Exhibit 10.10
Employment Agreement
This Employment Agreement ("Agreement"), dated as of March 1, 2006, is made by
and between IPG Photonics Corporation, a Delaware corporation having an office
at 00 Xxx Xxxxxxx Xxxx, Xxxxxx, XX, 00000 (the "Corporation"), and Xxxxxxx
Xxxxxx ("Executive"). The Corporation and Executive are referred to jointly
below as the "Parties."
WHEREAS, the Corporation desires to employ Executive on the terms and conditions
set forth in this Agreement; and
WHEREAS, Executive desires to accept employment by the Corporation on such terms
and conditions.
NOW, THEREFORE, in consideration of the employment of Executive, the mutual
terms and conditions set forth below, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties agree
as follows:
1. Employment. Executive will be employed by the Corporation in the
position of Vice President and Chief Financial Officer. Executive will report to
the Corporation's Chief Executive Officer. Executive's primary responsibility
will be managing the financial affairs of the Corporation and its subsidiaries.
Executive will carry out such duties as shall be assigned from time to time by
the Corporation's Chief Executive Officer, subject to applicable laws, and
ethical duties. During the Employment Term (as defined below), Executive shall
devote Executive's reasonable best efforts, energies and abilities and
Executive's full business time, skill and attention to the business and affairs
of the Corporation, and shall act at all times according to the highest
professional standards, for the purpose of advancing the business of the
Corporation.
2. Term. Subject to the Termination provisions below, Executive's
employment by the Corporation is for a term of two (2) years commencing on the
date of this Agreement (the "Initial Employment Period"). Executive's employment
by the Corporation will continue for successive one year terms following
expiration of the Initial Employment Period (the Initial Employment Period
together with any subsequent employment period shall be referred to as the
"Employment Term"), unless either party provides notice of intent not to renew
not less than (a) one hundred eighty (180) days prior to expiration of the then
current term or (b) 364 days prior to the end of the then current term following
a "Change of Control" of the Corporation (as such term is defined in the
Corporation's 2006 Incentive Stock Plan in effect on the date of this
Agreement), or unless in either case employment is terminated under the
termination provisions below.
3. Compensation. The Corporation shall pay Executive on a salary basis at
an annual rate of $270,000 (the "Base Salary"). The Base Salary will be paid in
equal installments in accordance with the Corporation's standard payroll
policies and schedule and is subject to tax and elective withholding and
deductions. The Corporation may, in its sole discretion, increase the Base
Salary on an annual or other basis. The amount of any bonus compensation to
Executive under any such program will be determined by the Board of Directors in
its sole discretion.
4. Benefits.
(i) Executive shall be entitled to the extent eligible to participate
in any benefit plans as may be adopted and modified by the Corporation from time
to time, including without limitation health, dental and medical plans, life and
disability insurance, paid time off, holiday, and retirement plans. The benefits
available to Executive shall be no less favorable than those available to other
executives at similar levels within the organization or to the employees of the
Company at the location where Executive works. Benefits provided under this
Agreement shall be subject to the terms and conditions of any applicable benefit
plan, including any eligibility and vesting requirements, as such plans may be
in effect from time to time.
(ii) Executive shall be entitled to four weeks vacation each year. The
maximum number of accrued vacation hours that Executive can have at any point in
time is equal to the total vacation hours earned in the last twelve months, plus
one week of vacation carried over from the prior twelve months of service.
5. Intentionally Omitted.
6. Other Activities. The employment of Executive shall be on a full-time
basis, but Executive may be an investor or otherwise have an interest in or
serve on the board of directors or advisory board to other businesses,
partnerships and entities so long as the other activities of Executive do not
materially interfere with the performance of Executive's duties to the
Corporation, and so long as such other activities do not cause Executive to
violate the Restrictive Covenants incorporated herein in Section 12 of this
Agreement, and so long as Executive discloses all such activities to the Chief
Executive Officer and the Board of Directors of the Corporation. Nothing in this
provision or this Agreement limits or restricts Executive's duties and
obligations, including the duty of loyalty, that arise under the law.
7. Termination by the Corporation. The Corporation may terminate the
Employment Term:
(i) by giving Executive ninety (90) days' prior written notice without
Cause (as defined below), or
(ii) for Cause (as defined below).
