EXHIBIT 99.C
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of the 11th day of February
2000, is between Circuit Systems, Inc., an Illinois corporation (the
"Company"), and Xxxxxxxxx X. Xxxxx ("Xxxxx").
WHEREAS, the Company is experiencing operational difficulties and
desires to retain Xxxxx in an executive capacity for the period and
upon the other terms and conditions herein provided to assist the
Company in its rehabilitative effort; and
WHEREAS, Xxxxx is willing to be employed by the Company pursuant
to the terms and conditions of this Agreement, and understands that one
of his missions as an executive employee will be to reduce the
Company's operating costs and/or increase revenues so as to "cover" the
Compensation and Benefits provided for herein.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and obligations herein contained, and for other good and
valuable consideration, the receipt, adequacy, and sufficiency of which
are hereby acknowledged, the parties hereto do hereby covenant and
agree as follows:
1. EMPLOYMENT
1.1 Position. The Company hereby confirms Xxxxx'x employment as
its Executive Vice President and Chief Operating Officer.
1.2 Duties. Xxxxx'x duties will include all those duties
customarily associated with the position of Executive Vice President
and Chief Operating Officer in an emerging growth company, including
those duties that require the performance of policy-making functions
as contemplated by Rule 3b-7 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Such duties shall also include
management of all functions and facilities required of and maintained
by the Company and its subsidiaries. Xxxxx agrees to devote
substantially his entire business time and attention to the performance
of his duties hereunder and to serve the Company diligently and to the
best of his abilities. Notwithstanding the foregoing, Xxxxx shall have
the continuing right (a) to make passive investments in the securities
of any publicly-owned corporation, (b) to make any other passive
investments with respect to which he is not obligated or required to,
and does not in fact, devote any substantial managerial efforts that
interfere with the fulfillment of his duties to the Company; and, (c)
subject to the prior written approval of the Company's Board of
Directors (the "Board of Directors"), to serve as a director of or
consultant to other companies and entities.
2. COMPENSATION AND BENEFITS
2.1 Base Annual Salary. The Company shall pay Xxxxx a base
annual salary of $420,000 (the "Base Annual Salary") periodically
throughout the year, commencing the date hereof, in accordance with its
customary payroll practices, as modified from time to time, subject to
all payroll and withholding deductions required by applicable law.
2.2 Cash Bonuses; Other Incentive Compensation. Subject to the
satisfaction of such criteria and the achievement of such objectives as
the Compensation Committee of the Board of Directors may establish,
Xxxxx may receive additional cash bonuses and other incentive
compensation (including stock options).
2.3 Other Benefits. Xxxxx shall be entitled to other benefits
and perquisites no less favorable than those provided to the Company's
employees generally, as such benefits and perquisites may be modified
from time to time in the Company's discretion. Such benefits shall in
all events include health insurance, a 401(k) plan and paid holidays
annually. Such perquisites shall in all events include three weeks of
vacation annually, disability insurance and group term life insurance.
The Company shall pay Xxxxx compensation in accordance with paragraph
2.1 hereof in the event Xxxxx does not take his full vacation during
any calendar. To assist with the business travel essential to
conducting business in the Metropolitan Chicago area, throughout the
term of this Agreement the Company will provide Xxxxx with a company-
acquired and -maintained automobile. All expenses incidental to the
personal use of the automobile shall be borne by Xxxxx.
2.4 Expense Reimbursement. Xxxxx shall be reimbursed by the
Company for his reasonable out-of-pocket business expenses in
accordance with the Company's established policies applicable to
executive officers generally. The Company shall reimburse Xxxxx for
his temporary living expenses and travel expenses to and from Elk Grove
Village, Illinois until such time as Xxxxx relocates his principal
place of residence near the Company's headquarters in Elk Grove
Village, Illinois. In addition, the Company will reimburse Xxxxx for
all expenses related to legal, tax and financial advice, not to exceed
37,500 in the aggregate over the Term of this Agreement.
2.5 Insurance. The Company will pay an annual premium for a
$5,000,000 life insurance policy to be owned by Xxxxx.
