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EXHIBIT 10.3.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is entered into as of February 28, 2005
by
and between Hi-Shear Technology
Corporation, a Delaware corporation (hereinafter
referred to as the "Company"), and George
W. Trahan (hereinafter referred to as
"Executive") under the following terms and
conditions:
RECITALS:
WHEREAS, the Company and Executive are parties to that certain
Employment Agreement dated February 28,
2000, the term of which expired as of
February 28, 2005;
WHEREAS, the Company and Executive desire to set forth the terms
and
conditions on which (i) the Company shall
continue to employ Executive, (ii)
Executive shall continue to render services
to the Company, and (iii) the
Company shall compensate Executive for such
services; and
WHEREAS, in connection with the continued employment of Executive
by
the Company, the Company desires to
restrict Executive's rights to compete with
the business of the Company.
NOW, THEREFORE, in consideration of the mutual promises, covenants
and
agreements hereinafter set forth, the
parties hereto agree as follows:
1.
EMPLOYMENT.
The Company hereby employs Executive and Executive hereby
accepts employment with the Company upon
the terms and conditions hereinafter
set forth.
2.
TERM.
2.1 The term of this Agreement (the "Term") shall be for a
period commencing on the Effective Date (as
defined in Section 2.3 below) of
this Agreement and shall continue through
February 28, 2007, unless sooner
terminated as provided in Paragraph 6. This
two-year period, as the same may be
extended hereafter by agreement of the
parties or terminated pursuant hereto, is
hereinafter referred to as the "Term".
2.2 For purposes of extending the term of the relationship
between the Company and Executive, the
parties agree to enter into good faith
negotiations within sixty (60) days prior
to the end of the Term. In the event
that the parties are unable to reach an
agreement by the end of the Term, this
Agreement shall be automatically terminated
on February 28, 2007.
2.3 The effective date of this Agreement shall be February 28,
2005 (the "Effective Date").
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3.
COMPENSATION.
3.1 For all services rendered by Executive under this
Agreement, the Company shall pay or cause
one or more of its subsidiaries to pay
Executive or his estate, if deceased, a
salary of $400,000 per year. Salary will
be increased to $440,000 per year at
February 28, 2006. The Company shall pay
such compensation to Executive or his
estate semi-monthly in accordance with its
standard practice for payment of
compensation.
3.2 As additional compensation, Executive shall be eligible to
participate in the executive bonus pool
program established by the Board and
administered by the Compensation
Committee.
3.3 All compensation shall be subject to customary withholding
tax and other employment taxes as are
required with respect to compensation paid
by a corporation to an employee.
4.
DUTIES AND RESPONSIBILITIES.
4.1 Executive shall, during the Term of this Agreement, devote
his full attention and expend his best
efforts, energies, and skills, on a
full-time basis, to the business of the
Company and any corporation controlled
by the Company (each, a "Subsidiary"). For
purposes of this Agreement, the term
the "Company" shall mean the Company and
all Subsidiaries. The Company agrees
that the devotion of reasonable amounts of
time to business activities separate
from and outside the scope of the business
of the Company will not violate the
terms of this Agreement, on the conditions
that (i) such activities are not
corporate opportunities of the Company; and
(ii) such activities do not
interfere with the performance of
Executive's duties hereunder.
4.2 During the Term of this Agreement, Executive shall serve
as the President, Chief Executive Officer
and Co-chairman or in such other
capacity as determined by the Board of
Directors or its Executive Committee, if
any. In the performance of all of his
responsibilities hereunder, Executive
shall be subject to all of the Company's
policies, rules, and regulations
applicable to its employees of comparable
status and shall report directly to,
and shall be subject to, the direction and
control of the Board of Directors of
the Company and shall perform such duties
as shall be assigned to him by the
Board of Directors or its Executive
Committee. In performing such duties,
Executive will be subject to and abide by,
and will use his best efforts to
cause other employees of the Company to be
subject to and abide by, all policies
and procedures developed by the Board of
Directors or its Executive Committee.
