EXHIBIT 10.43
AGREEMENT
This Agreement is entered into as of the 20th day of September, 1999 by
and between Ibis Technology Corporation, a Massachusetts corporation (the
"Company") and Xxxxxx X. Xxxx (the "Executive").
WHEREAS the Executive is the President and Chief Executive Officer of
the Company and has been employed in such capacity since December 1, 1997;
WHEREAS because of the skills and experience of the Executive and his
knowledge of the Company, his service to the Company is very important to the
future success of the Company;
WHEREAS the Executive desires to enter into this Agreement to provide
him with certain financial protection in the event that his employment
terminates for certain reasons in connection with or within a period of time
after a change of control of the Company; and
WHEREAS the Board of Directors of the Company has determined that it is
in the best interests of the Company to enter into this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Executive
agree as follows:
1. DEFINITIONS.
(a) CAUSE. As used herein, "Cause" shall mean a termination for one or
more of the following reasons, as determined by a majority vote of the Board:
(i) Executive's continuing failure to render services to the Company in
accordance with his assigned duties consistent with Section 1 of the employment
letter agreement by and between the Executive and the Company dated October 23,
1997 ("Employment Agreement") and such failure of performance continues for a
period of more than 120 days after notice thereof has been provided to the
Executive by the Board; (ii) the Executive's willful misconduct or gross
negligence; (iii) the Executive is convicted of a felony, either in connection
with the performance of his obligations to the Company or which conviction
materially adversely affects his ability to perform such obligations, or
materially adversely affects the business activities, reputation, goodwill or
image of the Company; (iv) willful disloyalty, deliberate dishonesty, breach of
fiduciary duty or breach of the terms of the Employment Agreement; (v) the
commission by the Executive of an act of fraud, embezzlement or deliberate
disregard of the rules or policies of the Company which results in significant
loss, damage or injury to the Company; (vi) the Executive's willful unauthorized
disclosure of any trade secret or confidential information of the Company; or
(vii) Executive's willful commission of an act which constitutes unfair
competition with the Company or which induces any employee or customer of the
Company to break a contract with the Company.
In making any determination under this Section 1(a), the Board shall
act fairly and in utmost good faith and shall give the Executive an opportunity
to appear and be heard at a meeting of the Board or any committee thereof and
present evidence on his behalf. For purposes of this Section, no act, or failure
to act, by the Executive shall be considered "willful" unless done, or admitted
to be done, by the Executive in bad faith and without reasonable belief that
such action or omission was in the best interest of the Company.
(b) CHANGE OF CONTROL. As used herein, a "Change of Control" shall be
deemed to have occurred if (i) there is a sale or transfer of all or
substantially all of the assets of the Company in one or a series of
transactions; (ii) any "person," as such term is used in Section 13(d) of the
Securities Exchange Act of 1934, as amended (or any successor provision) (the
"Exchange Act"), together with all "affiliates" and "associates" (as such terms
are defined in Rule 12b-2 under the Exchange Act or any successor provision) of
such person, shall become the "beneficial owner" or "beneficial owners" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act or any successor
provision), directly or indirectly, of securities of the Company representing in
the aggregate thirty percent (30%) or more of either (1) the then outstanding
shares of common stock of the Company or (2) the combined voting power of all
then outstanding securities
1
EXHIBIT 10.43
of the Company having the right under ordinary circumstances to vote in an
election of the Board of Directors of the Company (hereafter referred to as an
"Acquisition"); PROVIDED, that, notwithstanding the foregoing, an Acquisition
shall not be deemed to have occurred for purposes of this clause (ii) solely as
the result of an acquisition of securities by the Company which, by reducing the
number of shares of common stock or other voting securities outstanding,
increases (x) the proportionate number of shares of common stock beneficially
owned by any person to thirty percent (30%) or more of the common stock then
outstanding or (y) the proportionate voting power represented by the voting
securities beneficially owned by any person to thirty percent (30%) or more of
the combined voting power of all then outstanding voting securities; or (iii)
there is a merger or consolidation between the Company and a entity other than a
subsidiary of the Company in which the Company is not the continuing or
surviving corporation and pursuant to which the holders of the Company's voting
stock immediately prior to such merger or consolidation would not be the holders
immediately after such merger or consolidation of at least 50% of the voting
stock of the continuing or surviving corporation.
