Exhibit 10.1
TECHNICAL COMMUNICATIONS CORPORATION
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
TO: Mr. Carl H. Guild, Jr. Effective as of November 19, 1998
c/o Technical Communications Corporation
100 Domino Drive
Concord, Massachusetts 01742
This Agreement is intended to amend and restate that certain Employment
Agreement, dated as of February 16, 1998, by and between you and Technical
Communications Corporation, a Massachusetts corporation (the "Company"). The
Company hereby agrees with you as follows:
1. Position and Responsibilities.
1.1 Your duties as Chief Executive Officer and President of
the Company shall include, but not be limited to, the following: (i) serving as
the chief and principal spokesperson for the Company on all matters, (ii)
supervising the hiring and termination of all Company employees, consultants or
other agents (iii) serving as a liaison for the Company's management team to the
Board of Directors, (iv) the day-to-day management of the Company's operations
under the direction of the Board of Directors and (v) such other duties
customarily associated with such positions.
1.2 You will, to the best of your ability, devote your best
efforts to the performance of your duties hereunder and the business and affairs
of the Company. You agree to perform such duties as may be assigned to you by
the Company's Board of Directors from time to time.
1.3 You will duly, punctually and faithfully perform and
observe any and all rules and regulations which the Company may now or shall
hereafter establish governing the conduct of its business.
2. Term of Employment.
2.1 The term of this Agreement shall be for the period of
years set forth on Exhibit A annexed hereto commencing with the date hereof.
Thereafter, this Agreement shall be automatically renewed for successive periods
of one (1) year, unless: (a) you give the Company written notice of non-renewal
or termination; or (b) the Company shall give you written notice of non-renewal
or termination. Your employment with the Company may be terminated at any time
as provided in Section 2.2 or 2.4 of this Agreement.
2.2 The Company shall have the right, on written notice to
you, to terminate your employment:
(a) immediately at any time for Cause (as hereinafter
defined); or
(b) at any time without Cause or upon your inability
for a continuous period of at least one hundred eighty (180) days in
the aggregate during any 360-day period to perform duties hereunder due
to a physical or mental disability that is incapable of reasonable
accommodation under applicable law, including but not limited to the
Americans with Disabilities Act of 1990, as amended (such condition,
your "Disability").
2.3 For purposes of Section 2.2, the term "Cause" shall mean:
(a) Your failure or refusal to perform the services
specified herein, or to carry out any lawful directions of the Board of
Directors of the Company with respect to the services to be rendered or
the manner of rendering such services by you;
(b) conviction of a felony;
(c) fraud or embezzlement involving the assets of the
Company, its customers, suppliers or affiliates;
(d) gross negligence or willful misconduct; or
(e) breach of any term of this Agreement other than
as noted in (a) above.
Further, any dispute, controversy, or claim arising out of, in
connection with, or in relation to this definition of "Cause" shall be settled
by arbitration in Boston, Massachusetts, pursuant to the Commercial Rules then
in effect of the American Arbitration Association and in no other place. Any
award or determination shall be final, binding, and conclusive upon the parties,
and a judgment rendered may be entered in any court having jurisdiction thereof.
You and the Company knowingly waive any and all rights to a jury trial in any
forum. Each party shall bear its own expenses relating to the arbitration,
unless otherwise determined in arbitration.
2.4 You shall have the right to terminate this Agreement upon
prior written notice to the Company. Such notice shall contain the termination
date of your employment (your last date of employment in all cases under this
Agreement is hereby defined as the "Termination Date"). In the event you
terminate this Agreement, you will be paid Severance Pay [defined, for purposes
of this Section as your Base Salary (as defined in Exhibit A hereto) at the then
current level (as set forth on Exhibit A attached hereto), less applicable taxes
and other required withholdings and any amounts you may owe the Company] as
follows:
(i) If the Termination Date is on the renewal date of this
Agreement, you will be paid Severance Pay for six (6) months.
(ii) If the Termination Date is before the renewal date of
this Agreement, you will be paid Severance Pay in an amount for the lesser of
six (6) months or the balance of the Term of this Agreement or the number of
months worked within the current Term.
