EXHIBIT 10.8.1
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of April 3, 2000 by and between HCC
Industries Inc., a Delaware corporation (the "COMPANY") and Christopher H.
Bateman ("EMPLOYEE"). The parties agree as follows. The capitalized terms on
EXHIBIT A have the meanings respectively assigned to them, which apply equally
to the singular and plural forms of the terms.
1. EMPLOYMENT
1.1 TERM. The Company agrees to employ Employee for the Term, and Employee
accepts such employment.
1.2 TITLE; REPORTING; POLICIES.
1.2.1 TITLE; DUTIES. Employee will serve as Vice President and
Chief Financial Officer of the Company. Employee will
faithfully perform the duties of Employee's office to the
best of Employee's ability. Employee will have such duties
and responsibilities as are generally consistent with such
position in a company of comparable present and projected
size. Employee will also serve without additional
compensation in such executive capacities for one or more
direct or indirect subsidiaries of the Company as the Board,
from time to time, requests. Employee will also, subject to
Employee's election as such, serve as a member of any
committee of the Board to which Employee may be elected or
appointed.
1.2.2 REPORTING. Employee will report directly to the Chief
Executive Officer of the Company and will be subject to the
direction of the Board and to such limits on Employee's
authority as the Board from time to time imposes.
1.2.3 POLICIES. Employee will be subject to and comply with the
policies, standards and procedures generally applicable to
senior executives of the Company from time to time.
1.3 PLACE; TRAVEL.
1.3.1 PLACE OF EMPLOYMENT. Employee will be based at the Company's
principal executive offices in Los Angeles, California.
1.3.2 TRAVEL. Employee will be expected to engage in periodic
travel as is required for the proper discharge of Employee's
duties.
1.4 EXCLUSIVE; OUTSIDE ACTIVITIES. Employee will devote full and exclusive
business time to the Company. The foregoing will not prohibit Employee
from: (a) passive ownership of real or personal property; (b) owning
less than 5% of any class of securities of a corporation that is
publicly held; (c) owning any class of securities of or being a
partner in any other corporation or business not competing directly or
indirectly with the Company or providing goods or services to the
Company if, in each case, (x) interests are held for investment, (y)
Employee does not become involved in active management of an operating
business, and (z) such ownership or management does not materially
interfere with the performance of Employee's duties. Employee may also
hold directorships or similar positions with nonprofit, charitable,
community or other similar organizations, so long as such activities
do not materially interfere with the performance of Employee's duties.
Any other directorships or similar positions must be approved by the
Board, which approval will not be unreasonably withheld.
2. COMPENSATION AND BENEFITS
2.1. BASE SALARY. Employee will be paid the Base Salary during the Term in
accordance with the Company's policies.
2.2. CASH BONUSES. To the extent made available to other executives of
similar position, and at a level as determined at the sole discretion
of the Board of Directors, Employee will participate in Company
sponsored Cash Bonus programs.
2.3. BENEFIT PLANS. During the Term, Employee will be entitled to
participate in Benefit Programs substantially similar to the Benefit
Programs in which Employee participates on the date hereof.
2.4. EXPENSES. The Company will pay or reimburse Employee for reasonable
travel, entertainment or other expenses Employee incurs on behalf of
the Company in connection with the performance of Employee's duties in
accordance with Company policy existing at the time the expense was
incurred. Any such expenses must be either specifically authorized by
the Company or incurred in accordance with Company policies. Employee
must furnish the Company with evidence relating to such expenses, as
the Company requires substantiating such expenses for tax and
accounting purposes.
2.5. CAR. The Company will provide a car or reimburse Employee for car
expenses in the amount of $750 / month and will provide maintenance
and insurance in each case, in a manner consistent with present
practice of the Company.
2.6. D&O INSURANCE. The Company will furnish Employee with the same
Directors' and Officers' liability insurance furnished to other
executive officers from time to time, and use reasonable efforts to
name Employee as a named insured for four (4) years after the Term
ends.
2.7. VACATION. Employee will be entitled to paid vacation in accordance
with the Company's policies applicable to other executive officers of
the Company. Such vacation will be taken at such time each year as may
be mutually agreed upon by the Company and Employee.
2.8. INDEMNITY. To the fullest extent permitted by applicable law, as from
time to time in effect, the Company will indemnify Employee and hold
Employee harmless for any acts or decisions made in good faith in
performing services for the Company. If Employee is a party to a
definitive indemnification agreement with the Company, the foregoing
sentence will not be applicable.