(c) GOOD REASON. As used herein, a "Good Reason" shall mean either a
good faith determination by the Executive following a Change of Control that he
can no longer fulfill his duties as specified in the Employment Agreement or a
material change in the Executive's authority, functions, duties or
responsibilities as President and Chief Executive Officer of the Company
(including, without limitation, material changes in the control or managerial
structure of the Company) which would cause his position with the Company to
become of less dignity, responsibility, importance or scope than his position on
the date hereof or as of any subsequent date prior to the Change of Control, a
reduction in the Executive's salary or a material reduction in benefits from the
amount of salary paid or the value of the benefits available on the date hereof
or as of any subsequent date prior to the Change of Control, a transfer of the
principal location of the place of performance of the Executive's duties from
the Danvers, Massachusetts area without the Executive's consent, or the failure
of the Board of Directors of the Company to elect the Executive as President and
Chief Executive Officer of the Company at any time such elections are made, or
removal from such office of the Company, PROVIDED that such material change is
not in connection with a termination of the Executive's employment for Cause,
and, PROVIDED, FURTHER, that any notice of termination by the Executive for Good
Reason shall be given by him within ninety (90) days of when he becomes aware of
such change, of such failure or removal.
2. SEVERANCE COMPENSATION. In the event that at or near the time of, in
connection with, or within a period of two (2) years after, a Change of Control,
the Executive's employment with the Company is terminated either (i) by the
Company other than for Cause or (ii) by the Executive for a Good Reason, then
the Company, within ten (10) days of the applicable termination date, shall pay
to the Executive, in addition to any amounts due to Executive for services
rendered prior to the termination date, a lump sum amount equal to two (2) times
the Executive's highest Annual Salary during the preceding three year period,
including the year of such termination. Annual Salary shall mean Executive's
annual base salary and bonus, excluding reimbursements and amounts attributable
to stock options and other non-cash compensation.
3. CONTINUATION OF BENEFITS. In the event that at the time of, in connection
with, or within a period of (2) two years after a Change in Control, the
Executive's employment with the Company is terminated either (i) by the Company
other than for Cause or (ii) by the Executive for a Good Reason, then the
Company shall arrange to provide the Executive with life, disability, group
dental and health insurance benefits substantially similar to those the
Executive was receiving, immediately prior to the termination, until the earlier
of (a) two (2) years following his termination date, or (b) the date upon which
he becomes eligible for such coverage offered by a subsequent employer.
Executive's termination date shall be the date of any qualifying event under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and the COBRA
coverage that may be available to Executive, if any, shall be offset by any
period of coverage provided hereunder.
4. NO DUPLICATION OF COMPENSATION OR BENEFITS. The Executive's severance
compensation and benefits set forth in Sections 2 and 3 above shall replace, and
be provided in lieu of, any severance compensation and benefits that may be
provided to Executive under any other agreement, including but not limited to
those provided under Section 3(b) of the Employment Agreement; PROVIDED, that
this prohibition against duplication shall not be construed to otherwise limit
Executive's rights as to payments or benefits provided under any pension plan
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended), deferred compensation, stock, stock option or similar plan
sponsored by the Company; and FURTHER PROVIDED, that notwithstanding the
foregoing, all other rights and obligations set forth in the Employment
Agreement shall continue as provided for therein.
2
EXHIBIT 10.43
5. ENFORCEABILITY; REDUCTION.
(a) If any provision of this Agreement shall be deemed invalid or
unenforceable as written, this Agreement shall be construed, to the greatest
extent possible, or modified, to the extent allowable by law, in a manner which
shall render it valid and enforceable and any limitation on the scope or
duration of any provision necessary to make it valid and enforceable shall be
deemed to be a part thereof. No invalidity or unenforceability of any provision
contained herein shall affect any other portion of this Agreement.
(b) Notwithstanding anything provided herein, if the Executive is a
"disqualified individual" (as defined in Section 280G of the Internal Revenue
Code ("Code"), and the severance compensation and continuation of benefits
provided for in Sections 2 and 3 hereof (collectively "Severance Compensation")
together with any other payments which the Executive has the right to receive
from the Company (or its affiliates and subsidiaries), would constitute a
"parachute payment" (as defined in Section 280G(b)(2) of the Code), the
Severance Compensation shall be reduced. The reduction shall be in an amount so
that the present value of the total amount received by the Executive from the
Company (or its affiliates and subsidiaries) will be one dollar ($1.00) less
than three (3) times the Executive's Base Amount (as defined in Section 280G of
the Code) so that no portion of the amounts received by the Executive shall be
subject to the excise tax imposed by Section 4999 of the Code (excise tax).
