Exhibit 10.11
EMPLOYMENT AGREEMENT
     THIS AGREEMENT is made and entered into by and between Hargopal (Paul)
Singh (“Executive”) and Suntron Corporation, a Delaware corporation (the
“Company”), to be effective upon approval of the Board of Directors.
WITNESSETH:
     WHEREAS, Executive and the Company deem it to be in their respective best
interests to enter into an agreement providing for the Company’s continued
employment of Executive pursuant to the terms herein stated;
     NOW, THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, it is hereby agreed as follows:
     1. Effective Date. Provided the Agreement has been executed by Executive,
this Agreement shall be effective immediately upon the approval of the Board of
Directors and shall be effective only upon the approval of Board of Directors,
which date shall be referred to herein as the “Effective Date.”
     2. Position and Duties.
               (a) The Company hereby agrees to employ Executive and Executive
hereby agrees to continue his employment as President and Chief Executive
Officer of the Company for the “Term of Employment” (as defined in Section 5).
In this capacity, Executive shall devote his reasonable best efforts to the
performance of the services customarily incident to such office and position and
to such other services of an executive nature as may be reasonably requested by
the Board of Directors (the “Board”) of the Company which may include services
for one or more subsidiaries or affiliates of the Company. Executive, in his
capacity as an employee and officer of the Company, shall be directly
responsible to and obey the reasonable and lawful directives of the Board.
               (b) Executive shall use his reasonable best efforts during the
Term of Employment to protect, encourage, and promote the interests of the
Company.
     3. Compensation.
               (a) Base Salary. The Company shall pay to Executive during the
Term of Employment a salary at the rate of three hundred thousand dollars
($300,000) per calendar year. Such salary shall be payable in accordance with
the Company’s normal payroll procedures. Executive’s annual salary, as set forth
above or as it may be increased from time to time by the Board in its sole
discretion, shall be referred to hereinafter as “Base Salary.”
               (b) Bonus Compensation. In addition to the Base Salary, for each
fiscal year of the Company, or any portion thereof, during the Term of
Employment, Executive shall be eligible to participate in an incentive-based
bonus compensation program (the “Bonus Compensation”) in an amount determined by
the Compensation Committee of the Board (the “Compensation Committee”), and
consistent with other comparable executives of the Company

 

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and its affiliated companies. The amount, if any, of such Bonus Compensation for
each such fiscal year shall be determined based upon the Company’s attainment of
performance goals approved by the Compensation Committee and/or the Board of
Directors. Performance goals may include, among other things, the Company’s
earnings before interest expenses, taxes, and amortization costs (adjusted to
reflect working capital carrying costs and capital spending) (“EBITDA”) as well
as other goals and targets to be determined solely by the Compensation Committee
and/or the Board of Directors. Without limiting the foregoing, the amount of
Bonus Compensation, if any, to be paid in respect of any such fiscal year shall
be up to $360,000 for meeting or exceeding the agreed upon performance goals.
The performance goals and associated potential bonus payments for fiscal year
2005 are set forth in Exhibit A hereto. For any subsequent years after 2005, the
performance or other goals, EBITDA targets, EBITDA target payout levels, and
bonus payouts will be determined by the Board of Directors or its designee, in
its sole discretion.
     4. Benefits. During the Term of Employment:
               (a) Executive shall be eligible to participate in any life,
health and long-term disability insurance programs, pension and retirement
programs, leave of absence and other fringe benefit programs made available to
senior executive employees of the Company from time to time, and Executive shall
be entitled to receive such other fringe benefits as may be granted to him from
time to time by the Compensation Committee.
               (b) Executive shall be entitled to four weeks paid vacation per
each full year during the Term of Employment; provided that Executive may be
provided with additional paid vacation as provided by the Board (or its
designee) in its sole discretion.
               (c) Executive shall be eligible to participate in the Company’s
2002 Stock Option Plan, as amended, and such other equity based or incentive
compensation plans or programs as may be adopted by the Company from time to
time (collectively, the “Equity Plan”) for its senior executives, at such level
and in such amounts as may be determined by the Board in its sole discretion,
subject to the terms and conditions of the Equity Plan and any applicable award
agreements; provided that Executive shall receive an initial award of options to
purchase 700,000 shares of common stock of the Company substantially on the
terms set forth on Exhibit B hereto.
               (d) The Company shall reimburse Executive for reasonable business
expenses incurred in performing Executive’s duties and promoting the business of
the Company, including, but not limited to, reasonable entertainment expenses,
travel and lodging expenses, following presentation of documentation in
accordance with the Company’s business expense reimbursement policies.
               (e) The Company shall reimburse Executive for reasonable moving
expenses incurred by Executive if he is asked to move to the Phoenix, Arizona
area in connection with his employment by the Company following presentation of
documentation thereof; provided, that such expenses shall not exceed $75,000
(grossed up for tax purposes) in the aggregate and shall include any previously
unused portion of the $50,000 in moving expenses offered to Executive to
facilitate his move from Minnesota to Texas, as set forth in the

