EXHIBIT 10.109
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, executed as of June 20, 1998 between SpecTran
Corporation, a Delaware corporation (hereinafter referred to as the
"Corporation"), and Xxxxxxx X. Xxxx (hereinafter referred to as "Executive").
W I T N E S S E T H:
WHEREAS, SpecTran Specialty Optics Company ("SSOC"), a subsidiary
of the Corporation, presently employs Executive; and
WHEREAS, the Corporation wishes to employ and Executive wishes to be so
employed by the Corporation;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree with each other as follows:
Introduction. This Agreement replaces the Employment Agreement between
SSOC and Executive dated February 18, 1994 as amended by a letter agreement
between SSOC and Executive dated April 18, 1996, which Employment Agreement, as
amended, provided for February 19 to February 18 successive one year employment
terms unless notice is otherwise provided.
1. Employment. The Corporation agrees to and does hereby employ
Executive and Executive agrees to and does hereby accept employment by the
Corporation as Vice President Marketing and Sales of the Corporation, or in any
other capacity as determined by its Board of Directors, subject to the
supervision and direction of the President and Chief Executive Officer of the
Corporation, commencing on the date hereof and ending on midnight February 18,
1999 (the "Base Term"). The Base Term shall be automatically extended for
successive one-year periods unless either party provides notice to the other to
the contrary at least five (5) business days prior to the end of the Base Term
or any extension thereof, subject to prior termination in accordance with the
provisions of Article 12 hereof. The Base Term and any extensions thereof shall
be referred to in this Agreement as the "Employment Period".
2. Scope of Duties. Executive agrees that he will devote his full time
and effort during the Employment Period to the performance of the duties of his
office. Executive shall make his business headquarters at Sturbridge,
Massachusetts and shall relocate should the Corporation change its headquarters.
Executive shall undertake such travel as the Corporation may request.
3. Employment Period - Compensation.
(a) Executive Compensation. For the services and duties to be
rendered and performed by Executive during the Employment Period, the
Corporation agrees to pay Executive compensation at the rate of Twelve Thousand
Two Hundred Fifty Dollars and No Cents ($12,250.00) per month, (this amount to
be referred to as "Executive Compensation"). Executive shall be considered for
an increase in Executive Compensation effective June 1, 1999. Executive
Compensation shall be payable in equal semi-monthly installments. The
Corporation shall reimburse Executive for all expenses reasonably and
necessarily incurred in connection with his employment by the Corporation,
including traveling expenses while absent on the Corporation's business from its
business headquarters. The Board of Directors of the Corporation may increase
Executive's Executive Compensation at such time or times and in such amount or
amounts as it may in its sole discretion determine.
(b) Other Compensation.
i. Profit Sharing Plan. Executive will participate
in the Corporation's Profit Sharing Plan. Executive understands that the
targets set for the Profit Sharing Plan areestablished annually by the
Corporation's Board of Directors and often vary fromyear to year.
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ii. Incentive Plan. Executive will participate in
the Key Employee Incentive Plan established by the Corporation or related
transition or successor plans. For the second half of 1998, while nominally
Executive's participation in this Plan will permit Executive to earn a bonus
or up to thirty percent (30%) of Executive's 1998 second half base salary
(Executive Compensation), the present expectation is that Executive will not
earn a bonus of more than fifteen percent (15%) of Executive's 1998 second
half base salary (Executive Compensation).
iii. Stock Options. Executive will be eligible for
consideration for grants of stock options on an annual basis; whether Executive
receives a grant and the number of options granted is at the discretion of the
Board of Directors.
iv. Automobile Allowance. Executive will receive a
car allowance of $825 per month.
4. Vacation. Executive shall be entitled to a vacation each year equal
to one (1) month. Said vacation may be taken all at once or weekly at the sole
discretion of Executive.
