EXHIBIT 10.01
EMPLOYMENT AGREEMENT
October 10, 1997
Xxxxxx X. Xxxxxxx, Ph.D.
000 Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
Advanced Technology Materials, Inc., a Delaware corporation, has
agreed, pursuant to that certain Agreement and Plan of Merger and Exchange dated
as of the 7th day of April, 1997 by and among Advanced Technology Materials,
Inc., a Delaware corporation, ATMI Holdings, Inc. (n/k/a ATMI, Inc.), a Delaware
corporation, Alamo Merger, Inc., a Delaware corporation, Advanced Delivery &
Chemical Systems Nevada, Inc., a Nevada corporation, Advanced Delivery &
Chemical Systems Manager, Inc., a Delaware corporation, Advanced Delivery &
Chemical Systems Holdings, LLC, a Delaware limited liability company, Advanced
Delivery & Chemical Systems Operating, LLC, a Delaware limited liability company
and Advanced Delivery & Chemical Systems, Ltd., a Texas limited partnership (the
"Exchange Agreement"), to enter into an employment agreement with you. The
"Company" as used in this Agreement shall be defined as Advanced Technology
Materials, Inc., and for purposes of Section 8 hereof shall include any of its
subsidiaries or affiliates for which you provide any product, process,
technology or service to or supervise or otherwise participate in during the two
(2) years prior to the termination of your employment with Advanced Technology
Materials, Inc. As part of the transactions contemplated by the Exchange
Agreement and as a condition precedent for the ADCS Group to enter into the
Exchange Agreement and consummate the transactions contemplated thereby, you
have agreed to enter into such an employment agreement containing, among other
things, restrictions on your ability to compete with the business of the Company
and its subsidiaries and affiliates to the extent provided in the preceding
sentence for a period of time following your termination of employment.
Capitalized terms are used herein with the respective meanings set forth in the
Exchange Agreement unless otherwise defined herein or unless otherwise required
by the context.
Accordingly, in consideration of the premises and the mutual promises
and covenants contained herein and for other good and valuable consideration,
including but not limited to (i) your receipt of a term of employment pursuant
to Section 2 of this
Agreement; (ii) your access to and receipt of the confidential, proprietary and
trade secret information of the Company and its subsidiaries and affiliates;
(iii) your receipt of compensation pursuant to Section 3 of this Agreement; and
(iv) your receipt of other benefits pursuant to Section 4 of this Agreement, the
receipt and sufficiency of which are hereby expressly acknowledged, effective
the date of this Agreement, the Company and you agree as follows:
1. POSITION AND RESPONSIBILITIES.
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1.1 You shall serve as President, Chief Executive Officer and Chairman of
the Board of the Company or in such other capacity as shall be designated by the
Board of Directors of Holdings. You shall perform such duties at Danbury,
Connecticut or such other place as you and the Company shall mutually agree.
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 to the business and
affairs of the Company. You agree to serve as an officer of the Company and/or
Holdings, if elected by their respective Board of Directors, and to perform such
executive duties as may be assigned to you by their respective Board of
Directors from time to time.
1.3 You will duly, punctually and faithfully perform and observe any and
all rules and regulations which the Company and/or Holdings may now or shall
hereafter establish governing the conduct of the Company's business.
2. TERM OF EMPLOYMENT.
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2.1 The term of your employment shall be two (2) years (the "Initial
Term") commencing with the date hereof, provided your employment shall
automatically terminate upon your death and may be terminated at any time as
provided in Section 2.2. At the end of the Initial Term, unless the parties
mutually agree to renew, extend or modify the provisions hereof, your employment
shall continue "at will," subject to the Company's obligation to pay the
Severance Payment as hereinafter provided, and the other terms and conditions of
this Agreement (as then in effect) shall continue.
