Exhibit 10.01
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into in
Chelmsford, Massachusetts by and between Xxxxxx Automation, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxxxxx ("Executive"), as of
September 30, 2001 (the "Effective Date").
RECITALS
1. The Company entered into an employment agreement with Executive dated
October 1, 1994 that expires on September 30, 2001.
2. The Company desires to continue to retain Executive as its President
and Chief Executive Officer of the Company, to make secure for itself the
experience, abilities and services of Executive and to prevent the loss of such
experience, services and abilities.
3. On October 23, 2001, the Company, Pontiac Acquisition Corp., a
wholly-owned subsidiary of the Company and PRI Automation, Inc. ("PRI"),
entered into an agreement and plan of merger (the "Merger Agreement").
Following the consummation of the merger, PRI will become a wholly-owned
subsidiary of the Company (the "Merger").
4. In consideration of the employment to be provided hereby and the
amounts to be paid as provided herein, Executive desires to be employed by the
Company and to agree with the Company as further provided herein.
For and in consideration of the mutual promises, terms, provisions and
conditions contained in this Agreement, the parties hereby agree as follows:
1. Duties. The Company shall employ Executive during the Employment Term as
President and Chief Executive Officer of the Company. Executive shall have
general management and control of the business, affairs and property of the
Company and its direct and indirect subsidiaries and shall perform such duties
of such offices as are provided for in the bylaws of the Company subject to the
general supervision and direction of, and any policies and procedures
established from time to time by, the Directors of the Company (the "Board").
Further, Executive shall, in consultation with the Board, identify and recommend
to the Board a successor President and Chief Executive Officer prior to the
expiration of the Employment Term. If at any time during the Employment Term, as
defined herein, the Board appoints a new President and Chief Executive Officer,
then upon Executive's request, the Board shall appoint the Executive as Chairman
of the Board. As Chairman, Executive shall be an employee of the Company and
have duties consistent with such position and as mutually agreed upon by the
parties.
2. Term. Subject to Section 7 and the termination provisions contained therein,
the term of the Executive's employment under this Agreement shall begin on the
Effective Date and end on October 1, 2005 (the "Employment Term"). For all
purposes of this Agreement, Executive shall be considered an employee of the
Company whether Executive serves in the role of President and Chief Executive
Officer or the role of Chairman. If Executive is appointed to the position of
Chairman, Executive may elect to reduce his time commitment to the Company to no
fewer than 2 days a week, provided Executive accepts a prorated reduction in his
Adjusted Base Salary. In such event, all other provisions of this Agreement
shall continue to apply and Executive shall continue to be deemed an employee of
the Company under this Agreement.
3. Other Activities. Subject to Section 6 and the Non-Competition provisions
contained therein, Executive may serve on corporate, civic, or charitable boards
or committees, fulfill speaking engagements or manage personal investments;
provided that such activities do not interfere or conflict with the performance
of his duties or obligations under this Agreement.
4. Performance. During the Employment Term, Executive shall use his business
judgment, skill and knowledge for the advancement of the Company's interests and
to the discharge of his duties and responsibilities hereunder. Executive shall
perform and discharge, faithfully, diligently and to the best of his ability,
his duties and responsibilities hereunder. Subject to Section 2 hereof,
Executive shall devote substantially all of his working time and efforts to the
business and affairs of the Company.
5. Compensation and Benefits.
5.1. Base Salary. As consideration for Executive's services performed
during the Employment Term, the Company agrees to pay Executive a base salary of
$500,000 per year (the "Base Salary") payable, in accordance with the payroll
practices of the Company for its executives, and subject to federal and state
tax withholding. The Base Salary shall be reviewed annually by the Compensation
Committee of the Company Board of Directors (the "Committee") and increased as
determined by the Committee (the Base Salary as adjusted from time to time shall
be referred to as the "Adjusted Base Salary"). Subject to Section 2 hereof, in
no event shall any adjustment reduce the Adjusted Base Salary below $500,000 per
year. If the Merger is consummated, then Executive's Adjusted Base Salary shall
be increased to $615,000 as of the effective date of the Merger. If the Merger
is not consummated, then the Committee shall review the Adjusted Base Salary at
that time.