2.9. SECTION 162 (m) OF THE CODE. Notwithstanding anything to the contrary
in this Agreement, any payment under this Agreement that is not
deductible because of Section 162 (m) of the Code will not be paid
until the first day that it is deductible. Any such deferred payment
will bear interest at the short term federal rate determined under the
Code.
3. TERMINATION
3.1. BY COMPANY. The compensation and other benefits provided to Employee
under this Agreement, and the employment of Employee by the Company,
can be terminated prior to the expiration of the Term only as set
forth in this Section 3.1 and only in accordance with Section 3.4,
Effect of Termination.
3.1.1. DEATH. All payments and benefits under this Agreement will
terminate upon Employee's death, except as set forth in
Section 3.4.1.
3.1.2. UNAVAILABILITY. Employee's employment will terminate upon
the date as of which Employee is Unavailable, and upon
notice by the Company. All payments and benefits under this
Agreement will terminate, except as set forth in Section
3.4.1.
3.1.3. GOOD CAUSE. Employee's employment will terminate upon a
determination that there is Good Cause for such termination.
All payments and benefits under this Agreement will
terminate, except as set forth in Section 3.4.1.
3.1.4. WITHOUT GOOD CAUSE. The Board has the right to terminate
Employee's employment at any time, with or without Good
Cause. All payments and benefits under this Agreement will
terminate, except as set forth in Section 3.4.2.
3.2. BY EMPLOYEE. Employee can terminate employment under this Agreement
for Constructive Termination or if Employee has established Good
Reason under the terms of this Agreement. All payments and benefits
under this Agreement will terminate, except as set forth in Section
3.4.2.
3.3. NOTICE OF TERMINATION. Any termination by the Company for Good Cause
or Unavailability, or by Employee for Good Reason or Constructive
Termination, will be communicated by Notice of Termination to the
other party hereto. A "NOTICE OF TERMINATION" will (a) indicate the
specific termination provision in this Agreement relied upon, (b) to
the extent applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under such provisions and (c) if the Date of Termination is
other than the date of receipt of such notice, specify the termination
date (which if the Notice of Termination is being set forth by the
Company, unless due to Good Cause, Death or Unavailability, the date
shall not be less than 180 days after the giving of such notice). The
failure by the Employee or the Company to set forth in the Notice of
Termination any fact or circumstance that contributes to a showing of
Good Reason or Good Cause will not waive any right of Employee or the
Company hereunder or preclude Employee or the Company from asserting
such fact or circumstance in enforcing Employee's or the Company's
rights hereunder.
3.4. EFFECT OF TERMINATION.
3.4.1. DEATH; UNAVAILABILITY; GOOD CAUSE; OR TERMINATION BY
EMPLOYEE WITHOUT GOOD REASON. If during the Term Employee
dies, becomes Unavailable, is terminated for Good Cause, or
resigns without Good Reason, the company will pay to
Employee (or Employee's estate) the sum of Employee's Base
Salary and, in the case of Employee's Termination on account
of Employee's death or Unavailability, Earned and Unpaid
Bonuses, to which Employee was entitled through the Date of
Termination and any other previously earned but unpaid
compensation (excluding accrued bonuses other than, in the
case of Death or Unavailability, Earned and Unpaid Bonuses)
under this Agreement, in each case to the extent not
previously paid (the "ACCRUED OBLIGATIONS"). The Accrued
Obligations will be paid in a lump sum in cash within thirty
(30) days after the Date of Termination. If employment is
terminated due to Disability, Employee will, while Disabled,
continue to participate in any insurance programs that are
part of the Benefit Programs to the extent that such
continued participation is possible under their terms. All
accruals or vesting of benefits will terminate as of the
Date of Termination.
3.4.2. WITHOUT GOOD CAUSE, CONSTRUCTIVE TERMINATION OR FOR GOOD
REASON. If during the Term Employee's employment is
terminated by the Company for any reason, other than
Employee's death, Unavailability or Good Cause, or by the
Employee for Constructive Termination or for Good Reason,
the Company will pay to Employee the Base Salary and any
Earned and Unpaid Bonuses to which Employee would have been
entitled for the remainder of the Term. Employee will also
be entitled to continue to participate in any of the Benefit
Programs, as though Employee remained an employee, for such
period. Such amounts will be paid or provided to Employee at
such times and in such manner as they would have been paid
or provided if no such termination had occurred. If Employee
becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another
employer provided plan, the medical and other welfare
benefits described herein will be secondary to those
provided under such other plan during such applicable period
of eligibility.
