Document:

Exhibit 10.15

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), by
and between SMTEK INTERNATIONAL, INC., a Delaware corporation (the “Company”),
and Kirk A. Waldron (“Employee”), is effective as of July 1, 2004 (the
“Effective Date”), and amends and restates the Employment Agreement, effective
as of May 14, 2002, by and between the Company and Employee (the “Old
Employment Agreement”).

 

WHEREAS, the Company desires to continue
the employment of Employee in the position of Senior Vice President, Chief
Financial Officer and Treasurer, 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 Senior Vice
President, Chief Financial Officer and Treasurer, (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 $170,000
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.  This bonus, if any,
is 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 $675 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. 
While Employee is employed with the Company, the Company
shall also pay for reasonable dues, fees and costs, as determined by the Board,
that Employee incurs to maintain membership in appropriate professional
organizations.

 

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 one year of his salary at his highest base salary with the company
payable in a lump sum no later than 30 days after the termination date.

 

(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 one year
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 one year after termination of his employment for any
reason, he or she shall not (a) directly or indirectly 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 one year 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:

  	
   

  
	
   

  	
   

  	
  Kirk A.
  Waldron

  
	
   

  	
   

  	
  2066
  Creekwood Street

  
	
   

  	
   

  	
  Westlake
  Village, CA 91361

  

 

8.3  ENTIRE AGREEMENT/RELEASE UNDER OLD
EMPLOYMENT AGREEMENT.  This Agreement
supersedes any and all prior written or oral agreements between Employee and
the Company, including the Old Employment Agreement, 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.  The Employee acknowledges and agrees that the Company has fully
performed and complied with its obligations under the Old Employment Agreement,
and Employee releases the Company from any claims he may have against the
Company arising out of the Old Employment 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:   CEO and President

  	
   

  
	
  Date: May
  25, 2004

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/  KIRK A. WALDRON

  	
   

  	
   

  
	
  By:    Kirk
  A. Waldron

  	
   

  
	
  Date: May
  25, 2004EXHIBIT 10.16

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”), by and between SMTEK
INTERNATIONAL, INC., a Delaware corporation (the “Company”), and Richard
Fitzgerald (“Employee”), is effective as of July 1, 2004 (the “Effective Date”),
and amends any prior Employment Agreement 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, Operations, 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,
Operations,, (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
$140,000  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.  This bonus, if any,
is 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.  While
Employee is employed with the 

 

 

Company,
the Company shall also pay for reasonable dues, fees and costs, as determined
by the Board, that Employee incurs to maintain membership in appropriate
professional organizations.

 

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 one year of his salary at his highest base salary with the company
payable fifty-percent no later than 30 days after the termination date, with
the balance monthly over the six (6) month 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 one year 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 one year 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 one year 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:

  	
  Richard
  Fitzgerald

  
	
   

  	
   

  	
  at current
  address on file at the Company

  

 

 

8.3  ENTIRE AGREEMENT/RELEASE UNDER OLD
EMPLOYMENT AGREEMENT.  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:    CEO and President

  	
   

  
	
  Date: May
  25, 2004

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
    /s/ Richard
  Fitzgerald

  	
   

  	
   

  
	
  By:    “
  Employee”: Richard Fitzgerald

  	
   

  
	
  Date: May
  25, 2004

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