5.2. Bonus. Executive may receive bonuses (the "Annual Bonus") from
the Company when, as and if determined from time to time by the Committee.
The Committee shall review the Annual Bonus annually. Any such Annual
Bonuses paid to Executive shall be in addition to the Adjusted Base Salary.
5.3. Benefits. During the Employment Term, Executive shall be eligible for
participation in and shall receive all benefits available under the Xxxxxx
Automation, Inc. 401(k) Plan, welfare benefit plans, practices, policies and
programs (including medical, prescription, dental, disability, salary
continuance, group life, accidental death and travel accident insurance plans
and programs) normally available to other senior executives (except for any
other retirement plans not specifically provided for in this Section 5.3) of the
Company and the Supplemental Retirement Benefit described in Section 5.8 herein.
5.4. Medical Insurance. The Executive and his spouse shall be entitled to
continued medical, dental and vision insurance following the Termination Date
(as such term is defined in
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Section 7.4 herein) until the later of the Executive's or his spouse's death.
The medical, dental and vision coverage shall be substantially equivalent to the
group medical insurance provided to Executive during the Employment Term.
5.5. Life Insurance. The Company shall, during the Employment Term,
maintain insurance protection on the life of Executive as follows: (i) a policy
with death benefits of not less than $2,000,000 payable to a beneficiary
selected by Executive, (ii) a policy with death benefits of not less than
$1,000,000 payable to the Company, (iii) two policies with combined death
benefits of not less than $5,000,000 held in the Xxxxxx Automation, Inc. Rabbi
Trust (the "Rabbi Trust") dated January 1, 2000, subject to the terms and
conditions therein, and (iv) two divided ownership life insurance policies with
combined death benefits of not less than $1,241,572 payable in accordance with
the terms and conditions set forth in the Collateral Assignment Divided
Ownership Plan Agreements by and between the Executive and the Company dated
July 20, 1995. Executive shall be entitled upon the later of the expiration of
the Employment Term, or any subsequent employment agreement with the Company, to
assume ownership of the policies described in subsections (i) and (iv) of this
Section; provided that the transfer of the policies described in (iv) shall be
in accordance with the terms and conditions of the Collateral Assignment Divided
Ownership Plan Agreements.
5.6. Automobile. During the Employment Term, the Company shall
continue to provide Executive with an automobile of the type currently
provided to him for his use in connection with his employment hereunder, and
shall pay all expenses related thereto.
5.7. Business Expenses. Executive shall be entitled to receive prompt
reimbursement during the Employment Term for all reasonable
employment-related expenses incurred or paid by him in the performance of his
services, subject to reasonable substantiation and documentation.
5.8. Supplemental Retirement Benefit. Subject to Section 8, Executive
shall be entitled to the following Supplemental Retirement Compensation (the
"Supplemental Retirement Benefit") equal to the product of (i) the Final
Adjusted Base Salary as defined herein, (ii) times one and one-half, and (iii)
times the number of years of service by Executive to the Company, with
appropriate adjustment for his last year of service if it is less than a full
year ("Year of Service"). The Final Adjusted Base Salary shall equal either: (x)
if the PRI Merger is not consummated, the greater of (i) the Adjusted Base
Salary in effect immediately prior to the Termination Date, or (ii) $500,000; or
(y) if the Merger with PRI is consummated, then the Final Adjusted Base Salary
shall be the greater of (i) Adjusted Base Salary in effect immediately prior to
the Termination Date, or (ii) $615,000. For purposes of calculating the total
Supplemental Retirement Benefit, the Final Adjusted Base Salary shall be
appropriately adjusted only if at any time after the Effective Date through
October 1, 2003 the Executive reduces his work schedule, in which case the Final
Adjusted Base Salary shall be reduced to reflect the pro-rata reduction in Base
Salary as described in Section 2 herein. For purposes of calculating the total
Supplemental Retirement Benefit, there shall be no reduction of Final Adjusted
Base Salary for any periods after October 1, 2003 regardless of whether the
Executive reduces his work schedule as provided for in Section 2 herein. There
shall be no reduction to Final Adjusted Base Salary for any periods prior to the
Effective Date.