3. TERM
3.1 Term. The term of the Executive's employment hereunder shall
be the period of twelve (12) months commencing as of the date hereof
and expiring on January 31, 2001 (the "Term"). The term of Executive's
employment hereunder shall, in any event, be subject to earlier
termination as provided in paragraph 4 hereof.
4. TERMINATION AND SEVERANCE PAY
4.1 At Will. Xxxxx and the Company acknowledge and agree that
Xxxxx'x employment with the Company is "at will" during the term of
this Agreement. Accordingly, either party (and in the case of the
Company, only by the Board of Directors) may terminate Xxxxx'x
employment by the Company, with or without cause, in which case Xxxxx
shall have no claim for lost wages, although termination of Xxxxx'x
employment shall be subject to the terms and conditions of this
Agreement regarding severance pay, benefits and other obligations.
4.2 Voluntary Resignation. In the event that Xxxxx'x employment
with the Company terminates as a result of his voluntary resignation,
Xxxxx shall be entitled to no severance pay or benefits.
4.3 Involuntary Termination.
(a) Severance Pay. In the event that Xxxxx'x employment
with the Company is not extended by the Company upon the expiration of
the Term of this Agreement, Xxxxx shall be entitled to severance pay in
the form of continuation of Base Annual Salary for six (6) months from
the expiration of the Term of this Agreement. In the event that Xxxxx'x
employment with the Company is terminated by the Company For Just Cause
(as defined in Section 4.3(c) hereof), Xxxxx shall not be entitled to
severance pay or benefits. In the event that Xxxxx'x employment with
the Company is terminated by the Company other than for Just Cause
prior to the expiration of the Term of this Agreement, Xxxxx shall be
entitled to severance pay in the form of continuation of Base Annual
Salary for the remainder of the Term and an additional six (6) months
after the expiration of the Term. Xxxxx shall have no duty to mitigate
such payments by seeking or accepting other employment; accordingly,
such payments shall not be reduced due to receipt of other compensation
from such other employment as he may obtain during the term of his
severance payments.
(b) Additional Benefits. In the event that Xxxxx'x
employment with the Company is terminated by the Company other than For
Just Cause, Xxxxx shall be entitled to continue to participate in the
Company's employee benefit programs as and to the extent theretofore
made available to him pursuant to Section 2.4 above. Such benefits
shall be continued at no additional cost to Xxxxx, except to the
extent, if any, that tax laws require the inclusion of the value of
such benefits in his gross income. Such benefits shall continue for
the benefit of Xxxxx for the entire period of his severance pay
continuation as provided in Section 4.3(a) above, in the same manner
and at the same level as in effect immediately prior to Xxxxx'x
termination.
(c) For Just Cause. For purposes of this Agreement, the
term "For Just Cause" shall mean any termination of employment of Xxxxx
for one or more of the following reasons: (i) the substantial failure
by Xxxxx to comply with a lawful, written instruction of the Company's
Board of Directors, which instruction is consistent with his duties as
elsewhere provided in this Agreement, which failure continues without
interruption for the 30 days immediately following Xxxxx'x receipt of
such instruction; (ii) the substantial and continuing failure of Xxxxx
to render vital service to the Company in execution of his essential
duties, as determined by the Board of Directors in good faith with
reference to Xxxxx'x employment agreement then in effect, after giving
written notice to Xxxxx and an opportunity for him to remedy such
failure within 30 days of receiving such notice; (iii) the conviction
of Xxxxx for a felony involving an act of moral turpitude, which
conviction has become final and non-appealable; (iv) recklessness in
the performance of Xxxxx'x duties to the Company causing material harm
to the Company; or (v) material dishonesty, material breach of
fiduciary duty or material breach by Xxxxx of any representation,
covenant or other agreement contained in this Agreement.
