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Exhibit 10.14
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of June, 1998, by
and between SPEEDFAM INTERNATIONAL, INC., an Illinois corporation (hereinafter
referred to as the "Company") and XXXXX X. XXXXXX (hereinafter referred to as
the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to retain the services of the Employee in
the capacities set forth herein, and the Employee desires to be employed by the
Company in such capacities;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, the Company and the Employee hereby agree as follows:
1. Employment. The Company hereby employs the Employee and the
Employee hereby accepts employment with the Company upon the terms and
conditions hereinafter set forth and subject to the policies as
published in the Company's Employee Handbook, as from time to time
amended.
2. Term. Subject to the provisions for earlier termination
hereinafter set forth in Section 12 of this Agreement, the term of
employment hereunder shall commence on the date hereof and end on the
day preceding the first anniversary of the date hereof.
3. Automatic Extension. The term of employment of the Employee
hereunder shall automatically continue for additional one (1) year
terms upon the same terms and conditions contained herein unless either
the Company or the Employee shall notify the other at least thirty (30)
days prior to the expiration of the initial term or any renewal term of
its or his intention to terminate this Agreement as of the end of its
then current term.
4. Compensation. The Company agrees to provide the Employee
with the following compensation for all services rendered under this
Agreement:
4.1. Salary. During the term hereof, the Company
shall pay to the Employee a Base Annual Salary of TWO HUNDRED
SIXTY THOUSAND DOLLARS ($260,000), payable in accordance with
the standard payroll practices of the Company (including any
salary-reduction contributions to plans or programs maintained
by the Company). Further, the Base Annual Salary of the
Employee shall be reviewed annually by the Company and
adjusted as appropriate.
4.2. Annual Incentive Opportunity. During the term of
this Agreement, the Employee shall participate in the annual
incentive plan maintained by the Company for its executives.
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4.3. Long-term Incentive Opportunity. During the term
of this Agreement, the Employee shall participate in any
long-term incentive plan maintained by the Company, including,
but not limited to, stock options, performance shares,
restricted stock and long-term cash incentive plans, in a
manner consistent with other executives of the Company, as
determined by the Board.
4.4. Other Benefits. To the extent the Employee is
eligible under the appropriate laws, the Employee shall be
entitled to participate in and receive benefits under any and
all pension, profit-sharing, health, disability and insurance
plans, if any, which the Company may maintain. The Employee
shall also receive an allowance of THIRTEEN THOUSAND SEVEN
HUNDRED FIFTY FOUR DOLLARS ($13,754) annually for automobile
expenses.
4.5. Health Care Insurance Beyond Termination.
Following the termination of Employee's employment with the
Company, to the extent the Employee or his spouse shall no
longer qualify to participate under the Company's health
insurance plan, the Company shall pay for private health care
insurance policies, with coverage comparable to the health
insurance coverage provided from time to time to officers of
the Company, for the Employee and his spouse for their
lifetimes.
5. Duties. The Employee shall, subject to election and removal
by the Board of the Company in their sole discretion, serve as CHAIRMAN
of the Board of the Company. As such, the Employee's duties and
responsibilities shall include, but shall not be limited to, giving
advice and counsel to the President and CEO.
6. Extent of Service. The Employee shall devote the Employee's
full business time, attention, and energies to the business of the
Company and its Affiliates and shall not, during the term of this
Agreement, be engaged in any other business activity, whether or not
such activity is pursued for gain, profit, or other pecuniary
advantage, unless written approval is first secured from the Board of
the Company. The foregoing to the contrary notwithstanding, the
Employee may continue his present service as a member of the board of
directors of Xxxxxxx, Inc., of Downers Grove, Illinois, and Extrude
Hone Corporation, of Irving, Pennsylvania.
7. Working Facilities. The Employee shall be furnished with
office space, furnishings, secretarial support and such other
facilities and services which are reasonably necessary for the
performance of the Employee's duties.
8. Expenses. The Company will reimburse the Employee for all
reasonable business expenses which are incurred by the Employee in the
promoting of the interests of the Company upon presentation by the
Employee from time to time (at least monthly) of an itemized account of
such expenses containing such detail as may reasonably be required by
the Board of Directors of the Company.
