EMPLOYMENT AGREEMENT
This is an Employment Agreement (the "Agreement") made effective as of
May 1. 1995, between and among ASSEMBLY & MANUFACTURING SYSTEMS CORP.
(f.k,a. AUTOMATION TOOLING SYSTEMS CORP), a California corporation having
its principal place of business located at 2222 Shasta Way, Simi Valley,
California 93065 ("EMPLOYER") and AMIR KHIABANI ("EMPLOYEE"),
Section 1.0 - Recitals
l.l EMPLOYEE has rendered services to EMPLOYER over a period of
many months in various capacities, e.g. just prior to the recent sale of
EMPLOYER, EMPLOYEE was project manager of EMPLOYER,
l.2 EMPLOYEE represents that he has extensive experience and
comprehensive knowledge of the business of EMPLOYER, Based upon EMPLOYEE's
representation regarding his experience and abilities, EMPLOYER has a
compelling need for his continued association as executive, officer and
director of EMPLOYER, to assure the continued association and services of
EMPLOYEE, to retain and utilize his experience, skills, abilities, background
and knowledge, and to facilitate long-range planning and growth of the
business of EMPLOYER in an orderly and efficient manner, EMPLOYER is willing
to continue to employ EMPLOYEE upon the terms and conditions set forth
hereinafter,
1.3 EMPLOYEE is willing to continue rendering services to EMPLOYER
upon the terms and conditions set forth hereinafter,
l.4 NOW, THEREFORE, in consideration of the foregoing recitals
and of the promises and conditions herein contained, the parties agree as set
forth below.
Section 2.0 - Employment
2.1 Powers and Duties, EMPLOYEE shall be employed by EMPLOYER as
its Vice President of Operations, EMPLOYEE shall have powers and duties
consistent with such position and shall report directly to the President of
EMPLOYER,
2.2 Term of Employment. The term of this Agreement and
EMPLOYEE'S employment shall be two (2) years, unless sooner terminated as a
result of the following: (i) retirement of the EMPLOYEE; (ii) death of
EMPLOYEE; (iii) an Involuntary Termination pursuant to a Disabling Event
under Section 6.1; (iv) an Employer Termination For Cause pursuant to
Section 6.2; (v) an Employer Termination For Cause pursuant to Section 6,3;
(vi) an Employer Termination Without Cause pursuant to Section 6.4 or
(vii) a Voluntary Termination pursuant to Section 6.5. The initial and
any subsequent term of this Agreement shall be automatically renewed for
a period of one year unless EMPLOYEE notifies EMPLOYER, or EMPLOYER
notifies EMPLOYEE, in writing at least 30 days prior to expiration of the
then current term of this Agreement that the Agreement shall not be renewed,
2.3 Time to be Devoted to Employment. Except for annual
vacations taken pursuant to Section 4.1, during the employment term the
EMPLOYEE shall devote his full time and energy to the business of EMPLOYER.
EMPLOYEE shall not be engaged in any other business activity which, in the
reasonable judgment of the Board of Directors of EMPLOYER, conflicts with
the duties of the EMPLOYEE hereunder, whether or not such activity is
pursued for gain, profit or other pecuniary advantage; provided, however,
that EMPLOYEE may, without violating the provisions of this Section 2.3 own
less than 5% of the outstanding capital stock of a company whose shares are
actively traded on a public securities exchange or a public over-the-counter
market,
Section 3.0 - Compensation of the EMPLOYEE
3.1 Annual Salary. As compensation for the services to be
performed hereunder, the EMPLOYEE shall receive a salary at the rate of
Eighty-Nine Thousand Five Hundred Dollars ($89,500,00) per annum, payable
in equal weekly installments ("Regular Compensation") which shall be
adjusted semi-annually for any change upward from the preceding semi-annual
period in the cost-of-living index for the Los Angeles/Long Beach region as
compiled by the United States Department of Labor (the "semi-annual COLA"),
3.2 Salary Continuation During Disability. If the EMPLOYEE for
any reason whatsoever suffers a Disabling Event (defined in Section 6.1)
during the term of his employment, EMPLOYER agrees that, if the EMPLOYEE
is involuntarily terminated pursuant to Section 6.1. it will pay the EMPLOYEE
an amount equal to seventy percent (70%) of the Regular Compensation he is
receiving at the time of occurrence of the Disabling Event, payable as set
forth above. Such payment shall be increased semi-annually by COLA and shall
continue for so long as EMPLOYEE is disabled and thereafter until the
earlier of the following events occurs: (i) EMPLOYEE is rehired by EMPLOYER
for a salary and executive position at least equal to his executive position
nd his Regular Compensation at the time of occurrence of the Disabling Event
plus accrued semi-annual COLA, or (ii) the second anniversary date of the
Disabling Event,
3.3 Tax Withholding. EMPLOYER shall have the right to deduct or
withhold, from any amounts of money due the EMPLOYEE and/or his spouse, any
and all sums required for federal income and Social Security taxes, together
with all state and local taxes now applicable or that may be enacted and
become applicable in the future.
