Exhibit 10.1


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (this “Agreement”), by and between SMTEK
INTERNATIONAL, INC., a Delaware corporation (the “Company”), and Robert Miller
(“Employee”), is effective as of February 5, 2004 (the “Effective Date”), and
supersedes the Employment Offer Letter by and between the Company and Employee
(the “Offer Letter”).


 


WHEREAS, the Company desires to continue the employment of Employee in
the position of Vice President, Sales and Marketing, and


 


WHEREAS, Employee agrees to be employed by the Company
in such position pursuant to the terms and conditions of this Agreement.


 


NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:


 


1.               EMPLOYMENT POSITION.


 


While employed by the Company, Employee shall (a) serve as the
Company’s Vice President, Sales and Marketing, (b) report directly to the
Company’s Chief Executive Officer (the “CEO”), and (c) perform the duties and
functions assigned to him by the CEO.


 


2.               COMPENSATION AND BENEFITS.


 


2.1  BASE SALARY.  While employed by the Company, Employee’s
base salary shall be $160,000 per year payable in accordance with the Company’s
standard payroll schedule; provided, however, that this base salary will be
reviewed for merit and cost of living increases, by the Company’s Board of
Directors (the “Board”) and/or the Compensation Committee of the Board, but
shall not be decreased without Employee’s prior written consent.


 


2.2  BONUSES.  During each fiscal year that Employee is
employed with the Company, Employee shall be eligible for an incentive bonus at
the Company’s sole discretion.  Employee
shall be eligible to receive annual bonus compensation based upon criteria and
the achievement of such objectives as the Board may from time to time
establish, in the exercise of its discretion. 
Employee shall also be eligible for an incentive bonus of up to $22,500
per quarter by meeting certain revenue objectives and financial goals
established via mutual written agreement by Employee and the CEO and as
approved by the Compensation Committee. 
These bonuses, if any, are intended to reward contribution to the
Company’s performance over an entire fiscal year, and consequently will be paid
only if the Company still employs Employee, Employee is in good standing at the
time the bonus is determined and Employee is in full compliance with this
Agreement.


 


2.3  OTHER BENEFITS.  Employee shall, while employed by the
Company, be eligible to participate in the employee benefits and benefit plans
that the Company generally makes available to its full-time regular employees,
subject to the terms and conditions of such plans, as they may be modified from
time to time.  In addition, while
employed by the Company, Employee shall be entitled to the following benefits:
a car allowance of $650 per month; a cell


 

















 


phone with monthly charges reasonably limited by the Board; and a
corporate credit card with charges reasonably limited by the Board.


 


2.4  EXPENSE REIMBURSEMENT.  While employed by the Company, Employee
shall be entitled, in accordance with the reimbursement policies in effect from
time to time, to receive reimbursement from the Company for reasonably business
expenses incurred by Employee in the performance of Employee’s duties
hereunder, provided Employee furnishes the Company with vouchers, receipts and
other details of such expenses in the form required by the Company, sufficient
to substantiate a deduction for such business expenses under all applicable
rules and regulations of federal and state taxing authorities.


 


2.5  WITHHOLDING.  The Company shall deduct and withhold from the compensation
payable to Employee hereunder any and all applicable federal, state and local
income and employment withholding taxes and any other amounts require to be
deducted or withhold by the Company under applicable statutes, regulations,
ordinances or orders governing or requiring the withholding or deduction of
amounts otherwise payable as compensation or wages to employees.


 


3.               TERMINATION.


 


3.1  AT WILL.  Employee and the Company acknowledge and
agree that Employee’s employment with the Company is expressly “at will”.  This means that either party may terminate
Employee’s employment with or without Cause (as defined in Section 3.3(d)
below) upon written notice.  Any
termination of Employee’s employment is, however, subject to the terms and
provisions of this Agreement as to severance pay and other obligations.


 


3.2  VOLUNTARY RESIGNATION.


 


(a)  NO SEVERANCE.  In the event that Employee’s employment with
the Company terminates as a result of his voluntary resignation, Employee shall
be entitled only to accrued but unpaid salary and vacation as of the date of
termination.