2.2 The Company shall have the right, on written notice to you specifying
the reason, to terminate your employment:
(a) immediately for Cause (as defined in Section 2.4), or
(b) subject to Section 2.6 hereof, at any time without Cause, or
(c) subject to Section 2.6 hereof, in the event of your death or total
disability which, in the reasonable opinion of the Board of Directors of
Holdings, renders you
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unable or incompetent to carry out your duties, responsibilities, and
assignments for a period of ninety (90) consecutive days.
2.3 You shall have the right, on written notice to the Company, to
terminate your employment if you "resign for just cause," which shall mean a
resignation of your employment as a direct result of (a) a material breach by
the Company of its obligations to you under this Agreement, provided that, if
such breach is capable of remedy, a written notice within sixty (60) days of
such breach and opportunity to cure such breach shall be afforded the Company
and, in such event, just cause shall exist if the Company shall fail to cure
such breach within a reasonable period of time not to exceed thirty (30) days;
or (b) a significant decrease by the Board of Directors of Holdings of your
duties or authority (except in connection with a termination pursuant to Section
2.2(a) or (c)), provided that you have given the Company notice of such decrease
within three (3) months of its occurrence.
2.4 The term "Cause" shall mean (i) your failure or refusal to render
substantial services to the Company in accordance with your obligations under
this Agreement, provided that if your failure or refusal is capable of remedy, a
written notice within three (3) months of such failure or refusal and
opportunity to cure shall be afforded you and, in such event, Cause shall exist
if you fail to cure such failure or refusal within a reasonable period of time
not to exceed thirty (30) days or if such failure or refusal is timely cured,
you repeat such failure or refusal; (ii) the commission by you of an act of
fraud or embezzlement against the Company or the commission by you of any other
action with the intent to injure the Company; (iii) an act of moral turpitude by
you which is materially detrimental to the business or reputation of the
Company; or (iv) your having been convicted of, or pleading nolo contendere to,
a felony (other than traffic offenses which do not bring you or the Company into
disgrace or disrepute). For purposes of this Section 2.4, the term "Company"
shall include the Company and its subsidiaries and affiliates.
2.5 If you are terminated for Cause, neither the Company nor any
affiliate of the Company shall have any further obligation to you or your
personal representatives under this Agreement, except for salary, additional
compensation and permitted business expenses accrued hereunder and unpaid at the
date of termination. On or before the date of termination of your employment,
you shall return to the Company all records and other personal property of the
Company in your possession or control, including all confidential, proprietary
or trade secret information of the Company and its subsidiaries and affiliates.
2.6 Severance Benefits. In the event of the termination of your
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employment pursuant to either Section 2.2(b) or Section 2.3 hereof, the Company
shall pay to you an aggregate of eighteen (18) months' Base Salary at the time
of termination, less applicable taxes and withholding (the "Severance Payment"),
in the manner and subject to the terms and conditions as hereinafter provided,
and the Company shall provide you during such period medical, dental, life and
disability insurance benefits on the same basis the
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Company would have provided you such benefits during such period had you
continued to be an employee of the Company (collectively, the "Severance
Benefits"). The Severance Payment shall be payable in installments on such date
or dates on which Base Salary would have been paid to you had your employment
not been terminated.
