Exhibit 10.39
November 24, 2004
CONFIDENTIAL
Xxxxxx X. Xxxxxxx
[HOME ADDRESS]
RE: SEPARATION AGREEMENT
Dear Xxx:
The following are the terms of your Separation Agreement with Applied
Materials, Inc., and its affiliates and subsidiaries (collectively "Applied").
1. TERMINATION OF EMPLOYMENT. Your employment terminated effective
October 22, 2004. You will be paid all salary and accrued and untaken vacation
through that date. You will receive by separate cover information regarding your
rights to health-insurance continuation under COBRA. You are eligible to
participate in Applied's Retiree Medical "Bridge to Medicare" Plan and will
receive the benefits described in that Plan so long as you remain eligible. To
the extent that you have such rights, nothing in this Agreement will impair
those rights.
2. COMPLIANCE WITH EMPLOYEE AGREEMENT AND MAINTENANCE OF CONFIDENTIAL
INFORMATION. You must comply in all respects with the terms of the Employee
Agreements you signed, and, following your Termination Date, you will continue
to abide by those provisions relating to former employees. In addition, you
specifically acknowledge that, by reason of your employment and/or relationship
with Applied, you had access to, acquired and/or learned confidential,
proprietary and/or trade secret information. However, you will not at any time
publish, disclose or use in any way, any such information.
3. NON-COMPETITION. For a period of one year following the termination
of your employment, you will not directly or indirectly compete with Applied.
This means that you will not, directly or indirectly, form a business that is,
become employed by, or render services (whether characterized as services of a
founder, developer, employee, consultant, or director) to, any company, firm,
venture, partnership, or business that competes with Applied, including
competition for Applied's customers or competition with Applied's products,
services, or technological developments (existing or planned).
4. NON-SOLICITATION. For a period of one year following the termination
of your employment with Applied, you will not either directly or indirectly
solicit, induce, recruit or encourage any of Applied's employees to leave their
employment or take away such employees, or attempt to solicit, induce, recruit,
encourage or take away employees of Applied, either for yourself or for any
other person or entity.
Letter to Xxxxxx X. Xxxxxxx Page 2
November 24, 2004
5. NON-DISPARAGEMENT. You agree that you will not knowingly disparage,
criticize, or otherwise make any derogatory statements, whether written or oral,
regarding Applied or its business, products or services, or its directors,
officers or employees or its organization, policies, practices or processes.
Applied agrees to instruct members of its board of directors and its executive
officers not to knowingly disparage you, criticize you, or otherwise make any
derogatory statements about you. The foregoing restrictions will not apply to
any statements that are made truthfully in response to a subpoena or other
compulsory legal process.
6. RELEASE OF CLAIMS. You waive and release and promise never to assert
any and all claims of every kind, known or unknown, suspected or unsuspected,
that you have, might have or might ever have had against Applied and its
predecessors, subsidiaries, related entities, officers, directors, shareholders,
agents, attorneys, employees, successors, or assigns, arising from or related to
your employment with Applied and/or the termination of your employment with
Applied as of the time that you sign this Agreement.
These claims include, but are not limited to, claims arising under
federal, state and local statutory or common law, such as (as amended) Title VII
of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of
1974, other federal and state anti-discrimination statutes, the California Labor
Code, and the law of contract and tort. These claims do not, however, include
claims for already-vested benefits under Applied's benefit plans (which do not
include a bonus under Applied's Fiscal Year 2004 Executive Incentive Plan
bonus), any claim arising after you sign this Agreement, or any claim arising
under this Agreement.
You also waive and release and promise never to assert any such claims,
even if you do not now know or believe that you have such claims. You therefore
waive your rights under section 1542 of the Civil Code of California which
states:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known to him must have materially affected his
settlement with the debtor."
7. CONFIDENTIALITY OF AGREEMENT. The fact and terms of this letter,
including the benefits provided to you under it, are highly confidential. Unless
and until Applied files this Agreement with the United States Securities and
Exchange Commission, you will not disclose the fact or terms of this letter, or
the benefits provided to you under it, to any person other than your spouse,
attorney, certified public accountant and investment advisor (collectively the
"Permissible Disclosure Parties") in order for them to render professional
services to you. You will instruct the Permissible Disclosure Parties, however,
to maintain the confidentiality of this information just as you must. You
further agree to take all steps necessary to ensure that confidentiality is
maintained by any and all of the individuals or entities to whom authorized
disclosure is or was made and agree to accept responsibility for any breach of
confidentiality by any of those individuals or entities.
