Agreement
This Agreement ("Agreement"), dated as of August 12, 2002, is between
Titan EMS, Inc., a Delaware Corporation ("the "Company"), and Stephen Saul
Kennedy ("Executive").
WHEREAS, the Company desires to engage Executive as its Vice President
of Sales, (referred to herein as "VPS"), for the period, and upon the other
terms and conditions, herein provided; and
WHEREAS Company has agreed to give Executive vested options to purchase
up to 360,000 shares of its common stock for a period of five years from the
date of this Agreement at the option price of $1.50 per share as described
more fully on Exhibit A; and
WHEREAS, Executive is willing to be employed by the Company as its VPS
pursuant to the terms and conditions of this Agreement effective August 12,
2002;
NOW, THEREFORE, in consideration of the promises, 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 Executive's
employment as its VPS. Executive shall report directly to the Company's
Chief Executive Officer and shall perform the duties described in
Section 1.2 hereof, subject to such limitations of authority as may be
established from time to time by the Company's Board of Directors and
applicable law.
1.2 Duties. Executive's duties will include all those duties
customarily associated with the position of VPS in an emerging growth
company, subject to the direction of the Company's Chief Executive
Officer. Such duties shall include management of PCB sales. Executive
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, Executive shall have the continuing right:
to make passive investments in the securities of any
publicly-owned corporation;
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
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 Executive represents that he
is under no actual or alleged restriction, limitation, or other
prohibition (whether as a result of prior employment or otherwise) to
perform his duties as described herein.
2. COMPENSATION AND BENEFITS
2.1 Base Annual Salary. The Company shall pay Executive a base
annual salary of $140,000.00 (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 Other Benefits. Executive 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.
2.3 Expense Reimbursement. With respect to Executive's reasonable
out-of-pocket business expenses, Executive shall be reimbursed in accordance
with Company's established policies.
3. TERMINATION AND SEVERANCE PAY
3.1 At Will. Executive and the Company acknowledge and agree that
Executive's employment with the Company is "at will" during the term of this
Agreement. Accordingly, either party may terminate Executive's employment by
the Company, with or without cause, in which case Executive shall have no
claim for lost wages, although termination of Executive's employment shall be
subject to the terms and conditions of this Agreement regarding severance pay,
benefits and other obligations. Executive and the Company are not party to
any oral agreement relating to the Executive's employment by the Company.
3.2 Voluntary Resignation. In the event that Executive's employment
with the Company terminates as a result of his voluntary resignation,
Executive shall be entitled to no severance pay or benefits.
3.3 Involuntary Termination.
Severance Pay. In the event that Executive's employment with the
Company is terminated by the Company For Just Cause (as defined in Section 3.3
(c) hereof), Executive shall not be entitled to severance pay or benefits.
Excepting termination by the Company For Just Case, in the event that
Executive's employment with the Company is terminated, Executive shall be
entitled to severance pay in the form of continuation of Base Annual Salary,
for the remainder of six months.
(b) Additional Benefits. In the event that Executive's
employment with the Company is terminated by the Company other than For Just
Cause, Executive 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 2.3 above. Such benefits shall be continued in
accordance with the Company's employment policies then in effect including
customary co-payment obligation for health insurance. Such benefits shall
continue for the benefit of Executive for the entire period of his severance
pay continuation as provided in section 3.3 (a) above, in the same manner and
at the same level as in effect immediately prior to Executive's termination.
In addition, upon any termination of Executive by the Company other than For
Just Cause, any and all cash bonuses that would be payable to Executive at the
end of a period but for is earlier termination shall be payable to him
immediately and pro rata (in accordance with the percentage of completion of
the period in question and with reference to the best available financial
information proximate to the time of termination).
(c) For Just Cause. For purposes of this Agreement, the term
"For Just Cause" shall mean any termination of employment of Executive for one
or more of the following reasons:
the substantial failure by such person, for any reason other
than his death or Disability (as defined below), to comply with a
lawful, written instruction of the Company's Chief Executive
Officer or Board of Directors, which instruction is consistent
with his duties as elsewhere provided in this Agreement, and
which instruction is not overruled by higher corporate authority
and which failure continues without interruption for the five (5)
days immediately following Executive's receipt of such
instruction;
the substantial and continuing failure of Executive, for any
reason other than his death or Disability, to render vital
service to the Company in execution of his essential duties, as
determined by the Company's Chief Executive Officer or Board of
Directors in good faith with reference to such person's
employment agreement then in effect after giving written notice
to such person and an opportunity for him to remedy such failure
within five (5) days of receiving such notice;
the conviction of such person for a felony involving an act
of moral turpitude, which conviction has become final and
non-appealable;
recklessness in the performance of such person's duties to
the Company causing material harm to the Company; or
material dishonesty, material breach of fiduciary duty or
material breach by Executive of any representation, covenant or
other agreement contained in this Agreement.
3.4 Death. In the event of Executive's death, this Agreement
shall automatically terminate and shall be of no further force or effect;
provided, however, the Company shall be obligated to make all the payments and
to provide all the benefits due to Executive hereunder to the time of his
death.
3.5 Disability. In the event of Executive's Disability (as defined
below) during the term of this Agreement for any period of at least three (3)
consecutive months, the Company shall have the right, exercisable in its
discretion, to terminate this Agreement. In the event that the Company does
elect to terminate this Agreement, Executive shall not be entitled to any
severance pay but shall be entitled to normal disability benefits in
accordance with such policies of the Company as may then be in effect. For
purposes of this Agreement, "Disability" shall mean the inability of Executive
to perform the essential functions of his employment hereunder by reason of
physical or mental illness or incapacity as determined by a physician chosen
by the Company and reasonably satisfactorily to Executive or his legal
representative.