3.4 Incentive Compensation.
3.4.1 In addition to Regular Compensation, EMPLOYEE shall
be entitled to incentive compensation ("Incentive Compensation") from
EMPLOYER, payable in a lump sum on or before thirty days (30) following each
anniversary date of this Agreement, including its expiration date. EMPLOYER'S
obligation to pay Incentive Compensation shall survive expiration of this
Agreement,
3.4.2 The amount of Incentive Compensation payable to
EMPLOYEE shall be based on the following percentages of the Pretax Earnings
(defined below) of EMPLOYER, determined as of each anniversary date of this
Agreement, for the immediately preceding 12-month period:
3.4.2.1 If Pretax Earnings for the applicable 12-month
period equal or exceed the Projected Pretax Earnings (defined below) for
such 12-month period, EMPLOYEE shall receive Incentive Compensation equal to
20% of EMPLOYEE'S then current annual Regular Compensation, payable as
aforesaid.
3.4.2.2 If Pretax Earnings for the applicable 12-month
period exceed the Projected Pretax Earnings (defined below) for such 12-month
period by 20% or more, EMPLOYEE shall receive additional Incentive
Compensation [in addition to the Incentive Compensation payable under
Section 3, 4, 2.1 above)] equal to 20% of EMPLOYEE'S then current annual
Regular Compensation, payable as aforesaid,
3.4.3 "Pretax Earnings" means the pretax earnings of the
EMPLOYER in whatever form the businesses of EMPLOYER may be conducted
(including, without limitation, as a subsidiary or subsidiaries, as a
division or divisions, or as part of a subsidiary or division of any current
or future parent of EMPLOYER, or any subsidiary or affiliate thereof
(collectively, "Parent Company")], determined in accordance with generally
accepted accounting principles, consistently applied, except that solely
for the purpose of such definition (i) no deduction shall be made for
federal, state or local income or excise taxes; (ii) no deduction shall be
made for Parent Company head office or corporate charges, other than charges
for specific necessary services supplied at fair market value; (iii) no
deduction shall be made for amortization of goodwill; (iv) no deduction for
interest on funds advanced by the Parent Company shall be made for any
fiscal period, other than interest (at not greater than the then fair market
rate) on funds advanced by the Parent Company at the request of EMPLOYEE for
operating capital; (v) a net loss incurred for any fiscal period shall not
be carried back to offset earnings for any prior fiscal period, but
it shall be carried forward to offset pretax earnings for subsequent fiscal
periods until such net loss is depleted; (vi) no deduction shall be made for
management fees paid by EMPLOYER to the Parent Company, provided that this
clause shall not be deemed to prevent the deduction of head office or corporate
charges subject to the limitation specified in clause (ii); and (vii) no
deduction shall be made for any dividend or redemption payments.
3.4.4 "Projected Pretax Earnings" means the Pretax
Earnings projected in a EMPLOYER budget approved by the President of EMPLOYER,
3.4.5 Past due Incentive Compensation shall earn interest at
the rate of 10% per annum, compounded daily, until paid.
