EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.25
Novellus Systems, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
TEL: (000) 000-0000
FAX: (000) 000-0000
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
TEL: (000) 000-0000
FAX: (000) 000-0000
This Executive Employment Agreement, dated as of October 12, 2005, is between
Novellus Systems, inc. a California corporation (the “Company”) and Xx. Xxxxxx
Caulfbeld, an individual currently residing at 000 Xxxxxxx Xxxxxxx, Xxxxxx, Xxx Xxxx 00000
(“Executive”).
I. POSITION AND RESPONSIBILITIES
A. Position. Executive is employed by the Company to render services to the Company in
the position of Executive Vice President of Sales and Marketing, reporting directly to Xxxxxxx X.
Xxxx, or his successor as Chief Executive Officer. Executive shall perform such duties and
responsibilities as are normally related to such position in accordance with the standards of the
industry and any enhanced duties now or hereafter assigned to Executive by the Company. Executive
shall abide by the rules, regulations, and practices as adopted or modified from time to time in
the Company’s sole discretion.
B. Other Activities. Except upon the prior written consent of the Company, Executive will
not, during the term of this Agreement, (i) accept any other employment, or (ii) engage, directly
or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that
might interfere with Executive’s duties and responsibilities hereunder or create a conflict of
interest with the Company.
C. No Conflict. Executive represents and warrants that Executive’s execution of this
Agreement, Executive’s employment with the Company, and the performance of Executive’s proposed
duties under this Agreement shall not violate any obligations Executive may have to any other
employer, person or entity, including any obligations with respect to proprietary or confidential
information of any other person or entity.
II. COMPENSATION AND BENEFITS
A. Base Salary. In consideration of the services to be rendered under this Agreement,
the Company shall pay Executive an initial salary, payable bi-weekly, at the rate of Three Hundred
Eighty-five Thousand Dollars ($385,000) per year (“Base Salary”). The Base
plans established by the Company, and as may be amended from time to time in the Company’s sole
discretion.
G. Expenses. The Company shall reimburse Executive for reasonable business expenses incurred
in the performance of Executive’s duties hereunder in accordance with the Company’s expense
reimbursement guidelines.
III. AT-WILL EMPLOYMENT; TERMINATION BY COMPANY
A. At-Will Termination by Company. The employment of Executive shall be “at-will” at
all times. The Company may terminate Executive’s employment with the Company at any time, without
any advance notice, for any reason or no reason at all, notwithstanding anything to the contrary
contained in or arising from any statements, policies or practices of the Company relating to the
employment, discipline or termination of its employees. Upon and after such termination, all
obligations of the Company under this Agreement shall cease.
X. Xxxxxxxxx. Except in situations where the employment of Executive is terminated For
Cause, By Death or By Disability (as defined in Section 4 below), in the event that the Company
terminates the employment of Executive at any time prior to the third anniversary of the date
Executive begins his employment, Executive will receive a lump-sum amount, within 30 days of such
termination, equal to the product of (i) Executive’s then-monthly base salary and (ii) the number
of months remaining until the third anniversary of the date Executive begins his employment,
payable in the form of salary continuation. Such Severance shall be reduced by any remuneration
paid to Executive because of Executive’s employment or self-employment during the severance period,
and Executive shall promptly report all such remuneration to the Company in writing. Executive’s
eligibility for Severance is conditioned on Executive having first signed a release agreement in
the form attached as Exhibit A. Executive shall not be entitled to any severance payments if
Executive’s employment is terminated For Cause, By Death or By Disability (as defined in Section IV
below) or if Executive’s employment is terminated by Executive (in accordance with Section V
below).
IV. OTHER TERMINATIONS BY COMPANY
A. Termination for Cause. For purposes of this Agreement, “For Cause” shall mean: (i)
Executive commits a crime involving dishonesty, breach of trust, or physical harm to any person;
(ii) Executive willfully engages in conduct that is in bad faith and materially injurious to the
Company, including but not limited to, misappropriation of trade secrets, fraud or embezzlement;
(iii) Executive commits a material breach of this Agreement, which breach is not cured within twenty
days after written notice to Executive from the Company; (iv) Executive willfully refuses to
implement or follow a lawful policy or directive of the Company, which breach is not cured within
twenty days after written notice to Executive from the Company; or (v) Executive engages in
misfeasance or malfeasance demonstrated by
a pattern of failure to perform job duties diligently and professionally, which conduct is not
cured within twenty days of written notice to Executive, to the extent such conduct can be cured.