8. CONSIDERATION FOR ACCEPTANCE OF AND COMPLIANCE WITH THIS AGREEMENT.
In consideration for your acceptance of this Agreement and continuing compliance
with it, Applied will:
a. Payments. Pay you $1,600,000, as follows:
December 31, 2004: $600,000
April 30, 2005: $300,000
July 30, 2005: $300,000
October 31, 2005: $400,000
Letter to Xxxxxx X. Xxxxxxx Page 3
November 24, 2004
b. Extension of Option Exercise Period. You may exercise
until the close of the U. S. stock market on December
20, 2004, all stock options granted to you under the
Employee Stock Incentive Plan and vested prior to the
termination of your employment, as follows: (a)
120,000 options granted on April 15, 1999, with an
exercise price of $15.50 per share (Grant No. 21004),
(b) 400,000 options granted on September 10, 1999,
with an exercise price of $19.6875 per share (Grant
No. 23246), (c) 240,000 options granted on October
18, 2000, with an exercise price of $21.0313 per
share (Grant No. 46564), and (d) 240,000 options
granted on November 27, 2001, with an exercise price
of $20.9850 per share (Grant No. 98508). All other
terms and conditions of such option agreements shall
remain the same. All other options were forfeited on
October 22, 2004 and cannot be exercised at any time.
c. Reference Requests. The Company will provide a
reference letter in the form attached as Exhibit A in
response to a written reference request authorized by
you. You must direct all reference requests to
Xxxxxxxxx Xxxxxxx, Corporate Vice President of Global
Human Resources, Applied Materials, Inc., at 0000
Xxxxx Xxxx., X.X. Box 58039, Santa Clara, CA 95050,
or her successor. In response to inquiries concerning
your employment, the Company will disclose your dates
of employment and job titles.
9. REMEDIES IN EVENT OF BREACH OF AGREEMENT. In the event that you
breach any of your obligations to Applied under this Agreement or as otherwise
imposed by law, Applied will be entitled to recover the sums paid to you under
the Agreement, to cease making any further payments, and to obtain all other
relief provided by law or equity.
10. SEVERABILITY. If any provision of this letter is held to be void,
voidable, unlawful or unenforceable, the remaining portions of this Agreement
will remain in full force and effect, except that if paragraphs 2, 3, 4, 5, 6, 7
and/or 8 of this Agreement are held to be void, voidable, unlawful or
unenforceable, then Applied, at its sole option, may rescind this Agreement and
recover all consideration paid to you under it.
11. ARBITRATION OF DISPUTES RELATING TO AGREEMENT. Any dispute,
controversy or claim arising under or in connection with this Agreement, or the
breach of this Agreement, will be settled exclusively by arbitration in
accordance with the Comprehensive Arbitration Rules of JAMS now in effect.
Judgment upon the award rendered by the Arbitrator(s) may be entered in any
court having jurisdiction of the matter. The arbitration will take place in
Santa Xxxxx County, California. The Arbitrator will have full authority to award
interim injunctive relief in addition to any and all other appropriate remedies
otherwise available to the Arbitrator.
12. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of California (except for its conflict of
laws provisions).
13. COMPLETE AGREEMENT. This Agreement, including Exhibit A which is
incorporated herein by reference, contains the entire agreement of the parties
with respect to this subject matter, supersedes all prior and contemporaneous
written and oral agreements, discussions, negotiations, understandings or
courses of conduct, and may not be modified or changed in any manner except by a
writing duly executed by the parties. No party is relying upon any other
agreement, representation, statement, omission, understanding or course of
conduct which is not expressly set forth in this Agreement. Headings used in
this Agreement are for convenience only and will not be used to interpret
Letter to Xxxxxx X. Xxxxxxx Page 4
November 24, 2004
its substantive terms.
14. PERIOD FOR CONSIDERATION AND REVOCATION. You have until November
30, 2004 to consider this Agreement, although you are free to accept it at any
time within this period of time. You are advised to consult an attorney about
this Agreement. Once you accept this Agreement, you will have an additional
seven days to revoke your acceptance by means of a written notice of revocation
sent to my attention.
To accept this Agreement, please date and sign this letter and return
it to me.
Sincerely,
/s/ Xxxxxxxxx Xxxxxxx
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Xxxxxxxxx Xxxxxxx
Corporate Vice President of
Global Human Resources
Applied Materials, Inc.
. . .
By signing this letter, I acknowledge that I have had the opportunity
to review this Agreement carefully with an attorney of my choice; that I have
read this Agreement and understand its terms; and that I enter into this
Agreement knowingly and voluntarily.
Dated: November 30, 2004 /s/ Xxxxxx X. Xxxxxxx
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Letter to Xxxxxx X. Xxxxxxx Page 5
November 24, 2004
EXHIBIT A
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Re: Xxxxxx X. Xxxxxxx
Dear :
--------
This letter is written in response to your request for references.
Dates of Employment: August 29, 1984 - April 21, 1989
November 5, 1990 - October 22, 2004
Last Position: Executive Vice President and Chief Financial Officer
It is the Company's policy not to disclose any additional information.
Sincerely yours,
(Contact Title)