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5.8.1. Merger/Funding. If the Merger with PRI is consummated, then
(A) the Company shall make a contribution to the Rabbi Trust, no later than the
end of the fiscal quarter following the Merger effective date, of an amount
equal to the then difference between (x) the total amount of assets held in the
Rabbi Trust and (y) Executive's accrued Supplemental Retirement Benefit; and (B)
the Company shall contribute, on a quarterly basis beginning with the quarter
following the Merger effective date, an amount to the Rabbi Trust sufficient to
provide that the then total amount of assets held in the Rabbi Trust are equal
to the value of Executive's then accrued Supplemental Retirement Benefit.
5.8.2. Payment. The Supplemental Retirement Benefit shall be payable
in an amount equal to 1/12 of his Final Adjusted Base Salary, for a period of
months equal to the product of (x) one and one half (y) times that number of
months in the Years of Service. The first payment shall be paid to the Executive
on the first day of the month next beginning after the Termination Date, except
that if the Termination Date falls on or after the twentieth day of a month,
such payment shall be paid on the first day of the second month next beginning.
5.8.3. Merger/Payment. If the Merger is consummated, then the
Supplemental Retirement Benefit shall be paid in a lump sum amount on the first
day of the month next beginning after the Termination Date, if the Merger is not
consummated, (i) the Committee shall review the Supplemental Retirement Benefit
payment provisions at that time, and (ii) in the event Executive dies or becomes
permanently disabled, Executive, or his heirs or attorney in fact if Executive
is deceased or incapable, physically or mentally, of so acting, may elect to
receive the entire Supplemental Retirement Benefit, or the remaining unpaid
balance thereof, over a period of not less than four (4) years upon written
notice to the Board.
6. Proprietary Rights and Non Competition.
6.1. Confidentiality. Executive will maintain in confidence and will not
disclose or use, either during or after the Employment Term, any proprietary or
confidential information or know-how belonging to the Company ("Proprietary
Information"), whether or not in written form, except to the extent required to
perform duties on behalf of the Company. For purposes of this Agreement,
"Proprietary Information" shall mean any information, not generally known in the
relevant trade or industry, which was obtained from the Company, or which was
learned, discovered, developed, conceived, originated or prepared by Executive
in connection with this Agreement. Such Proprietary Information includes,
without limitation, software, technical and business information relating to the
Company's inventions or products, research and development, production
processes, manufacturing and engineering processes, machines and equipment,
finances, customers, marketing and production and future business plans,
information belonging to customers or suppliers of the Company disclosed
incidental to Executive's performance under this Agreement, and any other
information which is identified as confidential by the Company, but only so long
as the same is not generally known in the relevant trade or industry.
6.2. Inventions. For purposes of this Agreement, "Inventions" shall mean
any new or useful art, discovery, contribution, finding or improvement, whether
or not patentable, and all related know-how. Inventions shall include, without
limitation, all designs, discoveries,
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formulae, processes, manufacturing techniques, semiconductor designs, computer
software, inventions, improvements and ideas.
6.3. Disclosure and Assignment of Inventions. Executive will promptly
disclose and describe to the Company all Inventions which he may solely or
jointly conceive, develop or reduce to practice during the Employment Term (i)
which relate at the time of conception, development, or reduction to practice of
the Invention to the Company's business or actual or demonstrably anticipated
research or development, (ii) which were developed, in whole or in part, on the
Company's time or with the use of any of the Company's equipment, supplies,
facilities or trade secret information, or (iii) which resulted from any work
performed by Executive for the Company (the "Company Inventions"). Executive
hereby assigns all of his right, title and interest worldwide in the Company
Inventions and in all intellectual property rights based upon the Company
Inventions; provided, however, that Executive does not assign or agree to assign
any Inventions, whether or not relating in any way to the Company business or
demonstrably anticipated research and development, which were made by him prior
to the date of this Agreement, or which were developed by him independently
during the term of this Agreement and not under the conditions stated in
subparagraph (ii) above.
6.4. Documents and Materials. Upon termination of this Agreement or at any
other time upon the Company's request, Executive will promptly deliver to the
Company, without retaining any copies, all documents and other materials
furnished to him by the Company, prepared by him for the Company or otherwise
relating to the Company's business, including, without limitation, all written
and tangible material in his possession incorporating any Proprietary
Information.