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offer letter from Suntron Corporation to Hargopal (Paul) Singh dated June 30,
2004 for the position of Vice President of Customer Business Management at its
Gulf Coast Operations (hereinafter “GCO 2004 Offer Letter”), but that was not
used by Executive).
               (f) If Executive is not able to sell his home in Minnesota for a
period of six (6) months from the date of its placement on the market, which
shall require an active listing in the multiple listing service for a period of
six (6) months, the Company will offer additional assistance to Executive to
offset the financial burden, if any, at that time.
     5. Term; Termination of Employment. As used herein, the phrase “Term of
Employment” shall mean the period commencing on the Effective Date and, except
as otherwise specifically provided below, ending on December 31, 2006, which
shall automatically renew for periods of one year unless one party gives written
notice to the other at least 60 days prior to the end of the then current term
that the Agreement shall not be further extended. Notwithstanding the foregoing,
the Term of Employment shall expire on the first to occur of the following:
               (a) Termination by the Company without Cause or Resignation for
Good Reason. Notwithstanding anything to the contrary in this Agreement, whether
express or implied, (i) the Company may, at any time, terminate Executive’s
employment without Cause (as defined below) by giving Executive at least
15 days’ prior written notice of the effective date of termination and (ii) the
Executive may resign for Good Reason (as defined below) by giving the Company at
least 15 days’ prior written notice of the effective date of termination. In the
event Executive’s employment hereunder is terminated by the Company without
Cause (defined below), or Executive resigns for Good Reason (defined below), the
Company shall continue to pay to Executive Base Salary for a period of twelve
(12) months following the date of such termination, in accordance with the
Company’s customary payroll practices, subject to and consistent with
Section 409A of the Internal Revenue Code, and shall pay Executive a pro-rated
Bonus Compensation for the year in which such termination occurs, based on
performance to the date of termination. Further, notwithstanding the foregoing,
as a condition precedent to Executive’s receipt of said continued Base Salary
and any pro-rated Bonus Compensation under this Section 5(a), Executive shall
execute and shall not revoke a Severance Agreement and Release of All Claims,
consistent with and not in excess of the consideration set forth this Section,
and in a form mutually acceptable to the Company and Executive. The Parties
agree to amend this Agreement to the extent necessary to avoid imposition of any
additional tax or income recognition prior to actual payment to Executive under
Internal Revenue Code 409A and any temporary or final Treasury Regulations and
IRS guidance thereunder.
               (b) Termination for Cause. The Company shall have the right to
terminate Executive’s employment at any time for Cause by giving Executive
written notice of the effective date of termination (which effective date may,
except as otherwise provided below, be the date of such notice). If the Company
terminates Executive’s employment for Cause, Executive shall be paid his unpaid
Base Salary through the date of termination and the Company shall have no
further obligation hereunder from and after the effective date of such
termination and the Company shall have all other rights and remedies available
under this or any other agreement and at law or in equity.