3.4.3. WAIVER. If Employee elects to receive the payments, and
accepts the payments, set forth in this Section 3.4,
Employee agrees that such payments will constitute
Employee's sole and exclusive right and entitlement in
connection with Employee's employment by the Company and the
termination of such employment and any and all matters
related to or arising in connection with such employment.
Employee's acceptance of such amounts will release the
Company and its affiliated entities (including, but not
limited to, all directors, officers, employees and agents)
from any claims that Employee might otherwise have or assert
in connection with such matters. In addition, the Company is
entitled to condition such payment on Employee's execution
of a normal release. If Employee desires to pursue or
enforce any
such rights, entitlements or remedies that would otherwise
be waived and released, then Employee must refuse the
payments provided for in Section 3.4 in their entirety. If
Employee accepts such payments, Employee will be deemed to
have agreed to the foregoing exclusivity of rights and
waiver of claims.
3.4.4. MITIGATION. Employee shall have no obligation to seek or
accept employment elsewhere after any termination under this
Agreement pursuant to Section 3.4.2. Additionally, if
Employee accepts employment elsewhere after any termination
under this Agreement pursuant to Section 3.4.2, the Company
will have no right to offset any amounts paid to Employee
from such other employment during the remaining term hereof,
including, but not limited to, any benefits to which
Employee is entitled under the other company's benefit plans
and programs.
3.4.5. EFFECT ON BENEFIT PROGRAMS. The termination of this
Agreement will not affect any vested rights that Employee
may have at the Date of Termination under any Benefit
Program.
3.4.6. COOPERATION. Following termination of employment with the
Company for any reason, Employee will cooperate with the
Company for the longer period of either 90 days or for the
period of time that the Employee is receiving benefits, as
reasonably requested by the Company, to effect a transition
of Employee's responsibilities and to ensure that the
Company is aware of all matters being handled by Employee.
3.4.7. CONTINGENT BONUS PLAN BENEFITS. Notwithstanding Section 6.3
of the Contingent Bonus Plan of the Company, if this
Agreement is terminated by the Company under Sections 3.1.1,
3.1.2, or 3.1.4, by the Employee under Section 3.2 or by the
Employee providing a six month notice of non-renewal of this
Agreement, the Employee's vested benefits, if any, under the
Contingent Bonus Plan shall not terminate. Such benefits
will be paid to the Employee on March 28, 2001 for the Bonus
Units granted from Bonus Amount A and April 3, 2002 for the
Bonus Units granted from Bonus Amount B, all as defined in
the Contingent Bonus Plan of the Company.
4. OTHER AGREEMENTS
4.1. CONFIDENTIAL INFORMATION, ETC.
4.1.1. CONFIDENTIAL INFORMATION. Employee will hold all
Confidential Information in a fiduciary capacity for the
benefit of the Company. After termination of Employee's
employment, Employee will not, without the prior written
consent of the Company or as may otherwise be required by
court order, communicate or divulge any such Confidential
Information to anyone other than the Company and those
designated by it. Employee acknowledges that Employee has
reviewed and signed the Property Rights and Confidentiality
Agreement attached hereto as EXHIBIT B and agrees that
Employee's current signature on that Agreement acknowledges
his or her receipt thereof.
4.1.2. CLIENTS; EMPLOYEES. During the Term and afterwards for a
period of six (6) months, Employee will not (a) solicit
customers, suppliers or clients of the Company to reduce or
discontinue their business with the Company or to engage in
business with any competing entity or (b) attempt to induce
any employee of the Company to leave such employment.
4.1.3. PUBLICATIONS. If Employee desires to publish the results of
Employee's work for or experiences with the Company through
literature, interviews or speeches, Employee will submit
requests for such interviews or such literature or speeches
to the Chief Executive Officer at least five (5) days before
any dissemination of such information for a determination of
whether such disclosure is in the best interests of the
Company. Employee will not publish, disclose or otherwise
disseminate such information without the prior written
approval of the Company.