 


(b)  RELOCATION OF
HEADQUARTERS/DIRECTED RESIGNATION NOT VOLUNTARY RESIGNATION.  For purposes of this Agreement, the term
“voluntary resignation” shall not include any situation where:  (1) Employee terminates his employment with
the Company within 60 days after the Company (A) relocates the Corporate
headquarters more than 20 miles from Moorpark, California or (B) requires Employee to
physically report for his employment duties more than 20 miles from Moorpark,
California; or (2) Employee resigns pursuant to a direct request of the CEO or
the Board.  A termination or resignation
under such circumstances shall be treated as an involuntary termination without
Cause, and Employee’s entitlement to severance pay and additional benefits in
accordance with the provisions of Sections 3.3(a), 3.3(b) and 3.3(c) below
shall apply unless, and only if, such termination was for Cause.


 


3.3  INVOLUNTARY TERMINATION.


 


(a)  INVOLUNTARY
TERMINATION.  The Company shall be
deemed to have terminated the employment of Employee involuntarily and without
Cause if (1) Employee’s full-time employment is terminated by the Company
without Cause; or (2) Employee terminates his employment with the Company
within 60 days after the Company materially reduces Employee’s functions,
duties or


 

















 


responsibilities or reporting relationships or otherwise demotes
Employee.  The parties agree, however,
that if global parts/materials duties are taken from Employee, such action
alone will not constitute an involuntary termination without Cause under (2)
above.


 


(b)  SEVERANCE PAY.  In the event Employee’s employment is involuntarily terminated
without Cause as stated in Section 3.2(b) or 3.3(a) above, Employee shall
be entitled to severance pay equal to three (3) months of his salary at his
highest base salary with the company within the initial year of the Effective
Date (through February 4, 2005), six (6) months of his salary at his
highest base salary with the company from year one until year two, and twelve
(12) months of his highest base salary with the company after the completion of
year 2 and thereafter, payable monthly over the severance period after the date
of termination.


 


(c)  ADDITIONAL BENEFITS.  In the event of termination because of any
of the events described in Section 3.2(b), Employee’s benefits as outlined
in Section 2.3 shall continue for a period of one year following the
occurrence of either of those events. 
In the event of termination of Employee’s employment pursuant to
Section 3.3(a), Employee’s benefits as outlined in Section 2.3 shall
continue for 30 days from the date of termination of his employment with the
Company.  Otherwise, Employee’s benefits
terminate upon the date of Employee’s termination from the Company.


 


(d)  CAUSE.  For purposes of this Agreement, “Cause”
shall mean (1) the willful and deliberate refusal or failure of Employee to
comply with a lawful written instruction of the CEO or the Board, which refusal
is not remedied by Employee within 30 days after his receipt of written notice
from the Company identifying the refusal; (2) an act or acts of personal
dishonesty by Employee that were intended to result in personal enrichment of
Employee at the expense of the Company; (3) Employee’s conviction of any felony
involving an act of moral turpitude; or (4) Employee’s material breach of any
representation or covenant contained in Section 5, 6 or 7 of this
Agreement.  In the event that the
Company terminates Employee’s employment for Cause, Employee shall be entitled
only to accrued but unpaid salary and vacation as of the date of termination.


 


3.4  DEATH. 
In the event of Employee’s death, the Employment Period shall
automatically terminate.  Termination of
Employee’s employment as a result of his death shall not result in any
obligation by the Company to pay severance pay (unless the obligation to pay
severance exists as of the date of Employee’s death).  However, Employee shall be entitled to accrued but unpaid salary
and vacation earned through the date of termination.


 


3.5  DISABILITY. 
In the event of Employee’s Disability (as defined below) during the
Employment Period for any period of at least six consecutive months, the
Company shall have the right, which may be exercised in its sole discretion, to
terminate Employee’s employment.  In the
event the Company elects to terminate Employee, Employee shall not be entitled
to any severance pay at any time but shall be entitled to (a) accrued but
unpaid salary and vacation earned through the date of termination and (b)
normal disability benefits in accordance with the policies established from
time to time by the Company.  For
purposes of this Agreement, “Disability” shall mean the inability of Employee
to perform his employment services hereunder by reason of physical or mental
illness or incapacity as determined by a physician chosen by the Company and
reasonably satisfactory to Employee or his legal representative.