4. TERM
This Agreement shall become effective as of the date hereof and shall
terminate on the date that is five (5) years after the date hereof, unless
earlier terminated pursuant to Article 3 hereof.
5. NON-DISCLOSURE, RESTRICTIVE COVENANTS, AND NON-DISPARAGEMENT
5.1 Non-Disclosure. Except as is reasonably necessary in the
performance of his duties hereunder, Executive 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,
suppliers and distribution information, price lists, identity and list
of actual and potential customers, trade secrets, technical information,
business plans, and strategies and financial records or condition;
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 Executive through a breach of
this Section 5.1)
5.2 Restrictive Covenants. Executive agrees that, after
the termination of Executive's employment and for the one year
period after the date hereof, provided the Company is not in
default of any obligation to Executive under this Agreement or
otherwise, he shall not:
directly or indirectly, alone or as a partner, joint venturer,
officer, director, employee, consultant, agent, independent contractor or
stockholder of any company or business, engage in any business activity in
the State of California ("Restricted Territory"), and which is directly or
indirectly in competition with the business conducted by the Company as of
the date of the termination of Executive's employment; provided however,
that, the beneficial ownership of less than 5% of the shares of stock of any
corporation having a class of equity securities actively traded on a
national securities exchange or over-the-counter market shall not be deemed,
in and of itself, to violate the prohibitions of this Section.
directly or indirectly:
induce any customer to patronize any business directly or
indirectly in competition with the business conducted by Company;
canvass, solicit or accept from any entity any such
competitive business; or
request or advise any customer to withdraw, curtail, or
cancel any such customer's business with Company;
employ any person who was employed by Company at or within twelve
(12) months prior to the termination of Executive's employment or in any
manner seek to induce any such person to leave his or her employment; or
directly or indirectly, in any way utilize, disclose, copy,
reproduce, or retain in his possession's any of Company's proprietary rights
or records, including, but not limited to, any of its customer lists.
Executive agrees and acknowledges that the restrictions contained
in this Section 5.2 are reasonable in scope and duration and are necessary
to protect Company after the termination of Executive's employment. If any
provision of this Section as applied to any party or to any circumstance is
adjudged by a court to be invalid or unenforceable, the same will in no way
affect any other circumstance or the validity or enforceability of this
Agreement. If any such provision, or any part, thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall
have the power to reduce the duration and/or area of such provision, and/or
to delete specific words or phrases, and in its reduced form, such provision
shall then be enforceable and shall be enforced. The parties agree and
acknowledge that the breach of this Section will cause irreparable damage to
Company and upon breach of any provision of this Section, Company shall be
entitled to injunctive relief, specific performance or other equitable
relief; provided, however, that this shall in no way limit any other
remedies which Company may have (including, without limitation, the right to
seek monetary damages).
5.3 Defamatory Statement. Executive agrees from the date hereof he
shall not make any written or oral statements that are slanderous, libelous
or defamatory concerning the company or any of its affiliates, including
without limitation, any or all of the Company's or affiliate's executive
officers and directors.
6. MISCELLANEOUS
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 Notices. Any and all notices referred to herein shall be
furnished in writing and shall be delivered by hand or sent by registered or
certified mail, postage prepaid, to the respective parties at the following
addresses ) or at such other address as either party may from time to time
designate to the other by like notice):
To the Company: Titan EMS, Inc.
1855 Norman Avenue
Santa Clara, CA 95054
To Executive: Stephen Saul Kennedy
5880 Texas Court
San Jose, CA 95120
6.3 Assignment. This Agreement may not be assigned by Executive 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.
6.4 Entire Agreement. This Agreement supersedes any and all prior
written or oral agreements between Executive and the Company and evidences the
entire understanding of the parties hereto with respect to the terms and
conditions of Executive's employment with the Company.
6.5 Governing Law. This Agreement shall be enforced in accordance
with the laws of the State of California and shall be construed in accordance
therewith. The parties hereto agree that all actions or proceedings arising
in connection with this Agreement shall be tried and litigated exclusively in
the State and Federal courts located in the County of Santa Clara, State of
California. The aforementioned choice of venue is intended by the parties to
be mandatory and not permissive in nature thereby precluding in the
possibility of litigation between the parties with respect to or arising out
of this Agreement in any jurisdiction other than that specified in this
paragraph. Each party hereby waives any right it may have to assert the
doctrine of forum non conveniens or similar doctrine or to object to venue
with respect to any proceeding brought in accordance with this paragraph, and
stipulates that the State and Federal courts located in the County of Santa
Clara, State of California shall have in personam jurisdiction and venue over
each of them for the purpose of litigating any dispute, controversy, or
proceeding arising out of or related to this Agreement. Each party hereby
authorizes and accepts service of process sufficient for personal mail, return
receipt requested, postage prepaid, to its address for the giving of notices
as set forth in this Agreement. Any final judgement rendered against a party
in any action of proceeding shall be conclusive as to the subject of such
final judgement and may be enforced in other jurisdictions in any manner
provided by law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
Titan EMS, Inc.
By: /s/ Louis George /s/ Stephen Saul Kennedy
Chief Executive Officer Stephen Saul Kennedy