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9. Vacation. The Employee shall be entitled to paid vacation
in accordance with Company policy as set forth in the Company's
Employee Handbook. All vacation time shall be taken by the Employee at
such times as shall be mutually agreed upon by the Employee and the
Chief Executive Officer of the Company.
10. Disability. If, as a result of sickness or other
disability, the Employee is not able to perform the Employee's duties,
this Section 10 shall apply as follows:
10.1. For the first ninety (90) consecutive days of
sickness or other disability the Company shall continue to pay
the Employee full Base Annual Salary (reduced by any payments
from any short-term disability plan which may be maintained by
the Company), and shall continue to pay premiums on then
existing group life, health, disability and other insurance
plans with respect to which the Employee participates,
provided the Employee remains eligible to participate
thereunder.
10.2. If the disability or other sickness continues
past ninety (90) consecutive days, the Company, in its sole
discretion, may elect to place the Employee on Disability
Leave of Absence. During such period, the Company shall, for
the remainder of the contract term, or until the Employee
returns from such Disability Leave of Absence, continue to pay
premiums on then existing group life, health, disability and
other insurance plans with respect to which the Employee
participates, provided the Employee remains eligible to
participate thereunder. Further, the Company shall pay to the
Employee, two-thirds (2/3) of the Employee's Base Annual
Salary, reduced by any payments for which the Employee is
eligible from any disability insurance programs maintained by
the Company.
11. Death. If the Employee dies during the term of this
Agreement, the Company shall pay to the Employee's Beneficiary (or if
there is no named Beneficiary, the estate of the Employee), the
compensation as set forth in Section 4 of this Agreement, for the
period up to the date of the Employee's death. In no event shall the
Company be obligated to pay to any person any other compensation with
respect to any period following the date of the Employee's death.
12. Termination of Employment.
12.1. Termination for Cause. The Company may
terminate the Employee's employment under this Section of the
Agreement for Cause. Cause shall be defined as:
12.1.1. The Employee's Material Breach of
this Agreement, which breach is not cured within ten
(10) business days after written notice from the
Company specifying such breach has been delivered to
the Employee;
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12.1.2. Commission by the Employee of any
materially fraudulent, dishonest or other act of
misconduct in the performance of the Employee's
duties hereunder, other than at the specific
direction of the President or Board; or,
12.1.3. Arrest for any felony or crime
involving moral turpitude.
12.1.4. Following a Termination for Cause,
the Company shall pay to the Employee the Base Annual
Salary provided in Section 4.1 accrued up to the date
of termination. In no event shall the Company be
obligated to pay any other compensation with respect
to any period before or after the date of such
termination.
12.2. Termination Following a Change of Control. If,
during a period of two (2) years following a Change of
Control, the employment of the Employee is terminated by the
Company for any reason other than Cause, or if the Employee is
subject to Constructive Termination, benefits shall be payable
under this Section 12.2.
12.2.1. The Employee shall receive all Base
Annual Salary accrued up to the date of termination
and, within thirty (30) days of termination, a single
payment equal to two (2) times the sum of (i) the
Employee's highest Base Annual Salary during the
Employee's employment with the Company and (ii) the
Employee's highest target annual incentive award
opportunity.
12.2.2. All unvested stock options awarded
to the Employee pursuant to the Company's stock
option plans shall immediately vest in full to the
Employee; provided that such stock options shall be
exercisable only within ninety (90) days from such
vesting.
12.3. Other Termination at the Election of the
Company. The Company may elect to terminate the employment of
the Employee for any reason other than Cause or following a
Change of Control, upon written notice to the Employee,
accompanied by payment in a lump sum of:
12.3.1. All compensation accrued up to the
date of termination;
12.3.2. An amount equal to one (1) times the
Employee's Base Annual Salary of record on the date
of termination.
