Exhibit 10.7
PRI AUTOMATION, INC.
EMPLOYMENT AGREEMENT
This Agreement is dated as of July 5, 2001 and is by and between
Xxxxxxxxx Xxxxxxx of 0 Xxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Employee") and PRI Automation Inc., a Massachusetts corporation, with its
principal offices at 000 Xxxxxxxxx Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Company").
In consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
1. EMPLOYMENT STATUS. The Employee shall be an employee "at will" and
the Employee or the Company may terminate the Employee's employment at any time,
with or without reason. The consequences of any such termination shall be as set
forth in Section 7 hereof.
2. SCOPE OF EMPLOYMENT. The Company hereby agrees to employ the
Employee as its Chairman of the Board of Directors and the Employee hereby
accepts such employment, on the terms and conditions set forth in this
Agreement.
a. The Employee shall perform such duties and functions
related to executive business decisions and technology issues in
support of the Chief Executive Officer and with the direction of the
Board of Directors of the Company consistent with the duties that he is
now performing for the Company. The Employee shall comply in the
performance of such duties with the policies of, the Chief Executive
Officer and/or the Board of Directors, but only to the extent that such
policies do not lessen or conflict with Employee's rights hereunder.
b. The Employee agrees that during such employment he will
devote a portion of his business time, attention and energies to the
business and interests of the Company for an average of 20 Hours per
week, and will faithfully, competently and to the best of his skill and
ability serve in the foregoing position and in such other capacity or
capacities as he may occupy with the Company from time to time. The
Employee shall perform his services at the Company's principal office
or at any other location convenient to the Employee.
c. The Employee agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any
changes therein which may be adopted from time to time by the Company.
3. SALARY. The Company shall pay the Employee a salary at the annual
rate of One Hundred Thousand Dollars ($100,000), in arrears in substantially
equal installments not less frequently than twice monthly (the "Base Salary").
4. EXPENSES. The Company shall reimburse the Employee for all
reasonable travel, entertainment and business expenses incurred by him in
connection with his duties hereunder, provided that the Employee submits to the
Company receipts or other documentation pursuant to the policies of the Company.
5. BENEFITS. The Employee shall be entitled to participate in or
receive benefits under the Company's employee benefit plans and policies in
effect from time to time for comparable employees, subject to the applicable
terms and conditions of the particular benefit plan. The Company may change,
amend, modify or terminate any benefit plan from time to time but in no event
shall employee's benefits be diminished from those now in effect for comparable
employees. Such benefits shall include, without limitation, medical insurance,
life insurance and retirement benefits.
6. OPTIONS. The Employee shall be entitled to participate in the
Company's currently existing stock option plans at a level and under terms
consistent with those applicable to non-employee directors of the Company (the
"Option Plan").
7. TERMINATION. Upon termination of Employee's employment hereunder,
Employee's rights and entitlements shall be determined in accordance with the
following provisions.
(a) FOR CAUSE BY THE COMPANY. The provisions of this Section
7(a) shall apply in the event that Employee's employment hereunder is
terminated by the Company for "Cause". For purposes of this Agreement,
"Cause" shall mean (i) Employee's willful and continued failure
substantially to perform his duties hereunder (other than as a result
of total or partial incapacity due to physical or mental illness), (ii)
the willful commission by Employee of acts that are dishonest and
demonstrably injurious to the Company, or (iii) an act or acts on
Employee's part constituting a felony under the laws of the United
States or any state thereof.
If Employee is terminated for Cause, he shall be entitled to
receive his Base Salary through the date of termination. All other
benefits due Employee following Employee's termination of employment
pursuant to this Section 7(a) shall be determined in accordance with
the plans, policies and practices of the Company at the time of such
termination.
Termination for Cause shall be effected by a written notice
that includes a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board
at a meeting of the Board called and held for that purpose (after
reasonable notice to Employee and reasonable opportunity for Employee,
together with Employee's counsel, to be heard before the Board prior to
such vote), finding that in the good faith opinion of the Board that an
event constituting Cause for termination in accordance with this
Section 7(a) has occurred and specifying the particulars thereof in
detail.