4.3 Without first obtaining the written permission of the
Board of Directors of the Company,
Executive will not authorize or permit the
Company to engage the services of, or
engage in any business activity with, or
provide any financial or other benefit to,
any affiliate of Executive. The
phrase "affiliate of Executive" as used in
this Section shall mean and include
Executive's family by blood or marriage
(including, without limitation, parents,
spouse, siblings, children and in-laws),
and any business or business entity
which is directly or indirectly owned or
controlled by Executive or any member
of the Executive's family or in which
Executive or any member of the Executive's
family has any direct or indirect financial
interest whatsoever.
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4.4 To induce the
Company to enter into this Agreement, the
Executive represents and warrants to the
Company that (a) the Executive is not a
party or subject to any employment
agreement or arrangement with any other
person, firm, company, corporation or other
business entity, (b) the Executive
is subject to no restraint, limitation or
restriction by virtue of any agreement
or arrangement, or by virtue of any law or
rule of law or otherwise which would
impair the Executive's right or ability (i)
to enter the employ of the Company,
or (ii) to perform fully his duties and
obligations pursuant to this Agreement,
and (c) to the best of Executive's
knowledge no material litigation is pending
or threatened against any business or
business entity owned or controlled or
formerly owned or controlled by
Executive.
5.
RESTRICTIVE COVENANTS.
5.1 Executive acknowledges that (i) he has a major
responsibility for the operation,
administration, development and growth of the
Company's business, (ii) the Company's
business is or may become national or
international in scope, (iii) his work for
the Company has brought him and will
continue to bring him into close contact
with confidential information of the
Company and its customers, and (iv) the
agreements and covenants contained in
this Section 5.1 are essential to protect
the business interest of the Company
and that the Company will not enter into
this Agreement but for such agreements
and covenants. Accordingly, the Executive
covenants and agrees as follows:
5.l(a) Except as otherwise provided for in this
Agreement, during the Term of this
Agreement and, if this Agreement is
terminated for any reason during the Term,
for two (2) years following such date
of termination (the "Termination Period"),
the Executive shall not, directly or
indirectly, compete with respect to any
services or products of the Company
which are either offered or are being
developed by the Company as of the date of
termination; or, without limiting the
generality of the foregoing, be or become,
or agree to be or become, interested in or
associated with, in any capacity
(whether as a partner, shareholder, owner,
officer, director, Executive,
principal, agent, creditor, trustee,
consultant, co-venturer or otherwise) any
individual, corporation, firm, association,
partnership, joint venture or other
business entity, which competes with
respect to any services or products of the
Company which are either offered or are
being developed by the Company as of the
data of termination; provided, however,
that the Executive may own, solely as an
investment, not more than one percent (1%)
of any class of securities of any
publicly held corporation in competition
with the Company whose securities are
traded on any national securities exchange
in the United States of America, and
may retain his ownership interest in those
entities referred to in Section 4.1
above.
5.1(b) During the term of this Agreement and, if
applicable, during the Termination Period,
the Executive shall not, directly or
indirectly, (i) induce or attempt to
influence any executive of the Company to
leave its employ, (ii) aid or agree to aid
any competitor, customer or supplier
of the Company in any attempt to hire any
person who shall have been employed by
the Company within the one (1) year period
preceding such requested aid, or
(iii) induce or attempt to influence any
person or business entity who was a
customer or supplier of the Company during
any portion of said period to
transact business with a competitor of the
Company in Company's business.
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5.1(c) During the Term of this Agreement, the
Termination Period, if applicable, and
thereafter, the Executive shall not
disclose to anyone any information about
the affairs of the Company, including,
without limitation, trade secrets, trade
"know-how", inventions, customer lists,
business plans, operational methods,
pricing policies, marketing plans, sales
plans, identity of suppliers or customers,
sales, profits or other financial
information, which is confidential to the
Company or is not generally known in
the relevant trade, nor shall the Executive
make use of any such