4.1.4. DOCUMENTS. On the Date of Termination, Employee shall
deliver to the Company and not keep or deliver to anyone
else any and all notes, notebooks, memoranda, documents,
regardless of whether such materials are in hard copy form
or on computer disks and, in general, any and all material,
relating to the Company's business. Employee shall not
retain any such materials without prior written approval by
the Company.
4.2. WORK PRODUCT.
4.2.1 OWNERSHIP OF WORK PRODUCT. If Employee conceives of,
discovers, invents or creates inventions, improvements, new
contributions, literary property, material, ideas and
discoveries, whether patentable or copyrightable or not (all
of the foregoing being collectively referred to herein as
"WORK PRODUCT"), or receives information about business
opportunities for the Company, unless Company otherwise
agrees in writing, all of the foregoing will be owned by and
belong exclusively to Company and that Employee will have
not personal interest therein, if they are either related in
any manner to the business (commercial or experimental) of
Company, or are, in the case of Work Product, conceived or
made on Company's time or with the use of Company's
facilities or materials, or, in the case of business
opportunities, are presented to Employee for the possible
interest or participation of Company. Employee will further,
unless Company otherwise agrees in writing, (a) promptly
disclose any such Work Product and business opportunities to
Company; (b) assign to Company, upon request and without
additional compensation, the entire rights to such Work
Product and business opportunities; (c) sign all papers
necessary to carry out the foregoing; and (d) give testimony
in support of Employee's inventorship or creation in any
appropriate case. Employee will not assert any rights to any
Work Product or business opportunity as having been made or
acquired by Employee prior to the date of this Agreement
except for Work Product or business opportunities, if any,
disclosed to and acknowledged by Company in writing prior to
the date thereof.
4.2.2 NONASSIGNABLE SECTION 2870 INVENTIONS. In the event that
Employee's employment is subject to the California Labor
Code, except for Employee's obligations under Section 4.2.3.
below, this Agreement does not apply to Work Product with
qualifies as a nonassignable Work Product under Section 2870
of the California Labor Code ("Section 2870"). Employee
acknowledges that Employee has reviewed the Employee-Owned
Invention Notification attached hereto as EXHIBIT C and
agrees that Employee's signature on that Notification
acknowledges his or her receipt thereof.
4.2.3 EMPLOYEE DISCLOSURE OBLIGATION. Employee shall, during the
employment and for six months thereafter, promptly disclose
to the Company fully and in writing all Work Product made,
conceived or first reduced to practice by Employee, either
alone or jointly with others, including, if Section 2870
applies to Employee, any Work Product that Employee believes
fully qualifies for protection under Section 2870, together
with all evidence, in writing, necessary to substantiate
that belief. In addition, Employee will disclose to the
Company all patent applications filed by Employee or on
Employee's behalf within a year after termination of the
employment. The Company will maintain such information in
confidence and will not use for any purpose or disclose to
third parties any such information without Employee's
consent except to the extent necessary to exploit and
enforce any proprietary or intellectual property right the
Company may have in such disclosed information.
4.3. INSURANCE. The Company will have the right to take out life, health,
accident, "Key-man" or other insurance covering Employee, in the name
of the Company and at the Company's expense in any amount deemed
appropriate by the Company. Employee will assist the Company in
obtaining such insurance, including, but not limited to, submitting to
any reasonably required medical examination. The Company will be the
owner and beneficiary of any and all policies for such insurance.
4.4. ASSISTANCE IN LITIGATION, QUASI-LEGAL PROCEEDINGS, INCLUDING, EXTERNAL
OR INTERNAL INVESTIGATIONS. Employee will furnish information, render
assistance, advice and counsel to the
Company at its request regarding any litigation, quasi-legal,
proceeding, including, but not limited to, any external or internal
investigation, matter, dispute or controversy with which the Company
or any of its affiliates or in which any of them is, or may become
involved and of which Employee has or may have reason to have
knowledge, information or expertise. Such services will be without
additional compensation if Employee is then employed by the Company or
if the Employee is drawing on benefits after termination and for
reasonable compensation and subject to Employee's reasonable
availability if Employee is not. In any event, the Company will pay
all of Employee's reasonable out-of-pocket expenses in connection
therewith.
4.5. WITHHOLDING TAXES. To the extent required by the law in effect at the
time any amounts under this Agreement are paid, the Company will
withhold from such payments the taxes and other amounts required to be
withheld by applicable law.