6.5. Competitive Employment. During the Employment Term and for a period
of two (2) years thereafter (collectively, the "Non-Competition Period"),
Executive will not engage, directly or indirectly, in any employment,
consulting, or other activity in any business competitive with the Company and
its subsidiaries, subject to the following exceptions: (i) that nothing in this
Section 6.5 shall preclude Executive from serving as a director of any other
corporation, and (ii) nothing in this Section 6.5, subject to Section 6.9
herein, shall preclude Executive from making passive investments in securities
of any unrelated business enterprise or, if the proposed investment is in a
related business enterprise, then after disclosure to and approval by the Board.
6.6. Nonsolicitation. In addition to and without limiting the foregoing,
during the term of the Non-Competition Period, Executive shall not attempt to or
assist any other person in attempting to do any of the following: (i) hire any
director, officer, Executive, or agent of the Company or any subsidiary or
affiliate, or encourage any such person to terminate such relationship with the
Company or any subsidiary or affiliate, as the case may be; (ii) encourage any
customer, client, supplier or other business relationship of the Company or any
subsidiary or affiliate to terminate or alter such relationship, whether
contractual or otherwise, to the disadvantage of the Company or any subsidiary
or affiliate; as the case may be; (iii) encourage any prospective customer or
supplier not to enter into a business relationship with the Company or any
subsidiary or affiliate; (iv) impair or attempt to impair any relationship,
contractual or otherwise, written or oral, between the Company or any subsidiary
or affiliate and any customer, supplier or other business relationship of the
Company or any subsidiary or affiliate or; (v) sell or
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offer to sell or assist in or in connection with the sale to any customer or
prospective customer of the Company or any subsidiary or affiliate any products
of the type sold or rendered by the Company or any subsidiary or affiliate, for
which products Executive had material dealings in the performance of Executive's
duties within the period two years before Executive's termination.
6.7. Acts to Secure Proprietary Rights.
6.7.1. Further Acts. Executive agrees to perform, during and after
the Employment Term, all acts deemed necessary or desirable by the Company to
permit and assist it, at its expense, in perfecting and enforcing the full
benefits, enjoyment, rights and title throughout the world in the Company
Inventions. Such acts may include, without limitation, execution of documents
and assistance or cooperation in the registration and enforcement of applicable
patents and copyrights or other legal proceedings.
6.7.2. Appointment of Attorney-in-Fact. In the event that the
Company is unable, for any reason whatsoever, to secure Executive's signature to
any lawful and necessary documents required to apply for or execute any patent,
copyright or other applications with respect to any the Company Inventions
(including improvements, renewals, extensions, continuations, divisions or
continuations in part thereof), Executive hereby irrevocably appoints the
Company and its duly authorized officers and agents as his agents and
attorneys-in-fact to execute and file any such application and to do all other
lawfully permitted acts to further the prosecution and issuance of patents,
copyrights or other rights thereon with the same legal force and effect as if
executed by him, intending hereby to create a so-called "durable power" which
will survive any subsequent disability.
6.8. No Conflicting Obligations. Executive's performance of his duties and
obligations under this Agreement does not breach and will not breach any
agreement to keep in confidence proprietary information, knowledge or data
acquired by him.
6.9. Corporate Opportunities. Executive agrees that he will first present
to the Board, for its acceptances or rejection on behalf of the Company, any
opportunity to create or invest in any company which is or will be involved in
providing or furnishing semiconductor or flat panel display substrate handling
equipment, systems, components, products, software and services which comes to
his attention and in which he, or any affiliate, might desire to participate. If
the Board rejects the same or fails to act thereon in a reasonable time,
Executive shall be free to invest in, participate or present such opportunity to
any other person or entity.
7. Termination Events.
7.1. Termination by the Company. At the election of the Company, this
Agreement shall terminate and any and all rights and obligations of the Company
and Executive hereunder shall cease and be completely void except as
specifically set forth in this Agreement, upon the earliest to occur of the
following: (i) the death or "long-term disability" of Executive; or (ii) the
termination of Executive by the Company with "cause" under this Agreement and
delivery of written notice in accordance with Section 13.
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7.1.1. Long-Term Disability. For purposes of this Agreement,
"long-term disability" shall mean the disability of Executive which prevents
Executive from devoting to the business of the Company his full-time subject to
Section 2 herein, best efforts, skill and attention, and such condition
continues for a period of two hundred seventy (270) consecutive days.
