KEY EMPLOYEE AGREEMENT
EXHIBIT
10.7
The
undersigned, NEXX SYSTEMS, INC., a Delaware corporation, as well as its
successors and assigns (hereinafter collectively referred to as the “Company”)
and Xxxx X. Xxxxxx, of Lexington, Massachusetts, in consideration of
and as a condition of your employment or continued employment by the Company,
hereby agree as follows:
1. Position and
Responsibilities.
1.1 You
shall serve as Vice President of Sales and Business Development of the Company
(or in such other capacity as shall be designated by the President and
reasonably acceptable to you). You will, to the best of your ability,
devote your full time and best efforts to the performance of your duties
hereunder and the business and affairs of the Company and perform such duties as
may be assigned to you by or on authority of the Company’s President from time
to time and the duties customarily associated with such capacity from time to
time and at such place or places as the Company shall designate are appropriate
and necessary in connection with such employment.
1.2 You
will report directly to the Company’s President and Board of
Directors.
2. Term of
Employment.
2.1 The
initial term of this Agreement shall be for the period set forth on Exhibit A annexed
hereto commencing with the date hereof. Thereafter, this Agreement
shall be automatically renewed for successive periods of one year, unless you or
the Company shall give the other party not less than thirty (30) days written
notice of non-renewal. Your employment with the Company may be
terminated as provided in section 2.2.
2.2
The
Company shall have the right, upon written notice to you, to terminate your
employment:
(a) immediately
at any time for “Cause” (as defined herein subject to your right of cure and
right to dispute as provided in Section 2.3 herein); or
(b) at any
time, without “Cause”, provided that the Company shall be obligated to pay to
you the Severance Benefits set forth in Sections 6 or 7, as applicable, of Exhibit A, plus any
sums then due to you, including those expenses as are provided in Section 4 of
Exhibit A, less
(i) applicable taxes and other required withholdings, and (ii) any amounts you
may owe to the Company. Payments under this Section 2.2 (b) (other than
unreimbursed expenses as are provided in Section 4 of Exhibit
A) shall not be due or payable if you are terminated at any
time for “Cause” or if you voluntarily resign from your employment, except as
set forth in Section 7 of Exhibit
A.
2.3 For
the purpose of Section 2.2, the term “Cause” shall mean any of the
following: (a) gross negligence in the performance of assigned
duties; (b) willful misconduct involving the Company, its vendors, customers
and/or potential customers; (c) refusal to perform or discharge the duties of
responsibilities assigned by the President or Board of Directors of the Company
provided the same are not illegal or unethical and the failure to correct such
refusal and perform such duties or responsibilities within two weeks (14
calendar days) after written notice of such failure; (d) indictment under a
felony or misdemeanor involving moral turpitude; (e) willful or prolonged
absence from work not excused by disability; or (f) falseness of any warranty or
representation by you herein or the breach of your obligations under
this Agreement or your duties as an employee of the Company to the material
detriment of the Company.
2.4 In
the event of the Involuntary Termination (as hereinafter defined) of your
employment with the Company at any time, the Company hereby agrees to provide
you with Severance Benefits as defined in Section 6 of Exhibit A hereto or
payments in the event of a “Change of Control” as defined in Section 7 of
Exhibit A. In this regard, the phrase “Involuntary Termination” shall
mean (a) any termination of your employment by the Company other than for
“Cause”, as defined in Section 2.3, or (b) any notice by the Company not to
renew this Agreement pursuant to Section 2.1.
2.5 You
shall have the right to terminate this Agreement upon not less than thirty (30)
days prior written notice to the Company.
3. Compensation. You
shall receive the compensation and benefits set forth on Exhibit A
(“Compensation”) for all services to be rendered by you hereunder and for your
transfer of property rights pursuant to an agreement relating to proprietary
information and inventions attached of even date herewith hereto as Exhibit C between you
and the Company (the NEXX Systems, Inc. Confidentiality, Noncompetition,
Proprietary Information and Inventions Agreement).
4.
Other Activities during
Employment.
4.1 Except
for any outside employments and directorships currently held by you as listed on
Exhibit B, and
except with the prior written consent of the Company’s President, you
will not during the term of this Agreement undertake or engage in any other
employment, occupation or business enterprise other than one in which you are an
inactive investor.