The Company may terminate Executive’s employment For Cause at any time, without any advance notice.
The Company shall pay to Executive all compensation to which Executive is entitled up through the
date of termination, subject to any other rights or remedies of Employer under law; and thereafter
all obligations of the Company under this Agreement shall cease.
B. By Death. Executive’s employment shall terminate automatically upon Executive’s death.
The Company shall pay to Executive’s beneficiaries or estate, as appropriate, any compensation then
due and owing. Thereafter all obligations of the Company under this Agreement shall cease. Nothing
in this Section shall affect any entitlement of Executive’s heirs or devisees to the benefits of
any life insurance plan or other applicable benefits.
C. By Disability. If Executive becomes eligible for the Company’s long term disability
benefits or if, in the sole opinion of the Company, Executive is unable to carry out the
responsibilities and functions of the position held by Executive by reason of any physical or
mental impairment for more than ninety consecutive days or more than one hundred and twenty days in
any twelve-month period, then, to the extent permitted by law, the Company may terminate
Executive’s employment. The Company shall pay to Executive all compensation to which Executive is
entitled up through the date of termination, and thereafter all obligations of the Company under
this Agreement shall cease. Nothing in this Section shall affect Executive’s rights under any
disability plan in which Executive is a participant.
V. TERMINATION BY EXECUTIVE
Executive may terminate employment with the Company at any time for any reason or no reason at
all, upon four weeks’ advance written notice. During such notice period Executive shall continue to
diligently perform all of Executive’s duties hereunder. The Company shall have the option, in its
sole discretion, to make Executive’s termination effective at any time prior to the end of such
notice period as long as the Company pays Executive all compensation to which Executive is entitled
up through the last day of the four week notice period. Thereafter all obligations of the Company
shall cease. Notwithstanding any other provision in this Agreement, in the event the Executive
resigns for Good Reason (as defined below) (whether or not Good Reason exists due to a Change of
Control (as defined below)), the Company shall pay the Executive the Severance described in Section
III.B. above and Executive’s restricted stock award described in Section II(C) above shall
immediately vest in full. Executive’s eligibility for Severance is conditioned on Executive having
first signed a release agreement in the form attached as Exhibit A. “Change of Control” of the
Company shall mean a transaction whereby the stockholders of the Company immediately before the
transaction do not retain immediately after the transaction ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding voting securities of the
combined company or the sale of all or substantially all of the Company’s assets. “Good Reason”
shall mean any of the following: (a) a demotion or material diminution of the Executive’s duties,
responsibilities and/or position in the Company, without the Executive’s consent, (b) a reduction
of the Executive’s Base Salary, without Executive’s consent or (c) a material breach of any
provision of this Agreement by the Company, absent cure after twenty (20) days’ written notice by
the Executive.
VI. TERMINATION OBLIGATIONS
A. Return of Property. Executive agrees that all property (including without limitation all
equipment, tangible proprietary information, documents, records, notes, contracts and
computer-generated materials) furnished to or created or prepared by Executive incident to
Executive’s employment with the Company belongs to the Company and shall be promptly returned to
the Company upon termination of Executive’s employment.
B. Resignation, Cooperation and Indemnity. Upon termination of Executive’s employment,
Executive shall be deemed to have resigned from all offices and directorships then held with the
Company. Following any termination of employment, Executive shall cooperate with the Company in the
winding up of pending work on behalf of the Company and the orderly transfer of work to other
employees. Executive shall also cooperate with the Company in the defense of any action brought by
any third party against the Company that relates to Executive’s employment by the Company provided
that the Company pays for all expenses Executive incurs in connection with such cooperation. The
Company shall indemnify Executive against any expenses (including attorneys’ fees), liability,
judgments, and/or amounts paid as settlement incurred in connection with any dispute, action, suit
or legal proceeding arising from or relating to Executive’s employment by the Company or his duties
and responsibilities in connection with such employment, except that, in the event it is determined
in such dispute, action, suit or legal proceeding that Executive acted in bad faith, without the
authority of the Company or outside the scope of his employment, then the Company shall be relieved
of any indemnity obligation under this Section and Executive shall be required to reimburse the
Company for any amounts already paid by the Company pursuant to this Section.
VII. INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION
A. Proprietary Information Agreement. Executive agrees to sign and be bound by the terms of
the Proprietary Information and Inventions Agreement, which is attached as Exhibit B (“Proprietary
Information Agreement”).