2.7 In the event of the termination of your employment associated
with a "change in control" of Holdings (including if you "resign for just cause"
as defined in Section 2.3), (a) all stock options held by you to purchase shares
of Holdings Common Stock shall become immediately exercisable, notwithstanding
the vesting provisions of any stock option award agreement concerning such
options; provided that such acceleration of vesting shall not occur if and to
the extent that (i) Holdings' independent accountant has advised the Board of
Directors of Holdings that such acceleration could prohibit the accounting
treatment of the transaction which is a change in control as a pooling of
interests under Accounting Principles Board Opinion No. 16 (or any successor
opinion) and (ii) the Board of Directors of Holdings intends to treat such
transaction as a pooling of interests, in which case options would continue to
vest as permitted within the terms of the applicable stock plans, and (b) you
will be entitled to any bonuses under any bonus plans then in effect as if fully
earned. Benefits payable under this Section 2.7 upon a change in control may
subject you to an excise tax as "excess parachute payments" under Section 280G
of the Code. Holdings will reimburse you for all excise taxes paid, but the
reimbursement will constitute an excess parachute payment and will be subject to
further excise tax. Such further excise tax will trigger further reimbursement
by Holdings. For purposes of this Section 2.7, a "change in control" of
Holdings shall be deemed to have taken place if: (i) a third person, including a
"person" as defined in Section 13(d)(3) of the Exchange Act becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly, of securities of Holdings representing twenty-five percent (25%) or
more of the total number of votes that may be cast for the election of the
directors of Holdings; or (ii) as the result of, or in connection with, any
tender or exchange offer, merger, consolidation or other business combination,
sale of assets or one or more contested elections, or any combination of the
foregoing transactions (a "Transaction") the persons who were directors of
Holdings immediately prior to the Transaction shall cease to constitute a
majority of the Board of Directors of Holdings or of any successor to Holdings.
Notwithstanding the foregoing, a "change in control" of Holdings shall not be
deemed to have taken place as a result of (i) the consummation of the
transactions contemplated by the Exchange Agreement, (ii) the consummation of
the transactions contemplated by that certain Agreement and Plan of Merger dated
May 17, 1997, by and among, inter alia, Holdings and Xxxxxxxx Semiconductor
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Laboratories, Inc., or (iii) the consummation of all such transactions.
3. COMPENSATION.
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3.1 Base Salary. The Company shall pay to you for the services to be
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rendered hereunder a Base Salary ("Base Salary") at an annual rate of $210,000,
subject to customary withholding for federal, state and local taxes. Such Base
Salary shall be
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payable periodically in conformity with the prevailing practice of Holdings and
Holdings' subsidiaries for executives' compensation as such practice shall be
established or modified from time to time. Such Base Salary shall be subject to
increase from time to time to take into account appropriate cost of living
adjustments and general compensation increases based on performance, in the
discretion of the Board of Directors of Holdings.
3.2 Business Expenses. You shall be entitled to be reimbursed for all
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reasonable and necessary expenses incurred in connection with the performance of
your duties hereunder provided that you shall, as a condition of reimbursement,
submit verification of the nature and amount of such expenses in accordance with
the reimbursement policy from time to time adopted by Holdings.
4. OTHER BENEFITS.
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4.1 Vacation. You shall be entitled to vacation in accordance with
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the vacation policy of Holdings and Holdings' subsidiaries, as the same may be
in effect from time to time, without loss of compensation or other benefits to
which you are entitled under this Agreement, to be taken at such times as you
may reasonably select.
4.2 Other Benefit Programs. The Company will provide to you all other
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employee benefits generally available to employees of Holdings and Holdings'
subsidiaries of equivalent position, as the same may be in effect from time to
time.
4.3 Incentive Compensation. You shall be eligible to receive additional
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compensation, including awards of performance bonuses at levels commensurate
with employees of Holdings and Holdings' subsidiaries of equivalent position and
grants of employee stock options, in each case in the discretion of the
Compensation Committee of the Board of Directors of Holdings.
5. OTHER ACTIVITIES DURING EMPLOYMENT.
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5.1 Except with the prior written consent of the Holdings' Board of
Directors, which consent shall not be unreasonably withheld, you will not during
the term of this Agreement undertake or engage in any other employment or
occupation except as permitted by Section 5.3. This provision shall not be
deemed to preclude membership in professional societies, lecturing or the
acceptance of honorary positions, that are in any case incidental to your
employment by the Company, which are not adverse or antagonistic to or
competitive with the Company or its subsidiaries or affiliates, their business
or prospects, financial or otherwise and are consistent with your obligations
regarding the confidential, proprietary and trade secret information of the
Company and its subsidiaries and affiliates pursuant to the Proprietary
Information and Inventions Agreement referenced below.
