Key Employee Agreement With Donald R. Peck

KEY EMPLOYEE AGREEMENT


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To: Donald R. Peck As of February 1, 1997
6 Doran Farm Lane
Lexington, Massachusetts 02173


The undersigned, Centennial Technologies, Inc., a Delaware corporation (the "Company"), hereby agrees with you as follows:


1. POSITION AND RESPONSIBILITIES.


1.1 You shall serve as the Treasurer and General Counsel of the Company or in a comparable position with similar responsibilities, as designated by the Company's Board of Directors, and shall perform such functions as are customarily associated with such capacity from time to time at the Company's headquarters or such place or places as are appropriate and necessary in connection with such employment.


1.2 You will, to the best of your ability, devote your full time and best efforts to the performance of your duties hereunder and the business and affairs of the Company. You agree to perform such duties consistent with your position as may be lawfully and reasonably assigned to you by the Company's Board of Directors from time to time. Such duties may include similar responsibilities with companies in which the Company has a majority ownership interest.


1.3 You will duly, punctually and faithfully perform and observe any and all lawful rules and regulations which the Company may now or shall hereafter establish governing the conduct of its business.


2. TERM OF EMPLOYMENT.


2.1 The initial term of this Agreement shall be for one year, subject to earlier termination in accordance with Section 2.2 hereof. Thereafter, this Agreement may be renewed upon the written agreement of you and the Company.


2.2 The Company shall have the right to terminate your employment at any time either (a) immediately without prior written notice for "cause" (as defined herein), or (b) upon at least ten (10) days' written notice without cause. If the Company terminates your employment for cause, the Company shall be obligated to pay you an amount equal to your salary and vacation pay which is accrued and unpaid up to the


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date of such termination. If the Company terminates your employment without cause, the Company shall be obligated to pay you your Base Salary (as defined in EXHIBIT A attached hereto) for a period of time equal to the greater of (i) six months, or (ii) that period of time which commences on the date of such termination and ends with the expiration in the initial term of employment set forth in Section 2.1 (the "Severance Period"). The Company shall also continue in full force and effect for the Severance Period all health and insurance benefits that you enjoyed at the time of your termination without cause, and all other benefits which applicable law requires to be continued. Should you continue to be employed by the Company beyond the term of this Agreement without a mutually agreed upon renewal or modification of this Agreement, a six month severance provision for termination without cause as described above shall apply.


2.3 For purposes of Section 2.2 hereof, the term "cause" shall mean the following: (i) your involvement in any felony crime, material arrestable criminal offense (excluding road traffic offenses for which a fine or non-custodial penalty is imposed), or any crime in connection with your employment with the Company (including theft of Company assets); or (ii) material insubordination or your unreasonable failure to take actions permitted by law and necessary to implement strategies or policies of the Company and which are consistent with your positions and duties, following written warning of such material insubordination or unreasonable failure; or (iii) drunkenness or use of any drug or narcotic which adversely affects your job performance; or (iv) any knowing or intentional misrepresentation of significant information important to the operating condition of the Company; or (v) acting in material breach or contravention of any non-competition, non-disclosure or non-solicitation covenants hereof.


3. COMPENSATION. You shall receive the compensation and benefits set forth on Exhibit A hereto ("Compensation") for all services to be rendered by you hereunder and for your transfer of property rights, if any, pursuant to an agreement relating to proprietary information and inventions of even date herewith attached hereto and made a part hereof as EXHIBIT C between you and the Company (the "Proprietary Information and Inventions Agreement"). If you remain as a full-time employee of the Company until at least August 31, 1997, the Company will pay you, in a lump-sum payment within two (2) weeks following such date, a "stay bonus" equal to six (6) months' Base Salary.


4. OTHER ACTIVITIES DURING EMPLOYMENT.


4.1 Except for any outside employments and directorships currently held by you as listed on EXHIBIT B hereto, if any, and except with the prior written consent of the Company's Board of Directors (which approval shall not be unreasonably withheld), you will not during the term of this Agreement undertake or engage in any other employment, occupation or business enterprise other than one in which you are an inactive investor.


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4.2 You hereby agree that, except as disclosed on EXHIBIT B hereto, during your employment hereunder, you will not, directly or indirectly, engage (a) individually, (b) as an officer, (c) as a director, (d) as an employee, (e) as a consultant, (f) as an advisor, (g) as an agent (whether a salesperson or otherwise), (h) as a broker, or (i) as a partner, coventurer, stockholder or other proprietor owning directly or indirectly more than one percent (1%) interest, in any firm, corporation, partnership, trust, association, or other organization which is engaged in any line of business engaged in or under demonstrable development by the Company (such firm, corporation, partnership, trust, association, or other organization being hereinafter referred to as a "Prohibited Enterprise"). You hereby represent that you are not presently engaged in any of the foregoing capacities described in (a) through (i) in any Prohibited Enterprise.


5. FORMER EMPLOYERS.


5.1 You represent and warrant that your employment by the Company will not conflict with and will not be constrained by any prior or current employment, consulting agreement or relationship whether oral or written. You represent and warrant that you do not possess confidential information arising out of any such employment, consulting agreement or relationship which, in your best judgment, would be utilized in connection with your employment by the Company.


5.2 If, in spite of the second sentence of Section 5.1, you should find that confidential information belonging to any other person or entity might be usable in connection with the Company's business, you will not intentionally disclose to the Company or use on behalf of the Company any confidential information belonging to any of your former employers; but during your employment by the Company you will use in the performance of your duties all information which is generally known and used by persons with training and experience comparable to your own, all information which is common knowledge in the industry or otherwise legally in the public domain.


6. PROPRIETARY INFORMATION AND INVENTIONS. You agree to execute, deliver and be bound by the provisions of the Proprietary Information and Inventions Agreement attached hereto as EXHIBIT C and incorporated herein.


7. [NOT USED].


8. REMEDIES. Your obligations under the Proprietary Information and Inventions Agreement and the provisions of Sections 9, 10 and 11 of this Agreement (as modified by Section 12, if applicable) shall survive the expiration or termination of your employment (whether through your resignation or otherwise) with the Company. You acknowledge that a remedy at law for any breach or threatened breach by you of the provisions of this Agreement or the Proprietary Information and Inventions Agreement would be inadequate and you therefore agree that the Company shall be entitled to injunctive relief in case of any such breach or threatened breach.


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9. ASSIGNMENT. This Agreement and the rights and obligations of the parties hereto shall bind and inure to the benefit of any successor or successors of the Company by reorganization, merger or consolidation and any assignee of all or substantially all of its business and properties, but, except as to any such successor or assignee of the Company, neither this Agreement nor any rights or benefits hereunder may be assigned by the Company or by you, except by operation of law or by a further written agreement by the parties hereto.


10. CONFIDENTIALITY. You agree to keep confidential, except as the Company may otherwise consent in writing, and, except for the Company's benefit, not to disclose or make any use of at any time either during or subsequent to your employment, any trade secrets, confidential information, knowledge, data or other information of the Company relating to products, processes, know-how, techniques, methods, designs, formulas, test data, customer lists, business plans, marketing plans and strategies, pricing strategies, or other subject matter pertaining to any business of the Company or any of its affiliates, which you may produce, obtain, or otherwise acquire during the course of your employment, except as herein provided. You further agree not to deliver, reproduce or in any way allow any such trade secrets, confidential information, knowledge, data or other information, or any documentation relating thereto, to be delivered to or used by any third parties without specific direction or consent of a duly authorized representative of the Company.


11. ARBITRATION. Any dispute concerning this Agreement including, but not limited to, its existence, validity, interpretation, performance or non-performance, arising ...