5. Secrets. Executive agrees that any trade secrets or any other
proprietary information (whether in written, verbal or any other form) relating
to the existing or contemplated business and/or field of interest of the
Corporation and/or any of its Affiliates (defined below), or of any corporation
or other legal entity in which the Corporation or any of its Affiliates has an
ownership interest of more than twenty-five percent (25%), and any proprietary
information (whether in written, verbal or any other form) of any of the
Corporation's customers, suppliers, licensors or licensees, including, but not
limited to, information relating to inventions, disclosures, processes, systems,
methods, formulae, patents, patent applications, machinery, materials, notes,
drawings, research activities and plans, costs of production, contract forms,
prices, volume of sales, promotional methods, list of names or classes or
customers, which he has heretofore acquired during his employment by EBOC, EBOT,
any of their respective Affiliates (as defined below) or which he may hereafter
acquire during his employment with the Corporation or any of its Affiliates, in
both cases whether during or outside business hours, whether or not on EBOC's
EBOT's or the Corporation's premises, as the result of any disclosures to him,
or in any other way, shall be regarded as held by him in a fiduciary capacity
solely for the benefit of the Corporation, its successors or assigns, and shall
not at any time, either during the term of this Agreement or thereafter, be
disclosed, divulged, furnished, or made accessible by him to anyone, or be
otherwise used by him, except in the regular course of business of the
Corporation or its Affiliates. Upon termination of his employment, Executive
shall return or deliver to the Corporation all tangible forms of such
information in his possession or control, and shall retain no copies thereof.
Information shall, for purposes of this Agreement, be considered to be secret if
not known by the trade generally, even though such information may have been
disclosed to one or more third parties pursuant to any business discussion or
agreement, including distribution agreements, joint research agreements or other
agreements entered into by EBOC, EBOT or the Corporation or any of their
Affiliates. For the purposes of this Agreement, "Affiliates" shall mean any
corporation, partnership, joint venture, other entity of any type or individual
that directly or indirectly, through one or more intermediaries, controls or is
controlled, or is under common control with, EBOC, EBOT or the Corporation, as
the case may be.
6. Patents. Executive agrees to and does hereby sell, assign, transfer
and set over to the Corporation, its successors, assigns, or Affiliates, as the
case may be, all his right, title, and interest in and to any inventions,
improvements, processes, patents or applications for patents which he develops
or conceives individually or in conjunction with others during his employment by
the Corporation, or, having possibly conceived same prior to his employment, may
complete while in the employ of the Corporation or any of its Affiliates, in
both cases whether during or outside business hours, whether or not on the
Corporation's premises, which inventions, improvements, processes, patents or
applications for patents are (i) in connection with any matters within the scope
of the existing or contemplated business of the Corporation or any of its
Affiliates, or (ii) aided by the use of time, materials, facilities or
information paid for or provided by the Corporation, all of the foregoing to be
held and enjoyed by the Corporation, its successors, assigns or Affiliates, as
the case may be, to the full extent of the term for which any Letters Patent may
be granted and as fully as the same would have been held by Executive, had this
Agreement not been made. Executive will make, execute and deliver any and all
instruments and documents necessary to obtain patents for such inventions,
improvements and processes in any and all countries. Executive hereby
irrevocably appoints the Corporation to be his attorney in fact in the name of
and on behalf of Executive to execute all such instruments and do all such
things and generally to use the Executive's name for the purposes of assuring to
the Corporation (or its nominee) the full benefit of its rights under the
provisions of Articles 5 and 6.
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7. Disability. (a) In the event Executive becomes partially disabled,
or becomes totally disabled (as determined in accordance with Article 7(c)
below) and such total disability has continued for less than six (6) full
consecutive calendar months, then the Corporation shall continue during the
Employment Period to pay Executive at the rate of his Annual Executive
Compensation as set forth in Article 3 and continue the benefits provided for
him in Articles 8 and 9 hereof. The Corporation's obligations in the event of
Executive's partial disability shall terminate upon the end of the Employment
Period.