12.4. Benefit Payments. Following the termination of
the Employee's employment for any reason, the Company shall
pay to the Employee, under the terms of the Company's benefit
plans, an amount equal to the vested benefits of the Employee
in any pension or other benefit plan as of the termination
date. If elected by the Employee, the Company shall, instead
of direct payment to the
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Employer, transfer such funds to such other benefit plans as
designated by the Employee.
13. Restrictive Covenants.
13.1. Employee understands that the Company's
business involves the design, improvement, development,
testing, manufacturing, marketing and sale of products, and
that this business requires substantial investments in capital
and substantial commitments of time and effort by the
Company's employees. The Employee further understands that, as
a result, certain of the Company's personnel, including the
Employee, acquire information with respect to customer
goodwill, trade secrets and Confidential Information, which,
of itself and apart from the Employee's abilities, could be of
great value to a competitor of the Company, potential
competitors of the Company, and to others.
13.2. The Employee further understands that
employment with the Company is conditioned upon the Company's
being able to place complete trust and confidence in the
Employee and to rely on the Employee's doing everything
possible to avoid the disclosure or use of Confidential
Information to persons, corporations, organizations and others
outside the Company, which may become known to, or subject to
the control of the Employee during the term of employment
hereunder. The Employee also understands that competition in
the manufacture, sale, and development of products is not
local in nature or scope, but involves various corporations,
organizations and others located within the United States and
throughout the world.
13.3. In recognition of these circumstances and for
the purpose of inducing the Company to employ the Employee (or
continue the employment of the Employee with appropriate
compensation reviews) to repose trust and confidence in the
Employee, and to make Confidential Information available to
the Employee, the Employee agrees that the following
restrictive covenants are necessary and proper for the
protection of the Company.
13.4. Subject to Section 13.6 below, the Employee
will promptly disclose and assign to the Company, without the
right to any form of compensation therefore, every invention
that the Employee, individually or jointly with others, during
the term of the Employee's employment with the Company and for
a period of one (1) year following termination of such
employment for any reason, may discover, invent, conceive or
originate, relating in any way to the present or contemplated
scope of the Company's business with regard to any of its
clients, customers or vendors or to any Product, Technology,
process, or device dealt in, used or under development or
manufacture by the Company for itself or others or that
results from or may be suggested by any work the Employee may
do for the Company or at the Company's request. The Employee
will fully cooperate with the Company in applying for and
securing in the name of the Company or its designee patents or
copyrights with respect to
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said Inventions in each country in which the Company may
desire to secure patent or copyright protection. The Employee
will promptly execute all proper documents presented to the
Employee for signature by the Company to enable the Company or
its designee to secure such patent or copyright protection and
to transfer legal title therein, together with any patents or
copyrights that may be issued thereon or in connection
therewith, to the Company or its designee. The Employee will
give such true information and testimony as may be requested
of the Employee by the Company relative to any of said
Inventions.
13.5. Subject to Section 13.6 below, the Company
shall have the exclusive right to use in its business, and to
make, use and sell products, processes, and/or services
arising out of any Invention, whether or not patentable, which
is assignable by the Employee to the Company pursuant to
Section 13.4 above.
13.6. The Employee is hereby notified that Sections
13.4 and 13.5 above do not apply to an Invention for which no
equipment, supplies, facility, technology, confidential
information, or trade secret information of the Company was
used and which was developed entirely on the Employee's own
time, unless:
13.6.1. The Invention was related:
13.6.1.1. To the business of the
Company; or
13.6.1.2. To the Company's actual
or demonstrably anticipated research or
development;
or;
13.6.2. The Invention results from any work
performed by the Employee for the Company.
13.7. The Employee agrees that all financial data,
customer lists, plans, contracts, agreements, literature,
manuals, catalogues, brochures, books, records, computer files
or applications, maps, correspondence, and other materials
furnished or made available to the Employee by the Company or
an Affiliate, or any of its clients, or created, prepared or
secured through the efforts of the Employee, relating to the
business conducted by the Company or an Affiliate, whether or
not containing any Confidential Information, are and shall
remain the property of the Company, and the Employee agrees to
deliver all such materials, including all copies thereof, to
the Company upon termination of the Employee's employment
hereunder, or at any other time at the Company's request.
