EXHIBIT 10.51
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made by and between BTU
International, Inc. (the "Company"), a Delaware corporation, and Xxxx X.
Xxxxxxxxxx (the "Executive"), effective as of this 14th day of June, 2002.
WHEREAS, the operations of the Company and its Affiliates are a complex
matter requiring direction and leadership in a variety of arenas, including
financial, strategic planning, regulatory, community relations and others;
WHEREAS, the Executive is possessed of certain experience and expertise
that qualify him to provide the direction and leadership required by the Company
and its Affiliates; and
WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company therefore wishes to employ the Executive as its Chief Executive Officer
and the Executive wishes to accept such employment;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, terms, provisions and conditions set forth in this Agreement,
the parties hereby agree:
1. EMPLOYMENT. Subject to the terms and conditions set forth in
this Agreement, the Company hereby offers and the Executive hereby accepts
employment.
2. TERM. Subject to earlier termination as hereafter provided,
this Agreement shall have an original term of twenty-four (24) months commencing
on the first day of the Executive's employment hereunder (the "First Day of
Employment") and shall be automatically extended thereafter for an indefinite
term, unless either party provides written notice to the other at least six
months prior to the expiration of the original term that the Agreement is not to
be extended. The term of this Agreement, as may be extended or renewed, is
hereafter referred to as "the term of this Agreement" or "the term hereof."
3. CAPACITY AND PERFORMANCE.
(a) During the term hereof, the Executive shall serve the
Company as its Chief Executive Officer. The Executive shall comply with the
lawful directives of the Board of Directors of the Company (the "Board") and
shall perform such duties and responsibilities, commensurate with his position
as
Chief Executive Officer, on behalf of the Company and its Affiliates as
may from time to time be prescribed by the Board or its designee(s). In
addition, the Company shall obtain all of the necessary director and/ or
stockholder approvals required to elect the Executive to the Company's Board of
Directors to serve for an initial period beginning on the [First Day of
Employment], and ending on the date of the next annual meeting of stockholders
of the Company. During the term hereof, the Company shall use its best efforts
to assure that the nomination of the Executive is included as part of the
Company's slate of directors to be recommended for election by the stockholders
at each appropriate annual meeting of the stockholders, provided that the
Executive is otherwise eligible for such election; however, the failure of the
stockholders to so elect the Executive shall not constitute Good Reason for
termination by the Executive hereunder. The Company shall have the right to
remove the Executive from the Board of Directors at the time his employment
hereunder is terminated for any reason, including expiration of the term set
forth in Paragraph 2.
(b) During the term hereof, the Executive shall be
employed by the Company on a full-time basis and shall perform and discharge,
faithfully, diligently and to the best of his ability, his duties and
responsibilities hereunder.
(c) During the term hereof, the Executive shall devote
his full business time and his best efforts, business judgment, skill and
knowledge exclusively to the advancement of the business and interests of the
Company and its Affiliates and to the discharge of his duties and
responsibilities hereunder. The Executive shall not engage in any other business
activity or serve in any industry, trade, professional, governmental or academic
position during the term of this Agreement, except as may be expressly approved
in advance by the Board in writing, which approval shall not be unreasonably
withheld; provided, however, that the Executive shall not be prohibited from
devoting time to non-business related activities, so long as such activities do
not prevent or interfere with the Executive's performance of his obligations
hereunder.
4. COMPENSATION AND BENEFITS. As compensation for all services
performed by the Executive under and during the term hereof and subject to
performance of the Executive's duties and of the obligations of the Executive to
the Company and its Affiliates, pursuant to this Agreement or otherwise:
(a) BASE SALARY. During the term hereof, the Company
shall pay the Executive a base salary at the rate of Three Hundred Thirty
Thousand Dollars ($330,000) per annum, payable in accordance with the payroll
practices of the Company for its executives (the "Base Salary"); provided,
however, that the Base Salary will be subject to any reduction in effect from
time to time that applies to executives of the Company generally. Such Base
Salary shall be subject to increase in the sole discretion of the Board, based
upon review of the Executive's performance by the Board from time to time, but
in no event shall the Board review the Executive's performance less than
annually.