The determination as to whether any reduction in Severance Compensation
is necessary and the amount of any such reduction shall be made by the Company's
independent public accountants (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and to the Executive within
fifteen (15) business days of the Executive's termination date. Any such
determination by the Accounting Firm shall be conclusive and binding upon the
Executive and the Company. The Executive shall determine which part of the
Severance Compensation shall be eliminated or reduced consistent with the
requirements of this Section 5 and shall notify the Company promptly in writing;
PROVIDED, that if the Executive does not make such determination within ten (10)
business days of the receipt of the calculations made by the Accounting Firm,
the Company shall determine which part of the Severance Compensation shall be
eliminated or reduced consistent with the requirements of this Section 5 and
shall notify the Executive promptly in writing of such election.
If through error or otherwise the Executive should receive payments
under this Agreement, together with other payments the Executive has the right
to receive from the Company (or its affiliates and subsidiaries), in excess of
one dollar ($1.00) less than three times his Base Amount, the Executive shall
immediately repay the excess to the Company upon notification that an
overpayment has been made.
6. MITIGATION. The Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment provided for herein be reduced by any
compensation earned by the Executive as the result of employment by another
employer or by retirement benefits after the termination date or otherwise.
7. NOTICES. All notices, requests, consents and other communications hereunder
shall be in writing, shall be addressed to the receiving party's address set
forth below or to such other address as a party may designate by notice
hereunder, and shall be either (i) delivered by hand, (ii) made by telex,
telecopy or facsimile transmission, (iii) sent by overnight courier, or (iv)
sent by registered or certified mail, return receipt requested, postage prepaid.
If to the Company:
Ibis Technology Corporation
00 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Board of Directors
3
EXHIBIT 10.43
If to the Executive:
Xxxxxx X. Xxxx
0 Xxxxxxxxxx Xxxx, Xxxx 00
Xxxxxxxxxx, XX 00000
In each case with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by registered
or certified mail, on the 5th business day following the day such mailing is
made.
8. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
9. MODIFICATIONS AND AMENDMENTS. The terms and provisions of this Agreement may
be modified or amended only by written agreement executed by all parties hereto.
10. WAIVERS AND CONSENTS. The terms and provisions of this Agreement may be
waived, or consent for the departure therefrom granted, only by written document
executed by the party entitled to the benefits of such terms or provisions. No
such waiver or consent shall be deemed to be or shall constitute a waiver or
consent with respect to any other terms or provisions of this Agreement, whether
or not similar. Each such waiver or consent shall be effective only in the
specific instance and for the purpose for which it was given, and shall not
constitute a continuing waiver or consent.
11. ASSIGNMENT. The rights and obligations under this Agreement may not be
assigned by either party hereto without the prior written consent of the other
party.
12. BENEFIT. All statements, representations, warranties, covenants and
agreements in this Agreement shall be binding on the parties hereto and shall
inure to the benefit of the respective successors and permitted assigns of each
party hereto. Nothing in this Agreement shall be construed to create any rights
or obligations except among the parties hereto, and no person or entity shall be
regarded as a third-party beneficiary of this Agreement.
13. GOVERNING LAW. This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the law of the
Commonwealth of Massachusetts, without giving effect to the conflict of law
principles thereof.
14. JURISDICTION AND SERVICE OF PROCESS. Any legal action or proceeding with
respect to this Agreement may be brought in the courts of the Commonwealth of
Massachusetts or of the United States of America for the District of
Massachusetts. By execution and delivery of this Agreement, each of the parties
hereto accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each of the parties
hereto irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by certified mail, postage prepaid, to the party at its address set
forth in Section 7 hereof.
4
EXHIBIT 10.43
15. NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by a party
hereto in exercising any right, power or remedy under this Agreement, and no
course of dealing between the parties hereto, shall operate as a waiver of any
such right, power or remedy of the party. No single or partial exercise of any
right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
16. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
and by different parties hereto on separate counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
COMPANY:
IBIS TECHNOLOGY CORPORATION
By: /S/ XXXXXXX XXXXXXX
--------------------------------
Xxxxxxx Xxxxxxx
Chairman of the Board of Directors
EXECUTIVE:
/S/ XXXXXX X. XXXX
-----------------------------------
XXXXXX X. XXXX
5
