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EXHIBIT 10.45
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is effective as of August 1,
1997, by and between Xxxxx Xxxxxx (the "Employee") and Silicon Valley Group,
Inc., a Delaware corporation (the "Company").
R E C I T A L S
A. The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication and commitment of
the Employee.
B. In order to accomplish the foregoing objectives, the Board of
Directors has directed the Company, upon execution of this Agreement by the
Employee, to agree to the terms provided herein.
C. Certain capitalized terms used in the Agreement are defined in
Section 6 below.
In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Employee by the Company, the
parties agree as follows:
1. Duties and Scope of Employment.
(a) Position. The Company shall employ the Employee in the
position of Vice President, Corporate, as such position was defined in terms of
responsibilities and compensation as of the effective date of this Agreement;
provided, however, that the Board shall have the right, prior to the occurrence
of a Change of Control (as defined in Section 6 below), to revise such respon
sibilities and compensation from time to time as the Board may deem necessary or
appropriate subject to the Involuntary Termination provisions under Section
6(b).
(b) Obligations. The Employee shall devote his full business
efforts and time to the Company and its subsidiaries. The foregoing, however,
shall not preclude the Employee from engaging in such activities and services as
do not interfere or conflict with his responsibilities to the Company.
2. Base Compensation. The Company shall pay the Employee as
compensation for his services a base salary at the annualized rate of $275,000,
along with such performance bonus amounts and car allowances, if any, as the
Board shall authorize, in its discretion, from time to time. Such salary shall
be reviewed at least annually and shall be increased from time to time subject
to accomplishment of such performance and contribution goals and objectives as
may be established from time to time by the Board. Such salary shall be paid
periodically in accordance with normal
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Company payroll. The annual compensation (including bonus amounts) specified in
this Section 2, together with any increases in such compensation that the Board
may grant from time to time, is referred to in this Agreement as "Base
Compensation."
3. Employee Benefits. The Employee shall be eligible to participate
in the employee benefit plans and executive compensation programs maintained by
the Company applicable to other key executives of the Company, including
(without limitation) retirement plans, savings or profit-sharing plans, deferred
compensation plans, supplemental retirement or excess-benefit plans, stock
option, incentive or other bonus plans, life, disability, health, accident and
other insurance programs, paid vacations, and similar plans or programs, subject
in each case to the generally applicable terms and conditions of the plan or
program in question and to the determination of any committee administering such
plan or program.
4. At-Will Employment. The Company and the Employee acknowledge that
the Employee's employment is at will, as defined under applicable law. If the
Employee's employment terminates for any reason, the Employee shall not be
entitled to any payments, benefits, damages, awards or compensation other than
as provided by this Agreement. The terms of this Agreement shall terminate upon
the earlier of (i) the date that all obligations of the parties hereunder have
been satisfied, (ii) twelve (12) months after a Change of Control or (iii) so
long as there has been no Change in Control, August 1, 2004. A termination of
the terms of this Agreement pursuant to the preceding sentence shall be
effective for all purposes, except that such termination shall not affect the
payment or provision of compensation or benefits on account of a termination of
employment occurring prior to the termination of the terms of this Agreement.
5. Severance Benefits. Subject to Section 7 below, if the Employee's
employment terminates at any time, then the Employee's right, if any, to receive
severance benefits shall be as set forth in this Section 5 in lieu of any other
severance or severance-type benefits to which Employee may otherwise be entitled
under the Company's existing plans, policies or programs.
(a) Voluntary Resignation; Termination For Cause. If the
Employee's employment terminates by reason of the Employee's voluntary
resignation (and is not an Involuntary Termination), or if the Employee is
terminated for Cause, then the Employee shall not be entitled to receive
severance or other benefits except for those (if any) as may then be established
under the Company's then existing severance and benefits plans and policies at
the time of such termination applicable to a voluntary termination or
termination for cause.
(b) Involuntary Termination. If the Employee's employment is
terminated as a result of Involuntary Termination other than for Cause, then the
Employee shall be entitled to receive severance pay in an aggregate amount equal
to two times the Employee's Base Compensation for the twelve-calendar month
period immediately preceding the Termination Date. Any severance payments to
which the Employee is entitled pursuant to this section shall be paid, at the
option of the Employee, either in twenty-four (24) equal monthly installments
following the Termination Date, or in a single, lump-sum payment within thirty
days following the Termination Date.