(b) BONUS COMPENSATION. During the term hereof, the
Executive shall be entitled to participate in the Company's Executive Bonus Plan
(the "Plan") in accordance with the terms thereof, as such terms may be modified
or amended by the Company from time to
time. In accordance with the Plan, the amount of bonus compensation will be
determined by the Board, based on its assessment, in its sole discretion, of the
Company's achievement of performance targets which will be established annually
by the Board after consultation with the Executive (the "Performance Targets").
The amount of bonus compensation for which the Executive will be eligible each
fiscal year will range from zero to seventy percent (70%) of the sum paid to the
Executive as salary over that fiscal year (the "Paid-Out Salary"), and will be
thirty-five percent (35%) of the Paid-Out Salary if the Board determines that
the Company has achieved all of the Performance Targets (the "Bonus"). For
fiscal year 2002, the Bonus, if any, will be pro-rated based on the number of
days during fiscal year 2002 the Executive was employed by the Company. In
accordance with the Plan, except as set forth in Paragraphs 5(a), 5(b), 5(d) and
5(f) below, the Executive shall not be eligible to receive any portion of the
Bonus for any fiscal year in which he is not employed by the Company on the date
that bonus compensation payments are distributed.
(c) STOCK OPTIONS. Promptly following the First Day of
Employment, the Company shall grant to the Executive an option to purchase One
Hundred Fifty Thousand (150,000) shares of the common stock of the Company at a
price per share equivalent to the fair market value on the First Day of
Employment (the "Options"). The Options are not intended to qualify as incentive
stock options under Section 422 of the Internal Revenue Code of 1986. The shares
which are subject to the Options shall vest and become exercisable over a four
year period and shall expire on the fifth (5th) anniversary of the day
immediately preceding the date the Options were granted, as set forth in the
Company's 1993 Equity Incentive Plan, as may be amended from time to time (the
"Equity Incentive Plan") and the option certificates. The Option shall be
subject to a stock option grant agreement, the Equity Incentive Plan and such
other restrictions as are generally applicable to stock options issued to
employees of the Company, as each may be amended from time to time. The grant of
stock options to the Executive under this Agreement is subject to the Executive
signing the applicable stock option grant agreement. The Executive shall not be
eligible to receive any stock options, restricted stock or other equity of the
Company, whether under an equity incentive plan or otherwise, except as
expressly provided in this Agreement or as otherwise expressly authorized for
him individually by the Board.
(d) RESTRICTED STOCK. Promptly following the First Day of
Employment, the Company shall grant to the Executive Twenty Thousand (20,000)
shares of restricted common stock of the Company (the "Restricted Shares"). The
Restricted Shares will vest during the Executive's employment hereunder in
accordance with the following schedule: (i) ten thousand (10,000) Restricted
Shares will vest twelve months after the First Day of Employment; and (ii) the
remaining ten thousand (10,000) Restricted Shares will vest twenty-four months
after the First Day of Employment. The Restricted Shares shall be subject to all
terms and provisions of any applicable agreement or plan relating to restricted
stock of the Company, including the Equity Incentive Plan and other restrictions
as are generally applicable to restricted stock issued to employees of the
Company, as each may be amended from time to time. Notwithstanding anything to
the contrary contained herein or in any applicable agreement or plan relating to
restricted stock of the Company, if the Executive has made a timely election
pursuant to Section 83(b) of the Internal Revenue Code, as amended, with respect
to the Restricted Shares (the "83(b) Election"), then, upon the termination of
the
Executive's employment hereunder: (A) pursuant to Sections 5(a), 5(b), or 5(d)
of this Agreement, the Company shall either, in its sole discretion: (i) cause
to immediately vest and become fully exercisable all of the Restricted Shares
that are not yet vested and exercisable; or (ii) immediately cancel the
Restricted Shares that are not yet vested and exercisable and reimburse the
Executive for the amount of taxes he paid to the Internal Revenue Service in
connection with the 83(b) Election, provided the Executive submits satisfactory
substantiation and documentation as requested by the Company; (B) pursuant to
Section 5(f) of this Agreement during the first year of the Executive's
employment hereunder, the Company shall either, in its sole discretion: (i)
cause to immediately vest and become fully exercisable the Restricted Shares
described in 4(d)(i) above, or (ii) immediately cancel the Restricted Shares
described in 4(d)(i) above and reimburse the Executive for the amount of taxes
he paid to the Internal Revenue Service in connection with the 83(b) Election
with respect to such shares, provided the Executive submits satisfactory
substantiation and documentation as requested by the Company, and, in either
case, cause to immediately vest and become fully exercisable the Restricted
Shares described in 4(d)(ii) above; or (C) pursuant to Section 5(f) of this
Agreement during the second year of the Executive's employment hereunder, the
Company shall cause to immediately vest and become fully exercisable the
Restricted Shares described in Section 4(d)(ii) above (the "Restricted Stock
Benefit").