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13.8. Other than as expressly directed by the Company
and in the performance of duties to the Company or with the
expressed permission of the Company, the Employee shall never,
during or following the Employee's employment with the
Company, directly or indirectly, sell, use, disclose, lecture
upon, or publish data of information containing or relating to
any Confidential Information or Technology of the Company or
its Affiliates or any Invention assignable to the Company
pursuant to the terms of Section 13.4 above.
13.9. During the term of the Employee's employment
with the Company and for a period of two (2) years after the
termination thereof, the Employee agrees that the Employee
will not:
13.9.1. Own or have any interest in,
directly or indirectly, except through stock traded
on a national stock exchange where the Employee owns
less than one percent (1%) of the total issued and
outstanding shares of such stock, or act as an
officer, director, agent, employee, or consultant of,
or assist in any way or in any capacity, any person,
firm, association, partnership, corporation or other
entity which sells or provides products or services
in direct competition with the products or services
of the Company or its Affiliates anywhere within the
world where any Confidential Information acquired by
the Employee would reasonably be considered
advantageous to such other competing entity, or
13.9.2. Directly or indirectly entice,
induce or in any manner influence any person who is,
or shall be, in the service of the Company or its
Affiliates to leave such service for the purpose of
engaging in business or being employed by or
associated with any person, firm, association,
partnership, corporation or other entity which sells
or provides products or services in competition with
the Company or its Affiliates anywhere in the world.
If any court shall finally hold that the time, territory or
any other provision of this Section 13.9 constitutes an
unreasonable restriction against the Employee, the Employee
agrees that the provisions hereof shall not be rendered null
and void, but shall apply as to such time, territory, and
other extent as such court may determine to be a reasonable
restriction under the circumstances involved.
13.10. The Employee understands that if there is a
breach by the Employee of any duty to the Company with respect
to any Confidential Information or Invention, the Company may
suffer irreparable injury and may not have adequate remedy at
law. As a result, the Employee agrees that if a breach of this
Agreement occurs, the Company may, in addition to any other
remedies available to it, bring an action or actions for
injunction, specific performance, or both, and have entered
into a temporary restraining order, preliminary or permanent
injunction, or other action compelling specific performance.
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14. Definitions.
14.1. "Affiliate" means any entity in which the
Company, or any entity which owns, directly or indirectly, a
majority ownership interest in the Company, owns, directly or
indirectly, at least a twenty percent (20%) interest in such
entity.
14.2. "Base Annual Salary" means the annualized value
of the Employee's salary, based on the most recent pay period.
14.3. "Board" means the Board of Directors of the
Company.
14.4. "Change in Duties" means:
14.4.1. A significant reduction in the
nature or scope of the Employee's authority or duties
from those immediately prior to the date on which a
Change of Control occurs;
14.4.2. A material reduction in the
Employee's Base Annual Salary;
14.4.3. Exclusion from any incentive or
benefit program from which the Employee was
previously eligible, and which other executives with
comparable duties participate in;
14.4.4. A change in location of the
Employee's principal place of employment by more than
fifty (50) miles;
14.5. "Change of Control" shall be deemed to have
occurred upon:
14.5.1. A business combination, including a
merger or consolidation, of the Company as a result
of which the shareholders of the Company prior to the
combination do not continue to own, directly or
indirectly, at least seventy percent (70%) of the
equity of the combined entity;
14.5.2. A sale, transfer, or other
disposition in one or more transactions (other than
in transactions in the ordinary course of business or
in the nature of a financing) of the assets or
earning power aggregating more than forty-five
percent (45%) of the assets or operating revenues of
the Company to any person or affiliated or associated
group of persons (as defined by Rule 12b-2 of the
Exchange Act in effect as of the date hereof);
14.5.3. The liquidation of the Company;
14.5.4. One or more transactions which
result in the acquisition by any person or associated
group of persons (other than the Company, any
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employee benefit plan whose beneficiaries are
employees of the Company or any of its subsidiaries)