4.6. MEDICAL EXAMINATION. Employee will submit to and cooperate in, from
time to time, such examinations as the Company reasonably requests to
determine whether Employee is or continues to be able to perform the
essential functions of his/her position.
5. DISPUTE RESOLUTION
5.1. DISPUTE RESOLUTION. Except as necessary for the Company to
specifically enforce its rights under Sections 1.4, 4.1 and 4.2 of the
Agreement or to obtain injunctive relief, the parties agree that any
disputes that may arise in connection with, arising out of or relating
to this Agreement, or any dispute that relates in any way, in whole or
in part, to Employee's employment with the Company, the termination of
that employment or any other dispute by and between the parties or
their successors or assigns, will be submitted to binding arbitration
in Los Angeles, California according to the Employment Dispute
Resolution rules and procedures of the American Arbitration
Association and California Code of Civil Procedure Section 1283.05.
Each party will pay half of any costs associated with the arbitration.
This arbitration obligation extends to any and all claims that may
arise by and between the parties or their successors, assigns or
affiliates, and expressly extends to, without limitation, claims or
causes of action for wrongful termination, impairment of ability to
compete in the open labor market, breach of an express or implied
contract, breach of the covenant of good faith and fair dealing,
breach of fiduciary duty, fraud, misrepresentation, defamation,
slander, infliction of emotional distress, disability, loss of future
earnings, and claims under the California or other State
Constitutions, the United States Constitution, and applicable state
and federal fair employment laws, federal equal employment opportunity
laws, and federal and state labor statues and regulations, including,
but not limited to, the Civil Rights Act of 1964, as amended, the Fair
Labor Standards Act, as amended, the Americans With Disabilities Act
of 1990, the Rehabilitation Act of 1973, as amended, the Employee
Retirement Income Security Act of 1974, as amended, and the Age
Discrimination in Employment Act of 1967.
5.2 RIGHTS AND REMEDIES UPON BREACH. If Employee breaches, or threatens to
commit a breach of, any of the provisions of Sections 1.4, 4.1 and 4.2
of the Agreement (the "Restrictive Covenants"), the Company and its
subsidiaries, affiliates, successors or assigns shall have the
following rights and remedies, each of which shall be independent of
the others and severally enforceable, and each of which shall be in
addition to, and not in lieu of, any other rights or remedies
available to the Company or its subsidiaries, affiliates, successors
or assigns at law or in equity:
5.2.1 SPECIFIC PERFORMANCE. The right and remedy to have the
Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or
threatened breach of the Restrictive Covenants would cause
irreparable injury to the Company or its subsidiaries,
affiliates, successors or assigns and that money damages
would not provide an adequate remedy to the Company or its
subsidiaries, affiliates, successors or assigns;
5.2.2 ACCOUNTING. The right and remedy to require Employee to
account for and pay over to the Company or its subsidiaries,
affiliates, successors or assigns, as the case may be, all
compensation, profits, monies, accruals, increments or other
benefits derived or received by
Employee as a result of any transaction or activity
constituting a breach of the Restrictive Covenants;
5.2.3 SEVERABILITY OF COVENANTS. Employee acknowledges and agrees
that the Restrictive Covenants are reasonable and valid in
geographic and temporal scope and in all other respects. If
any court determines that any of the Restrictive Covenants,
or any part thereof, is invalid or unenforceable, the
remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect without regard to
the invalid portions;
5.2.4 BLUE-PENCILING. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable
because of the duration or geographic scope of such
provision, such court shall have the power to reduce the
duration or scope of such provision, as the case may be,
and, in its reduced form, such provision shall then be
enforceable;
5.2.5 ENFORCEABILITY IN JURISDICTION. Employee intends to and
hereby confers jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the
geographic scope of such covenants. If the courts of any one
or more of such jurisdictions hold the Restrictive Covenants
unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of Employee that such
determination not bar or in any way affect the Company's or
its subsidiaries', affiliates', successors' or assigns'
right to the relief provided above in the courts of any
other jurisdiction within the geographic scope of such
covenants, as to breaches of such covenants in such other
respective jurisdictions, such covenants as they relate to
each jurisdiction being, for this purpose, severable into
diverse and independent covenants.