2.5 In the event the Company terminates your employment or
chooses not to renew your employment, the Company shall be obligated to pay you
as Severance Pay (defined as one of the following, as applied to the facts):
(a) In the event of your termination by the Company
(i) without Cause or (ii) upon your death or Disability, you (or your
estate, as the case may be) shall be paid an amount equal to the
greater of six (6) months' Base Salary at the then current level (as
set forth on Exhibit A attached hereto) or your Base Salary for the
remaining Term of this Agreement, less applicable taxes and other
required withholdings and any amounts you may owe the Company, and all
health and other benefits to which you had been entitled while employed
by the Company shall be continued at the Company's expense for at least
six (6) months, including all payments to be made by the Company and
you pursuant to COBRA. The Company shall also ; or
(b) In the event the Company notifies you of its
intent not to renew this Agreement, an amount equal to six (6) months'
Base Salary at the then current level (as set forth on Exhibit A
attached hereto), less applicable taxes and other required withholdings
and any amounts you may owe
the Company, and all health and other benefits to which you had been
entitled while employed by the Company shall be continued at the
Company's expense for at least six (6) months, including all payments
to be made by the Company and you pursuant to COBRA; or
(c) In the event of your termination by the Company
for Cause (as defined in Section 2.3), you shall be entitled to no
Severance Pay.
In all circumstances arising under Section 2.4 or this Section 2.5, you
agree that at the time of your leaving the employ of the Company, the Company
has a right of set-off against all monies, salary, expenses or other payments
owed to you as of that date with respect to any and all amounts owed by you to
the Company.
In all circumstances in which you are to receive Severance Pay you may
receive Severance Pay in either a lump sum payment or in twenty-four (24) equal
weekly payments at your option. You must notify the Company of your selection in
writing within one (1) week of the Termination Date.
3. Compensation. You shall receive the compensation and benefits set
forth on Exhibit A hereto ("Compensation") for all services to be rendered by
you hereunder.
4. Confidentiality.
4.1 You agree at all times during the term of your employment
and thereafter to hold in strictest confidence, and not to use, except for the
benefit of the Company, or to disclose to any person, firm or corporation
without written authorization of the Company, any Proprietary Information of the
Company. "Proprietary Information" means any Company proprietary information,
technical data, trade secrets or know-how, including, but not limited to,
research and development information, product plans, products, services,
customer lists and customers (including, but not limited to customers of the
Company on whom you called or with whom you became acquainted during the term of
your employment), suppliers, markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering information,
hardware configuration information, marketing information, costs, pricing,
finances or other business information disclosed to you by the Company either
directly or indirectly in writing, orally or by drawings or inspection of parts
or equipment. Proprietary Information does not include any of the foregoing
items that have become publicly known and made generally available through no
wrongful act of yours. You further agree that all Proprietary Information shall
at all times remain the property of the Company.
4.2 You agree that any and all information generated by you
during working hours, or on Company property, or by the use of any Company
assets, whether in electronic or physical form, is and shall remain the property
of the Company, and that the Company has the right of access to any information
belonging to you that is at any time stored in Company equipment, or on Company
property, in any form, including the right to inspect the contents of
briefcases, handbags, and the like.
4.3 You agree that at the time of your leaving the employ of
the Company, you will immediately deliver to the Company (and will not keep in
your possession or deliver to anyone else) any and all devices, records, data,
notes, reports, proposals, lists, correspondence, specifications, drawings,
blueprints, sketches, materials, equipment, other documents or property, or
reproductions of any aforementioned items, containing Proprietary Information or
otherwise belonging to the Company, its successors or assigns.
4.4 You agree that you will not, during your employment with
the Company, improperly use or disclose any proprietary information or trade
secrets of any former employer or other person or entity, if any, with which you
have an agreement or duty to keep such information in confidence, and that you
will not bring onto the premises of the Company any unpublished document or
proprietary information belonging to any such employer, person or entity.
4.5 You recognize that the Company has received and in the
future will receive from third parties their trade secrets or proprietary
information subject to a duty on the Company's part to maintain the
confidentiality of such information to use it only for certain limited purposes.
You agree to hold all such trade secrets or proprietary information in the
strictest confidence and not to disclose it to any person, firm or corporation
or to use it except as necessary in carrying out my work for the Company
consistent with the Company's agreement with such third party.
5. Non-Competition.
THIS SECTION MAY AFFECT YOUR RIGHT TO ACCEPT EMPLOYMENT WITH OTHER
COMPANIES SUBSEQUENT TO YOUR EMPLOYMENT BY THE COMPANY.