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(c) Disability; Death. If the Company terminates the Employee's
employment as a result of the Employee's Disability, or the Employee's
employment is terminated due to the death of the Employee, then the Employee (or
the Employee's estate, if such termination results from Employee's death) shall
be entitled, at the Employee's option, to (i) continue receiving the Employee's
Base Compensation for 24 months following such termination, at the same
annualized rate as was in effect at the Termination Date, offset, in the case of
Disability, by any payments Employee receives from any governmental agency or
private disability insurance plan as a result of such Disability, or (ii)
receive the full amount set forth in Section 5(c)(i) in a single, lump-sum
payment.
(d) Options.
(i) If the Employee's employment is terminated following a
Change of Control as a result of an Involuntary Termination other than for
Cause, then the unvested portion of any stock option held by the Employee under
the Company's stock option plans shall automatically be accelerated as of the
Termination Date and the Employee or the Employee's representative, as the case
may be, shall have the right to exercise all or any portion of such stock
option, in addition to any portion of the option exercisable prior to such
termination. If a termination of Employee's employ ment results in acceleration
of vesting of any option, the Employee shall have 90 days following the
Termination Date to exercise such option, notwithstanding any contrary provision
of the option agreement.
(ii) If a Change of Control occurs within 90 days following
the termination of Employee's employment as a result of an Involuntary
Termination other than for Cause, then Employee or the Employee's
representative, as the case may be, shall have the right to exercise all options
which were not exercisable as of the Termination Date, at the same exercise
price as would have applied if Employee had still been employed at the time of
the Change in Control. Promptly following the occurrence of any such Change of
Control within such 90 days, the Company will provide to the employee written
notice of such Change of Control and a written statement as to the number of
shares exercisable by Employee as a result of this Section 5(d)(ii) and the
exercise price or prices thereof. The right to exercise such option shall
continue for 90 days following the Company's delivery of the written notice
contemplated by the preceding sentence. In the event that the securities
issuable upon exercise of such options have been converted into different
securities as a result of the Change of Control, or have been converted into a
right to receive consideration as a result of the Change of Control, Employee
shall, upon exercise of such option, be entitled to receive the same securities
or consideration as Employee would have received had the option been exercised
immediately prior to the Change of Control.
(e) Set-off. In the event that, upon any termination of
Employee's employment (whether voluntary or involuntary) prior to a Change of
Control, the Employee owes any amounts to the Company, (i) the amount of each
monthly severance payment to be paid to Employee shall be reduced by the amount
of all accrued interest on, and a portion of the outstanding principal amount
of, any such debt owing from Employee to the Company at the Termination Date if
the Employee
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has elected to receive severance payments over twenty-four months, or (ii) the
payment will be reduced by the outstanding principal amount and accrued interest
if the Employee has elected to receive a single, lump-sum payment. The portion
of the principal amount of such debt by which each monthly severance payment
will be reduced shall be 1/24 in the case of a termination covered under Section
5(b) or Section 5(c) or in full if the Employee has elected to receive a single,
lump-sum payment.
6. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:
(a) Change of Control. "Change of Control" shall mean the
occurrence of any of the following events:
(i) Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then outstanding
voting securities; or
(ii) A change in the composition of the Board occurring
within a two-year period, as a result of which fewer than a majority of the
directors are Incumbent Directors. "Incumbent Directors" shall mean directors
who either (A) are directors of the Company as of the date hereof, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Company); or
(iii) The consummation of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve a plan of complete
liquidation of the Company or the consummation of the sale or disposition by the
Company of all or substantially all the Company's assets.