5.3 PREVAILING PARTY. The prevailing party in any action relating to this
Agreement will be entitled to recover, in addition to other
appropriate relief, reasonable legal fees, costs and expenses incurred
in such action.
5.4 SUCCESSOR. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, to
expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.
6. GENERAL PROVISIONS
6.1. ASSIGNMENT. This Agreement is a personal contract, and the rights,
interests and obligations of Employee under this Agreement may not be
sold, transferred, assigned, pledged or hypothecated by Employee,
except that this Agreement may be assigned by the Company to any
corporation or other business entity that succeeds to all or
substantially all of the business of the Company or any division or
subunit thereof through merger, consolidation, corporate
reorganization or by acquisition of all or substantially all of the
assets of the Company and that assumes the Company's obligations under
this Agreement. The term and conditions of this Agreement will inure
to the benefit of and be binding upon any successor to the business of
the Company and Employee's heirs and legal representatives.
6.2. AMENDMENTS; WAIVERS. Amendments, waivers, demands, consents and
approvals under this Agreement must be in writing and designated as
such. No failure or delay in exercising any right will be deemed a
waiver of such right.
6.3. INTEGRATION. This Agreement is the entire agreement between the
parties pertaining to its subject matter, and supersedes all prior
agreements and understandings of the parties in connection with such
subject matter.
6.4. INTERPRETATION; GOVERNING LAW. This Agreement is to be construed as a
whole and in accordance with its fair meaning. This Agreement is to be
interpreted in accordance with the laws of the State of California.
6.5. HEADINGS. Headings of Sections and subsections are for convenience
only and are not a part of this Agreement.
6.6. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which constitute one agreement.
6.7. SUCCESSORS AND ASSIGNS. This Agreement is binding upon and inures to
the benefit of each party and such party's respective heirs, personal
representatives, successors and assigns. Nothing in this Agreement,
express or implied, is intended to confer any rights or remedies upon
any other person.
6.8. EXPENSES. If the Employee seeks legal representation in connection
with this Agreement, the Company shall reimburse the Employee for
legal expenses in an amount not to exceed $1000.00.
6.9. REPRESENTATION BY COUNSEL; INTERPRETATION. The Employee acknowledges
that he/she has had the opportunity to be represented by counsel in
connection with this Agreement. Any rule of law, including, but not
limited to, Section 1654 of the California Civil Code, or any legal
decision that would require interpretation of any claimed ambiguities
in this Agreement against the party that drafted it, has no
application and is expressly waived.
6.10. TIME IS OF THE ESSENCE. Time is of the essence in the performance of
each and every term, provision and covenant in this Agreement.
6.11. NOTICES. Any notice to be given hereunder must be in writing and
delivered to the following addresses (or to another address as either
shall designate in writing). Such notice will be effective (a) if
given by telecopy or if confirmed by returned telecopy, (b) one
Business Day after delivery through a generally recognized and
reputable overnight courier or messenger for next day deliver, (c) if
given by mail or any other means, when actually delivered to the
address specified.
IF TO THE COMPANY: IF TO EMPLOYEE:
HCC Industries Inc. At Employee's most recent
4232 Temple City Blvd. address on the books and
Rosemead, California 91770 records of the Company.
Attention: Chairman of the Board
The parties have signed this Agreement effective as of the date on page three.
HCC INDUSTRIES INC.
By:
-----------------------------
Its:
----------------------------
EMPLOYEE
--------------------------------
Christopher H. Bateman
EXHIBIT A
DEFINED TERMS
"AGREEMENT" means this Employment Agreement, as amended from time to time.
"BASE SALARY" means the annual amount of $212,000. Base salary may be increased
from time to time at the sole discretion of the Board of Directors. In no event
will Base Salary be reduced.
"BENEFIT PROGRAMS" means programs such as group health, dental, life and
disability, 401k and similar programs (but excluding bonus plans).