(e) VACATIONS. During the term hereof, the Executive
shall be entitled to up to four (4) weeks of vacation per year, to be taken at
such times and intervals as shall be determined by the Executive, subject to the
reasonable business needs of the Company. Vacation shall otherwise be governed
by the policies of the Company, as in effect from time to time.
(f) OTHER BENEFITS. During the term hereof and subject to
any contribution therefor generally required of executives of the Company, the
Executive shall be entitled to participate in any and all employee benefit plans
from time to time in effect for executives of the Company generally, except to
the extent such plans are in a category of benefit otherwise provided to the
Executive (e.g., severance pay). Such participation shall be subject to the
terms of the applicable plan documents and generally applicable Company
policies. The Company may alter, modify, add to or delete its employee benefit
plans at any time as it, in its sole judgment, determines to be appropriate,
without recourse by the Executive. In addition, during the term hereof, the
Company shall: (i) lease on behalf of the Executive, or reimburse the Executive
for the cost equivalent of leasing, a Mercedes E320 or equivalent automobile;
and (ii) reimburse the Executive for the cost of gasoline, routine maintenance
and automobile insurance associated with the leased automobile; provided the
Executive submits satisfactory documentation as may be specified by the Company
(the "Automobile Benefit"). In addition, during the term hereof, the Company
shall provide for an additional term life insurance benefit for the Executive
with a death benefit not less than two (2) times the Executive's Base Salary, to
be payable to such beneficiaries as shall be designated by the Executive (the
"Life Insurance Benefit").
(g) BUSINESS EXPENSES. The Company shall pay or reimburse
the Executive for all reasonable business expenses incurred or paid by the
Executive in the performance of his duties and responsibilities hereunder,
subject to any reasonable limit and
other reasonable restrictions on such expenses set by the Board and subject to
such reasonable substantiation and documentation as may be specified by the
Company from time to time.
5. TERMINATION OF EMPLOYMENT AND SEVERANCE BENEFITS.
Notwithstanding the provisions of Section 2 hereof, the Executive's employment
hereunder shall terminate prior to the expiration of the term under the
following circumstances:
(a) DEATH. In the event of the Executive's death during
the term hereof, the Executive's employment hereunder shall immediately and
automatically terminate. For purposes of this Agreement, the date of termination
of the Executive's employment hereunder is referred to as the "Separation Date."
In such event, the Company shall pay to the Executive's designated beneficiary
or, if no beneficiary has been designated by the Executive, to his estate, (i)
the Base Salary earned but not paid through the Separation Date, (ii) pay for
any vacation time earned but not used through the Separation Date, (iii) any
Bonus for the fiscal year preceding the year in which the Separation Date occurs
that was earned but had not yet been paid; (iv) provided that the Executive was
employed for at least one hundred eighty (180) days during the fiscal year in
which the Separation Date occurs, any Bonus for such fiscal year, pro-rated
based on the number of days during such fiscal year the Executive was employed
by the Company; and (v) any business expenses incurred by the Executive but that
had not yet been reimbursed on the Separation Date, provided that such expenses
and the required substantiation and documentation are submitted within thirty
(30) days of termination and that such expenses are reimbursable under Company
policy (all of the foregoing, "Final Compensation)." In addition, if the
Executive made an 83(b) Election, the Company shall provide the Restricted Stock
Benefit to the Executive's designated beneficiary or, if no beneficiary has been
designated by the Executive, to his estate. The Company shall have no further
obligation to the Executive hereunder.
(b) DISABILITY.