(b) In the event Executive becomes totally disabled (as
determined in accordance with Article 7(c) below), and such total disability has
continued for six (6) full consecutive calendar months or more, then for so long
thereafter during the Employment Period as such total disability shall continue
or for a period of one (1) year, whichever is longer, Executive shall be paid at
seventy-five percent (75%) of the rate of his Annual Executive Compensation as
set forth in Article 3 hereof.
(c) For purposes of this Agreement, determination of whether
Executive is or is not totally disabled shall be made as follows:
(i) Executive's inability, physical or mental,
for whatever reason, to be able to perform
his duties to the Corporation shall be total
disability; and
(ii) If any difference shall arise between the
Corporation and Executive as to whether he
is totally disabled, such difference shall
be resolved as follows: Executive shall be
examined by a physician appointed by the
Corporation amd a physician appointed by
Executive. If said two physicians shall
disagree concerning whether Executive is
totally disabled, that question shall be
submitted to a third physician, who shall
be selected by such two physicians. The
medical opinion of such third physician,
after examination of Executive and
consultation with such other two physicians,
shall decide the question.
(d) Should Executive become totally disabled then he may by
action of the Board of Directors be removed from his position and employment
with the Corporation.
8. Death. In the event of the death of Executive during the Employment
Period, the Corporation shall continue to pay Executive's Annual Executive
Compensation for a period of one (1) year from the date of death. The salary
payment will be made to the wife of Executive or if no wife shall survive
Executive, to his Estate.
9. Employee Benefits. (a) Executive may participate in all benefit
plans to the extent, if any, that he may be eligible to do so under the
provisions of such plan or program. Those benefit plans may include medical and
insurance, life and accidental death/dismemberment insurance, short- and
long-term disability, tuition reimbursement, 401(k) plan, stock purchase plan,
vacation and pension plans. The Corporation may terminate, modify, or amend any
such plan or program, in the manner and to the extent permitted therein, and the
rights of Executive under any such plan or program shall be subject to any such
right of termination, modification, or amendment. To the extent any payments
under any such plan or program are made to Executive because he is disabled,
such amounts shall be credited against amounts due to Executive under Article 7.
(b) For the sake of clarification, and notwithstanding any
other provision of this Agreement, it is understood and agreed that all benefits
provided to Executive under this Agreement shall be provided to the extent that
they exceed any employee benefit provided to Executive other than specifically
through this Agreement, such as the programs, plans, etc. referred to in Article
9(a) above. The benefits provided under this Agreement shall be supplemental to
benefits provided otherwise to Executive by the Corporation, and shall not be
provided to the extent that they are duplicative. For example, if a disability
benefit is available under a program referred to in Article 9(a) above and it
provides the same or greater benefit than provided in Article 7 hereof, then no
benefit will be paid out under Article 7 hereof. If a disability benefit
available under Article 9(a) above is less than that provided in Article 7
hereof, then supplemental payments would be available under Article 7 hereof to
the extent that the total of the payments would equal the aggregated benefits
provided by Article 7.
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10. Covenant Not to Compete. During the Employment Period, Executive
agrees not to compete with the Corporation (the Corporation for purposes of this
Article 10 means the Corporation and its Affiliates) either directly, or by
stock interest exceeding five percent (5%), or otherwise in any way in any
business in which it is then engaged anywhere in the world. During the one-year
period immediately following termination of Executive's employment with the
Corporation, Executive agrees that he will not (a) engage, directly or
indirectly, or by stock interest exceeding five percent (5%), or otherwise in
any way, in any business in which the Corporation was engaged during the term of
his employment or which the Corporation planned, during the term of his
employment to enter, (b) solicit any past, present or future customers of the
Corporation in any way relating to any business in which the Corporation was
engaged during the term of his employment, or which the Corporation planned
during the term of his employment, to enter, or (c) induce or actively attempt
to influence any other employee or consultant of the Corporation to terminate
his or her employment or consultancy with the Corporation. During this one-year
period, provided that the Corporation has requested within fifteen (15) business
days after Executive's last day of employment the non-competition agreement
referred to above with respect to said period, Executive shall receive Annual
Executive Compensation and employee benefits paid or maintained in the same
fashion and in amounts not less than those he received during the last year of
employment with the Corporation, and the Corporation shall have the right to
call upon Executive's services as a consultant. In the event that Executive
violates any provision of this Article 10 or of Article 5, then in addition to
any other remedies available to the Corporation (which can include obtaining
injunctive relief as the parties acknowledge that irreparable damage not
compensable by money can result), the Corporation shall have the right
immediately to terminate any payments or benefits provided or to be provided to
Executive under this Agreement.