(b) Involuntary Termination. "Involuntary Termination" shall
mean (i) without the Employee's express written consent, the assignment to the
Employee of any duties or the reduc tion of the Employee's duties, either of
which results in a significant diminution in the Employee's position or
responsibilities with the Company in effect immediately prior to such
assignment, or the removal of the Employee from such position and
responsibilities; (ii) a substantial reduction, without good business reasons
and without the Employee's written consent, of the facilities and perquisites
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(including office space and location) available to the Employee immediately
prior to such reduction; (iii) a reduction by the Company in the Base
Compensation of the Employee as in effect immediately prior to such reduction,
other than (A) a bonus reduction resulting from application of a bonus formula
or plan on a basis that is consistent with prior practice or (B) a reduction
which is com parable (on a percentage basis) to a reduction applicable to all
executive officers of the Company; (iv) a material reduction by the Company in
the kind or level of employee benefits to which the Employee is entitled
immediately prior to such reduction with the result that the Employee's overall
benefits package is significantly reduced other than, so long as there is no
Change of Control, a reduction which is comparable to a reduction applicable to
all executive officers of the Company; (v) the relocation of the Employee to a
facility or a location more than 25 miles from the Employee's then present
location, without the Employee's express written consent; (vi) any purported
termination of the Employee by the Company which is not effected for Disability
or for Cause, or any purported termination for which the grounds relied upon are
not valid; (vii) the failure of the Company to obtain the assumption of this
agreement by any successors contemplated in Section 9 below; or (viii) any
purported termination of the Employee's employment by the Company which is not
effected pursuant to a notice of termination satisfying the requirements of
Section 10(b) below, and for purposes of this Agreement, no such purported
termination shall be effective.
(c) Cause. "Cause" shall mean (i) any act of personal dishonesty
taken by the Employee in connection with his responsibilities as an employee and
intended to result in substantial personal enrichment of the Employee, (ii) the
conviction of a felony, (iii) a willful act by the Employee which constitutes
gross misconduct and which is injurious to the Company, and (iv) con tinued
violations by the Employee of the Employee's obligations under Section 1 of this
Agreement which are demonstrably willful and deliberate on the Employee's part
after (a) there has been deliv ered to the Employee a written demand for
performance from the Company which describes the basis for the Company's belief
that the Employee has not substantially performed his duties and sets forth
specific performance goals to cure such defaults, and (b) the Employee has been
given 120 days during which the Employee has been unable to cure such failure to
perform hereunder.
(d) Disability. "Disability" shall mean that the Employee has
been unable to perform his duties under this Agreement as the result of his
incapacity due to physical or mental illness, and such inability, at least 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and agreed to the Employee or
the Employee's legal representative (such agreement not to be unreasonably
withheld). Termination resulting from Disability may only be effected after at
least 30 days' written notice by the Company of its intention to terminate the
Employee's employment. In the event that the Employee resumes the performance of
substantially all of his duties hereunder before the termination of his
employment becomes effective, the notice of intent to terminate shall
automatically be deemed to have been revoked.
(e) Termination Date. "Termination Date" shall mean (i) if this
Agreement is terminated by the Company for Disability, thirty (30) days after
notice of termination is given to the
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Employee (provided that the Employee shall not have returned to the performance
of the Employee's duties on a full-time basis during such thirty (30) day
period), (ii) if the Employee's employment is terminated by the Company for any
other reason, the date on which a notice of termination is given, provided that
if within thirty (30) days after the Company gives the Employee notice of
termination, the Employee notifies the Company that a dispute exists concerning
the termination, the Termination Date shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by final
judgment, order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected), or (iii)
if the Agreement is terminated by the Employee, the date on which the Employee
delivers the notice of termination to the Company.
(f) Dispute Resolution. If a dispute should arise between the
Employee and the Company as to whether Employee's duties or responsibilities
have been substantially reduced, thereby constituting an Involuntary Termination
pursuant to Section 6(b), the Company agrees to pay to the Employee and the
Employee agrees to accept from the Company severance benefits pursuant to
Section 5 for a period of twelve (12) months.
7. Limitation on Payments.
(a) In the event that the severance and other benefits provided
for in this Agreement or otherwise payable to the Executive (i) constitute
"parachute payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code") and (ii) but for this Section would be
subject to the excise tax imposed by Section 4999 of the Code, then the
Executive's severance benefits under Section 5 shall be payable either (i) in
full, or (ii) as to such lesser amount which would result in no portion of such
severance benefits being subject to excise tax under Section 4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Section 4999, results
in the receipt by the Executive on an after-tax basis, of the greatest amount of
severance benefits under this Agreement, notwithstanding that all or some
portion of such severance benefits may be taxable under Section 4999 of the
Code.
(b) If a reduction in the payments and benefits that would
otherwise be paid or provided to the Executive under the terms of this Agreement
is necessary to comply with the provisions of Section 7(a), the Executive shall
be entitled to select which payments or benefits will be reduced and the manner
and method of any such reduction of such payments or benefits (including but not
limited to the number of options that would vest under Section 5(d) subject to
reasonable limitations (including, for example, express provisions under the
Company's benefit plans) (so long as the requirements of Section 7(a) are met).