 

















 


4.               TERM.


 


The term during
which Employee will provide services to the Company pursuant to this Agreement
will commence on the Effective Date and will expire on the third anniversary of
the Effective Date (the “Employment Period”), unless terminated earlier
pursuant to the provisions of Section 3 provided that the term shall
“evergreen” commencing on the second anniversary of the Effective Date so that
until and unless Company notifies Employee that the term will be permitted to
expire, there will at all times be six (6) moths remaining in the term.


 


5.               NONDISCLOSURE OF INFORMATION AND
NON-SOLICITATION OF EMPLOYEES.


 


5.1  NONDISCLOSURE OF
CONFIDENTIAL INFORMATION.  Except in the
performance of his duties hereunder, Employee shall not, either during or
subsequent to the Employment Period, disclose, directly or indirectly, to any
person or entity or use for his own direct or indirect benefit any Confidential
Information (as defined below) pertaining to the Company obtained by Employee
in the course of his employment with the Company.  For purposes of this Agreement, “Confidential Information” shall
include any proprietary or confidential information of any kind, nature or
description concerning any matters affecting or relating to the business of the
Company, including, without limitation, the Company’s products, services,
processes, suppliers, customers, customers’ account executives, financial,
sales and distribution information, price lists, identity and list of actual
and potential customers, trade secrets, technical information, business plans
and strategies to the extent that such information has not been publicly
disseminated by the Company, other than through a breach hereof.  The Company shall have available to it all
remedies, including, but not limited to suits for injunctive relief and/or
damages, as a result of Employee’s breach of confidentiality.  This provision shall survive the termination
of the employment relationship between the Company and Employee.


 


5.2  NON-SOLICITATION.  Employee agrees that, so long as he is
employed by the Company and for a period of six (6) months after termination of
his employment for any reason, he or she shall not (a) directly or indirectly
hire, solicit, induce or attempt to solicit or induce any Company employee to
discontinue his or her employment with the Company, (b) usurp any opportunity
of the Company that Employee became aware of during his tenure at the Company,
or (c) directly or indirectly solicit or induce or attempt to influence any
person or business that is an account, customer or client of the Company to
restrict or cancel the business of any such account, customer or client with
the Company.


 


6.               NON-COMPETITION.


 


So long as Employee is employed by the Company and for a period of six
(6) months after termination of his employment for any reason, Employee shall
not, without the prior written consent of the Board, either directly or
indirectly engage in any business engaged in by the Company wherever the
Company conducts its business.  The term
“directly” means Employee is acting on his own or is acting as a consultant,
employee, director, agent, representative or associate with or for any other
person or entity.  The term “indirectly”
means Employee is acting through any partnership, joint venture, corporation or
other entity or person.


 

















 


7.               REPRESENTATIONS AND COVENANTS OF
EMPLOYEE & COMPANY.


 


7.1  BEST EFFORTS.  In consideration of the payments to be made
hereunder, Employee agrees to devote his entire business time and attention to
the performance of his duties hereunder, and to serve the Company diligently
and to the best of his abilities. 
Notwithstanding the foregoing, Employee shall have the continuing right
to (a) make passive investments in the securities of any publicly-owned
corporation, (b) make any other passive investments with respect to which he is
not obligated or required to, and does not in fact, devote any managerial
efforts, and (c) serve as a director or consultant for other companies or
entities provided that they are not in a business that competes with the
Company.


 


7.2  NO RESTRICTIONS.  Employee represents that he is under no
actual or alleged restriction, limitation or other prohibition (whether as a
result of his prior employment or otherwise) to perform his duties as described
herein.


 


7.3  AUTHORITY.  The individual signing this Agreement on
behalf of the Company hereby represents and warrants that he has full authority
to do so on behalf of the Company.


 


7.4  DUTIES UPON
TERMINATION.  Upon termination of his
employment with the Company for any reason, Employee agrees to deliver promptly
to the Company all equipment, notebooks, documents, reports, files, samples,
books, correspondence, lists, computes disks or files and the like relating to
the Company’s business, which are or have ever been in his possession or under
his control.