B. Non-Solicitation. Executive acknowledges that because of Executive’s position in the
Company, Executive will have access to material intellectual property and confidential information.
During the term of Executive’s employment and for one year thereafter, in
Salary shall be paid in accordance with the Company’s regularly established payroll practice.
Executive’s Base Salary will be reviewed for increases from time to time in accordance with the
established procedures of the Company for adjusting salaries for similarly situated employees and
may be adjusted in the sole discretion of the Company. Nothwithstanding any other provision in this
Agreement, Executive’s base salary shall not be less than $385,000 per year, unless agreed by
Executive.
B. Stock Options. As a condition of Executive entering into this Agreement, the Company
shall provide Executive with an option to purchase 125,000 shares of the Common Stock of the
Company which option will vest 25% per year over a four (4) year period beginning on the date
Executive begins his employment. The exercise price per share of such options will be the fair
market value of the Company’s stock on the date Executive begins his employment. Executive’s
entitlement to the stock options is conditioned upon Executive’s signing of a standard form of
stock option agreement and is subject to its terms and the terms of the stock incentive plan under
which the options are granted.
C. Restricted Stock. As a condition of the Executive entering into this Agreement, the
Company shall provide Executive with a restricted stock award of 80,000 shares of the Common Stock
of the Company. Executive’s entitlement to such restricted stock award is conditioned upon
Executive’s signing of a restricted stock purchase agreement and is subject to its terms and the
terms of the stock incentive plan under which the restricted stock award is granted, which award
shall be subject to a three-year xxxxx xxxx. Such three year cliff vesting period will begin on the
date Executive begins his employment; provided, however, in the event of Executive’s death or
termination without Cause (as defined below), such restricted stock award shall be fully vested.
D. Bonus Plan. Executive will be eligible to participate in the Company’s Key
Director/Manager Bonus Program, which provides up to 100% of base salary (the “Target Bonus”)
contingent upon successful completion of company and personal performance objectives, with the
Target Bonus based 50% on commissions and 50% on corporate objectives, subject to annual review by
the Company’s Executive Staff and the Compensation Committee; provided, however, the Company shall
pay Executive a bonus of One Hundred Thousand Dollars ($100,000) for the year 2005.
E. Signing Bonus. Both parties shall make their best efforts to allow Executive to begin
his employment with the Company by November 1, 2005. So long as Executive has used his best efforts
to begin his employment with the Company on or prior to November 1, 2005, Company shall pay
Executive a one-time signing bonus in the amount of One Hundred Ninety-one Thousand Three Hundred
Four Dollars ($191,304) by no later than thirty (30) days after Executive’s start date.
F. Benefits. Executive shall be eligible to participate in the benefits made generally
available by the Company to similarly-situated Executives, in accordance with the benefit
addition to Executive’s other obligations hereunder or under the Proprietary Information Agreement,
Executive shall not, for Executive or any third party, directly or indirectly (a) divert or attempt
to divert from the Company any business of any kind, including without limitation the solicitation
of or interference with any of its customers, clients, members, business partners or suppliers, or
(b) solicit or otherwise induce any person employed by the Company to terminate his employment.
C. Non-Disclosure of Third Party Information. Executive represents and warrants and
covenants that Executive shall not disclose to the Company, or use, or induce the Company to use,
any proprietary information or trade secrets of others at any time, including but not limited to
any proprietary information or trade secrets of any former employer, if any; and Executive
acknowledges and agrees that any violation of this provision shall be grounds for Executive’s
immediate termination and could subject Executive to substantial civil liabilities and criminal
penalties. Executive further specifically and expressly acknowledges that no officer or other
employee or representative of the Company has requested or instructed Executive to disclose or use
any such third party proprietary information or trade secrets.
VIII. ARBITRATION
Executive agrees to sign and be bound by the terms of the Arbitration Agreement, which is
attached as Exhibit C.
IX. AMENDMENTS; WAIVERS; REMEDIES
This Agreement may not be amended or waived except by a writing signed by Executive and by a
duly authorized representative of the Company other than Executive. Failure to exercise any right
under this Agreement shall not constitute a waiver of such right. Any waiver of any breach of this
Agreement shall not operate as a waiver of any subsequent breaches. All rights or remedies
specified for a party herein shall be cumulative and in addition to all other rights and remedies
of the party hereunder or under applicable law.
X. ASSIGNMENT; BINDING EFFECT
A. Assignment. The performance of Executive is personal hereunder, and Executive agrees
that Executive shall have no right to assign and shall not assign or purport to assign any rights
or obligations under this Agreement. This Agreement may be assigned or transferred by the Company;
and nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a
sale of any or all or substantially all of its assets.