of the beneficial ownership (as defined in Rule 13d-3
of the Exchange Act, in effect as of the date hereof)
of forty percent (40%) or more of the Common Stock of
the Company or securities representing forty percent
(40%) or more of the combined voting power of the
voting securities of the Company, provided such
affiliated persons owned less than forty percent
(40%) prior to such transaction or transactions; or
14.5.5. The election or appointment, within
a twelve (12) month period, of any person or
affiliated or associated group, or its or their
nominees, to the Board of Directors of the Company,
such that such persons or nominees, when elected or
appointed, constitute a majority of the Board of
Directors of the Company and whose appointment or
election was not approved by a majority of those
persons who were directors at the beginning of such
period or whose election or appointment was made at
the request of an Acquiring Person. An "Acquiring
Person" is any person who, or which, together with
all affiliates or associates of such person, is the
beneficial owner of twenty percent (20%) or more of
the Common Stock of the Company then outstanding,
except that an Acquiring Person does not include the
Company or any employee benefit plan of the Company
or any of its subsidiaries or any person holding
Common Stock of the Company for or pursuant to such
plan. For the purpose of determining who is an
Acquiring Person, the percentage of the outstanding
shares of the Common Stock of which a person is a
beneficial owner shall be calculated in accordance
with Rule 13d-e of the Exchange Act.
14.6. "Code" means the Internal Revenue Code of 1986,
as from time to time amended.
14.7. "Company" means SpeedFam International, Inc.,
an Illinois corporation.
14.8. "Confidential Information" means any and all
Technology and/or information which:
14.8.1. Is provided to the Employee by the
Company;
14.8.2. Is created, developed, or otherwise
generated by or on behalf of the Company;
14.8.3. Concerns or relates to any aspect of
the Company's business; or
14.8.4. Is, for any reason, identified by
the Company as confidential.
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14.8.5. Notwithstanding the foregoing
provisions of this Section 14.8, Confidential
Information shall not include such information which
the Employee can show, clearly and convincingly:
14.8.5.1. Is publicly and openly
known and in the public domain;
14.8.5.2. Becomes publicly and
openly known and in the public domain
through no fault of the Employee; or
14.8.5.3. Is in the Employee's
possession and documented prior to this
Agreement, lawfully obtained from a source
other than from the Company, and not subject
to any obligation of confidentiality or
restricted use.
14.9. "Constructive Termination" means the voluntary
termination of employment by the Employee following a Change
in Duties following a Change of Control.
14.10. "Exchange Act" means the Securities Exchange
Act of 1934, as from time to time amended.
14.11. "Invention" means any new or useful art,
discovery, or improvement (including any technologies, tests,
programs, products, concepts, ideas, apparatus, equipment,
machinery, processes, methods, formulae, designs or
techniques), whether or not related to a Product and whether
or not patentable, and all the know-how related thereto.
14.12. "Material Breach" means a willful or negligent
failure to perform the Employee's duties as set forth in this
Agreement.
14.13. "Product" means any product or service which
is, or may in the reasonable future be, manufactured, sold,
designed, developed, considered by, or of interest to the
Company or an Affiliate (including, but not limited to, any
product or service involving CMP planarization technology,
such as CMP-V tools or any free-abrasive machining, lapping,
polishing and grinding).
14.14. "Technology" means prototypes, models,
concepts, inventions, circuit designs, drawings, hardware,
technological developments and improvements, methods,
techniques, systems, documentation, data, works of authorship,
products, and related information whether or not patentable,
copyrightable, and whether or not presently used or used in
the future.
14.15. "Voting Securities" mean any securities which
ordinarily possess the power to vote in the election of
directors without the happening of any precondition or
contingency.
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15. Miscellaneous.
15.1. This Agreement supersedes all prior agreements
and understandings by and between the Employee and the Company
and any of its Affiliates or their respective directors,
officers, shareholders, employees, attorneys, agents, or
representatives, including any Severance Agreement, Employment
Letter, Employment Terms, Non-Disclosure Agreement and/or
Employment Agreement (including change of control provisions)
and constitutes the entire agreement between the parties,
respecting the subject matter hereof and there are no
representations, warranties or other commitments other than
those expressed herein.