(i) The Company may terminate the Executive's
employment hereunder, upon notice to the Executive, in the event that
the Executive becomes disabled during his employment hereunder through
any illness, injury, accident or condition of either a physical or
psychological nature and, as a result, is unable to perform
substantially all of his duties and responsibilities hereunder, with or
without reasonable accommodation, for ninety (90) consecutive calendar
days or an aggregate of one hundred twenty (120) days during any period
of three hundred and sixty-five (365) consecutive calendar days. In the
event of such termination, the Company shall have no further obligation
to the Executive, other than for payment of Final Compensation and, if
the Executive made an 83(b) Election, the Company shall provide the
Restricted Stock Benefit to the Executive.
(ii) The Board may designate another employee to
act in the Executive's place during any period of the Executive's
disability. Notwithstanding any such designation, the Executive shall
continue to receive the Base Salary in accordance with Section 4(a) and
benefits in accordance with Section 4(f), to the extent permitted by
the then-current terms of the applicable benefit plans, until the
Executive becomes eligible for disability income benefits under the
Company's disability income plan or until the termination of his
employment, whichever shall first occur.
(iii) While receiving disability income payments
under the Company's disability income plan, the Executive shall not be
entitled to receive any Base Salary under Section 4(a) hereof, but
shall continue to participate in Company benefit plans in accordance
with Section 4(f) and the terms of such plans, until the termination of
his employment.
(iv) If any question shall arise as to whether
during any period the Executive is disabled through any illness,
injury, accident or condition of either a physical or psychological
nature so as to be unable to perform substantially all of his duties
and responsibilities hereunder, the Executive may, and at the request
of the Company shall, submit to a medical examination by a physician
selected by the Company to whom the Executive or his duly appointed
guardian, if any, has no reasonable objection to determine whether the
Executive is so disabled and such determination shall for the purposes
of this Agreement be conclusive of the issue. If such question shall
arise and the Executive shall fail to submit to such medical
examination, the Company's determination of the issue shall be binding
on the Executive.
(c) BY THE COMPANY FOR CAUSE. The Company may terminate
the Executive's employment hereunder for Cause at any time upon notice to the
Executive setting forth in reasonable detail the nature of such Cause. The
following events shall constitute Cause for termination:
(i) The final written determination by the Board
of Directors of the Company, after 30 days' prior written notice to the
Executive and the opportunity for the Executive to be heard by the
Board of Directors, that the Executive has materially failed to perform
his duties and responsibilities to the Company or any of its Affiliates
(other than by reason of disability), or acted in a materially
negligent manner with respect to his duties and responsibilities to the
Company or any of its Affiliates;
(ii) The final written determination by the Board
of Directors of the Company, after 30 days' prior written notice to the
Executive and the opportunity for the Executive to be heard by the
Board of Directors, that the Executive has materially breached any
material provision of this Agreement or any other agreement with the
Company or any of its Affiliates;
(iii) The commission of fraud, embezzlement or
theft by the Executive with respect to the Company or its Affiliates;
or
(iv) The commission by the Executive of any
felony or any other crime involving dishonesty or moral turpitude.
Upon the giving of notice of termination of the Executive's employment hereunder
for Cause, the Company shall have no further obligation to the Executive, other
than for (i) the Base Salary earned but not paid through the Separation Date,
(ii) pay for any vacation time earned but not used through the Separation Date,
(iii) any Bonus for the fiscal year preceding the year in which the Separation
Date occurs that was earned but had not yet been paid; and (iv) any business
expenses incurred by the Executive but that had not yet been reimbursed on the
Separation Date, provided that such expenses and the required substantiation and
documentation are submitted within thirty (30) days of termination and that such
expenses are reimbursable under Company policy Final Compensation.
(d) BY THE COMPANY OTHER THAN FOR CAUSE AND TERMINATION
BY THE EXECUTIVE FOR GOOD REASON. The Company may terminate the Executive's
employment hereunder other than for Cause at any time. For purposes hereof, the
election by the Company not to renew the term of this Agreement pursuant to
Section 2 above shall for all purposes be deemed a termination by the Company
other than for Cause, and in such event, the Executive shall be entitled to all
of the rights and benefits set forth in this Paragraph 5(d) as of the expiration
of the term of this Agreement. The Executive may terminate this Agreement at any
time for Good Reason. "Good Reason" shall mean any of the following
circumstances unless remedied by the Company within thirty (30) days after
receipt of written notification from the Executive that such circumstances exist
or have occurred: (i) material diminution in the nature or scope of the
Executive's responsibilities, duties or authority; provided, however, that any
diminution of the business of the Company or any of its Affiliates shall not
constitute Good Reason; (ii) material reduction of the Executive's compensation
and/or benefits, other than any reduction in effect from time to time that
applies to the base salaries of executives of the Company generally, as provided
in Paragraph 4(a); or (iii) any material failure by the Company to comply with
any of the material provisions of this Agreement.
