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EXHIBIT 10.12
R. YORK
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") is entered
into by
and between Richard York ("Executive") and MEMS USA, INC., a
Nevada Corporation
and California MEMS USA INC. a California Corporation,
collectively ("MEMS") as
of November 1, 2006 (the "Effective Date").
WITNESSETH:
WHEREAS, MEMS is desirous of offering employment to the
Executive on
the Effective Date pursuant to the terms and conditions and for
the
consideration set forth in this Agreement, and Executive is
desirous of being
employed by MEMS pursuant to such terms and conditions and for
such
consideration.
NOW, THEREFORE, for and in consideration of the mutual
promises, covenants, and obligations contained herein, MEMS and
Executive agree
as follows:
Article 1. EMPLOYMENT AND DUTIES
1.1 MEMS agrees to employ Executive, and Executive agrees to
be
employed by MEMS, beginning as of the Effective Date and
continuing until the
date of termination of Executive's employment pursuant to the
provisions of
Article 3 (the "Term"), subject to the terms and conditions of
this Agreement.
1.2 Beginning as of the Effective Date, Executive shall be
employed as
Chief Financial Officer. Executive agrees to serve in the
assigned position or
in such other executive capacities as may be requested from time
to time by the
Employer and to perform diligently and to the best of
Executive's Abilities the
duties and services pertaining to such positions as reasonably
determined by
MEMS, as well as such additional or different duties and
Services appropriate to
such positions which Executive from time to time may be
reasonably directed to
perform by MEMS.
1.3 Executive shall at all times comply with and be subject to
such
policies and procedures as MEMS may establish from time to time,
including,
without limitation, the MEMS Company Code of Business Conduct
(The "Code of
Business Conduct").
1.4 Executive shall, during the period of Executive's
employment,
devote Executive's full business time, energy, and best efforts
to the business
and affairs of MEMS. Executive may not engage, directly or
indirectly, in any
other business, investment, or activity that is in competition
with the Business
of MEMS or interferes with Executive's performance of
Executive's duties
hereunder, is contrary to the interest of MEMS or any of MEMS
subsidiaries and
divisions collectively, the "MEMS Entities" or, individually, a
"MEMS Entity"),
or requires any significant portion of Executive's business
time. The foregoing
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notwithstanding, the parties agree that Executive may engage in
passive personal
investments and other business activities which do not conflict
with the
business and affairs of the MEMS Entities or interfere with
Executive's
performance of his duties hereunder; provided that Executive may
own up to 2% of
any public company that competes with MEMS. Executive may not
serve on the board
of directors of any entity other than a MEMS Entity during the
Term without the
approval thereof in accordance with MEMS policies and procedures
regarding such
service. Executive shall be permitted to retain any compensation
received for
approved service on any unaffiliated corporation's board of
directors.
1.5 Executive agrees that Executive owes a fiduciary duty of
loyalty
and care to MEMS and must act at all times in the best interests
of MEMS and the
other MEMS Entities and not act in a manner which would,
directly or indirectly,
injure any such entity's business, interests or reputation.
Executive
acknowledges that any direct or indirect interest in, connection
with, or
benefit from any outside activities, particularly commercial
activities, which
interest might in any way adversely affect MEMS, or any MEMS
Entity involves a
possible conflict of interest. Accordingly, Executive agrees
that Executive will
not knowingly become involved in a conflict of interest with
MEMS or the MEMS
Entities, or upon discovery thereof, allow such a conflict to
continue.
Moreover, Executive shall not engage in any activity that might
involve a
possible conflict of interest without first obtaining approval
in accordance
with MEMS's policies and procedures.
Article 2. COMPENSATION AND BENEFITS
2.1 Executive's base salary during the Term shall be not less
than
$120,000 per annum which shall be paid in accordance with MEMS'
standard payroll
practice for its executives. Executive's base salary may be
increased from time
to time with the approval of the MEMS Board of Directors or its
delegate, as
applicable. Such increased base salary shall become the minimum
base salary
under this Agreement and may not be decreased thereafter without
the written
consent of Executive.
2.1.1 If at any time during the Term of this Agreement, MEMS
is unable, due to lack of available funds, to pay Executive's
base salary, in
whole or in part, the unpaid portion of Executive's salary shall
continue to
accrue to Executive and Executive shall be paid all sums due
hereunder once said
funds are available.
2.1.2 Executive shall receive an auto allowance of $500.00
per
month effective November 1, 2006. All registration fees, fuel,
maintenance,
repairs and insurance costs of such automobile shall be the
responsibility of
Executive.
2.1.3 Executive shall be eligible for an annual bonus, for
the
period from this agreement date to October 30, 2007, and other
forms of
supplemental compensation as may, from time to time, be approved
by the MEMS
board of directors. Annual incentive compensation, if any, will
be determined by
the Board, in its sole discretion, and paid as soon as
practicable after the end
of the year.
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2.2 During the Term, Executive shall participate in the MEMS
Annual
Performance Review process. Further, Executive will be granted
300,000 options
to purchase MEMS common stock at an option price equal to the
closing price of
MEMS stock on the Over the Counter Bulletin Board (OTCBB) on the
date of grant
and shall vest as follows: 10% upon execution of this Agreement,
and thereafter
30% per annum on the anniversary of your hire date.