"BOARD" means the Company's Board of Directors as composed at the time, not
including Employee.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day national
banks in the State of California are authorized or required by law to close.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(a) the sale, lease, transfer or other disposition of all or
substantially all of the assets of the Company or its
subsidiaries (taken as a whole) to any Person or related group
of Persons other than the Stockholders (all as defined in the
Stockholders Agreement);
(b) the merger or consolidation of the Company with or into another
corporation, or the merger of another corporation into the
Company, with the effect that Persons other than the
Stockholders (and their Permitted Transferees (as defined in the
Stockholders Agreement) or any "group" (as defined in the rules
promulgated under Section 13(d) of the Securities Exchange Act
of 1934, as amended) of which any Stockholder or Permitted
Transferees is a member) hold more than 50% of the total voting
power on a fully diluted basis entitled to vote in the election
of directors, managers or trustees of the surviving corporation
of such merger or the corporation resulting from such
consolidation; and
(c) any other event which results in a Person or "group" other than
the Stockholders (and their Permitted Transferees or any "group"
of which any Stockholder or their Permitted Transferees is a
member) holding, directly or indirectly, in the aggregate more
than 50% of common stock to the issuance of all shares of common
stock issuable (i) upon conversion of all convertible securities
outstanding at such time and all convertible securities issuable
upon the exercise of any warrants, options and other rights
outstanding at such time, and (ii) upon exercise of all other
warrants, options and other rights outstanding at such time.
"CHANGE OF STATUS" means any change in Employee's title, duties and
responsibilities, or place of employment (beyond 25 miles of Employee's current
place of employment).
"CODE" means the Internal Revenue Code of 1986, as amended from time to time.
"COMMON STOCK" means the Company's common stock, $0.10 par value.
"COMPANY" means HCC Industries Inc., a Delaware corporation, together with its
subsidiaries.
"CONFIDENTIAL INFORMATION" means information not known by the trade generally or
not reasonably available to a knowledgeable person in the trade, even though
such information may have been disclosed to one or more third parties pursuant
to consulting agreements, joint research agreements, or other agreements entered
into by the Company and includes, but is not limited to, trade secrets, designs,
plans, formulas, customer lists, lists of suppliers, and all other confidential
and proprietary information.
"CONSTRUCTIVE TERMINATION" means that if there is a Change of Status or a Change
of Control in the Company, which results in a Change of Status for the Employee
and thus an effective termination, Employee may, at Employee's sole discretion,
terminate as though he/she were terminating for Good Reason.
"CONTINGENT BONUS PLAN" means the Contingent Bonus Plan, dated February 14, 1997
between the Company and the Participants, as that term is defined therein.
"DATE OF TERMINATION" means:
(a) the end of the Term, if Employee's employment has not terminated
before then;
(b) if Employee's employment is terminated by the Company for Good
Cause, or by Employee for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein,
as the case may be;
(c) if Employee's employment is terminated by reason of death or
Unavailability, the date of death of Employee or the effective
date, of the Unavailability, as the case may be; and
(d) if Employee's employment is terminated by the Company other than
for Good Cause, Death or Unavailability, or by the Employee for
Good Reason or Constructive Termination, 180 days after the date
on which the Company notifies Employee of such termination.
"DISABILITY" means the Employee's inability to substantially render to the
Company the services required under this Agreement for more than 60 days out of
any consecutive 120 day period because of mental or physical illness or
incapacity, as determined in good faith by the Board.
"EARNED AND UNPAID BONUSES" means with respect to any date, bonuses which have
been earned by Employee as of the end of the Company's fiscal year preceding
such date but not paid to Employee.
"GOOD CAUSE" means a finding by the Board in good faith that Employee has
(a) been engaged in an act or acts of dishonesty that were intended
to and did result directly or indirectly in gain or personal
enrichment to Employee at the expense of the Company;
(b) failed to substantially perform Employee's duties hereunder
(other than failure resulting from Employee's Unavailability due
to Disability) persisting for a reasonable period following the
delivery to Employee of written notice specifying the details of
any alleged failure to perform, which failure has, at the sole
discretion of the Company, resulted in material injury and
damage to the Company;
(c) breached this Agreement in any material respect; or
(d) been convicted of any felony offense or misdemeanor offense
involving fraud, theft or dishonesty at any time.
An event specified in (b) or (c) above will not constitute "GOOD CAUSE" until
the Board provides Employee with written notice of such event setting forth in
reasonable detail the specifics of such event and such event has not been cured
to the reasonable satisfaction of the Board, within thirty days of such notice
(except upon the subsequent occurrence of a substantially similar event, in
which case such second event will constitute "Good Cause" without any notice or
cure period).
"GOOD REASON" means, other than an event also constituting Good Cause, the
Company's material breach of this Agreement.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement, dated February 14,
1997 among the Company, Windward, Windward/Park, Windward/Merban,
Windward/Merchant, and the Management Stockholders as defined therein.