In the event of such termination by the Company other than for Cause or
by the Executive for Good Reason: (A) during the first year of the Executive's
employment hereunder, in addition to Final Compensation, for the number of
months equal to the difference between (y) twenty-four (24) and (z) the number
of months the Executive was employed hereunder, the Company shall continue to
pay the Executive the Base Salary at the rate in effect on the Separation Date;
or (B) during the second year of the Executive's employment hereunder, in
addition to Final Compensation, for a period of twelve months following the
Separation Date the Company shall continue to pay the Executive the Base Salary
at the rate in effect on the date of termination; or (C) during any extension
term of this Agreement, in addition to Final Compensation, for a period of
twelve months following the Separation Date the Company shall continue to pay
the Executive the Base Salary at the rate in effect on the date of termination,
provided the Executive makes himself available to perform a reasonable amount of
transition services during the first three months following the Separation Date
(all of the foregoing, "Severance Payments"). In addition, if the Executive made
an 83(b) Election, the Company shall provide the Restricted Stock Benefit to the
Executive. The Severance Payments will be calculated using the Base Salary in
effect on the Separation Date, as modified by any reduction then in effect with
respect to the base salaries of executives of the Company generally. The
Severance Payments will be offset by any amount the Executive earns through
other employment while receiving the Severance Payments.
In addition to the benefits outlined above, the Company shall continue
the Automobile Benefit and the Life Insurance Benefit for a period of three
months, and shall continue the Executive's coverage under the Company's medical
and dental plans until the earlier of the date that is six months after the
Separation Date or the date that the Executive obtains other employment that
offers comparable medical and dental insurance, subject to the Executive's
compliance with the substantiation and documentation requirements set forth in
Paragraph 4(f) and subject to the terms of the applicable benefit plans and
applicable law. Any obligation of the Company to the Executive hereunder is
conditioned, however, upon the Executive signing a release of claims in the form
provided by the Company (the "Employee Release") within twenty-one days (or such
greater period as the Company may specify) following the later of the date on
which the Executive receives notice of termination of employment or the date the
Executive receives a copy of the Employee Release and upon the Executive not
revoking the Employee Release in a timely manner thereafter. Base Salary to
which the Executive is entitled hereunder shall be payable in accordance with
the normal payroll practices of the Company and will begin at the Company's next
regular payroll period which is at least five business days following the
effective date of the Employee Release, but shall be retroactive to next
business day following the Separation Date.
(e) BY THE EXECUTIVE. After the original term hereof
expires, during any extension term, the Executive may terminate his employment
hereunder at any time other than for Good Reason upon four months' notice to the
Company. Upon the effective date of such termination of the Executive's
employment hereunder, the Company shall have no further obligation to the
Executive, other than for any Final Compensation due to him.
(f) UPON A CHANGE OF CONTROL. If a Change of Control, as
defined in Paragraph 13 below, occurs and, within four (4) months prior to or
following such Change of Control, the Company terminates the Executive's
employment other than for Cause as a result of such Change of Control, then, in
lieu of any payments to the Executive under Paragraph 5(d) hereof, and provided
that the Executive signs the Employee Release as specified in Paragraph 5(d),
the Company shall: (i) in addition to the Final Compensation, for a period which
is the greater of (A) the remaining portion of the initial term of this
Agreement; and (B) eighteen months following the Separation Date, continue to
pay the Executive the Base Salary at the rate in effect on the Separation Date,
as modified by any reduction then in effect with respect to the base salaries of
executives of the Company generally; and (ii) cause all shares subject to the
Option, as defined in Paragraph 4(c) above, that are not exercisable on the
Separation Date to immediately vest and become fully exercisable (the
"Accelerated Options"). The Accelerated Options will remain exercisable until
that date which is three months from the Separation Date (or, if the Separation
Date occurs prior to the date the Change of Control occurs, until that date
which is three months from the date the Change of Control occurs), after which
date any Accelerated Options not exercised shall be forfeited and shall
terminate. Except as otherwise expressly provided in this Paragraph 5(f), the
terms and conditions of the Accelerated Options shall remain unchanged and shall
be governed by the terms of the applicable stock option grants, agreements and
plans and other restrictions or
provisions generally applicable to options granted to Company employees, as
these may be amended from time to time by the Company. In addition, provided
that the Executive was employed for at least one hundred eighty (180) days
during the fiscal year in which the Separation Date occurs, the Company shall
pay the Executive any Bonus for such fiscal year, pro-rated based on the number
of days during such fiscal year the Executive was employed by the Company. If
the Executive made an 83(b) Election, the Company shall provide the Restricted
Stock Benefit to the Executive.