4.2 You
hereby agree that, except as disclosed on Exhibit B hereto,
during your employment hereunder, you will not, directly or
indirectly, engage (a) individually, (b) as an officer, (c) as a director, (d)
as an employee, (e) as a consultant, (f) as an advisor, (g) as an agent (whether
a salesperson or otherwise), (h) as a broker, or (i) as a partner, coventurer,
stockholder or other proprietor owning directly or indirectly more than two
percent (2%) interest, in any firm, corporation, partnership, trust,
association, or other organization which is engaged in the research,
development, production, manufacture or marketing of equipment or processes in
direct competition with the Company or any other line of business engaged in or
under demonstrable development by the Company (such firm, corporation,
partnership, trust, association, or other organization being hereinafter
referred to as a “Prohibited Enterprise”). Except as may be shown on
Exhibit B, you
hereby represent that you are not engaged in any of the foregoing capacities (a)
through (i) in any Prohibited Enterprise.
5. Former
Employers.
5.1 You
represent and warrant that your employment by the Company will not conflict with
and will not be constrained by any prior or current employment, consulting
agreement or relationship whether oral or written. You represent and
warrant that you do not possess confidential information arising out of any such
employment, consulting agreement or relationship that, in your best judgment,
would be utilized in connection with your employment by the Company in the
absence of Section 5.2.
5.2 If,
in spite of the second sentence of Section 5.1, you should find that
confidential information belonging to any other person or entity might be usable
in connection with the Company’s business, you will not intentionally disclose
to the Company or use on behalf of the Company any confidential information
belonging to any of your former employers; but during your employment by the
Company you will use in the performance of your duties all information which is
generally known and used by persons with training and experience comparable to
your own all information which is common knowledge in the industry or otherwise
legally in the public domain.
6. Proprietary Information and
Inventions and Non-Competition. You agree to execute, deliver
and be bound by the provisions of the NEXX Systems, Inc. Proprietary Information
and Inventions and Non-Competition Agreement attached hereto as Exhibit
C.
7. Remedies. Your
obligations under the NEXX Systems, Inc. Proprietary Information and Inventions
and Non-Competition Agreement and the provisions of Sections 4, 6, and 8 of this
Agreement (as modified by Section 9, if applicable) shall survive the expiration
or termination of your employment (whether through your resignation or
otherwise) with the Company. You acknowledge that a remedy at law for
any breach or threatened breach by you of the provisions of the NEXX Systems,
Inc. Proprietary Information and Inventions and Non-Competition Agreement would
be inadequate and you therefore agree that the Company shall be entitled to such
injunctive or other equitable relief in case of any such breach or threatened
breach.
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8. Assignment. This
Agreement and the rights and obligations of the parties hereto shall bind and
inure to the benefit of any successor or successors of the Company by
reorganization, merger or consolidation and any assignee of all or substantially
all of its business and properties, but, except as to any such successor or
assignee of the Company, neither this Agreement nor any rights or benefits
hereunder may be assigned by the Company or by you, except by operation of
law. The Company’s obligations and those of any successors or
assignees of the Company under this Agreement, including but not limited to the
severance provisions and other compensation and benefits due to you pursuant to
Exhibit A
hereto, will be a condition of and are to remain those of any successor or
assignee.
9. Interpretation.
IT IS THE INTENT OF THE PARTIES THAT in case any one or more of the provisions
contained in this Agreement (including Exhibits A, B and C hereto) 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, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained
herein. MOREOVER, IT IS THE INTENT OF THE PARTIES THAT in case any
one or more of the provisions contained in this Agreement (including Exhibits A,
B and C hereto) shall for any reason be held to be excessively broad as to
duration, geographical scope, activity or subject, such provision shall be
construed by limiting and reducing it as determined by a court of competent
jurisdiction, so as to be enforceable to the extent compatible with applicable
law.
10. Notices. Any
notice which the Company is required to or may desire to give you shall be given
by personal delivery or registered or certified mail, return receipt requested,
addressed to you at your address of record with the Company, or at such other
place as you may from time to time designate in writing. Any notice
that you are required or may desire to give to the Company hereunder shall be
given by personal delivery or by registered or certified mail, return receipt
requested, addressed to the Company at its principal office, or at such other
office as the Company may form time to time designate in writing. The
date of personal delivery or the dated of mailing any notice under this Section
10 shall be deemed to be the date of delivery thereof.
11. Waivers. If
either party should waive any breach of any provision of this Agreement, such
party shall not thereby be deemed to have waived any preceding or succeeding
breach of the same or any other provision of this Agreement.
12. Complete Agreement;
Amendments. The foregoing including Exhibits A, B and C
hereto, is the entire agreement of the parties with respect to the subject
matter hereof, superseding any previous oral or written communications,
representations, understandings, or agreements with the Company or any officer
or representative thereof. Any amendment to this Agreement or waiver
by the Company of any right hereunder shall be effective only if evidenced by a
written instrument executed by the parties hereto, upon authorization of the
Company’s Board of Directors.