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(b) DISABILITY. The provisions of this Section 7(b) shall
apply in the event that Employee's employment terminates on account of
"Disability". For purposes of this Agreement, "Disability" shall mean
Employee's physical or mental incapacity, which results in his
inability to perform his duties for a period of six (6) consecutive
months. Any question as to the existence of the Disability of Employee
as to which Employee and the Company cannot agree, shall be determined
in writing by a qualified independent physician mutually acceptable to
Employee and the Company.
In the event of the Disability of Employee, the Company may
terminate the employment of Employee by delivery of a notice of
termination to the Employee which notice shall be effective not less
than thirty (30) days after delivery thereof. Upon termination of
Employee's employment hereunder as a result of Disability, Employee
shall receive his Base Salary for a period of six (6) months following
such termination. Any payments provided for in this Section 7(b) shall
be offset (but not below zero) by any payment of disability benefits in
lieu of Base Salary received by Employee under the Company's employee
benefit plans as then in effect. In addition, all options or other
awards previously granted by the Company shall continue to vest during
the period of salary payments.
(c) DEATH. Upon termination of Employee's employment hereunder
as a result of Employee's death, Employee's estate shall be entitled to
receive his Base Salary through the date of termination. All other
benefits due Employee following Employee's termination of employment
pursuant to Section 7(a) shall be determined in accordance with the
plans, policies and practices of the Company at the time of such
termination. Thereafter, the Company shall, except as provided in
subsection (g) hereof, have no further obligation to compensate
Employee under this Agreement.
(d) WITHOUT CAUSE BY THE COMPANY. If Employee's employment is
terminated by the Company without "Cause" (other than by reason of
Disability or death), Employee shall receive, as promptly as
practicable following such termination, but in any event not later than
ten (10) business days following such termination, a lump sum payment
in cash equal to the sum of:
(i) if not theretofore paid, the Employee's Base
Salary through the date of termination at the rate in effect on the
date of termination or, if higher, at the highest rate in effect at any
time within the 90-day period preceding the date of this Agreement;
(ii) a severance payment of One Hundred Thousand
Dollars ($100,000); and
(iii) in the case of compensation previously deferred
by the Employee, if any, all amounts of such compensation previously
deferred and not yet paid by the Company.
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In addition, all options or other awards issued under the Option Plan
shall become fully vested and exercisable as of the date of
Termination.
(e) FOR GOOD REASON BY EMPLOYEE. The provisions of this
Section 7(e) shall apply in the event that the Employee terminates his
employment with the Company for "Good Reason". For purposes of this
Agreement, "Good Reason" means (without Employee's express prior
written consent):
(i) The assignment to Employee by the Company of
duties inconsistent with Employee's positions, duties,
responsibilities, titles or offices, or any removal of Employee from or
any failure to re-elect Employee to any of such positions, except in
connection with the termination of Employee's employment for Cause,
Disability, or as a result of Employee's death or by Employee other
than for Good Reason;
(ii) A reduction by the Company in Employee's Base
Salary as in effect at the date of this Agreement, as the same may be
increased during the Term of this Agreement;
(iii) A relocation of the Company's principal
executives offices to a location outside of the metropolitan Boston,
Massachusetts area or the Company's requiring Employee to be based
anywhere other than its current location in Billerica, Massachusetts,
except for required travel on the Company's business to an extent
substantially consistent with Employee's business travel obligations at
the date of this Agreement, or any material reduction or adverse change
in the emoluments or perquisites of office provided to the Employee at
the date of this Agreement;
(iv) A failure by the Company to continue in effect
fringe benefits and benefit or compensation plans (including any profit
sharing, bonus, life insurance, health, stock option, accidental death
or dismemberment or disability plan) with terms which in the aggregate
are as favorable as those fringe benefits and plans to which Employee
is entitled or in which Employee is participating, as the case may be,
at the date of this Agreement (or in the case of fringe benefits or
plans granted or adopted, as the case may be, after the date hereof and
providing a type of benefit not provided by the Company at the date of
this Agreement, at the respective dates of grant or adoption of such
fringe benefits or plans); or
(v) The failure by the Company to obtain the specific
assumption of this Agreement by any successor or assignee of the
Company or any person acquiring a substantial portion of the assets of
the Company, or, following any such assumption, assignment or
acquisition by an entity other than an affiliate of the Company, the
occurrence of any event that Employee reasonably believes will impair
his rights under this Agreement.