"Cause" shall mean: (A) an act of fraud, embezzlement or theft by Executive in
connection with Executive's duties or in the course of Executive's employment
with the Corporation; (B) Executive's intentional wrongful damage to the
property of the Corporation; (C) Executive's intentional breach of Section 12
hereof while Executive remains in the employ of the Corporation; (D) an act of
Gross Misconduct (as defined below); or (E) a felony conviction or a conviction
for a misdemeanor involving moral turpitude; and, in each case, the
determination by the Directors of the Corporation as hereafter provided that any
such act shall have been materially harmful to the Corporation. For purposes of
this Agreement, "Gross Misconduct" shall mean a willful or grossly negligent act
or omission which has or will have a material and adverse impact on the business
or reputation of the Corporation, or on the business of the Corporation's
customers or suppliers as such relate to the Corporation. Notwithstanding the
foregoing, Executive shall not be deemed to have been terminated for "Cause"
hereunder unless and until there
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shall have been delivered to Executive a copy of a resolution duly adopted by
the affirmative vote of a majority of the independent Directors then in office
at a meeting of the Directors called and held for such purpose, finding that,
Executive has committed an act set forth above in this Section 7. Nothing herein
shall limit Executive's right or Executive's beneficiaries' right to contest the
validity or propriety of any such determination.
8. Termination by Executive. Executive may terminate the Employment Term
(i) by giving the Corporation sixty (60) days' prior written notice, or (ii) for
Good Reason (as defined below), subject to the Corporation's right to cure the
breach for a period of thirty (30) days after notice from Executive of his
intention to terminate for Good Reason. In the event of termination by notice
under the preceding subsection (i), the Corporation in its discretion may elect
a termination date that is earlier than the conclusion of the sixty (60) day
notice period, but in the event of such election the termination shall still be
deemed a voluntary termination by Executive under this Section. "Good Reason"
means the occurrence of any of the following events without Executive's express
written consent:
(a) The assignment to Executive of any duties materially
inconsistent (except in the nature of a promotion) with
Executive's position in the Corporation and the
responsibilities specified in this Agreement or a
substantial adverse alteration in the nature of Executive's
position or responsibilities or in the conditions of
employment;
(b) A reduction by the Corporation of or a failure to pay
Executive's Base Salary, or a material reduction in benefits
Executive is entitled to under this Agreement other than a
reduction approved by the Board of Directors of the
Corporation that similarly applies to all executive officers
of the Company, provided that a reduction in Base Salary
shall not exceed more than 10% of then Base Salary;
(c) A relocation of the offices of Executive to a place greater
than thirty-five (35) miles in distance from Executive
offices of the Corporation in Oxford, MA; or
(d) The failure of Executive to be the Vice President and Chief
Financial Officer of (i) a company having its securities
registered under the Securities Exchange Act of 1934
following the effectiveness of the Corporation's initial
public offering, or (ii) the Corporation following a "Change
of Control" of the Corporation (as such term is defined in
the Corporation's 2006 Incentive Stock Plan in effect on the
date of this Agreement).
The Corporation shall have no obligations to Executive after Executive's last
day of employment following termination of employment under this Section, except
as specifically set forth in this Agreement or under the option agreement.
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9. Automatic Termination. Notwithstanding the provisions of Section 2,
Executive's employment shall automatically terminate upon Executive's death or
Disability (as defined below). Executive shall be deemed to have a "Disability"
for purposes of this Agreement if Executive is unable to substantially perform,
by reason of physical or mental incapacity, Executive's duties or obligations
under this Agreement, with or without reasonable accommodation as defined in the
Americans with Disabilities Act and implementing regulations, for a period of
one hundred and eighty (180) consecutive days in any 360-day period. The Board
of Directors shall determine, according to the facts then available, whether and
when the disability of Executive has occurred and shall state that date of
termination in the Notice of Termination. Such determination shall be made by
the Board of Directors in the exercise of reasonable discretion.