7.1.2. Cause. For purposes hereof, "cause" shall include,
without limitation, the occurrence of any of the following events during the
Employment Term of this Agreement:
(i) habitual neglect of material duties assigned to
Executive hereunder, which is not remedied within thirty
(30) days of receipt of written notice thereof from the
Company;
(ii) fraud or embezzlement committed by Executive
against the Company; and
(iii) conviction of a crime classified as a felony under
any Federal, state or local law with all appeals
relating thereto having been unsuccessfully exhausted
and all appeal periods being lapsed.
7.2. Termination Without Cause. This Agreement shall terminate and any and
all rights and obligations of the Company and Executive hereunder shall cease
and be completely void except as specifically set forth in this Agreement, upon
delivery of written notice by the Company to the Executive in accordance with
Section 13.
7.3. Termination by Executive for Good Reason. This Agreement shall
terminate and any and all rights and obligations of the Company or Executive
hereunder shall cease and be completely void except as specifically set forth in
this Agreement, upon the Executive's resignation for "good reason"; provided
that Executive shall provide the Company with written notice of the occurrence
of such action he believes constitutes Good Reason and the Company has failed to
remedy such action within thirty (30) days of its receipt of such notice
7.3.1. Good Reason. "Good Reason" shall mean the Company has taken
action that serves to adversely change Executive's status by a reduction in
title or a reduction in duties without Executive's consent.
7.4. Termination by Executive following a Change of Control. This
Agreement shall terminate and any and all rights and obligations of the Company
or Executive hereunder shall cease and be complete void except as specifically
set forth in the Agreement upon the Executive's resignation or termination
following a "change of control."
7.4.1. Change of Control. For purposes hereof a "change of control"
of the Company shall be deemed to have occurred if:
(i) any "person" or group of affiliated "persons" (as
such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act), becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities
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representing more than 20% of the total voting power
represented by the Company's then outstanding voting
securities (except in connection with a merger, which
the Board approves and that the Executive consents to
and approves or a merger in respect of which, pursuant
to Section 251(f) of the Delaware General Corporation
law, as now in effect and as the same may be amended
from time to time, no vote of the stockholders of
Company is required);
(ii) the Board approves, and the stockholders of the
Company approve, if necessary, a plan of complete
liquidation of the Company, or the Company sells or
otherwise disposes of substantially all of its assets
to any "person" or group of affiliated "persons" (as
such term is used in Sections 13(d) and 14(d) of the
Exchange Act); or
(iii)individuals who, as of the date hereof, constitute
the Company Board (the "Incumbent Company Board") cease
for any reason to constitute at least a majority of the
Company Board, provided that any person becoming a
director subsequent to the date hereof whose election,
or nomination for election by Company's stockholders,
was approved by a vote of at least a majority of the
directors comprising the Incumbent Company Board shall
be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent
Company Board.
7.5. Termination Date. The term "Termination Date" shall mean the earlier
of (i) the expiration of the Employment Term or (ii) if the date Executive's
services are terminated (A) by his death, then the date of his death, or (B) by
his Long-Term Disability, then the date of the occurrence of his Long-Term
Disability, or (C) for any other reason, then the date on which such termination
is to be effective pursuant to the notice of termination to be given by the
party terminating the employment relationship.
8. Effect of Termination.
8.1. Termination for Death or Disability. It is expressly acknowledged and
agreed that if Executive's employment shall be terminated due to Executive's
death or Long-Term Disability, all of the obligations under Sections 1 through 5
of the Company and Executive shall cease except that the Company shall pay, or
provide the following benefits, to Executive or his estate, as the case may be,
without further recourse or liability to the Company:
(i) an amount equal to the sum of Executive's earned but unpaid
Adjusted Base Salary and prorata Annual Bonus, which shall be
the greater of (i) his prior year's Annual Bonus, or (ii) the
average of his most recent three year Annual Bonuses;
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(ii) an amount equal to the value of Executive's accrued
vacation pay;
(iii) his Supplemental Retirement Benefit in accordance with
Section 5.8;
(iv) in the event of Long Term Disability, continued life insurance
coverage in accordance with Section 5.5 until October 1, 2005;
and
(v) continued medical, dental and vision insurance in
accordance with Section 5.4.