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5.2 Except as permitted by Section 5.3, you will not assume or participate
in, directly or indirectly, any position or interest adverse or antagonistic to
the Company or its subsidiaries or affiliates, their business or prospects,
financial or otherwise, or take any action towards any of the foregoing.
5.3 During the term of your employment by the Company, except on behalf of
the Company or its subsidiaries or its affiliates, you will not, directly or
indirectly, whether as an officer, director, stockholder, partner, proprietor,
associate, representative or otherwise, become or be interested in any other
person, corporation, firm, partnership or other entity whatsoever which directly
competes with the Company or its subsidiaries or affiliates, in any part of the
world, in any line of business engaged in (or planned to be engaged in) by the
Company or its subsidiaries or affiliates (or any successor to their business).
With respect to any company or partnership which directly competes with the
Company or its subsidiaries or affiliates, in any part of the world, in any line
of business engaged in (or planned to be engaged in) by the Company or its
subsidiaries or affiliates (or any successor to their business), this Section
5.3 shall not prohibit you from owning (i) as a passive investor only, an
aggregate of not more than one percent (1%) of the total stock or equity
interests of such company or partnership if the same are publicly traded, or
(ii) stock or equity interests of such company or partnership through mutual
funds or other similar investment vehicles over which you retain no investment
discretion.
6. FORMER EMPLOYMENT.
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6.1 You represent and warrant that your employment by the Company will not
conflict with and will not be constrained by any prior employment or consulting
agreement or relationship. Subject to Section 6.2, you represent and warrant
that you do not possess confidential information arising out of prior employment
which, in your best judgment, would be utilized in connection with your
employment by the Company in the absence of Section 6.2.
6.2 If, in spite of the second sentence of Section 6.l, you should find
that confidential information belonging to any former employer might be usable
in connection with the Company's business, you will not intentionally disclose
to the Company or use on its behalf 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 and all
information which is common knowledge in the industry or otherwise legally in
the public domain or is legally obtainable.
7. CONFIDENTIALITY. You acknowledge that, in consideration of your
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receipt of the specific consideration expressed in the second paragraph of this
Agreement, you have entered into and are bound by the terms of the standard
Proprietary Information and Inventions Agreement for employees of Holdings'
subsidiaries and affiliates, the terms of which are incorporated herein by
reference.
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8. POST-EMPLOYMENT ACTIVITIES.
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8.1 You understand and acknowledge that the provisions of this Section 8
are necessary to protect the legitimate business interests of the Company and
are fair and reasonable for numerous reasons, including your receipt of the
specific consideration expressed in the second paragraph of this Agreement. In
addition, as a result of your executive position with the Company, you have had,
and will continue to have, access to significant confidential, proprietary or
trade secret information of the Company, so that, if you were employed by a
competitor of the Company, there would be a substantial risk to the Company of
your use of its confidential, proprietary or trade secret information. Based on
the foregoing, for a period of the later of sixty (60) months from the date of
this Agreement or thirty-six (36) months after the termination of your
employment with the Company, absent the Company's prior written approval (with
concurrence by the Board of Directors of Holdings), you will not directly or
indirectly:
(a) render any services to, or engage in any activities for, any other
person, firm, corporation or business organization with respect to any
product, process, technology or service, in existence or under development
which substantially resembles or competes with a product, process, or
service of the Company in existence or under development upon which you
worked or exercised supervisory responsibility at any time during the two
(2) years prior to the termination of your employment with the Company;
(b) solicit employees of the Company to leave their employ or offer or
cause to be offered employment to any person who is or was employed by the
Company at any time during the six (6) months prior to the termination of
your employment with the Company;
(c) entice, induce or encourage any of the Company's other employees
to engage in any activity which, were it done by you, would violate any
provision of this Section 8; or
(d) otherwise attempt to interfere with or disrupt the business or
activities of the Company or its subsidiaries or affiliates after written
notice and a 60-day cure period.
You agree that if you act in violation of this Section 8, the number of days
that you are in violation will be added to the time period specified in this
Section 8.