10. Certain Obligations of the Corporation Following Termination of the
Employment Period. Following termination of the Employment Period under the
circumstances described below, the Corporation will pay to Executive the
following compensation and provide the following benefits in addition to any
benefits to which Executive may be entitled by law in full satisfaction and
final settlement of any and all claims and demands that Executive or the
Corporation may have against the other under this Agreement:
(i) Without Cause by the Corporation or Good Reason by Executive. In
the event that the Employment Period is terminated by the Corporation without
Cause pursuant to Section 7(i) hereof or by Executive for Good Reason pursuant
to Section 8 hereof, Executive shall be entitled to the following payments:
(a) Base Salary through the termination date and any bonus that
has been actually earned as of or prior to the termination
date, but has not been paid; and
(b) Continuing payments of Base Salary, payable in accordance
with regular payroll practices of the Corporation, for
twelve months following the date of termination.
(ii) Termination by Executive Without Good Reason or by the
Corporation for Cause. In the event the Employment Period as terminated by
Executive pursuant to 8(i) hereof without Good Reason or by the Corporation
pursuant to Section 7(ii) hereof for Cause, Executive shall be entitled to no
further compensation or other benefits under this Agreement except as to that
portion of any unpaid Base Salary and other benefits accrued, earned or vested
up to and including the effective date of such termination.
(iii) Death; Disability. In the event that the Employment Period is
terminated by reason of Executive's death or for Disability, Executive or
Executive's estate, as the case may be, shall be entitled to the payments Base
Salary through the date of death or the date of termination as specified in the
Notice of Termination in the event of Disability, plus any unpaid bonus
previously awarded to Executive.
11. Nature of Payments. Upon termination of employment pursuant to Sections
7, 8 or 9, Executive will be released from any duties and obligations to the
Corporation set forth in this Agreement (except the duties and obligations under
the Restrictive Covenants and as set forth in Section 12 hereof) and the
obligations of the Corporation to Executive will be as set forth in Section 10.
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12. Restrictive Covenants. Executive has executed and delivered an Employee
Non-Disclosure Agreement, dated the date hereof (the "Restrictive Covenants")
and Executive agrees that, as part of this Agreement, Executive shall comply
with the terms of the Restrictive Covenants.
13. Indemnification.
(i) Indemnification Terms. The Corporation agrees that if Executive is
made a party, or is threatened to be made a party, to any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he is or was a director, officer or
employee of the Corporation or is or was serving at the request of the
Corporation as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such
Proceeding is Executive's alleged action in an official capacity while serving
as a director, officer, member, employee or agent, Executive shall be
indemnified and held harmless by the Corporation to the fullest extent permitted
or authorized by the Corporation's certificate of incorporation or bylaws or, if
greater, by the laws of the State of Massachusetts, against all cost, expense,
liability and loss (including, without limitation, attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by Executive in connection
therewith, and such indemnification shall continue as to Executive even if he
has ceased to be a director, member, employee or agent of the Corporation or
other entity and shall inure to the benefit of Executive's heirs, executors and
administrators. The Corporation shall advance to Executive all reasonable costs
and expenses incurred by him in connection with a Proceeding within 20 days
after receipt by the Corporation of a written request for such advance. Such
request shall include an undertaking by Executive to repay the amount of such
advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses.
(ii) No Presumptions. Neither the failure of the Corporation
(including its Board, independent legal counsel or stockholders) to have made a
determination prior to the commencement of any proceeding concerning payment of
amounts claimed by Executive under Section 15(a) above that indemnification of
Executive is proper because he has met the applicable standard of conduct, nor a
determination by the Corporation (including its Board, independent legal counsel
or stockholders) that Executive has not met such applicable standard of conduct,
shall create a presumption that Executive has not met the applicable standard of
conduct.
(iii) Liability Insurance. The Corporation agrees to continue and
maintain a directors' and officers' liability insurance policy covering
Executive to the extent the Corporation provides such coverage for its other
executive officers, and which would provide coverage for Executive after the
Term of Employment for actions taken during the Term of Employment.
14. Notices. Any and all notices provided for herein shall be in writing
and shall be delivered by certified mail, return receipt requested or in person.
Notice shall be deemed to have been given when notice is received by the party
on whom the notice was served. Notice to the Corporation shall be addressed to
the Corporation at its principal office, and notice to Executive at Executive's
last address as shown on the records of the Corporation.