6. EFFECT OF TERMINATION. The provisions of this Section 6 shall
apply to termination due to the expiration of the term hereof, pursuant to
Section 5 or otherwise.
(a) Payment by the Company of any Base Salary or other
specified amounts that may be due the Executive, the continuation of the
Automobile Benefit and any acceleration of the exercise date of any shares of
the Option to which the Executive may be entitled under the applicable
termination provision of Section 5 shall constitute the entire obligation of the
Company and its Affiliates to the Executive.
(b) Except as otherwise provided in this Agreement and by
applicable law, benefits shall terminate pursuant to the terms of the applicable
benefit plans based on the date of termination of the Executive's employment
without regard to any continuation of Base Salary or other payment to the
Executive following such date of termination.
(c) Provisions of this Agreement shall survive any
termination if so provided herein or if necessary or desirable to accomplish the
purposes of other surviving provisions, including without limitation the
obligations of the Executive under Paragraphs 7, 8 and 9 hereof. The obligation
of the Company to make payments to or on behalf of the Executive under Paragraph
5 hereof is expressly conditioned upon the Executive's continued full
performance of obligations under Paragraphs 7, 8 and 9 hereof. The Executive
recognizes that, except as expressly provided in Paragraph 5, no compensation is
earned after termination of employment.
7. CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges that the Company and its
Affiliates continually develop Confidential Information, that the Executive may
develop Confidential Information for the Company or its Affiliates and that the
Executive may learn of Confidential Information during the course of employment.
The Executive will comply with the policies and procedures of the Company and
its Affiliates for protecting Confidential Information and shall not disclose to
any Person or use, other than as required by applicable law or for the proper
performance of his duties and responsibilities to the Company and its
Affiliates, any Confidential Information obtained by the Executive incident to
his employment or other association with the Company or any of its Affiliates.
The Executive understands that this restriction shall continue to apply after
his employment terminates, regardless of the reason for such termination.
(b) All documents, records, tapes and other media of
every kind and description relating to the business, present or otherwise, of
the Company or its Affiliates and
any copies, in whole or in part, thereof (the "Documents"), whether or not
prepared by the Executive, shall be the sole and exclusive property of the
Company and its Affiliates. The Executive shall safeguard all Documents and
shall surrender to the Company at the time his employment terminates, or at such
earlier time or times as the Board or its designee may specify, all Documents
then in the Executive's possession or control.
8. ASSIGNMENT OF RIGHTS TO INTELLECTUAL PROPERTY. The Executive
shall promptly and fully disclose all Intellectual Property, as defined in
Paragraph 13 below, to the Company. The Executive hereby assigns and agrees to
assign to the Company (or as otherwise directed by the Company) the Executive's
full right, title and interest in and to all Intellectual Property. The
Executive agrees to execute any and all applications for domestic and foreign
patents, copyrights or other proprietary rights and to do such other acts
(including without limitation the execution and delivery of instruments of
further assurance or confirmation) requested by the Company to assign the
Intellectual Property to the Company and to permit the Company to enforce any
patents, copyrights or other proprietary rights to the Intellectual Property.
The Executive will not charge the Company for time spent in complying with these
obligations. All copyrightable works that the Executive creates shall be
considered "work made for hire".
