board of Directors. In the event of a
merger, sale, transfer, consolidation or reorganization involving ▇▇▇▇▇▇, this
Agreement shall continue in force and become an obligation of ▇▇▇▇▇▇ or
successor entity.
18. Severability. If any provision of this Agreement as applied to
either party or to any circumstances shall be adjudged by a court or arbitration
to be void, voidable or unenforceable, the same shall in no way affect any other
provision of this Agreement. In case this Agreement, or any one or more of the
provisions hereof, shall be held to be invalid, illegal or unenforceable
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within any governmental jurisdiction or subdivision thereof, this Agreement or
any such provision thereof shall not as a consequence thereof be deemed to be
invalid, illegal or unenforceable in any other governmental jurisdiction or
subdivision thereof.
19. Waiver. The waiver by either party of any term or condition of this
Agreement or any breach thereof shall not constitute a waiver of any other term
or condition or breach of this Agreement, nor shall it constitute a waiver of
the same term or condition in the future.
20. Notices. Any notice or communication required or permitted to be
given to the parties hereto shall be delivered personally or be sent by United
States registered or certified mail, postage prepaid and return receipt
requested, and addressed or delivered as follows, or such other address as the
party addressed may be substituted by prior written notice pursuant to this
section:
(a) If to Executive: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
White Microelectronics/
▇▇▇▇▇▇ Instrument Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(b) If to ▇▇▇▇▇▇: Chairman, Board of Directors
▇▇▇▇▇▇ Instrument Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
21. Representations by Executive. Executive represents and warrants
that he is not a party to or bound by any agreement or covenant that would
prohibit, restrict or inhibit in any way the full performance of his duties for
▇▇▇▇▇▇ under this Agreement. Executive further acknowledges that he has been
given the opportunity to consult with legal counsel regarding this Agreement.
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22. Captions. Captions of this Agreement are inserted for convenience
and do not constitute a part hereof.
23. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective
as of the day and year first written above.
▇▇▇▇▇▇ INSTRUMENT CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Chairman of the Board
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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