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15. Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the substantive laws of the Commonwealth of
Massachusetts, without regard to its internal conflicts of law provisions.
16. Severability. In the event that any provision of this Agreement shall
be determined to be invalid, illegal or otherwise unenforceable or contrary to
law or public policy, the enforceability of the other provisions in this
Agreement shall not affected thereby.
17. Assignment. Executive recognizes that this is an agreement for personal
services and that Executive may not assign this Agreement. The Agreement shall
inure to the benefit of and binding upon the Corporation's successors and
assigns.
18. Entire Agreement/Amendment. This Agreement and the restrictive
agreement referred to in Section 12 constitute the entire agreement between the
Parties with respect to the subject matter hereof and supersedes any and all
other agreements, either oral or in writing, among the Parties hereto with
respect to the subject matter hereof. This Agreement may not be amended except
by written agreement signed by both Parties.
19. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, and by the different Parties in separate counterparts, each
of which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement (and all signatures need not appear on any
one counterpart), and this Agreement shall become effective when one or more
counterparts has been signed by each of the Parties hereto and delivered to each
of the other Parties hereto.
20. Waiver. The failure of either of the Parties to at any time enforce any
of the provisions of this Agreement shall not be deemed or construed to be a
waiver of any such provision, nor to in any way affect the validity of this
Agreement or any provision hereof or the right of either of the Parties to
enforce each and every provision of this Agreement. No waiver of any breach of
any of the provisions of this Agreement shall be effective unless set forth in a
written instrument executed by the party against whom or which enforcement of
such waiver is sought, and no waiver of any such breach shall be construed or
deemed to be a waiver of any other or subsequent breach.
21. Capacity. Executive and the Corporation hereby represent and warrant to
the other that: (i) Executive or the Corporation has full power, authority and
capacity to execute and deliver this Agreement, and to perform Executive's or
the Corporation's obligations hereunder; (ii) such execution, delivery and
performance will not (and with the giving of notice or lapse of time or both
would not) result in the breach of any agreements or other obligations to which
Executive or the Corporation is a party or Executive or the Corporation is
otherwise bound; and (iii) this Agreement is Executive's or the Corporation's
valid and binding obligation in accordance with its terms.
22. Arbitration. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof or otherwise arising out of Executive's
employment or the termination of that employment (including, without limitation,
any claims of unlawful employment discrimination whether based on age or
otherwise) shall, to the fullest extent permitted by law, be settled by
arbitration in any forum and form agreed upon by the parties or, in the absence
of such an agreement, under the auspices of the American
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Arbitration Association ("AAA") in Worcester, Massachusetts in accordance with
the Employment Dispute Resolution Rules of the AAA, including, but not limited
to, the rules and procedures applicable to the selection of arbitrators. In the
event that any person or entity other than Executive or the Employer may be a
party with regard to any such controversy or claim, such controversy or claim
shall be submitted to arbitration subject to such other person or entity's
agreement. Judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. This Section 23 shall be specifically
enforceable. Notwithstanding the foregoing, this Section 23 shall not preclude
either party from pursuing a court action for the sole purpose of obtaining a
temporary restraining order or a preliminary injunction in circumstances in
which such relief is appropriate; provided that any other relief shall be
pursued through an arbitration proceeding pursuant to this Section 23. Punitive
and consequential damages shall not be permitted as an award and each party
shall bear the fees and expenses of its own counsel and expert witnesses.
23. Consent to Jurisdiction. To the extent that any court action is
permitted consistent with or to enforce Section 23 of this Agreement, the
parties hereby consent to the jurisdiction of the Superior Court of the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts. Accordingly, with respect to any such court action,
Executive (a) submits to the personal jurisdiction of such courts; (b) consents
to service of process; and (c) waives any other requirement (whether imposed by
statute, rule of court, or otherwise) with respect to personal jurisdiction or
service of process.
IN WITNESS WHEREOF, this Employment Agreement has been duly executed:
/s/ Xxxxxxxx X. Xxxxxxxxx /s/ Xxxxxxx Xxxxxx
------------------------------------- ----------------------------------------
Chief Executive Officer, by and for Xxxxxxx Xxxxxx
IPG PHOTONICS CORPORATION Executive
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