13. Headings. The
headings of the Sections hereof are inserted for convenience only and shall not
be deemed to constitute a part hereof or to affect the meaning of this
Agreement.
14. Counterparts. This
Agreement may be signed in two counterparts, each of which shall be deemed an
original and both of which shall together constitute one agreement.
15. Governing Law;
Venue. This Agreement shall be governed by and construed under
Massachusetts law. Venue for any dispute shall be the Superior Court
of the Commonwealth of Massachusetts for Middlesex County.
16. Advice of Separate
Counsel. You acknowledge that you have been advised to review this
Agreement (including Exhibits A, B, and C hereto) with your own legal counsel
and other advisors of your choosing and that prior to entering into this
Agreement, you have had the opportunity to review this Agreement with your
attorney and other advisors and have not asked (or relied upon) Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C. to represent you in this
matter.
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If you
are in agreement with the foregoing, please sign your name below and also at the
bottom of the Proprietary Information and Inventions and Non-Competition
Agreement, whereupon this Agreement shall become binding in accordance with its
terms. Please then return this Agreement to the
Company. (You may retain for your records the accompanying
counterpart of this Agreement enclosed herewith).
ACCEPTED
AND
AGREED:
NEXX SYSTEMS, INC.
___________________________ By:______________________________
Xxxx X.
Xxxxxx Xxxxxx
X. Xxxxx, President & CEO
Dated: ______________
Dated: ________________
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EXHIBIT
A
EMPLOYMENT
TERM, COMPENSATION AND BENEFITS
OF XXXX
X. XXXXXX
1. Term. The
initial term of the Agreement to which this Exhibit A is attached shall be for a
one year period from the date of this Agreement.
2.
Compensation.
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a.
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Base
Salary. Your base salary (the “Base Salary”) shall be
established by the Compensation Committee of the Board of
Directors. For the period beginning on the date of this
Agreement, you shall receive a Base Salary at the rate of One Hundred
Seventy-Five Thousand Dollars ($175,000) per annum paid bi-weekly until
changed by the Compensation Committee of the Board of
Directors.
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b.
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Bonus. For
fiscal 2009 (commencing on January 1, 2009), you shall be entitled to
receive a bonus that upon successful attainment of 100% of the approved
Sales Incentive Plan (SIP) commission arrangement defined for individuals
in the sales and marketing group is expected to generate $100,000 in bonus
potential for you in 2009. Further, on an annual basis, your
bonus will be subject to review by the Compensation Committee of the Board
of Directors.
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c.
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Equity. During
the course of your employment with the Company, you will be eligible to
receive stock options pursuant to the Company’s 2004 Employee, Director,
and Consultant Stock Option Plan (or any successor plan) in such amounts
and pursuant to vesting schedules as may be determined from time to time
by the Company’s Board of Directors, in its discretion, taking into
account, among other factors, your performance and the Company’s
performance. Notwithstanding the foregoing, in the event of a
Change of Control (as defined herein), the vesting on such options shall
be accelerated for an additional 25% of the original option grant upon the
Change of Control (but in any event not to exceed 100% of the original
option grant.)
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3. Vacation, Insurance and
Benefits. You shall be entitled to all legal
holidays recognized by the Company, and twenty- three days paid vacation per
annum. Any unused vacation must be used in the fiscal year in which
it has accrued in accordance with Company vacation policy. You shall
be eligible for participation in any group insurance plans that may be
established and maintained by the Company for all full-time employees or which
the Company is required to maintain by law. You shall also be
entitled to participate in any employee benefit programs that the Company’s
Board of Directors may establish for Company employees generally.
4. Reimbursement of
Expenses. The Company shall reimburse you for all usual and
ordinary business expenses incurred by you in the scope of your employment
hereunder in accordance with the Company’s expense reimbursement
policy.
5. Other
Benefits. The Company has reimbursed you for all appropriate
relocation expenses paid to third parties for your relocation to be used within
the first six months of employment. Relocation expenses included one
exploratory/house-hunting trip, temporary lodging at a local Residence Inn or
other similar residence (such residence to be approved by the Company in writing
in advance) for a period not to exceed 90 days while seeking to relocate from
your current residence to the greater Billerica area and moving of household
goods. Some relocation expenses are considered taxable based on
Internal Revenue Service rules and regulations. To assist you with
the resulting tax obligation, the Company has provided tax assistance by adding
an amount to your year-to-date income and withholding. The amount of
money added to income and withholding was calculated at the time of each
reimbursement for those expenses.