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If Employee terminates his employment for "Good Reason", Employee shall
be entitled to the same payments he would have received if his employment had
been terminated by the Company without "Cause".
(f) WITHOUT GOOD REASON BY EMPLOYEE. If Employee voluntarily
terminates his employment with the Company for any reason other than
"Good Reason", Employee shall be entitled to the payments and benefits
provided to executive employees according to the Company's retirement
plan in existence at the time of termination.
(g) CONTINUATION OF BENEFITS. Upon the termination of
Employee's employment other than as a result of death or for Cause, in
addition to any other amounts due hereunder, the Company shall provide
Employee with a continuation of those benefits to which Employee is
entitled hereunder for a period of twelve (12) months.
(h) NOTICE OF TERMINATION. Any purported termination of
employment by the Company or by Employee shall not be effective until
communicated by written notice of termination to the other party. For
purposes of this Agreement, a "notice of termination" shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon; shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of
employment under the provision so indicated; and, in the case of
termination by the Company for Cause, shall conform to the requirements
of Section 7(a) above.
8. MISCELLANEOUS.
(a) This Agreement supersedes all prior agreements, written or
oral, between the Employee and the Company relating to the subject
matter hereof. Notwithstanding the foregoing, the Employee and the
Company acknowledge that the Retention Agreement, dated as of
______________, and the Confidentiality, Invention, and Non-Competition
Agreement, dated as of _________________ between the Employee and the
Company, copies of which are attached hereto as Exhibit "A", remain in
full force and effect. This Agreement may not be modified, changed or
discharged in whole or in part, except by an agreement in writing
signed by the Employee and on behalf of the Company.
(b) NO WAIVER. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be
considered a waiver of such party's rights or deprive such party of the
right thereafter to insist upon strict adherence to that term or any
other term of this Agreement.
(c) SEVERABILITY. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect,
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the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.
(d) ASSIGNMENT. This Agreement shall not be assignable by
Executive or by the Company.
(e) ARBITRATION. Except where equitable relief is sought, any
dispute, controversy or claim arising out of or relating to this
Agreement, or the breach hereof, shall be settled by arbitration in
accordance with the rules of the American Arbitration Association by a
single arbitrator. The Arbitrator shall be an individual familiar with
the industry. The arbitrator's award shall be final and binding upon
both parties, and judgment upon the award may be entered in any court
of competent jurisdiction in any state of the United States or country
or application may be made to such court for a judicial acceptance of
the award and an enforcement as the law of such jurisdiction may
require or allow.
(f) This Agreement shall inure to the benefit of and be
binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If Executive should die while any amount would still be payable to
Executive hereunder if Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the devisee, legatee or other
designee of Executive or, if there is no such designee, to the estate
of Executive.
(g) NOTICE. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage
prepaid, addressed to the following addresses:
If to the Company:
PRI Automation, Inc.
000 Xxxxxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Attention:
If to the Employee:
0 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
(h) LEGAL FEES AND EXPENSES. The Company shall reimburse
Executive on a quarterly basis for all costs and expenses incurred by
Executive to enforce or protect his rights under this Agreement
(including fees and expenses incurred in connection with an
arbitration) unless it shall ultimately be determined by a final
judgment of an arbitrator or a court of competent jurisdiction that
Executive was without any justification for commencing or continuing
any such arbitration,
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action or proceeding, in which case Executive shall repay to the
Company any amounts of reimbursement paid and in the event of an
arbitration, shall also pay one half (1/2) of the fees of the
arbitrator.
(i) This Agreement shall be governed by, and construed and
enforced in accordance with, the substantive laws of The Commonwealth
of Massachusetts, without regard to its principles of conflicts of
laws.
IN WITNESS WHEREOF the Employee has executed this Agreement, and the
Company has caused this Agreement to be executed by a duly authorized officer,
as of the date first above written.
PRI AUTOMATION INC.
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------
Xxxxxxxx X. Xxxxx, President and
Chief Executive Officer
/s/ Xxxxxxxxx Xxxxxxx
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Xxxxxxxxx Xxxxxxx
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