Section 4.0 - Employee Benefits
4.1 Annual Vacation. EMPLOYEE shall be entitled to three (3)
weeks vacation time each year without loss of compensation. If EMPLOYEE
is unable for any reason to take the total amount of vacation time authorized
herein during any year, he may elect to do either or both of the following:
(i) accrue the unused time and add it to vacation time for the following
year provided the number of vacation days accrued may not result in EMPLOYEE
being entitled to more than four (4) weeks vacation time for that following
year and/or (ii) receive a cash payment for all or such part thereof not
accrued as aforesaid in an amount equal to the amount of Regular Compensation
attributable to that period of time. If EMPLOYEE fails to make an election
by notice to EMPLOYER prior to the end of such following year, he shall be
deemed to have elected a cash payment as provided in clause (ii) above for
all unused time, and EMPLOYER shall deliver the payment to EMPLOYEE within
thirty (30) days following the end of such following year.
4.2 Automobile Allowance. Within ten (10) days following the
beginning of each month during the, term of this is Agreement, EMPLOYER
shall pay EMPLOYEE the sum of Five Hundred Dollars ($500,00) as an automobile
allowance, Such sum shall be increased within thirty (30) days following the
January 1 of each fourth calendar year during the term of EMPLOYEE'S
employment to reflect the semi-annual COLA,
4.3 Contributory Savings Plan. EMPLOYEE shall continue to be
entitled to be a participant in any EMPLOYER savings plan established under
Section 4.01(k) of the Internal Revenue Code.
4.4 Medical, Etc., Insurance Coverage. EMPLOYER agrees to
include EMPLOYEE, and those of his children who qualify as EMPLOYEE'S
dependents under Section 152 of the Internal Revenue Code, in the coverage
of all of EMPLOYER'S medical, hospital, surgical, dental and other group
health and accident insurance plan(s).
4.5 Death Benefits. If EMPLOYEE should die during the employment
term, EMPLOYER agrees to pay the premiums upon the health and dental
insurance of EMPLOYER to which EMPLOYEE'S dependents are then entitled to
subscribe under the Consolidated omnibus Reconciliation Act of 1986
("Cobra"); such premium payments by EMPLOYER shall continue for the extension
period of thirty-six (36) months following the death of EMPLOYEE.
4.6 Key-Man Insurance. EMPLOYER may, at its election and for
their benefit, purchase "key-man" insurance insuring the EMPLOYEE against
accidental loss or death, EMPLOYEE shall submit to such physical examination
and supply such information as may be required in connection therewith.
4.7 Miscellaneous.
4.7.1 It is understood and agreed that the services required by
EMPLOYER will require EMPLOYEE to incur entertainment expenses during the
employment term on behalf of EMPLOYER, EMPLOYER shall make available to
EMPLOYEE sufficient funds for this purpose at such times as EMPLOYEE shall
request, in each instance, EMPLOYEE shall furnish to EMPLOYER adequate
records and other documentary evidence required by federal and state (or
their equivalents) statutes and regulations for the substantiation of each
such expenditure as an income tax deduction,
4.7.2 During the employment term EMPLOYER shall pay all reasonable
dues and fees necessary to maintain EMPLOYEE'S membership in such
professional organizations as EMPLOYEE may reasonably select.
4.7.3 In addition to the foregoing specifically provided benefits,
EMPLOYEE shall be entitled to and shall receive during the employment term
all other benefits and conditions of employment generally available to
full-time salaried employees of EMPLOYER,
Section 5.0 - Business Expenses
5.1 Reimbursement of other business Expenses.
5.1.1 EMPLOYER shall promptly reimburse EMPLOYEE for all other
reasonable business expenditures incurred by the EMPLOYEE in connection
with the business of the EMPLOYERS,
5.1.2 Each such expenditure shall be reimbursable only if it is
of a nature qualifying it as a proper deduction on the federal and state
income tax return of the applicable
EMPLOYER. Section 6.0 - Termination of the Agreement
6.1 Involuntary Termination. If EMPLOYEE for any reason
whatsoever becomes permanently incapacitated or disabled so that he is
mentally or physically incapable of performing the duties prescribed
herein for a period of (i) three (3) months or longer (defined as a
"Disabling Event"), EMPLOYER may, at that time or at any time thereafter,
at its option, terminate the employment of EMPLOYEE under this Agreement
immediately upon giving him notice to that effect (such termination and a
termination by operation of clause (ii) of Section 2.2. being hereinafter
called "Involuntary Termination"). An Involuntary Termination under this
Section 6.1 (for a Disabling Event) shall be subject to the provisions of
Section 3.2.