8.2. Termination for Cause. It is expressly acknowledged and agreed that
if Executive is terminated by the Company for Cause, all of the obligations
under Sections 1 through 5 of the Company and Executive shall cease except that
the Company shall pay immediately after the Termination Date the following
amounts to the Executive without further recourse or liability to the Company:
(i) an amount equal to the sum of Executive's earned but unpaid
Adjusted Base Salary; and
(ii) an amount equal to the value of Executive's accrued
vacation days.
8.3. Termination Without Cause. It is expressly acknowledged and agreed
that if Executive's employment shall be terminated by Company for any reason,
except as set forth in Section 7.1, at any time prior to the expiration of the
Employment Term, all of the obligations under Sections 1 through 5 of the
Company and Executive shall cease except that the Company shall pay, or provide
the following benefits, to Executive without further recourse or liability to
the Company:
(i) an amount equal to the sum of the Executive's earned but
unpaid Adjusted Base Salary and prorata Annual Bonus, which
shall be the greater of (i) his prior year's Annual Bonus, or
(ii) the average of his most recent three year's Annual
Bonuses;
(ii) his then current Annual Base Salary and Annual Bonus, which in
no case shall be less than the average of his most recent
three year's Annual Bonuses determined in accordance with
Section 2 for the remaining balance of the Employment Term;
(iii) an amount equal to the value of Executive's accrued
vacation pay;
(iv) his Supplemental Retirement Benefit in accordance with
Section 5.8;
(v) continued life insurance coverage in accordance with
Section 5.5 until October 1, 2005;
(vi) continued medical, dental and vision insurance in
accordance with Section 5.4; and
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(vii) immediately vest all options to purchase Company stock and,
notwithstanding the terms of any option agreement or option
plan to the contrary, the exercise period for all options,
except those options granted prior to September 30, 2001 the
extension of which would result in a charge to earnings or
other adverse accounting consequence determined in the
reasonable discretion of the Committee, shall expire upon the
earlier of (x) the last day of the 24th month following the
Termination Date, or (y) the expiration of the option term.
8.4. Termination by Executive For Good Reason. It is expressly
acknowledged and agreed that if Executive's employment shall be terminated
because the Executive resigns for Good Reason, all of the obligations under
Sections 1 through 5 of the Company and Executive shall cease except if the
Company shall pay, or provide the following benefits, to Executive without
further recourse or liability to the Company:
(i) an amount equal to the sum of the Executive's earned but
unpaid Adjusted Base Salary and prorata Annual Bonus, which
shall be the greater of (i) his prior year's Annual Bonus, or
(ii) the average of his most recent three year's Annual
Bonuses;
(ii) his then current Annual Base Salary and Annual Bonus, which in
no case shall be less than the average of his most recent
three year's Annual Bonuses determined in accordance with
Section 2 for the remaining balance of the Employment Term;
(iii) an amount equal to the value of Executive's accrued
vacation pay;
(iv) his Supplemental Retirement Benefit in accordance with
Section 5.8;
(v) continued life insurance coverage in accordance with
Section 5.5 until October 1, 2005;
(vi) continued medical, dental and vision insurance in
accordance with Section 5.4; and
(vii) immediately vest all options to purchase Company stock and,
notwithstanding the terms of any option agreement or option
plan to the contrary, the exercise period for all options,
except those options granted prior to September 30, 2001 the
extension of which would result in a charge to earnings or
other adverse accounting consequence determined in the
reasonable discretion of the Committee, shall expire upon the
earlier of (x) the last day of the 24th month following the
Termination Date, or (y) the expiration of the option term.
