SMTX » Topics » Item 1.01. Entry into a Definitive Material Agreement.

This excerpt taken from the SMTX 8-K filed Feb 11, 2005.

Item 1.01. Entry into a Definitive Material Agreement.

 

On February 7, 2005, the Company’s wholly owned subsidiary, SMTC Manufacturing Corporation of Canada, entered into an employment agreement and other related agreements with John Caldwell, the Company’s President and Chief Executive Officer. Under the terms of the agreements, Mr. Caldwell is entitled to an annual base salary of Cdn$504,000, which may be increased by the Board of Directors. Mr. Caldwell is also entitled to a car allowance. Beginning with the fiscal year beginning January 1, 2005, in the event that the Company meets certain EBITDA targets, Mr. Caldwell is eligible for an annual bonus equal to his then current base salary, or a higher amount determined by the Board of Directors if the Company exceeds the specified EBITDA targets. In the event that the Company’s performance is greater than 90% but less than 100% of the EBITDA target, Mr. Caldwell will be eligible for a reduced bonus. At the sole discretion of the Board of Directors, any bonus may be paid through the grant of fully vested deferred share units, each of which will be equivalent to the fair market value of a single share of the Company’s common stock. In the event that Mr. Caldwell is terminated without cause or, following a change of control, is terminated without cause or constructively discharged, he is entitled to a lump sum payment of two years base salary and target bonus. The employment agreement provides for customary non-competition and non-solicitation provisions which continue during the term of the agreement and for two years from the date of termination. Pursuant to a Deferred Share Units agreement, within 60 days following the termination of his employment (or within 10 days following a change of control), Mr. Caldwell will be entitled to a payment in the amount of the fair market value of 66,000 shares of the Company’s common stock. Copies of the employment agreement and the other related agreements are being filed as Exhibits 10.1, 10.2 and 10.3 hereto.

 

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Hexcel (HXL)
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