9. RESTRICTED ACTIVITIES. The Executive agrees that some
restrictions on his activities during and after his employment are necessary to
protect the goodwill, Confidential Information and other legitimate interests of
the Company and its Affiliates:
(a) While the Executive is employed by the Company,
during the period during which the Executive is receiving the Severance
Payments, and for an additional eighteen months thereafter (in the aggregate,
the "Non-Competition Period"), the Executive shall not, directly or indirectly,
own, manage, operate, control or participate in any manner in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner, director, principal, consultant, agent or otherwise with, or have any
financial interest in, or aid or assist anyone else in the conduct of, any
business, venture or activity which competes with any Business of the Company or
its Affiliates, in the United States or any other geographic area where such
Business is being conducted or actively being planned to be conducted at or
prior to the Separation Date. For the purposes of this Section 9, the Business
of the Company and its Affiliates shall include all Products and the Executive's
undertaking shall encompass all items, products and services that may be used in
substitution for Products. In no case shall the Non-Competition Period last for
more than twenty four (24) months after the Separation Date. Notwithstanding the
foregoing, ownership of not more than five percent of any class of equity
security of any publicly held corporation shall not, of itself, constitute a
violation of this Paragraph 9.
(b) The Executive agrees that, during his employment with
the Company, he will not undertake any outside activity, whether or not
competitive with the business of the Company or its Affiliates, that could
reasonably give rise to a conflict of interest or otherwise interfere with his
duties and obligations to the Company or any of its Affiliates.
(c) The Executive further agrees that while he is
employed by the Company and during the Non-Competition Period, the Executive
will not hire or attempt to
hire any employee of the Company or any of its Affiliates, assist in such hiring
by any Person, encourage any such employee to terminate his or her relationship
with the Company or any of its Affiliates, or solicit or encourage any customer
or vendor of the Company or any of its Affiliates to terminate or diminish its
relationship with them, or, in the case of a customer, to conduct with any
Person any business or activity which such customer conducts or could conduct
with the Company or any of its Affiliates.
10. NOTIFICATION REQUIREMENT. During the Non-Competition Period,
the Executive shall give notice to the Company of each new business activity he
plans to undertake which business is the same as or similar to the business of
the Company, as soon as reasonably practicable after the Executive finalizes his
intention to engage in such activity. The Executive shall provide the Company
with such other pertinent information concerning such business activity as the
Company may reasonably request in order to determine the Executive's continued
compliance with his obligations under Sections 7, 8 and 9 hereof.
11. ENFORCEMENT OF COVENANTS. The Executive acknowledges that he
has carefully read and considered all the terms and conditions of this
Agreement, including the restraints imposed upon him pursuant to Sections 7, 8
and 9 hereof. The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the Company and its Affiliates and that each
and every one of the restraints is reasonable in respect to subject matter,
length of time and geographic area. The Executive further acknowledges that,
were he to breach any of the covenants contained in Sections 7, 8 or 9 hereof,
the damage to the Company would be irreparable. The Executive therefore agrees
that the Company, in addition to any other remedies available to it, shall be
entitled to preliminary and permanent injunctive relief against any breach or
threatened breach by the Executive of any of said covenants, without having to
post bond. The parties further agree that, in the event that any provision of
Section 7, 8 or 9 hereof shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its being extended over too great
a time, too large a geographic area or too great a range of activities, such
provision shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.
12. CONFLICTING AGREEMENTS. The Executive hereby represents and
warrants that the execution of this Agreement and the performance of his
obligations hereunder will not breach or be in conflict with any other agreement
to which the Executive is a party or is bound and that the Executive is not now
subject to any covenants against competition or similar covenants or any court
order or other legal obligation that would affect the performance of his
obligations hereunder. The Executive will not disclose to or use on behalf of
the Company any proprietary information of a third party without such party's
consent.
13. DEFINITIONS. Words or phrases which are initially capitalized
or are within quotation marks shall have the meanings provided in this Section
and as provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:
(a) "Affiliates" means all persons and entities directly
or indirectly controlling, controlled by or under common control with the
Company, where control may be by either management authority or equity interest.