 


8.               MISCELLANEOUS.


 


8.1  NO WAIVER.  The waiver by either party of a breach of
any provision of this Agreement shall not operate as or be construed as a
waiver of any subsequent breach thereof.


 


8.2  NOTICES.  Any and all notices referred to herein shall
be sufficiently furnished if in writing, and sent by registered or certified
mail, postage prepaid, to the respective parties at the following addresses or
such other address as either party may from time to time designate in writing:


 


	
  To the Company:

  	
   

  	
  SMTEK
  International, Inc.

  
	
   

  	
   

  	
  200 Science Drive

  
	
   

  	
   

  	
  Moorpark, CA  93021-2003

  
	
   

  	
   

  	
  Attention: Secretary

  
	
   

  	
   

  	
   

  
	
  To Employee:

  	
   

  	
  Robert Miller

  
	
   

  	
   

  	
  at current address on file at the Company

  



 


8.3  ENTIRE AGREEMENT/RELEASE
UNDER OFFER LETTER.  This Agreement
supersedes any and all prior written or oral agreements between Employee and
the Company, including the Offer Letter, and contains the entire understanding
of the parties hereto, with respect to the terms and conditions of Employee’s
employment with the Company.  If this
Agreement is inconsistent with, or contradicts any term or provision in, any
option plan or agreement, including the Company’s Equity Incentive Plans and
Employee’s option


 

















 


agreements under Equity Incentive Plans, the terms and provisions of
such option plan and/or agreement shall govern and supercede the terms and
provisions of this Agreement.


 


8.4  GOVERNING LAW.  This Agreement shall be construed and
enforced in accordance with the laws and decisions of the State of California.


 


8.5  COUNTERPARTS.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed to constitute an original, but
all of which shall constitute one and the same instrument.


 


8.6  AMENDMENT.  This Agreement may not be modified, amended,
altered or supplemented except by written agreement between Employee and the
Company.


 


8.7  ASSIGNMENT AND PARTIES IN
INTEREST.  This Agreement shall inure to
the benefit of and be binding upon the parties named herein and their
respective successors and assigns; provided, however, Employee may not assign
any of his rights or obligations hereunder. 
Further, the Company will not consolidate or merge into or with another
corporation, or transfer all or substantially all of its assets to another
corporation or entity or person, unless such shall assume and be able to
satisfy all the duties and obligations of the Company under this Agreement.


 


8.8  ATTORNEY’S FEES &
COSTS.  In the event an action in law or
in equity is required to enforce or interpret the terms and conditions of this
Agreement, the prevailing party shall be entitled to reasonable attorneys fees
and costs in addition to any other relief to which that party may be entitled.


 


8.9  INTERPRETATION.   No provision of this document is to be
interpreted for or against any party because that party or party’s legal
representative drafted it.


 


8.10  SEVERABILITY.  In the event that any covenant, condition or
other provision herein contained is held to be invalid, void or illegal by any
court of competent jurisdiction, the same shall be deemed severable from the
remainder of this Agreement and shall in no way affect, impair or invalidate
any other covenant, condition or other provision herein contained.  If such condition, covenant or other
provision shall be deemed invalid due to its scope or breadth, such covenant,
condition or other provision shall be deemed valid to the extent of the scope
or breadth permitted by law.


 


8.11 
CAPTIONS/HEADINGS.  The captions
or headings in each section or sub-section are only for convenience
purposes.  Such captions or headings
shall not be used to interpret the sections or sub-sections of this Agreement.


 


 


IN WITNESS HEREOF, THE PARTIES TO THIS AGREEMENT AGREE TO THE ABOVE AND
BIND THEMSELVES ACCORDINGLY.


 


The “Company”:


 


SMTEK International, Inc., a Delaware corporation


 

















 


	
    /s/ Edward J. Smith

  	
   

  
	
  By:

  	
  Edward J. Smith

  
	
  Its:

  	
  President & CEO

  
	
  Date:

  	
  9/17/04

  
	
   

  
	
   

  
	
  “Employee”:  Bob Miller

  
	
   

  
	
   

  
	
    /s/ Robert Miller

  	
   

  
	
  By:

  	
  Robert Miller

  
	
  Date:

  	
  9/18/04