6.2 EMPLOYER Termination for Cause. EMPLOYER may terminate the
employment of EMPLOYEE hereunder at any time during the employment term for
"cause" (such termination being herein called a "EMPLOYER Termination for
Cause") by giving EMPLOYEE written notice of such termination specifying the
grounds upon which EMPLOYER seeks to terminate the employment of EMPLOYEE.
Such termination shall be effective no sooner than sixty (60) days after
delivery of the aforesaid notice to EMPLOYEE provided, however, that
EMPLOYER may relieve EMPLOYEE from the obligation to perform his duties
during such sixty (60) days after delivery of the notice, for the purposes of
this Section 6.2, "cause" means (i) EMPLOYEE'S willful and substantial
misconduct with respect to the business and affairs of EMPLOYER; (ii) the
commission by EMPLOYEE of embezzlement, fraud, or other like crime involving
money or other property of EMPLOYER; or (iii) EMPLOYEE'S material breach of
an expressly stated material obligation under this Agreement; and (iv)
EMPLOYEE'S failure to cure the same to EMPLOYER'S reasonable satisfaction
within sixty (60) days after receiving the aforesaid notice from EMPLOYER,
6.3 EMPLOYEE Termination For Cause. EMPLOYEE may terminate this
Agreement at any time during the employment term for "cause" (such
termination being herein called an "EMPLOYEE Termination for Cause") by
giving EMPLOYER notice of such termination which shall be effective no
sooner than sixty (60) days after delivery of the notice to EMPLOYER provided,
however, that EMPLOYER may relieve EMPLOYEE from the obligation to perform his
duties during such sixty (60) days after delivery of the notice, for the
purposes of this Section 6.3, "cause" means material breach by EMPLOYER of
one or more of its obligations under this Agreement,
6.4 EMPLOYER Termination Without Cause EMPLOYER may terminate the
employment of EMPLOYEE hereunder at any time during the employment term
without "cause" (such termination being herein called an "EMPLOYER
Termination Without Cause") by giving EMPLOYEE notice of such termination
which shall be effective immediately upon delivery of the notice to EMPLOYEE,
6.5 Voluntary Termination. Any termination of the employment of
EMPLOYEE otherwise than as a result of an Involuntary Termination, an
EMPLOYER Termination For Cause, an EMPLOYER Termination Without Cause or an
EMPLOYEE Termination For Cause shall be deemed to be a "Voluntary
Termination", A Voluntary Termination shall be effective as specified in a
written notice of termination provided, however, that EMPLOYER may relieve
EMPLOYEE of the obligation to perform his duties after the delivery of the
written notice of termination.
6.6 Effect of Termination of EMPLOYEE'S Employment.
6.6.1 Upon the termination of EMPLOYEE'S employment hereunder
pursuant to a Voluntary Termination or an EMPLOYER Termination For Cause,
neither EMPLOYEE nor his beneficiary(s) or estate shall have any surviving
rights or claims against any of EMPLOYER except to receive promptly upon
such termination: (i) any unpaid portion of EMPLOYEE'S Regular Compensation
provided for in Section 3.1 and Incentive Compensation provided for in
Section 3.4 computed on a pro rata basis to the date of termination; (ii)
reimbursement for any expenses for which EMPLOYEE is entitled to
reimbursement under this Agreement and for which he shall not have received
payment; (iii) payment for any unused annual vacation time for which EMPLOYEE
has not been compensated as of the date of termination; (iv) all employee
benefits vested in EMPLOYEE and/or his dependents, including, without
limitation, the benefits specified in Section 7.1 and (v) in the case of
an EMPLOYER Termination for Cause only, payment of an amount equal to the lesser
of (x) three (3) months' of EMPLOYEE'S Regular Compensation or (y) Employee's
Regular Compensation for the remainder of the term of the Agreement, in each
case computed at the rate in effect on the date of such termination and in each
case payable in equal weekly installments.