6.
Severance
Benefits.
(a) When
provided for in this Agreement, you shall be entitled to “Severance
Benefits.” When used in this Agreement, the term “Severance Benefits”
shall mean a total amount equal to six (6) months of your then
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current
annual Base Salary plus a cash payment equal to the cost of your COBRA coverage
for such six (6) month period. The Severance Benefits shall be
paid via check to you in equal bi-monthly installments and in accordance with
the Company’s payroll policy and schedule commencing within ten (10) days after
the date of your termination of employment with the Company.
(b) The
Severance Benefits referred to above will be in addition to, and not in
substitution for, any accrued and unpaid salary, vacation, pension or other
similar retirement benefits, and unreimbursed expenses to which you may be
otherwise entitled.
(c) Notwithstanding
any other provisions contained herein, Severance Benefits shall immediately
cease upon such date as you commence employment or consulting services which
provide for total compensation equal to at least 75% of your Base Salary (as
determined on a bi-weekly basis) as in effect immediately prior to your
termination.
7.
Change of
Control.
(a) For
the purposes of this Agreement, “Change of Control” means and shall be deemed to
occur if any of the following occurs:
(i) the
acquisition, after the date of this Agreement, by an individual, entity or group
[within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 as amended (the “Exchange Act”)] other than an existing
stockholder or stockholders of the Company of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either (A) the outstanding shares of common stock, par value $.01 per share, of
the Company (the “Common Stock”), or (B) the combined voting power of the voting
securities of the Company entitled to vote generally in the election of
directors (the “Voting Securities”); or
(ii) approval
by the Board of Directors and the shareholders of the Company of
a (A) tender offer to acquire any of the Common Stock or voting
securities, (B) reorganization, (C) merger or (D) consolidation, other than a
reorganization, merger or consolidation with respect to which all or
substantially all of the individuals and entities who were the beneficial
owners, immediately prior to such reorganization, merger or consolidation, of
the Common Stock and voting securities beneficially own, directly or indirectly,
immediately after such reorganization, merger or consolidation, more than 50% of
the then outstanding common stock and voting securities (entitled to vote
generally in the election of directors) of the Company resulting from such
reorganization, merger or consolidation in substantially the same proportions as
their respective ownership, immediately prior to such reorganization, merger or
consolidation, of the Common Stock and the voting securities; or
(iii)
approval
by the Board of Directors and the shareholders of the Company of the
sale or other disposition of all or substantially all of the assets of the
Company, excluding (a) a reorganization of the Corporation under the corporate
laws of a state or province other than Delaware or (b) a liquidation due to the
Company’s inability to continue as a going concern.
(b) In
the event of your actual termination of employment contemporaneous with or
within a 12-month period following a Change of Control, except (y) because of
your death, or (z) by the Company for Cause or Disability (as each is
hereinafter defined): (i) you shall be entitled to receive, in lieu
of the sums described in Section 6 above, an amount equal to twelve (12) months
of your then Base Salary determined as if payable under Section 6 above, to be
paid in accordance with the terms of this Agreement; and (ii) the following
additional provisions shall apply (which provisions shall supersede any other
provisions of the Agreement, including but not limited to Section 2 of the
Agreement, to the extent such provisions are inconsistent with the following
provisions):
(i) Disability. For
purposes of this Section 7(b), termination by the Company of your employment
based on “Disability” shall mean termination because of your absence from your
duties with the Company on a full time basis for one hundred twenty (120)
consecutive days as a result of your incapacity due to physical or mental
illness, unless within thirty (30) days after
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Notice of
Termination (as hereinafter defined) is given to you following such absence, you
shall have returned to the full time performance of your duties.
(ii) Cause. For
purposes of this Section 7(b), termination by the Company of your employment for
“Cause” shall mean termination for cause as defined in Sections
2.3.
8. Taxes. All
payments to be made to you under this Agreement will be subject to required
withholding of federal, state and local income and employment
taxes.
9. Release of
Company. In consideration of the payments under Sections 5 and
6 of this Exhibit “A” to the Agreement, and as a condition to receipt of such
payments, you agree to execute an agreement releasing the Company, its officers,
directors, employees and agents of and from any and all causes of action
relating to your employment by the Company (except for claims for
indemnification in your role as an officer or employee of the Company and for
sums due under Sections 5 and 6 of this Agreement) in a form of release
requested by Company counsel and deemed by Company counsel, in its sole
discretion, to be commercially reasonable.
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EXHIBIT
B
OUTSIDE
EMPLOYMENTS AND DIRECTORSHIPS OF
XXXX X.
XXXXXX
None
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