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Exhibit 10.6
EMPLOYMENT AGREEMENT This EMPLOYMENT
AGREEMENT (“Agreement”), effective July 1, 2006, is
entered into by and between SYS Technologies, a California
corporation, with its principal office at 5050 Murphy Canyon
Road, Suite 200, San Diego, California 92123
(“Company”), and Mike Fink, (“Employee”),
collectively the “Parties.” The Parties hereto desire
to enter into an employment arrangement and in order to accomplish
that purpose and in consideration of the terms, covenants and
conditions hereinafter set forth, the Parties hereby enter into
this Agreement. SECTION 1
EMPLOYMENT; TERM; DUTIES 1.1
Employment . Upon the terms and conditions hereinafter set
forth, the Company employs Employee, and Employee hereby accepts
employment, as Sr. Vice President, Contracts.
1.2 Term . Employee’s employment hereunder
shall be for a term (the “Term”) commencing on the date
this Agreement is effective and ending on June 30, 2008, unless the
Agreement terminates sooner pursuant to Section 4 below; provided,
however, that the Agreement shall renew automatically for
successive periods of one (1) year unless the Company or Employee
provides written notice to the other Party of a desire to change,
modify, amend or terminate the Agreement at least thirty (30) days
prior to the then-current expiration date of the Agreement. If the
Company elects not to renew this Agreement at the conclusion of the
Term, Employee will be eligible for severance benefits pursuant to
and in accordance with subsections 4.2 or 4.4.
1.3 Duties . During the Term, Employee shall
perform such duties for the Company as are prescribed by applicable
job specifications, the Bylaws of the Company and such other or
additional duties, consistent with such Bylaws, as may be assigned
to him/her from time to time by the Chief Financial Officer
(“CFO”), Chief Executive Officer (“CEO”),
or the Board of Directors of the Company. Employee shall devote
his/her best efforts, attention and energies to the performance of
his/her duties hereunder. This employment is full-time and
exclusive. Employee may not work for any other company or
enterprise during the Term of this Agreement such that such
employment would conflict or interfere with his/her obligations to
the Company under this Agreement. Employee must advise the CEO in
writing prior to undertaking any employment in addition to his/her
employment with the Company. SECTION 2
COMPENSATION 2.1 Base
Salary . For all services rendered by Employee hereunder and
all covenants and conditions undertaken by both Parties pursuant to
this Agreement, the Company shall pay, and Employee shall accept,
as compensation, an annual base salary (“Base Salary”)
of One Hundred Sixty Five Thousand Dollars ($165,000). This Base
Salary shall be payable in accordance with the normal payroll
practices of Company, less required deductions pursuant to state
and federal law, and less any amounts to be deducted pursuant to
agreement between the Parties. 2.2 Incentive
Compensation . The Employee shall also be paid such bonuses
and/or other compensation as may be determined from time to time by
the CFO, CEO, or the Board of Directors as they, in their sole
discretion, may determine based upon the performance of the
employee and/or of the Company.
2.3 Performance and Salary Review . Employee's
performance will be reviewed periodically, usually on an annual
basis. Adjustments to salary or other compensation, if any, will be
made by the CFO, CEO, or the Board of Directors as is then
appropriate. SECTION 3
BENEFITS/BUSINESS EXPENSES 3.1
Benefits . During the Term, Employee shall be entitled to
participate in such life, health, accident, disability and
hospitalization insurance plans, pension plans and retirement plans
as the Company makes available to the employees of the Company as a
group. 3.2 Business Expenses . Employee
will be reimbursed for all reasonable, out-of-pocket business
expenses incurred in the performance of his/her duties on behalf of
Company. To obtain reimbursement, expenses must be submitted
promptly with appropriate supporting documentation in accordance
with Company’s policies and procedures.
SECTION 4 TERMINATION; RESIGNATION;
CHANGE OF CONTROL; DEATH; DISABILITY
4.1 Termination of Employment With Cause . If
(a) Employee fails to meet the performance standards
established for his/her position and does not remedy such
shortcomings within 30 days after written notice from the Company
of such failure; or (b) Employee breaches any material
provision of this Agreement; or (c) Employee has been
convicted of any felony; or (d) Employee commits any act of
fraud, misappropriation of funds or embezzlement; or
(e) Employee fails to report to work for three
(3) consecutive business days without informing his/her
superior; or (f) Employee commits any act, or fails to take
any action, the effect of which is to bring the Company into
disrepute with any of its customers, including, but not limited to
a material violation of the Company Code of Ethics, the Company
shall have the right, upon written notice to the Employee, to
immediately terminate his/her employment (“Termination With
Cause”) hereunder, without any further liability or
obligation to him/her hereunder or otherwise in respect of his/her
employment, other than its obligation to pay unpaid Base Salary and
unused personal time accrued as of the date of termination.