(d) Constructive Termination. If Xxxxx without his prior
written consent, is removed by the Board of Directors of the Company
from the position of Executive Vice President and Chief Operating
Officer, or if Xxxxx'x duties are restricted or reduced in such a
manner as to result in his position with the Company no longer
including duties requiring the performance of policy making functions
by an executive officer within the meaning of Rule 3b-7 of the Exchange
Act, then, in either such case, the employment of Xxxxx shall be
deemed, in his discretion, involuntarily terminated by the Company
other than For Just Cause, it being understood that Xxxxx must exercise
his discretion under this Section 4.3(d) in writing to the Board of
Directors within sixty days following the latest to occur of any event
constituting involuntary termination pursuant to this Section 4.3(d).
5. NON-DISCLOSURE, NON-SOLICITATION, NON-COMPETE AND NON-
DISPARAGEMENT
5.1 Non-Disclosure. Except as is reasonably necessary in the
performance of his duties hereunder, Xxxxx shall not disclose to any
person or entity or use for his own direct or indirect benefit any
Confidential Information (as defined below) pertaining to the Company
obtained by him in connection with his employment with the Company.
For purposes of this Agreement, the term "Confidential Information"
shall include information with respect to the Company's products,
services, processes, suppliers, customers, customers' account
executives, financial, suppliers and distribution information, price
lists, identity and list of actual and potential customers, trade
secrets, technical information, business plans and strategies;
provided, however, that such information shall not be treated as
Confidential Information to the extent that it has been publicly
disclosed by the Company (other than by Xxxxx through a breach of this
Section 5.1).
5.2 Non-Solicitation. Xxxxx agrees that for a period of three
(3) years after termination of his employment for any reason other than
involuntary termination not for Just Cause, he shall not (a) directly
or indirectly solicit, induce or attempt to solicit or induce any
Company employee to discontinue such employee's employment by the
Company, (b) usurp any opportunity of the Company of which he became
aware during his tenure at the Company, or that was made available to
him on the basis of a mistaken belief that he was still employed by the
Company, or (c) directly or indirectly solicit or induce or attempt to
influence any person or business that is an account, customer or client
of the Company to reduce or cancel the business of any such account,
customer or client with the Company.
5.3 Non-Compete. Xxxxx agrees that, so long as he is employed by
the Company and for a period of three (3) years after termination of
his employment for any reason other than involuntary termination not
For Just Cause, he shall not, without prior written consent of the
Company's Board of Directors, either directly or indirectly (including,
without limitation, through a partnership, joint venture, corporation
or other entity or as a consultant, director or employee), engage in
the business engaged in by the Company as of the date hereof within any
of those geographical areas in which the Company currently conducts
active business operations. The parties hereto agree that the scope
and the nature of such covenant, and the duration and the area within
which such covenant is to be effective, are reasonable in light of all
facts and circumstances.
5.4 Non-Disparagement. Xxxxx agrees that, so long as he is
employed by the Company and for a period of three years after
termination of his employment for any reason other than involuntary
termination not For Just Cause, he shall not make any public comment
(whether written or oral) concerning or touching upon the Company or
any of its Affiliates, including but not limited to any or all of the
Company's executive officers and directors, which comment would tend to
disparage the personal, financial or business reputation of such other
person or persons, except for such comments as may be required by law
and except for such comments as may be made in litigation, arbitration
or mediation with such person or persons.
6. CERTAIN COVENANTS OF THE COMPANY
6.1 No Waiver. The waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed as a
waiver of any subsequent breach thereof.
6.2 Assignment. This Agreement may not be assigned by Xxxxx and
may not be assigned by the Company otherwise than by operation of law.
This Agreement shall be binding upon the Company's successors and
assigns.
6.3 Entire Agreement. This Agreement supersedes any and all
prior written or oral agreements between Xxxxx and the Company and
evidences the entire understanding of the parties hereto with respect
to the terms and conditions of Xxxxx'x employment with the Company.
6.4 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois without
regard to the choice of law rules of the State of Illinois or any other
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
By: --------------------------------
Xxxxx X. Xxxxx, Vice President,
Chief Financial Officer, and Treasurer
--------------------------------
Xxxxxxxxx X. Xxxxx
Acknowledged:
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Chairman, Compensation Committee
Circuit Systems, Inc.