11. Assignment. This Agreement may be assigned by the Corporation as
part of the sale of substantially all of its business; provided, however, that
the purchaser shall expressly assume all obligations of the Corporation under
this Agreement. Further, this Agreement may be assigned by the Corporation to an
Affiliate, provided that any such Affiliate shall expressly assume all
obligations of the Corporation under this Agreement, and provided further that
the Corporation shall then fully guarantee the performance of the Agreement by
such Affiliate. Executive agrees that if this Agreement is so assigned, all the
terms and conditions of this Agreement shall remain between such assignee and
himself with the same force and effect as if said Agreement had been made with
such assignee in the first instance.
12. Termination.
(a) For Cause. The Corporation may terminate Executive's
employment and this Agreement for Cause by delivering written notice to
Executive, setting forth the reason for termination. For the purpose of this
Agreement, "Cause" shall mean (i) the arrest of the Executive on charges of
having committed any felony, (ii) stealing from the Corporation, (iii) a willful
breach by Executive of a material provision of this Agreement and (iv) if
Executive engages in gross misconduct, such as fraud, dishonesty, gross
negligence or insubordination. If this Agreement is terminated for Cause, the
Corporation's obligation to Executive hereunder shall be limited to the
Executive Compensation and benefits earned up to the date notice of termination
is delivered to Executive.
(b) Termination Without Cause.If the Corporation dismisses
Executive without Cause, the Corporation shall continue to fulfill its
obligations under this Agreement until the later of: (A) the date six months
following Executive's dismissal, or (B) the end of the Employment Period.
(c) Termination By Executive. If Executive elects to terminate
his employment with the Corporation, the Corporation's obligations to Executive
under this Agreement shall be limited to the Executive Compensation and benefits
earned up to the date of Executive's departure. Nonetheless, the Corporation may
notify Executive that it wishes Executive not to compete and to be available as
a consultant in accordance with and for the compensation set out in Article 10.
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13. Survival. The provisions of Articles 5, 6, 10, 12 and
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14. Notices. All notices required or permitted to be given hereunder
shall be mailed by registered mail or delivered by hand to the party to whom
such notice is required or permitted to be given hereunder. If mailed, any such
notice shall be deemed to have been given when mailed as evidenced by the
postmark at point of mailing. If delivered by hand, any such notice shall be
deemed to have been given when received by the party to whom notice is given, as
evidenced by written and dated receipt of the receiving party.
Any notice to the Corporation or to any assignee of the Corporation
shall be addressed as follows:
SpecTran Corporation
00 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Any notice to Executive shall be addressed to the address appearing on
the records of the Corporation at the time such notice is given.
Either party may change the address to which notice to it is to be
addressed, by notice as provided herein.
15. Applicable Law. This Agreement shall be interpreted and enforced in
accordance with the laws of Massachusetts governing contracts made in and to be
performed solely in such State.
16. Effective Date. This Agreement shall become effective as of the
date first mentioned in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed the above
Agreement as of the day and year first above written.
SPECTRAN CORPORATION
By s/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx,
President and
Chief Executive Officer
s/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
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