4.2 Termination of Employment Without Cause .
Notwithstanding any provision to the contrary herein, the Company
may at any time, in its sole and absolute discretion and for any or
no reason, terminate the employment of the Employee hereunder;
PROVIDED, that if such termination is not a Termination With Cause,
as defined by subsection 4.1, and such termination is not
caused by the death or Disability of the Employee, the Company
shall pay and/or provide the Employee as follows:
4.2.1 All accrued but unpaid Base Salary.
4.2.2 Reimbursement of normal incidental employee
expenses as of the date of the termination as and when such amount
is due and payable hereunder in accordance with
subsection 3.2. 4.2.3 Company shall pay
twelve (12) severance payments (“Severance Payments”)
payable monthly to Employee equivalent to one-twelfth (1/12) of the
Base Salary in effect as of the date of such termination (the
“Termination Date”) for a period of twelve months
from the Date of Termination (the “Severance Period”),
provided that Employee and the Company execute an appropriate
mutual general release before Employee has any entitlement to the
Severance Payments. Company will also pay the premiums on the COBRA
insurance coverages during the Severance Period, provided that
Employee qualifies for such coverages and timely elects COBRA
coverage. The Company may, at its option, pay for and acquire
insurance which will provide the Severance Payments and such
benefits during the Severance Period. 4.2.4 All
stock options issued to Employee or earned but not yet issued prior
to the Termination Date shall immediately become fully vested.
4.2.5 Accrued but unused personal leave shall be
paid out in accordance with legal requirements. No personal leave
or other benefits shall continue to accrue during the Severance
Period. 4.2.6 Notwithstanding the foregoing, if
any amounts due to Employee pursuant to this Agreement are
determined to be “Parachute Payments” as such term is
defined in Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”), and the regulations
promulgated thereunder, then the total compensation paid to
Employee pursuant to this Agreement, together with any other
payment or the value of any benefit received or to be received by
Employee which is treated as a Parachute Payment shall not exceed
2.99 times Employee’s Base Amount (as such term is defined in
Section 280G of the Code). In the event a reduction of the
payments set forth in this Agreement is required pursuant to this
Section, Employee may select the compensation which will be reduced
in order to fall within the 2.99 times Base Amount limitation.
4.3 Resignation .
4.3.1 If Employee resigns (except as set forth in
subsections 4.3.2 or 4.4 below), this Agreement shall
immediately terminate and the Company shall have no further
liability or obligation to Employee hereunder, including any
severance payments, or otherwise in respect of his/her employment,
other than its obligation to pay unpaid Base Salary and unused
personal leave accrued as of the date of resignation.
4.3.2 Resignation with Cause . If Employee
resigns his/her employment because (a) his/her position or
duties are modified by the Company to such an extent that his/her
duties are substantially no longer consistent with the position for
which he/she was employed pursuant to this Agreement, or
(b) there has been a material breach by the Company of a
material term of this Agreement which continues uncured following
fourteen (14) days after written notice by Employee to the Company
of such breach, then Employee will be entitled to the severance
benefits set forth in subsection 4.2, consistent with the
terms of said provision. 4.4 Change In
Control . In the event of a Change in Control (as that term is
defined below), Company shall immediately take all necessary
measures, consistent with the Company’s Stock Option Plans,
to accelerate the vesting of any unvested options held by the
Employee under such Plans so that such options will be treated as
vested options during the Change in Control. In addition,
employment separation, as provided in this section, that occurs as
a result of a Change in Control shall result in Severance Payments
on the same terms set forth in subsection 4.2 above, except that
the Severance Period shall be eighteen (18) months. Such Change In
Control Severance Payments will be made in the event of:
(a) Employee’s involuntary dismissal or discharge by the
Company, other than pursuant to subsections 4.1, 4.3.1, or 4.5, or
(b) Employee’s voluntary resignation, other than
pursuant to subsection 4.3, following (i) a change in his/her
position with the Company (or Parent or Subsidiary employing
Employee) which materially reduces his/her duties and
responsibilities or the level of management to which he/she
reports, (ii) a reduction in Employee’s level of compensation
as of the date of the Change in Control (including base salary and
fringe benefits), or (iii) a relocation of Employee’s place
of employment by more than fifty (50) miles, provided and only if
such change, reduction, or relocation is effected by the Company
without Employee’s express consent.
4.4.1 For purposes of this Agreement, a “Change in
Control” shall mean: (i) the acquisition, by one person or a
group, of stock of the Company that causes such person or group to
own more than 50% of the total fair market value or total voting
power of the stock of such Company; (ii) either: (1) the
acquisition, by one person or a group, of ownership of 35% or more
of the total voting power of the stock of the Company; or
(2) the replacement of a majority of the members of the Board
with directors whose appointment or election is not endorsed by the
existing Board; AND (iii) the acquisition of assets from the
Company that have a total gross fair market value of 40% or more of
the total gross fair market value of all assets of the Company
prior to the acquisition. 4.5 Termination Due
to Death or Disability . This Agreement will immediately
terminate upon Employee’s death. This Agreement will
terminate upon Employee’s Disability (as defined below), when
consistent with state and federal law. In the event of
Employee’s termination due to death or Disability, Employee,
or Employee’s heirs, personal representatives or estate, as
the case may be, will be entitled to receive only the standard
entitlements and those benefits available under any applicable
Compan
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