Within thirty (30) days after the amount of any required reduction in payments
and benefits is finally determined in accordance with the provisions of Section
7(c), the Executive shall notify the Company in writing regarding which payments
or benefits are to be reduced. If no notification is given by the Executive, the
Company will determine which amounts to reduce. If, as a result of any reduction
required by Section 7(a), amounts previously paid to the Executive exceed the
amount to which the Executive is entitled, the
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Executive will promptly return the excess amount to the Company.
(c) Unless the Company and the Executive otherwise agree in
writing, any determination required under this Section shall be made in writing
by the Company's independent public accountants (the "Accountants"), whose
determination shall be conclusive and binding upon the Executive and the Company
for all purposes. For purposes of making the calculations required by this
Section, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the
Code. The Company and the Executive shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section.
8. Covenants of the Employee.
(a) Covenants. As additional consideration for the Company's
agreements set forth herein, Employee agrees that Employee will not:
(i) directly or indirectly, in any manner or capacity, as
advisor, principal, agent, partner, officer, director, stockholder, employee,
member of any association or otherwise, engage in any business or activity
conducted by the Company as of the Termination Date or have an interest in any
firm, corporation, partnership or association engaged in any such business or
activity or similar business or activity; provided, however, that ownership by
Employee, as a passive investment, of less than 1% of the outstanding shares of
capital stock of any corporation with one or more classes of its capital stock
listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this paragraph;
(ii) so long as there has been no Change of Control,
engage in any conduct detrimental to the Company or the conduct of its business.
(b) Consequences of Breach. In the event Employee breaches his
obligations under Section 8(a), (i) the Company's obligation to make payments to
Employee pursuant to this Agreement shall immediately terminate upon the
occurrence of the actions which constitute such breach, (ii) all loans from the
Company to Employee shall become immediately due and payable and (iii) if the
Company has paid any amounts to Employee since the occurrence of the actions
which constitute such breach, Employee shall repay such amounts upon demand by
the Company.
9. Successors.
(a) Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets shall assume the obligations under this Agreement and agree
expressly to perform the obligations under this Agreement in the same manner
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and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this
Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.
(b) Employee's Successors. The terms of this Agreement and all
rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
10. Notice.
(a) General. Notices and all other communications contemplated
by this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by U.S. registered or certified
mail, return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.
(b) Notice of Termination. Any termination by the Company for
Disability or Cause, or by the Employee as a result of a voluntary resignation
or an Involuntary Termination shall be communicated by a notice of termination
to the other party hereto given in accordance with this Section 10(b). Such
notice shall indicate the specific termination provision in this Agreement
relied upon, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision so indicated, and
shall specify the termination date (which shall be not more than thirty (30)
days after the giving of such notice). The failure by the Employee to include in
the notice any fact or circumstance which contributes to a showing of
Involuntary Termination shall not waive any right of the Employee hereunder or
preclude the Employee from asserting such fact or circumstance in enforcing his
rights hereunder.
11. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner), nor shall any such payment be
reduced by any earnings that the Employee may receive from any other source,
except as specifically provided for herein.
(b) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Employee and by an authorized officer of the
Company (other than the Employee). No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by
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the other party shall be considered a waiver of any other condition or provision
or of the same condition or provision at another time.
(c) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth or explicitly referenced in this Agreement have been
made or entered into by either party with respect to employment matters.
(d) Choice of Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
California.
(e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(f) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Santa Xxxxx County, California, in accor dance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Punitive damages shall not
be awarded.
(g) No Assignment of Benefits. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (g) shall be
void.
(h) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable taxes.
(i) Assignment by Company. The Company may assign its rights
under this Agreement to an affiliate, and an affiliate may assign its rights
under this Agreement to another affiliate of the Company or to the Company;
provided, however, that no assignment shall be made if the net worth of the
assignee is less than the net worth of the Company at the time of assignment. In
the case of any such assignment, the term "Company" when used in a section of
this Agreement shall mean the corporation that actually employs the Employee.
(j) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
COMPANY SILICON VALLEY GROUP, INC.
By: /s/ XXXXXX X. DER XXXXXXXXX
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Xxxxxx X. Der Xxxxxxxxx,
Chief Executive Officer
EMPLOYEE /s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
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