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               (c) Certain Definitions. For purposes of this Agreement:
                    (i) “Cause” shall mean:
                         (A) Fraud, misappropriation, embezzlement, dereliction
of duty, or other act of material misconduct by Executive against the Company or
any of its affiliates;
                         (B) Executive’s indictment for, charging with, or
conviction of a felony;
                         (C) Executive’s breach of any material term of this
Agreement, including without limitation Section 6; or
                         (D) Executive’s willful refusal or failure to act on
any reasonable and lawful directive or order from the Board which is material to
the business of the Company and which remains uncured for a period of thirty
days following written notice by the Company to Executive describing such
refusal or failure to act.
                    (ii) “Change of Control” shall mean:
                         (A) The acquisition by any person, entity, or group
(other than any of the Company, its subsidiaries or any employee benefit plan of
the Company) of more than 50% of the combined voting power of the Company’s then
outstanding securities;
                         (B) Stockholder approval of a merger or consolidation
of the Company, other than (i) a merger or consolidation in which the voting
securities of the Company immediately prior thereto continue to represent more
than 50% of the combined voting power of the outstanding voting securities of
the surviving entity immediately after such merger or consolidation; or
                         (C) A sale of all or substantially all of the Company’s
assets.
                    (iii) “Good Reason” shall mean:
                         (A) A material breach of a material term of this
Agreement by the Company;
                         (B) Any material adverse change in Executive’s job
title, duties, responsibilities and authority;
                         (C) Failure of the Company to pay Base Salary, Bonus
Compensation, or any other compensation due Executive, when due under this
Agreement.
provided, however, that none of the events described in this Section 5(c)(iii)
shall constitute Good Reason unless Executive shall have notified the Company in
writing describing the events

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which constitute Good Reason and the Company shall have failed to cure such
event within thirty days after the Company’s receipt of such written notice.
               (d) Termination on Account of Death. In the event of Executive’s
death while in the employ of the Company, his employment hereunder shall
terminate on the date of his death and Executive shall be paid his unpaid Base
Salary through the date of termination of employment, any pro-rated Bonus
Compensation, if any, for the then current fiscal year when it is paid to other
active employees, and any unpaid Bonus Compensation for the prior year, if any,
when it is paid to other active employees. No additional payments under Section
5(a) shall be paid by the Company. In addition, any other benefits payable on
behalf of Executive shall be determined under the Company’s insurance and other
compensation and benefit plans and programs then in effect in accordance with
the terms of such programs.
               (e) Resignation by Executive without Good Reason. In the event
that Executive’s employment with the Company is voluntarily terminated by
Executive for any reason other than for Good Reason, Executive shall be paid his
unpaid Base Salary through the date of termination of employment and any unpaid
Bonus Compensation for the prior year, if any, when it is paid to other active
employees, and the Company shall have no further obligation hereunder from and
after the effective date of termination and the Company shall have all other
rights and remedies available under this Agreement or any other agreement and at
law or in equity. Executive shall give the Company at least 30 days’ advance
written notice of his intention to terminate his employment hereunder.
               (f) Termination on Account of Disability. To the extent not
prohibited by The Americans With Disabilities Act of 1990 or other applicable
law, if, as a result of Executive’s incapacity due to physical or mental illness
(as determined in good faith by a physician acceptable to the Company and
Executive), Executive shall have been absent from the full-time performance of
his duties with the Company for 120 consecutive days during any twelve
(12) month period or if a physician acceptable to the Company advises the
Company that it is likely that Executive will be unable to return to the
full-time performance of his duties for 120 consecutive days during the
succeeding twelve (12) month period, his employment may be terminated for
“Disability.” During any period that Executive fails to perform his full-time
duties with the Company as a result of incapacity due to physical or mental
illness, he shall continue to receive his Base Salary, Bonus Compensation and
other benefits provided hereunder, together with all compensation payable to him
under the Company’s disability plan or program or other similar plan during such
period, until Executive’s employment hereunder is terminated pursuant to this
Section 5(f). Upon termination of employment under this Section 5(f), Executive
shall not be entitled to additional payments under Section 5(a), provided,
however, Executive shall be paid any pro-rated Bonus Compensation, if any, for
the then current fiscal year when it is paid to other active employees, and any
unpaid Bonus Compensation for the prior year, if any, when it is paid to other
active employees. In the event of a Disability, Executive’s benefits shall be
determined under the Company’s retirement, insurance, and other compensation and
benefit plans and programs then in effect, in accordance with the terms of such
programs and to the extent permitted by applicable law.
               (g) Termination of Employment Due to Change of Control. The
initial grant of options (700,000), provided for under Section 4(c) and
Exhibit B hereto, shall fully vest