(b) "Change of Control" means (A) any Person 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 the Company or any of
its Affiliates or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or one of its Affiliates, becomes a
beneficial owner (within the meaning of Rule 13d-3 as promulgated under the
Exchange Act), directly or indirectly, in one or a series of transactions, of
securities representing more than fifty percent (50%) of the combined voting
power of the Company's then outstanding securities; (B) any merger or
consolidation involving the Company or any sale of all or substantially all of
the assets of the Company, or any combination of the foregoing; or (C) there
occurs a closing of a sale or other disposition by the Company of all or
substantially all of the assets of the Company other than to one or more of the
Company's Affiliates or any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any of its Affiliates.
(c) "Confidential Information" means any and all
information of the Company and its Affiliates that is not generally known by
others with whom they compete or do business, or with whom any of them plans to
compete or do business and any and all information, publicly known in whole or
in part or not, which, if disclosed by the Company or its Affiliates would
assist in competition against them. Confidential Information includes without
limitation such information relating to (i) the development, research, testing,
manufacturing, marketing and financial activities of the Company and its
Affiliates, (ii) the Products, (iii) the costs, sources of supply, financial
performance and strategic plans of the Company and its Affiliates, (iv) the
identity and special needs of the customers of the Company and its Affiliates
and (v) the people and organizations with whom the Company and its Affiliates
have business relationships and those relationships. Confidential Information
also includes any information that the Company or any of its Affiliates have
received, or may receive hereafter, belonging to customers or others with any
understanding, express or implied, that the information would not be disclosed.
(d) "Intellectual Property" means inventions,
discoveries, developments, methods, processes, compositions, works, concepts and
ideas (whether or not patentable or copyrightable or constituting trade secrets)
conceived, made, created, developed or reduced to practice by the Executive
(whether alone or with others, whether or not during normal business hours or on
or off Company premises) during the Executive's employment that relate to either
the Products or any prospective activity of the Company or any of its Affiliates
or that make use of Confidential Information or any of the equipment or
facilities of the Company or any of its Affiliates.
(e) "Person" means an individual, a corporation, a
limited liability company, an association, a partnership, an estate, a trust and
any other entity or organization, other than the Company or any of its
Affiliates.
(f) "Products" mean all products planned, researched,
developed, tested, manufactured, sold, licensed, leased or otherwise distributed
or put into use by the Company or any of its Affiliates, together with all
services provided or planned by the Company or any of its Affiliates, during the
Executive's employment.
14. WITHHOLDING. All payments made by the Company under this
Agreement shall be reduced by any tax or other amounts required to be withheld
by the Company under applicable law.
15. ASSIGNMENT. Neither the Company nor the Executive may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that the Company may assign its rights and obligations under this Agreement
without the consent of the Executive in the event that the Executive is
transferred to a position with any of the Affiliates or in the event that the
Company shall hereafter affect a reorganization, consolidate with, or merge
into, any Person or transfer all or substantially all of its properties or
assets to any Person. This Agreement shall inure to the benefit of and be
binding upon the Company and the Executive, their respective successors,
executors, administrators, heirs and permitted assigns.
16. SEVERABILITY. If any portion or provision of this Agreement
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
17. WAIVER. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of either
party to require the performance of any term or obligation of this Agreement, or
the waiver by either party of any breach of this Agreement, shall not prevent
any subsequent enforcement of such term or obligation or be deemed a waiver of
any subsequent breach.
18. NOTICES. Any and all notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States mail,
postage prepaid, registered or certified, and addressed to the Executive at his
last known address on the books of the Company or, in the case of the Company,
at its principal place of business, attention of [the Chair of the Board], or to
such other address as either party may specify by notice to the other actually
received.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior communications,
agreements and understandings, written or oral, with respect to the terms and
conditions of the Executive's employment.
20. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a expressly authorized
representative of the Company.
21. HEADINGS. The headings and captions in this Agreement are for
convenience only and in no way define or describe the scope or content of any
provision of this Agreement.
22. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
23. GOVERNING LAW. This is a Massachusetts contract and shall be
construed and enforced under and be governed in all respects by the laws of the
Commonwealth of Massachusetts, without regard to the conflict of laws principles
thereof.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Company, by its duly authorized representative, and by the
Executive, as of the date first above written.
THE EXECUTIVE: BTU INTERNATIONAL, INC.
____________________ By: _________________________
Xxxx X. Xxxxxxxxxx
Name: Xxxx X. van der Wansem
Title: President & CEO