8.2 Upon your written request to the Company specifying the activities
proposed to be conducted by you, the Company may in its discretion, subject to
the concurrence of the Board of Directors of Holdings, give you written
approval(s) to engage personally in any activity or render services referred to
in Section 8.l upon receipt
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of written assurances (satisfactory to the Company and its counsel in their
discretion) from you and from your prospective employer(s) that the integrity of
the provisions of Section 7 and Section 8.l will not in any way be jeopardized
or violated by such activities; provided, however, the burden of so establishing
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the foregoing to the satisfaction of the Company and said counsel shall be upon
you and your prospective employer(s). Failure of the Company to respond to such
written request shall be deemed a rejection of such request.
9. REMEDIES. Your duties under Section 7 and Section 8 shall survive
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termination of your employment with the Company. You acknowledge and agree that
any breach by you of any of the provisions of Section 7 or Section 8.1 of this
Agreement will result in irreparable and continuing damage to the Company and
that a remedy at law for any breach or threatened breach by you of the
provisions of Section 7 or Section 8.1 would be inadequate, and you therefore
agree that the Company shall be entitled to temporary, preliminary and permanent
injunctive relief in case of any such breach or threatened breach. The
prevailing party in an action under this Agreement shall be entitled to recover
its costs and expenses, including attorneys' fees. Nothing in this Agreement
shall be construed to prohibit the Company from pursuing any other remedy
available to it at law or in equity, the parties having agreed that all remedies
are cumulative.
10. MISCELLANEOUS.
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10.1 Assignment. This Agreement and the rights and obligations of the
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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 or the
business or properties of the Company or any subsidiary or division thereof,
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
you.
10.2 Interpretation. In case any one or more of the provisions contained
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in this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement. If moreover, any one
or more of the provisions contained in this Agreement shall for any reason be
held to be excessively broad as to duration, geographical scope, activity or
subject, the parties expressly agree that a court may rewrite and modify such
provisions so as to be enforceable to the fullest extent compatible with the
applicable law as it shall then appear.
10.3 Notices. All notices, consents, waivers, and other communications
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under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by facsimile (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return
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receipt requested, or (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), in each
case to the appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a party may designate by notice to
the other parties):
If to the Company:
Advanced Technology Materials, Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile No. (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
If to you:
Xxxxxx X. Xxxxxxx
000 Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
Facsimile No. (000) 000-0000
10.4 Waivers. If either party shall waive any breach of any provision of
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this Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
10.5 Headings. The headings of the sections hereof are inserted for
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convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning hereof.
10.6 Applicable Law. This Agreement shall be governed by and construed
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(both as to validity and performance) and enforced in accordance with the laws
of the State of Connecticut applicable to agreements made and to be performed
wholly within such jurisdiction.
10.7 Complete Agreement; Amendments; Prior Agreements. The foregoing,
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together with the Proprietary Information and Inventions Agreement, are the
entire agreement of the parties with respect to the subject matter hereof and
may not be amended, supplemented, cancelled or discharged except by written
instrument executed by both parties hereto. This Agreement supersedes any and
all prior agreements between the Company and you with respect to the matters
covered hereby, including but not limited to, that certain Key Employee
Agreement between the Company and you.
10.8 Counterparts. This Agreement may be executed in counterparts, each
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of which when so executed and delivered shall constitute a complete and original
instrument but all of which together shall constitute one and the same
agreement, and it shall not be
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necessary when making proof of this Agreement or any counterpart thereof to
account for any other counterpart.
10.9 Opportunity for Review. You acknowledge that you had the opportunity
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to have this Agreement reviewed by an attorney prior to your execution of this
Agreement.
If you are in agreement with the foregoing, please so indicate by signing
and returning the enclosed copy of this letter.
ADVANCED TECHNOLOGY MATERIALS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Title: Vice President, Chief Financial
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Officer and Treasurer
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Accepted and agreed:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Date: October 10, 1997
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