8.5. Termination by Executive following a Change of Control. It is
expressly acknowledged and agreed that if Executive's employment shall be
terminated because the Executive resigns following a Change of Control, all of
the obligations under Sections 1 through
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5 of the Company and Executive shall cease except that the Company shall pay, or
provide the following benefits, to Executive without further recourse or
liability to the Company:
(i) a lump sum severance payment (the "Severance Payment") equal
to three (3) times Executive's Adjusted Base Salary and Annual
Bonus, which shall be the greater of (i) his prior year's
Annual Bonus, or (ii) the average of his most recent three
year's Annual Bonuses;
(ii) an amount equal to the sum of the Executive's earned but
unpaid Adjusted Base Salary and prorata Annual Bonus, which
shall be the greater of (i) his prior year's Annual Bonus, or
(ii) the average of his most recent three year's Annual
Bonuses;
(iii) an amount equal to the value of Executive's accrued
vacation pay;
(iv) his Supplemental Retirement Benefit in accordance with
Section 5.8;
(v) continued life insurance coverage in accordance with
Section 5.5 until October 1, 2005;
(vi) continued medical, dental and vision insurance in
accordance with Section 5.4; and
(vii) immediately vest all options to purchase Company stock and,
notwithstanding the terms of any option agreement or option
plan to the contrary, the exercise period for all options,
except those options granted prior to September 30, 2001 the
extension of which would result in a charge to earnings or
other adverse accounting consequence determined in the
reasonable discretion of the Committee, shall expire upon the
earlier of (x) the last day of the 24th month following the
Termination Date, or (y) the expiration of the option term.
8.6. Termination by Executive Without Good Reason. It is expressly
acknowledged and agreed that if Executive resigns without Good Reason, except as
set forth in Section 7.4, prior to the expiration of the Employment Term, all of
the obligations under Sections 1 through 5 of the Company and Executive shall
cease except that the Company shall pay, or provide the following benefits, to
Executive without further recourse or liability to the Company:
(i) an amount equal to the sum of the Executive's earned but
unpaid Adjusted Base Salary and prorata Annual Bonus, which
shall be the greater of (i) his prior year's Annual Bonus, or
(ii) the average of his most recent three year's Annual
Bonuses;
(ii) an amount equal to the value of Executive's accrued
vacation pay;
(iii) his Supplemental Retirement Benefit in accordance with
Section 5.8;
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(iv) continued life insurance coverage in accordance with
Section 5.5 until October 1, 2005; and
(v) continued medical, dental and vision insurance in
accordance with Section 5.4.
8.7. 280G Protection. If any amounts payable under, or benefits resulting
from, this Agreement are subject to the excise tax imposed under Code Section
4999 on "excess parachute payments", the Company will in good faith compute the
excise tax imposed under Code Section 4999 (the "Excise Tax") and shall pay that
amount to the Executive, including any federal, state, local and excise taxes
imposed on the foregoing payment under this Agreement. The effect of such
calculation will be to provide the Executive with a payment under this Agreement
that is economically equivalent to the payment he would have received but for
the imposition of the excise tax. The calculations under this Section 8.7 will
be made in a manner consistent with the requirements of Code Section 280G and
4999, as in effect at the time the calculations are made.
(a) The Gross-up Payment or portion thereof
provided for above shall be paid no later than the thirtieth (30th) day
following the Termination Date; provided, however, that if the amount of such
Gross-up Payment or portion thereof cannot be finally determined on or before
such day, the Company shall pay to the Executive on such day an estimate, as
determined in good faith by an Independent Accountant (the "Accountant"), of the
minimum amount of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code), subject to further payments pursuant to subsection (c) hereof, as soon as
the amount thereof can reasonably be determined, but in no event later than the
ninetieth day after the occurrence of the event subjecting the Executive to the
Excise Tax. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Company to the Executive, payable on the fifth day after demand by
the Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
(b) In the event of any controversy with the
Internal Revenue Service (or other taxing authority) with regard to the Excise
Tax, the Executive shall permit the Company to control issues related to the
Excise Tax (at its expense), provided that such issues do not potentially
materially adversely affect the Executive, but the Executive shall control any
other issues. In the event the issues are interrelated, the Executive and the
Company shall in good faith cooperate so as not to jeopardize resolution of
either issue, but if the parties cannot agree an arbitrator, selected in
accordance with the procedure set forth in Section 14, shall make the final
determination with regard to the issues. In the event of any conference with any
taxing authority as the Excise Tax or associated income taxes, the Executive
shall permit the representative of the Company to accompany the Executive, and
the Executive and the Executive's representative shall cooperate with the
Company and its representative.
(c) The Company shall be responsible for all
charges of the Accountant.
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(d) The Company and the Executive shall promptly
deliver to each other copies of any written communications, and summaries of any
verbal communications, with any taxing authority regarding the Excise Tax
covered by this section.