5.1 For the purpose of this Section:
(i) "Competing Product" means any product, process or
service of any person or organization other than the Company, in existence or
under development, which is (A) identical to, substantially the same as, or an
adequate substitute for any product, process or service of the Company, in
existence or under development, on which you worked during the last two (2)
years of your employment with the Company or about which you acquired
Proprietary Information and (B) which is (or could reasonably be anticipated to
be) marketed or distributed in such a manner and in such a geographic area as to
actually compete with such product, process or service of the Company.
(ii) "Competing Organization" means any person or
organization, including yourself, engaged in, or about to become engaged in,
research on or the acquisition, development, production, distribution,
marketing, or providing of, a Competing Product.
5.2 As a material inducement to the Company to employ you and
to continue to employ you, and in order to protect the Company's Proprietary
Information and good will, you agree to the following stipulations:
(i) You agree that, during the term of your
employment with the Company, you will not engage in any other employment,
occupation, consulting or other business activity related to the business in
which the Company is now involved or becomes involved during the term of your
employment, nor will you engage in any other activities that conflict with your
obligations to the Company.
(ii) In the event you terminate (or do not renew)
this Agreement, then you will not directly or indirectly, participate or engage
in, solicit, deliver or accept business relating in any manner to Competing
Products or to products, processes or services of the Company from or with any
of the customers or accounts of the Company with which you had any contact as a
result of your employment with the Company for a period which is the greater of
(A) six (6) months commencing with the Termination Date, or (B) the balance of
the Term of this Agreement (both A or B being a "Noncompete Period").
(iii) In the event the Company terminates without
Cause (or does not renew) this Agreement, then you will not directly or
indirectly, participate or engage in, solicit, deliver or accept business
relating in any manner to Competing Products or to products, processes or
services of the Company from or with any of the customers or accounts of the
Company with which you had any contact as a result of your employment with the
Company for a period which is the greater of (A) six (6) months commencing with
the Termination Date, or (B) the balance of the Term of this Agreement (both A
or B being a "Noncompete Period").
(iv) In the event the Company terminates your
employment with Cause, then, you will not, directly or indirectly, participate
or engage in, solicit, deliver or accept business relating in any manner to
Competing Products or to products, processes or services of the Company from or
with any of the customers or accounts of the Company with which you had any
contact as a result of your employment with the Company for a period of six (6)
months commencing with the Termination Date (a "Noncompete Period").
(v) During any Noncompete Period you will not render
services, directly or indirectly, as an employee, consultant or otherwise, to
any Competing Organization in connection with research on, or the acquisition,
development, production, distribution, marketing, sale or provision of any
Competing Product.
(vi) During any Noncompete Period you will not,
directly or indirectly: (a) induce any employee of the Company to leave the
Company's employment; (b) assist any other person or entity in requesting or
inducing any such employee of the Company to leave such employment; or (c)
induce or attempt to induce any employee of the Company to join with you in any
capacity, direct or indirect.
5.3 You agree that the restrictions set forth in this Section
5 are fair and reasonable and are reasonably required for the protection of the
interests of the Company. However, should an arbitrator or court nonetheless
determine at a later date that such restrictions are unreasonable in light of
the circumstances as they then exist, then you agree that this Section 5 shall
be construed in such a manner as to impose on you such restrictions as may then
be reasonable and sufficient to assure the Company of the intended benefits of
this Section.
5.4 Notwithstanding the provisions of this Section 5, the
Board of Directors may, in its sole discretion, permit you to accept employment
with a Competing Organization.
6. Other Employers. You represent and warrant that your employment by
the Company will not conflict with and will not be constrained by any prior or
current employment, consulting agreement or other relationship whether oral or
written. You represent and warrant that you do not possess confidential
information arising out of any such employment, consulting agreement or
relationship which, in your best judgment, would be utilized in connection with
your employment by the Company.
7. Assignment of Inventions.
7.1 Except as set forth in Section 7.3 of this Agreement, you
hereby acknowledge and agree that the Company is the owner of all Inventions (as
hereinafter defined). In order to protect the Company's rights to such
Inventions, by executing this Agreement you hereby irrevocably assign to the
Company all of your right, title and interest in and to all Inventions to the
Company.
