EXHIBIT 10.3
Employment Agreement
This Agreement is made and entered into this 21st day of March, 1997, 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 first
May 31st after 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 six (6) months
prior to the expiration of the initial one (1) year term or any renewal
term of its or his intention to terminate the term of employment of the
Employee as of the end of the initial one (1) year term or any such renewal
term, as the case may be.
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 One Hundred Fifty-Five
Thousand Dollars ($155,000), 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.
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
Six Thousand Eight Hundred Thirty-Eight Dollars ($6,838) annually for
automobile expenses.
5. Duties. The Employee shall, subject to election and removal by
the Board of the Company in their sole discretion, serve as Treasurer/Chief
Financial Officer of the Company. As such, the Employee's duties and
responsibilities shall include, but shall not be limited to, overseeing the
financial functions of the organization, including its financial plans and
policies, accounting practices and procedures, and the communication of
financial information to the financial community. The Employee shall also
be responsible for the performance of such other duties and
responsibilities as may be prescribed from time to time by the
President/Chief Operating Officer or the Board of the Company.
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.
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 the Company.
9. Vacation. The Employee shall be entitled to paid vacation in
accordance with Company policy. All vacation time shall be taken by the
Employee at such times
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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 failure or refusal to perform the
Employee's duties as provided for in this Agreement, occasioned
by reason other than sickness or other disability of the
Employee, which is not cured within ten (10) business days after
written notice from the Company specifying such failure or
refusal 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 Board; or,
12.1.3. Conviction 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 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.
12.3. 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.
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
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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 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
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patentable, which is assignable by the Employee to the Company
pursuant to Section 13.4 above.
13.6. Pursuant to Section 2(3) of the Illinois Employee
Patent Act, 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.
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:
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13.9.1. Own or have any interest, directly or
indirectly, in 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
competition with 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.
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.
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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 program from which
the Employee was previously eligible, or 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" means:
14.5.1. Any "person", including a "group" as determined
in accordance with Section 13(d)(3) of the Exchange Act, other
than Xxxxx X. Xxxxxx, his spouse, descendants, or any Trust for
the benefit of Xxxxx X. Xxxxxx, his spouse or descendants, who
is, or becomes, the beneficial owner of securities of the Company
representing more than fifty percent (50%) of the combined voting
power of the Company's then outstanding securities, other than by
reason of any redemption of stock resulting from the death of
Xxxxx X. Xxxxxx or his spouse;
14.5.2. As a result of, or in connection with, any
tender offer or exchange offer, merger or other business
combination, sale of assets or contested election, or any
combination of the foregoing transactions (a "Transaction") the
persons who constituted the Board of the Company prior to the
Transaction shall cease to constitute a majority of the Board of
the Company or any successor to the Company.
14.5.3. The Company is merged or consolidated with
another corporation and as a result of the merger or
consolidation, less than seventy percent (70%) of the outstanding
voting securities of the surviving or resulting corporation shall
then be owned in the aggregate by the former stockholders of the
Company;
14.5.4. A tender offer or exchange offer is made and
consummated for the ownership of securities of the Company
representing more than fifty percent (50%) of the combined voting
power of the Company's then outstanding voting securities; or,
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14.5.5. The Company transfers substantially all of its
assets to another corporation of which the Company owns less than
fifty percent (50%) of the outstanding voting securities.
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.
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 to time amended.
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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. "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).
14.13. "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.
14.14. "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.
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 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.
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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 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 Agreement by the Employee
or to enjoin the Employee from engaging in any activity in violation
hereof.
15.6. 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.
15.7. 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.
0000 Xxxx Xxxxxxx
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Attention: Chief Executive Officer
Facsimile: 000-000-0000
Confirm: 000-000-0000
If to the Employee: Xxxxx X. Xxxxxx
0000 X. Xx Xxxxx Xx.
Xxxxxxxxxx, XX 00000
(000) 000-0000
Facsimile: (000) 000-0000
Confirm: ____________________
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
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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.
15.8. 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.
15.9. All claims, disputes and other matters in question
arising out of, or relating to this Agreement, or the breach thereof,
shall be decided by 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.
15.10. This Agreement may be signed in multiple counterparts
which when taken together shall constitute the entire Agreement.
15.11. This Agreement shall be governed and construed in
accordance with the laws of the State of Illinois.
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/COO
--------------------------------
Employee
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx
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