Notwithstanding the
foregoing, any unvested shares shall vest on the close of
business on the day
before the closing date of any merger or acquisition agreement
whereby more than
50% of the issued and outstanding MEMS capital stock, or all or
substantially
all of its assets, is to be purchased or otherwise acquired by a
third-party.
2.3 During the Term, MEMS shall pay or reimburse Executive for
all
actual, reasonable and customary expenses incurred by Executive
in the course of
his employment; including, but not limited to, travel,
entertainment,
subscriptions and dues associated with Executive's membership in
professional,
business and civic organizations; provided that such expenses
are incurred and
accounted for in accordance with MEMS' applicable policies and
procedures, and
provided Executive presents appropriate vouchers or
receipts.
2.4 While employed by MEMS, executive shall be allowed to
participate,
on the same basis generally as other executives of MEMS
Entities, in all general
executive benefit plans and programs, including improvements or
modifications of
the same, which on the Effective Date or thereafter are made
available by the
MEMS Entities to all or substantially all of MEMS Entities'
similarly situated
executives. Such benefits, plans, and programs may include,
without limitation,
medical, health, and dental care, life insurance, disability
protection, and
qualified and non-qualified retirement plans. Except as
specifically provided
herein, nothing in this agreement is to be construed or
interpreted to increase
or alter in any way the rights, participation, coverage, or
benefits under such
benefit plans or programs than provided to similarly situated
executives
pursuant to the terms and conditions of such benefit plans and
programs.
2.5 MEMS shall not, by reason of this Article 2, be obligated
to
institute, maintain, or refrain from changing, amending or
discontinuing, any
incentive compensation, executive benefit or stock or stock
option program or
plan, so long as such actions are similarly applicable to
covered executives
generally.
2.6 MEMS may withhold from any compensation, benefits, or
amounts
payable under this Agreement all federal, state, city, or other
taxes as may be
required pursuant to any law or governmental regulation or
ruling.
Article 3. TERMINATION OF EMPLOYMENT AND EFFECTS OF SUCH
TERMINATION
3.1 Executive's employment with MEMS shall be terminated (i)
upon the
death of Executive, (ii) upon Executive's Retirement (as defined
below), (iii)
upon Executive's Permanent Disability (as defined below), (iv)
at any time by
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MEMS upon written notice to Executive, or by Executive upon
thirty (30) days'
written notice to MEMS, for any or no reason; or (v) on the
three (3) year
anniversary date of this Agreement unless extended, in writing,
by MEMS and
Executive.
3.2 If Executive's employment is terminated by reason of any of
the
following circumstances, Executive shall not be entitled to
receive the benefits
set forth in Section 3.3 hereof:
(i) Death.
(ii) Retirement. "Retirement" shall mean either (a)
Executive's retirement at or after normal retirement
age or (b) the voluntary termination of Executive's
employment by Executive in accordance with MEMS'
early retirement policy for other than Good Reason
(as defined below).
(iii) Permanent Disability. "Permanent Disability" shall
mean Executive's physical or mental incapacity to
perform his usual duties with such condition likely
to remain continuously and permanently as determined
by the Compensation Committee.
(iv) Voluntary Termination. "Voluntary Termination" shall
mean a termination of employment in the sole
discretion and at the election of Executive for other
than Good Reason. "Good Reason" shall mean (a) a
termination of employment by Executive because of a
material breach by MEMS of any material provision of
this Agreement which remains uncorrected for thirty
(30) days following written notice of such breach by
Executive to MEMS, provided such termination occurs
within sixty (60) days after the expiration of the
notice period or (b) a termination of employment by
Executive within six (6) months after a material
reduction in Executive's rank or responsibility with
MEMS.
(v) Expiration of the three (3) year term of this
Contract without a mutual agreement between MEMS and
Employee to extend the term thereof; or
(vi) Termination for Cause. Termination of Executive's
employment by MEMS for Cause. "Cause" shall mean any
of the following:
(a) Executive's gross negligence or willful misconduct in
the
performance of the duties and services required of Executive
pursuant to this Agreement, (b) Executive's indictment for a
felony, (c) a material violation of the Code of Business
Conduct or (d) Executive's material breach of any material
provision of this Agreement which remains uncorrected for
thirty (30) days following written notice of such breach to
Executive by MEMS. Determination as to whether or not Cause
exists for termination of Executive's employment will be
made
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by the MEMS Board of Directors. Decisions as to whether
"Cause" exists for termination of the employment
relationship
with Executive and whether and as of what date Executive has
become permanently disabled are delegated to MEMS Board of
Directors, or its delegate, for determination and any
dispute
by Executive with any such decision shall be limited to
whether the MEMS Board of Directors, or its delegate,
reached
such decision in good faith.
In the event Executive's employment is terminated under any of
the
foregoing circumstances, all future compensation to which
Executive is otherwise
entitled and all future benefits for which Executive is eligible
shall cease and
terminate as of the date of termination, except as specifically
provided in this
Section 3.2. Executive, or his estate in the case of Executive's
death, shall be
entitled to pro rata base salary through the date of such
termination and shall
be entitled to any individual bonuses or individual incentive
compensation not
yet paid but payable under MEMS' plans, if any, for years prior
to the year of
Executive's termination of employment, but shall not be entitled
to any bonus or
incentive compensation for the year in which he terminates
employment or any
other payments or benefits by or on behalf of MEMS except for
those which may be
payable pursuant to the te
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