7.2 For purposes of this Agreement, "Inventions" shall mean
all discoveries, processes, designs, technologies, devices, or improvements in
any of the foregoing or other ideas, whether or not patentable and whether or
not reduced to practice, made or conceived by you (whether solely or jointly
with others) during or prior to the period of your employment with the Company,
which relate in any manner to the actual or demonstrably anticipated business,
work, or research and development of the Company, or result from or are
suggested by any task assigned to you or any work performed by you for or on
behalf of the Company.
7.3 You agree that in connection with any Invention, you will
promptly disclose such Invention to your immediate superior at the Company in
order to permit the Company to enforce its property rights to such Invention in
accordance with this Agreement. Your disclosure shall be received in confidence
by the Company.
7.4 Upon request, you agree to assist the Company or its
nominee (at its expense) during and at any time subsequent to your employment in
every reasonable way to obtain for its own benefit patents and copyrights for
Inventions in any and all countries. Such patents and copyrights shall be and
remain the sole and exclusive property of the Company or its nominee. You agree
to perform such lawful acts as the Company deems to be necessary to allow it to
exercise all right, title and interest in and to such patents and copyrights.
7.5 In connection with this Agreement, you agree to execute,
acknowledge and deliver to the Company or its nominee upon request and at its
expense all documents, including assignments of title, patent or copyright
applications, assignments of such applications, assignments of patents or
copyrights upon issuance, as the Company may determine necessary or desirable to
protect the Company's or its nominee's interest in Inventions, and/or to use in
obtaining patents or copyrights in any and all countries and to vest title
thereto in the Company or its nominee to any of the foregoing.
7.6 You agree to keep and maintain adequate and current
written records of all Inventions made by you (in the form of notes, sketches,
drawings, flowcharts and other records as may be specified by the Company),
which records shall be available to and remain the sole property of the Company
at all times.
7.7 You acknowledge that the Company from time to time may
have agreements with other persons or with the U.S. Government or agencies
thereof, which impose obligations or restrictions on the Company regarding
Inventions made during the course of work thereunder or regarding the
confidential nature of such work. You agree to be bound by all such obligations
and restrictions and to take all action necessary to discharge the Company's
obligations.
7.8 You represent that your performance of all the terms of
this Agreement and as an employee of the Company does not and will not breach
any agreement to keep confidential proprietary information, knowledge or data
acquired by you in confidence or in trust prior to your employment by the
Company, and you will not disclose to the Company, or induce the Company to use,
any confidential or proprietary information or material belonging to any
previous client, employer or others. You agree not to enter into any agreement
either written or oral in conflict herewith.
8. Remedies. Your obligations under the provisions of Sections 4, 5, 6
and 7 of this Agreement (as modified by Section 10, if applicable) shall survive
the expiration or termination of your employment (whether through your
resignation or otherwise) with the Company. You acknowledge that a remedy at law
for any breach or threatened breach by you of the foregoing provisions would be
inadequate and you therefore agree that the Company shall be entitled to
injunctive relief in case of any such breach or threatened breach.
9. Assignment. This Agreement and the rights and obligations of the
parties hereto shall bind and inure to the benefit of any successor or
successors of the Company by reorganization, merger or consolidation and any
assignee of all or substantially all of its business and properties, but, except
as to any such successor or assignee of the Company, neither this Agreement nor
any rights or benefits hereunder may be assigned by the Company or by you,
except by operation of law.
10. Governing Law; Construction and Enforcement; Indemnification. This
Agreement shall be construed and enforced in accordance with the laws of the
Commonwealth of Massachusetts. You agree that any judicial action relating to
this Agreement shall be adjudicated in the courts of the Commonwealth of
Massachusetts and you consent to the exclusive jurisdiction of and venue in such
courts with respect to all such actions. Your covenants set forth herein are of
the essence of this Agreement; they shall be construed as independent of any
other provision in this Agreement, and the existence of any claim or cause of
action that you may have against the Company, whether predicated on this
Agreement or not, shall not constitute a defense to the enforcement by the
Company of these covenants. The remedies hereunder, and at law and in equity,
shall be cumulative and not alternative, and shall not be exhausted by any one
or more uses thereof. The nondisclosure and non-solicitation obligations
contained herein shall be extended by the length of time during which you shall
have been in breach of any of said provisions. You agree that, in addition to
any of the remedies provided to the Company and its subsidiaries and affiliates
herein, you shall indemnify and hold harmless the Company and its subsidiaries
and affiliates from and against any loss, liability, claim, damage or expense
(including without limitation attorneys' fees) occasioned by any breach of your
covenants or agreements or the inaccuracy of any of your representations set
forth in this Agreement.