15.2. The Employee represents and warrants to the
Company that the Employee is not a party to or bound by, and
the employment of the Employee by the Company or the
Employee's disclosure of any information to the Company or its
use of such information will not violate or breach any
employment, retainer, consulting, license, non-competition,
non-disclosure, trade secrets or other agreement between the
Employee and any other person, partnership, corporation, joint
venture, association or other entity.
15.3. No modification or amendment of, or waiver
under, this Agreement shall be valid unless signed in writing
and signed by the Employee and an appropriate officer of the
Company, pursuant to expressed authority of the Board.
15.4. The Employee agrees to indemnify the Company
and its Affiliates against, and to hold the Company and its
Affiliates harmless from, any and all claims, lawsuits,
losses, damages, expenses, costs and liabilities, including,
without limitation, court costs and attorney's fees, which the
Company or any of its Affiliates may sustain as a result of,
or in connection with, either directly or indirectly, the
Employee's breach or violation of any of the provisions of
this Agreement.
15.5. The Company agrees to indemnify the Employee
against, and to hold the Employee harmless from, any and all
claims, lawsuits, losses, damages, expenses, costs and
liabilities, including, without limitation, court costs and
attorney's fees, which the Employee may sustain as a result
of, or in connection with, either directly or indirectly, the
breach or violation by the Company or its Affiliates of any of
the provisions of this Agreement or any applicable law or
regulations.
15.6. The Employee hereby agrees that if the Employee
violates any provision of this Agreement, the Company will be
entitled, if it so elects, to institute and prosecute
proceedings at law or in equity to obtain damages with respect
to such violation or to enforce the specific performance of
this
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Agreement by the Employee or to enjoin the Employee from
engaging in any activity in violation hereof.
15.7. The waiver by either party to this Agreement of
a breach of any provision of this Agreement by the other shall
not operate or be construed as a waiver of any subsequent
breach.
15.8. Any communication which may be required under
this Agreement shall be deemed to have been properly given
when delivered personally at the address set forth below for
the intended party during normal business hours, when sent by
facsimile or other electronic transmission to the respective
facsimile transmission numbers of the parties set forth below
with telephone confirmation of receipt, or when sent by U.S.
registered or certified mail, return receipt requested,
postage prepaid as follows:
If to the Company: SpeedFam International, Inc.
000 X. 00xx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Chief Executive Officer
Facsimile: 000-000-0000
Confirm: 000-000-0000
If to the Employee: Xxxxx X. Xxxxxx
000 X. 00xx Xxx.
Xxxxxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
Notices shall be given to such other addressee or address, or
both, or by way of such other facsimile transmission number,
as a particular party may from time to time request by written
notice to the other party to the Agreement. Each notice,
request, demand, approval or other communication which is sent
in accordance with this Section shall be deemed to be
delivered, given and received for all purposes of this
Agreement as of two (2) business days after the date of
deposit thereof for mailing in a duly constituted U.S. post
office or branch thereof, one (1) business day after deposit
with a recognized overnight courier service or upon written
confirmation of receipt of any facsimile transmission. Notice
given to a party hereto by any other method shall only be
deemed to be delivered, given and received when actually
received in writing by such party.
15.9. This Agreement shall inure to the benefit of
and be binding upon the Company and the Employee and their
respective heirs, personal representatives, successors and
assigns.
15.10. All claims, disputes and other matters in
question arising out of, or relating to this Agreement, or the
breach thereof, shall be decided by
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arbitration, pursuant to the rules established by the American
Arbitration Association for the arbitration of such disputes,
and such arbitration shall occur in Chandler, Arizona.
15.11. This Agreement may be signed in multiple
counterparts which when taken together shall constitute the
entire Agreement.
15.12. This Agreement shall be governed and construed
in accordance with the laws of the State of Arizona.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SPEEDFAM INTERNATIONAL, INC. an Illinois
Corporation
By /s/ Xxxxxx Xxxxxxx
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Title President
---------------------------------
Employee
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
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