6.6.2 Upon the termination of EMPLOYEE'S employment
hereunder pursuant to an Involuntary Termination, neither EMPLOYEE nor his
beneficiary(s) or estate shall have any surviving rights or claims against
EMPLOYER except to receive promptly upon such termination: (i) payments and
benefits specified in Sections 6.6.1 and 7.1; (ii) if such Involuntary
Termination is due to a Disabling Event, payments pursuant to Section 3.2;
and (iii) if such Involuntary Termination is due to the death of EMPLOYEE,
payment of all death benefits provided under Section 4.5.
6.6.3 Upon the termination of EMPLOYEE'S employment under
this Agreement pursuant to an EMPLOYER Termination Without Cause or an
EMPLOYEE Termination For Cause, neither EMPLOYEE nor his beneficiary(s) or
estate shall have any surviving rights or claims against EMPLOYER except to
receive promptly upon such termination: (i) payments and benefits specified
in Sections 6.6.1 and 7.2; (ii) payment of an amount equal to the greater of
(x) three (3) months of EMPLOYEE'S Regular Compensation or (y) Employee's
Regular compensation for the remainder of the term of the Agreement, in each
case computed at the rate in effect on the date of such termination and in
each case payable in equal weekly installments; and (iii) payment of the
premium payments due upon the health and dental insurance for the entire period
to which EMPLOYEE is entitled to subscribe under Cobra as a result of such
termination; and (iv) transfer without charge to EMPLOYEE of the entire
interest, if any, which EMPLOYEE does not own on the date of such termination
in the life insurance policy, if any, on the EMPLOYEE's life provided for
in Section 4.6.
Section 7.0 - Stock Bonus Plan
7.1 Restricted Stock Option.
7.1.1 EMPLOYER hereby grants EMPLOYEE the option to purchase
shares of its common stock, exercisable on and after each anniversary
date of this Agreement and any extensions thereof (each such anniversary
date being hereinafter referred to as "Exercise Date"), at a price equal
to 75% of its fair market value on the Exercise Date ("Option").
7.1.2 The number of shares subject to the Option on each
Exercise Date shall be determined by dividing 40% of EMPLOYEE'S regular
compensation on the applicable Exercise Date by the exercise price. For
example, if the EMPLOYEE'S Regular Compensation is $100,000 per annum on
the first anniversary date of this Agreement (i.e., the first Exercise Date),
the number of shares subject to the option vesting on such anniversary date
would determined by dividing 40,000 (40% of $100,000) by the then fair market
per share value of EMPLOYER'S shares. If the fair market value is $1,00 per
share, the maximum number of shares subject to such option would be 40,000
shares.
7.1.3 The Option shall be exercisable as to the shares
optioned on the applicable Exercise Date for a period of ten (10) years
following such Exercise Date.
7.1.4 If EMPLOYEE'S employment by EMPLOYERS is terminated
for any reason, only that portion of the option exercisable at the time of
such termination of employment may thereafter be exercised by EMPLOYEE or,
in the case of termination by EMPLOYEE'S death, by EMPLOYEE'S legal
representative(s).
7.1.5 This Option is not intended to be and shall not be
treated as an incentive stock option under Section 4.2.2 of the Internal
Revenue Code unless this sentence has been manually lined out and its
deletion is followed by the signature of a corporate officer of EMPLOYER
and EMPLOYEE.
/s/ Dominick Savo
______________________________
EMPLOYER Signature
/s/ Amir Khiabani
_________________________________
EMPLOYEE Signature
If the parties elect to treat the option as an incentive stock option under
Section 4.2.2 as herein provided, the Option shall be subject to, and
EMPLOYER and EMPLOYEE agree to be bound by, all of the terms and conditions
of EMPLOYER'S stock option plan to which this Option shall be subject, as
the same may be amended from time to time in accordance with the terms
thereof, provided no such amendment shall deprive EMPLOYEE of this Option or
any of his rights hereunder.
7.1.6 EMPLOYEE may not transfer this Option except by will or
the laws of descent and distribution, This Option shall not be otherwise
transferred, assigned, pledged, hypothecated or disposed of in any way,
whether by operation of law or otherwise, and shall be exercisable during
the EMPLOYEE'S lifetime only by EMPLOYEE or his guardian or legal
representative.