"TERM" means the period from the date hereof through 180 days after the Notice
of Termination date in which the Employee is terminated for any reason other
than Good Cause, Death, Unavailability or voluntary termination.
"UNAVAILABILITY" means Employee being unable to fully perform Employee's duties
by reason of Disability or other incapacity, or by reason of any statute, law,
ordinance, regulation, order, judgment or decree, except for an instance that
would constitute Good Cause.
EXHIBIT B
PROPERTY RIGHTS AND CONFIDENTIALITY AGREEMENT
In consideration of my employment and the compensation paid me by HCC Industries
Inc., or any of its subsidiary companies (hereinafter collectively referred to
as the "Company"), I hereby agree as follows:
1. CONFIDENTIALITY. I agree that for and during the entire term of my employment
any of the following shall be considered and kept as the private and privileged
records of the Company and will not be divulged to any person, firm, or
institution except with the prior written authorization of the President of HCC:
a) Sales and marketing: customer lists and files, price lists,
forecasts, reports, data, research, orders, RFQ'S, and related
information whether documented in hard copy form or in
electronic files;
b) Financial: financial reports, budgets, forecasts, operating
analyses whether documented in hard copy form or in electronic
files;
c) Other: engineering processes and designs, drawings, trade
secrets, purchasing data, quality levels and yields, and
personnel files, whether documented in hard copy form or in
electronic files.
Further, upon termination of my employment for any reason, I agree that I will
continue to treat as private and privileged such information and will not
release any such information to any person, firm or institution without prior
written authorization of the President of HCC, and the Company shall be entitled
to an injunction by any competent court to enjoin and restrain the authorized
disclosure of such information.
2. OWNERSHIP OF EMPLOYEE'S INVENTIONS. All inventions, processes, procedures,
systems, discoveries, designs, glass formulae, trade secrets and improvements
conceived by me, alone or with others, during the term of my employment, that
are within the scope of the Company's business operations or that relate to any
of the Company's work or projects, are the exclusive property of the Company. I
agree to assist the Company, at its expense, to obtain patents on any such
patentable ideas, inventions, and other developments, and I agree to execute all
documents necessary to obtain such patents in the name of the Company.
3. RETURN OF PROPERTY. Upon termination of my employment, regardless of how
effected, I shall immediately turn over to the Company all of the Company's
property, including, but not limited to, all items used by me in rendering
services to the Company that may be in my possession or under my control,
including, but not limited to, all notes, memoranda, notebooks, drawings,
records, reports, software, electronic systems, computers, computer disks, paper
files, electronic files and other documents in either hard copy form or
electronic media (and all copies or reproductions of such material). I
acknowledge that this material is the sole property of the Company.
4. MISCELLANEOUS.
a) In the event I seek employment with any person, firm or other
enterprise competitive with the Company, I will disclose this
Agreement to them.
b) I acknowledge that this Agreement is not in any way intended to
create an Employment Contract, either expressed or implied.
c) This Agreement is governed by and will be construed under the
laws of the State of California.
EMPLOYEE:
Dated:
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Employee's Signature
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Employee's Name
HCC INDUSTRIES INC.:
Dated: By:
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EXHIBIT C
EMPLOYEE-OWNED INVENTION NOTIFICATION
This Employee-Owned Invention Notification ("Notification") is to inform
Employee in accordance with Section 2872 of the California Labor Code that the
Agreement between Employee and the Company does not require Employee to assign
or offer to assign to the Company any invention that Employee developed or
develops entirely on his or her own time without using the Company's equipment,
supplies, facilities or trade secret information except for those inventions
that either:
1. Relate at the time of conception or reduction to practice of the
invention to the Company's business, or actual or demonstrably
anticipated research or development of the Company; or
2. Result from any work performed by Employee for the Company.
To the extent a provision in the Agreement purports to require Employee to
assign an invention otherwise excluded from the preceding paragraph, the
provision is against the public policy of the State of California and is
unenforceable.
This Notification does not apply to any patent or invention covered by a
contract between the Company and the United States or any of its agencies
requiring full title to such patent or invention to be in the United States.
Employee acknowledges receipt of a copy of this Notification:
By:
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(Printed Name of Employee)
Date:
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Witnessed By:
- --------------------------------
(Printed Name of Representative)
Date:
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