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at a Change of Control (as defined herein). If Company terminates Executive’s
employment without Cause (as defined herein) six (6) months prior to a Change of
Control and in anticipation thereof, or, if within the first year after a Change
of Control, Executive’s employment is either terminated without Cause (as
defined herein) or Executive resigns for Good Reason (as defined herein) ,
subject to Section 409A of the Internal Revenue Code, Executive will receive a
bonus (less statutory deductions) to the extent that the value of those options
is less than $600,000 (two year’s base salary) at the time of termination of
employment. The value of the options shall be measured as the difference between
the aggregate value of the shares issuable upon exercise of the options and the
aggregate exercise price (the gain). Termination after a Change of Control,
under this scenario, will not trigger the additional payment of one year’s
salary and any pro-rated Bonus Compensation under the provisions of
Section 5(a).
     6. Confidential Information, Non-Solicitation and Non-Competition.
               (a) During the Term of Employment and for a period of one year
following the date Executive ceases to be employed by the Company (the
“Non-Compete Period”) for any reason, including, but not limited to, termination
with or without Cause or Resignation for Good Reason, with the exception of a
termination of employment after a Change of Control (as defined above in Section
5(c)(ii)) in the event a successor to the Company and Executive have not reached
a mutually acceptable employment agreement prior to termination, Executive shall
not, directly or indirectly, engage in, work for, consult or provide advice or
assistance to any Named Competitor (as defined below) within the United States
and its territories and protectorates. “Named Competitor” shall mean any company
that derives more than 50% of its annual revenues from the provision of high mix
electronic manufacturing services to original equipment manufacturers in the
semiconductor capital equipment, aerospace and defense electronics, computer
peripherals, medical equipment, industrial controls, telecommunications
equipment and/or electronic instrumentation industries. Executive further agrees
that during the Non-Compete Period he will not assist or encourage any other
person in carrying out any activity that would be prohibited by the provisions
of this Section 6 if such activity were carried out by Executive and, in
particular, Executive agrees that he will not induce any employee of the Company
to carry out any such activity; provided, however, that the “beneficial
ownership” by Executive, either individually or as a member of a “group,” as
such terms are used in Rule 13d of the General Rules and Regulations under the
Exchange Act, of not more than five percent (5%) of the voting stock of any
publicly held corporation shall not be a violation of this Agreement.
               (b) Executive agrees that, during the Term of Employment, and for
a period of one year thereafter, he will not, directly or indirectly, solicit or
contact any customer or supplier of the Company on behalf of any Named
Competitor or in any way interfere with the Company’s relationship with any
customer or supplier of the Company.
               (c) Executive agrees that, during the Term of Employment, and for
a period of one year thereafter, he will not, directly or indirectly, solicit or
recruit any employee of the Company for the purpose of being employed by him or
by any Named Competitor.