B. Binding Effect. Subject to the foregoing restriction on assignment by Executive, this
Agreement shall inure to the benefit of and be binding upon each of the parties; the affiliates,
officers, directors, agents, successors and assigns of the Company; and the heirs, devisees,
spouses, legal representatives and successors of Executive.
XI. NOTICES
All notices or other communications required or permitted hereunder shall be made in writing
and shall be deemed to have been duly given if delivered: (a) by hand; (b) by a nationally
recognized overnight courier service; or (c) by United States first class registered or certified
mail, return receipt requested, to the principal address of the other party, as set forth below.
The date of notice shall be deemed to be the earlier of (i) actual receipt of notice by any
permitted means, or (ii) five business days following dispatch by overnight delivery service or the
United States Mail. Executive shall be obligated to notify the Company in writing of any change in
Executive’s address. Notice of change of address shall be effective only when done in accordance
with this paragraph.
Company’s Notice Address:
Novellus Systems, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Executive’s Notice Address:
Xx. Xxxxxx Xxxxxxxxx
000 Xxxxxxx Xxxxxxx
Xxxxxx,XX 00000
000 Xxxxxxx Xxxxxxx
Xxxxxx,XX 00000
XII. SEVERABILITY
If any provision of this Agreement shall be held by a court or arbitrator to be invalid,
unenforceable, or void, such provision shall be enforced to the fullest extent permitted by law,
and the remainder of this Agreement shall remain in full force and effect. In the event that the
time period or scope of any provision is declared by a court or arbitrator of competent
jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems
enforceable, then such court or arbitrator shall reduce the time period or scope to the maximum
time period or scope permitted by law.
XIII. TAXES
All amounts paid under this Agreement (including without limitation Base Salary, bonuses and
Severance) shall be paid less all applicable state and federal tax withholdings and any other
withholdings required by any applicable jurisdiction.
XIV. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of the State of
California.
XV. INTERPRETATION
This Agreement shall be construed as a whole, according to its fair meaning, and not in favor
of or against any party. Sections and section headings contained in this Agreement are for
reference purposes only, and shall not affect in any manner the meaning or interpretation of this
Agreement. Whenever the context requires, references to the singular shall include the plural and
the plural the singular.
XVI. OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT
Executive agrees that any and all of Executive’s obligations under this agreement, including
but not limited to Exhibits B and C, shall survive the termination of employment and the
termination of this Agreement.
XVII. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which shall be deemed an
original of this Agreement, but all of which together shall constitute one and the same instrument.
XVIII. AUTHORITY
Each party represents and warrants that such party has the right, power and authority to enter
into and execute this Agreement and to perform and discharge all of the obligations hereunder; and that this Agreement constitutes the valid and legally binding agreement and obligation of
such party and is enforceable in accordance with its terms.
XIX. ENTIRE AGREEMENT
This Agreement is intended to be the final, complete, and exclusive statement of the terms of
Executive’s employment by the Company and may not be contradicted by evidence of any prior or
contemporaneous statements or agreements, except for agreements specifically referenced herein
(including the Executive Proprietary Information and Inventions Agreement attached as Exhibit B,
the Arbitration Agreement attached as Exhibit C, and the Stock Plan and Stock Option Agreement and
Restricted Stock Agreement of the Company). To the extent that the practices, policies or
procedures of the Company, now or in the future, apply to Executive and are inconsistent with the
terms of this Agreement, the provisions of this Agreement shall control. Any subsequent change in
Executive’s duties, position, or compensation will not affect the validity or scope of this
Agreement.
XX. EXECUTIVE ACKNOWLEDGEMENT
EXECUTIVE ACKNOWLEDGES EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING
THIS AGREEMENT, THAT EXECUTIVE HAS READ AND UNDERSTANDS THE AGREEMENT, THAT EXECUTIVE IS FULLY
AWARE OF ITS LEGAL EFFECT, AND THAT EXECUTIVE HAS ENTERED INTO IT FREELY BASED ON EXECUTIVE’S OWN
JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.
In Witness Whereof, the parties have duly executed this Agreement as of the date
first written above.
| Novellus Systems, Inc.: | Executive: | |||||
By:
|
/s/ Xxxxxxx X. Xxxx
Chief Executive Officer |
/s/ Xx. Xxxxxx Xxxxxxxxx
|
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