8.8. Fringe Benefits. To the extent any perquisite or fringe benefit that
Company is obligated to continue hereunder after the termination of Executive's
employment cannot be so continued due to legal impediment then, in such event,
Company shall, in lieu thereof, pay in cash to Executive the equivalent cost to
Company of such perquisite or fringe benefit, with any such payments to be made
at the time the payment of such perquisite or fringe benefit would normally be
paid.
9. Assignment. Neither the Company nor 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 party; provided, however, that the Company
may assign its rights and obligations under this Agreement without the consent
of Executive if the Company shall hereafter effect a reorganization, consolidate
with, or merge into any other entity or transfer all or substantially all of its
properties or assets to any other person or entity. This Agreement shall be
binding upon and inure to the benefit of the Company, Executive and their
respective successors, executors, administrators, heirs and permitted assigns.
10. Indemnification.
(a) To the maximum extent permitted under
Massachusetts law as from time to time in effect, the Company hereby agrees to
indemnify Executive and hold him harmless from, against and in respect of any
and all damages, deficiencies, actions, suits, proceedings, demands,
assessments, excise taxes, judgments, claims, losses, costs, expenses,
obligations and liabilities arising from or related to the performance of
Executive's duties and responsibilities under this Agreement.
(b) The Company agrees to continue and maintain a
directors' and officers' liability insurance policy covering Executive during
this employment and for six (6) years following the Termination Date. The amount
of coverage shall be reasonable in relation to Executive's position and
responsibilities during the Employment Term but in no event shall the amount of
coverage be less than $50,000,000 in the aggregate, provided that such coverage
is available at reasonable cost.
11. Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement by any other party will not operate or be construed as a
waiver of any other or subsequent breach by such other party.
12. Severability. The parties agree that each provision contained in this
Agreement shall be treated as a separate and independent clause, and the
unenforceability of any one clause shall in no way impair the enforceability of
any of the other clauses herein. Moreover, if one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to scope, activity or subject, such provisions shall be construed by the
appropriate judicial
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body by limiting and reducing it or them, so as to be enforceable to the extent
compatible with the applicable law.
13. Notices. Any notice or other communication in connection with this Agreement
shall be deemed to be delivered if in writing, addressed as provided below and
actually delivered at said address:
If to Executive, to him at the following address:
Xxxxxx X. Xxxxxxxx
000 Xxxxxxxx Xxxxxx, #000
Xxxxxx, XX 00000
If to the Company, to it at the following address:
Xxxxxx Automation, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Senior Vice President Finance and Administration/Chief
Financial Officer
or to such other person or address as to which either party may notify the
other in accordance with this Section 13.
14. Arbitration. In the event of a dispute between the parties as to the meaning
or interpretation of this Agreement, or the performance of either party
hereunder, either party may submit the matter for arbitration in Boston,
Massachusetts, to the American Arbitration Association, which is expressly
permitted and required hereby, to include the reasonable costs of arbitration,
including attorney fees, of the prevailing party, in its decision. If the
nonprevailing party should then fail to comply with such decision, the
reasonable costs of enforcement, including attorneys fees, shall be paid to the
prevailing party. Such costs shall specifically include any judicial proceeding
to confirm such decision.
15. Applicable Law. This Agreement shall be interpreted and construed in
accordance with the laws of the Commonwealth of Massachusetts.
16. Remedies. Executive acknowledges that a breach of any of the promises or
agreements contained herein could result in irreparable and continuing damage to
the Company for which there may be no adequate remedy at law, and the Company
shall be entitled to seek injunctive relief and/or a decree for specific
performance, and such other relief as may be proper (including monetary damages
if appropriate).
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17. Survival. Notwithstanding any provisions of this Agreement to the contrary,
the obligations of Executive and the Company pursuant to Sections 6 through 18
hereof shall each survive termination of this Agreement.
18. Effect of Headings. Any title of a section heading contained herein is for
convenience of reference only, and shall not affect the meaning of construction
or any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, as
of the date first above written.
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx
XXXXXX AUTOMATION, INC.
By: /s/ /Xxxxx X. Xxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxx
Senior Vice President Finance and
Administration/Chief Financial Officer
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