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               (d) Executive and the Company expressly agree that the Company
will or would suffer irreparable injury if Executive were to violate any
provision of this Section 6 and that the Company would by reason of such
violation be entitled to injunctive relief in a court of appropriate
jurisdiction.
               (e) If it is determined by a court of competent jurisdiction in
any state that any restriction in this Section 6 is excessive in duration or
scope or is unreasonable or unenforceable under the laws of that state, it is
the intention of the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the law of
that state.
     7. Taxes. All payments to be made to Executive under this Agreement will be
subject to any applicable withholding of federal, state and local income and
employment taxes.
     8. Miscellaneous. This Agreement shall also be subject to the following
miscellaneous considerations:
               (a) Executive and the Company each represent and warrant to the
other that he or it has the authorization, power and right to deliver, execute,
and fully perform his or its obligations under this Agreement in accordance with
its terms.
               (b) This Agreement contains a complete statement of all the
arrangements between the parties with respect to Executive’s employment by the
Company, this Agreement supersedes all prior and existing negotiations and
agreements between the parties concerning Executive’s employment, including, but
not limited to, the GCO 2004 Offer Letter, and this Agreement can only be
changed or modified pursuant to a written instrument duly executed by each of
the parties hereto.
               (c) If any provision of this Agreement or any portion thereof is
declared invalid, illegal, or incapable of being enforced by any court of
competent jurisdiction, the remainder of such provisions and all of the
remaining provisions of this Agreement shall continue in full force and effect.
               (d) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, except to the extent
governed by federal law.
               (e) The Company may assign this Agreement to any direct or
indirect subsidiary or parent of the Company or joint venture in which the
Company has an interest, or any successor (whether by merger, consolidation,
spin-off, purchase or otherwise) to all or substantially all of the stock,
assets or business of the Company or any subsidiary or parent of the Company,
and this Agreement shall be binding upon and inure to the benefit of such
successors and assigns. Except as expressly provided herein, Executive may not
sell, transfer, assign, or pledge any of his rights or interests pursuant to
this Agreement.
               (f) Any rights of Executive hereunder shall be in addition to any
rights Executive may otherwise have under benefit plans, agreements, or
arrangements of the Company

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to which he is a party or in which he is a participant, including, but not
limited to, any Company-sponsored employee benefit plans.
               (g) For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the named Executive at the address contained in the Company’s
records concerning the Executive. All notices to the Company shall be directed
to the attention of the Board with a copy to the Secretary of the Company.
               (h) Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
               (i) Failure to insist upon strict compliance with any of the
terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.
               (j) This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
               (k) The Company shall indemnify Executive to the fullest extent
permitted by the laws of the State of Delaware, as in effect at the time of the
subject act or omission, and he will be entitled to the protection of any
insurance policies that the Company may elect to maintain generally for the
benefit of its directors and officers against all costs, charges and expenses
incurred or sustained by him in connection with any action, suit or proceeding
to which he may be made a party by reason of his being or having been a
director, officer or employee of the Company or any of its affiliates or his
having served any other enterprise, plan or trust as director, officer, employee
or fiduciary at the request of the Company. The provisions of this Section 8(k)
shall survive any termination of Executive’s employment or any termination of
this Agreement.
     9. Resolution of Disputes. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted in Phoenix, Arizona in accordance with the rules of the American
Arbitration Association governing employment disputes as then in effect. The
Company and Executive hereby agree that the arbitrator will not have the
authority to award punitive damages, damages for emotional distress or any other
damages that are not contractual in nature. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction; provided, however, that the
Company shall be entitled to seek a restraining order or injunction in any court
of competent jurisdiction to prevent any continuation of any violation of the
provisions of Section 6, and Executive consents that such restraining order or
injunction may be granted without the necessity of the Company’s posting any
bond except to the extent otherwise required by applicable law. The fees and

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expenses of the American Arbitration Association and the arbitrator shall be
borne by the Company.
     10. Attorneys’ Fees.
               (a) Upon invoice in conformity with the Company’s customary
practices, the Company shall reimburse Executive the amount of all reasonable
legal fees incurred by Executive in connection with the negotiation of this
Agreement; provided, that such expenses shall not exceed $5,000 in the
aggregate.
               (b) If any suit or action is filed by any party to enforce this
Agreement or otherwise with respect to the subject matter of this Agreement,
each party shall be responsible to pay the attorneys fees and costs incurred by
such party in preparation or in prosecution or defense of such suit or action;
provided, however, that the court or adjudicator may in its sole discretion
allocate attorneys fees and costs to Executive.
* * * * * * * *
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
dates set forth below, to be effective as of approval of the Board of Directors
of Suntron Corporation.

          EXECUTIVE:   SUNTRON CORPORATION
 
       
 
       
/s/ Hargopal Singh
  By:   /s/ Jeffrey W. Goettman
 
       
Hargopal (Paul) Singh
       

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