11. Severability. IT IS THE INTENT OF THE PARTIES THAT in case any one
or more of the provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect the
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.
12. Notices. Any notice which the Company is required to or may desire
to give you shall be given by personal delivery or registered or certified mail,
return receipt requested, addressed to you at your address of record with the
Company, or at such other place as you may from time to time designate in
writing. Any notice which you are required or may desire to give to the Company
hereunder shall be given by personal delivery or by registered or certified
mail, return receipt requested, addressed to the Company at its principal
office, or at such other office as the Company may from time to time designate
in writing. The date of personal delivery or the date of making any notice under
this Section 12 shall be deemed to be the date of delivery thereof.
13. Waivers. If either party should waive any breach of any provision
of this Agreement, such party shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
14. Complete Agreement; Amendments. The foregoing, including Exhibit A
attached hereto, is the entire agreement of the parties with respect to the
subject matter hereof, superseding any previous oral or written communications,
representations, understandings, or employment agreements with the Company or
any officer or representative thereof. Any amendment to this Agreement or waiver
by the Company of any right hereunder shall be effective only if evidenced by a
written instrument executed by the parties hereto, upon authorization of the
Company's Board of Directors.
15. Headings. The headings of the Sections hereof are inserted for
convenience and shall not be deemed to constitute a part hereof nor to affect
the meaning of this Agreement in any way.
16. Counterparts. This Agreement may be signed in two counterparts,
each of which shall be deemed an original and both of which shall together
constitute one agreement.
17. Independent Advice. You hereby acknowledge that you have been
advised of the opportunity available to you to seek and obtain the advice of
legal counsel and financial advisors of your own choosing prior to and in
connection with your execution of this Agreement. In addition you hereby affirm
that you have either obtained such advice or knowingly and willingly decided to
forego the opportunity to avail yourself of such advice.
If you are in agreement with the foregoing, please sign your name
below, whereupon this Agreement shall become binding in accordance with its
terms. Please then return this Agreement to the Company. (You may retain for
your records the accompanying counterpart of this Agreement enclosed herewith).
Very truly yours,
TECHNICAL COMMUNICATIONS
CORPORATION
(As authorized by the Board of Directors)
By:
--------------------------------------------
Title: R.T. Lessard, Director and Chairman of
Compensation Committee
Accepted and Agreed:
- -----------------------------
Carl H. Guild, Jr.
EXHIBIT A
EMPLOYMENT TERM, COMPENSATION AND BENEFITS OF CARL H. GUILD, JR.
1. Term. The term of the Agreement to which this Exhibit A is annexed and
incorporated shall run through September 30, 2000.
2. Compensation.
(a) Base Salary. Your Base Salary shall be $160 per hour, up to a
maximum of 24 hours per week per year, payable in accordance
with the Company's payroll policies.
(b) Salary Adjustment; Bonuses. Your salary shall be subject to
merit review and adjustment from time to time by the Company's
Board of Directors. You shall be eligible for bonuses in the
discretion of the Company's Board of Directors, based on an
exceptional performance assessment.
(c) Stock Options. During the first year of your employment, you
shall receive incentive stock options in the form attached as
Annex 1 hereto. Nothing herein shall be deemed to void or
cancel any incentive stock options previously granted to you.
3. Vacations. You shall be entitled to vacation time and sick leave in
accordance with current Company policy, as amended from time to time.
4. Insurance and Benefits. You shall be eligible for participation in any
401(k) savings plan, health insurance plan, and other benefits in
accordance with current Company policy, which policy is subject to
change from time to time, and you shall be covered by the Company's
officer and director liability insurance policy.
5. Expenses. The Company shall reimburse you for relocation expenses in
accordance with Company policy, as amended from time to time, and all
reasonable and ordinary business expenses incurred by you in the scope
of your employment hereunder.
6. Part Time. To be entitled to the benefits described in the Agreement to
which this Exhibit is annexed and incorporated, you shall devote a
minimum of 30 hours per week (as computed by a cumulative annual
average) to the Company.