7.2 Merger. If EMPLOYER merges with another company, EMPLOYEE
will have the option to purchase shares of the new company on the same basis.
These shares will be made available through Bently Finance Corporation, a
Delaware corporation.
8.0 General Provisions
8.1 Notices. Notices and other communications among the parties
shall be in writing and shall be delivered personally or sent by air courier
or first class certified or registered mail, return receipt requested and
postage prepaid, addressed as follows:
If to the EMPLOYEE:
Mr. Amir Khiabani
2500 Ashmore Circle, #26
Thousand Oaks, California 91362
If to EMPLOYER
2222 Shasta Way,
Simi Valley, California 93065
Attention: Mr. Dominick Savo President
All notices and other communications given to any party in accordance with
the provisions of this Agreement shall be deemed to have been given on the
date of delivery if personally delivered; on the business day after the date
when sent if sent by air courier; and on the third business day after the
date when sent if sent by mail, in each case addressed to such party as
provided in this Section 8.1 or in accordance with the latest unrevoked
direction from such party.
8.2 Binding Agreement; Benefit. The provisions of this Agreement
will be binding upon, and will inure to the benefit of, the respective heirs,
representatives, assigns and successors of the parties.
8.3 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
California, USA.
8.4 Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement by any other party(s) must be in writing and
shall not operate or be construed as a waiver of any subsequent breach by
such other party(s).
8.5 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
8.6 EMPLOYEE Liability to EMPLOYER. EMPLOYEE shall not be liable
to EMPLOYER for any action taken or omitted to be taken by him except in the
case of his own failure to exercise the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of a company
with similar purposes.
8.7 Indemnification of the EMPLOYEE To the extent not expressly
prohibited by applicable law, and regardless of whether or not EMPLOYEE
succeeds on the merits of any litigation, EMPLOYER, jointly and severally,
shall defend, indemnify and hold harmless EMPLOYEE from any and all costs,
expenses, damages, claims, liabilities and judgments (including the
reasonable costs of the defense of any claim or action and any sums which may
be paid with the consent of EMPLOYER in settlement thereof) which may be
incurred by or awarded against EMPLOYEE, by reason of any action taken or
omitted to be taken on behalf of EMPLOYER or in furtherance of its interests,
EMPLOYEE shall not be entitled to claim any indemnity or reimbursement under
this Section 8.7 to the extent the same is in respect of any cost, expense,
damage or claim that may be incurred by EMPLOYEE which results from the failure
of EMPLOYEE to act in accordance with the provisions of this Agreement and
the "prudent man" standard of care set forth in Section 8.6. To the extent
permitted by applicable law, EMPLOYERS shall make prompt payment of
litigation expenses at the request of EMPLOYEE in advance of payment of
indemnification. In defending any appeal by EMPLOYEE of a determination that
EMPLOYEE has not met the requisite standard of conduct required for
indemnification under this Section 8.7. EMPLOYER shall be required to prove
under applicable standards of proof that EMPLOYEE has not met such standard
of conduct in order to prevail.
8.9 Assignment. This Agreement is personal in its nature and
no party shall, without the consent of all the others, assign or transfer
this Agreement or any rights or obligations hereunder; provided, however, that
the provisions hereof shall inure to the benefit of, and be binding upon (i)
each successor of any of the corporate parties, whether by merger,
consolidation, transfer of all or substantially all assets, or otherwise and
(ii) the heirs and legal representatives of EMPLOYEE.
8.10 Section Headings and Cross-References. The section
headings contained in this Agreement are for convenience only and will not
be construed as part of this Agreement, Cross-references to section numbers
in this Agreement shall be construed to refer only to the sections of this
Agreement and not to the sections of any exhibit incorporated into or referred
to herein, unless expressly indicated otherwise.
8.11 Amendments. No amendments or additions to this Agreement shall
be binding unless reduced to writing and signed by all the parties, except
as otherwise may be specifically provided herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
"EMPLOYER"
ASSEMBLY AND MANUFACTURING SYSTEMS CORP.
/s/
____________________________
Dominick Savo, President
EMPLOYEE
/s/
__________________________
Amir Khiabani
Exhibit 4.24