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Exhibit 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of the 8th day of
September 1997, by and between SUBMICRON SYSTEMS CORPORATION, a Delaware
corporation (the "Company"), and XXXXX X. XXXXXX ("Executive"). The Company and
Executive are hereinafter collectively referred to as the "Parties," and
individually referred to as a "Party."
RECITALS
A. The Company desires assurance of the association and services of
Executive in order to retain Executive's experience, skills, abilities,
background and knowledge, and is willing to engage Executive's services on the
terms and conditions set forth in this Agreement.
B. Executive desires to be in the employ of the Company, and is willing
to accept such employment on the terms and conditions set forth in this
Agreement.
AGREEMENT
In consideration of the foregoing premises and the mutual covenants herein
contained, and for other good and valuable consideration, the Parties, intending
to be legally bound, agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive, and Executive hereby
accepts employment by the Company, upon the terms and conditions set forth in
this Agreement.
2. POSITION AND RESPONSIBILITIES.
(A) DUTIES. The Company shall employ Executive in the capacity of Senior
Vice President-Global Business and Development, and Executive shall serve as
such for the term and under other conditions hereinafter set forth. Executive
shall devote his full business time and attention to the performance of such
services as are customary for such a position and of such other services as may
be necessarily requested by the Board of Directors of the Company (the "Board")
that are consistent with those required of such a position. In the event that,
without his consent, Executive is assigned to a position involving a different
title or materially lesser authority and responsibility, then Executive shall
have the option, exercisable for 30 days following notice to Executive of such
assignment or new title, to consider that this Agreement has been terminated
without cause in which case Executive shall be entitled to the benefits set
forth in Section 7(c) hereof.
(B) COMPANY PROPERTY. All advertising, sales, manufacturers' and other
materials or articles or information, including without limitation data
processing reports, customer sales
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analyses, invoices, price lists or information, samples, or any other materials
or data of any kind furnished to Executive by the Company or developed by
Executive on behalf of the Company or at the Company's direction or for the
Company's use or otherwise in connection with Executive's employment hereunder,
are and shall remain the sole and confidential property of the Company; if the
Company requests the return of such materials at any time during or at or after
the termination of Executive's employment, Executive shall immediately deliver
the same to the Company.
(C) NONCOMPETITION, TRADE SECRETS, ETC.
(I) During the term of this Agreement and, only in the event that
Executive's employment is terminated for cause (as defined below) or Executive
resigns without good reason (as defined below), for one year after the
termination of his employment with Company, Executive shall not, directly or
indirectly, solicit, induce, encourage or attempt to influence any client,
customer, employee, consultant, independent contractor, salesman or supplier of
the Company to cease to do business or terminate his employment with the
Company, and shall not engage in (as a principal, partner, director, officer,
agent, employee, consultant or otherwise) or be financially interested in any
business operating anywhere in the world which is involved in business
activities which are the same as or in competition with business activities
carried on by the Company, or being definitively planned by the Company, at the
time of the termination of Executive's employment. However, nothing contained
in this Section 2(c) shall prevent Executive from (A) holding for investment no
more than 5% of any class of equity securities of a company whose securities
are publicly traded or (B) hiring an employee of the Company who approached
Executive of the employee's own accord without Executive violating any of the
above provisions of this Section 2(c)(i). The covenant in this Section 2(c)(i)
is not limited geographically because the Company's business is international,
and Executive acknowledges that he will be performing duties that are
international in scope.
(II) During the term of this Agreement and at all times thereafter,
Executive shall not use for his personal benefit, or disclose, communicate or
divulge to, or use for the direct or indirect benefit of any person, firm,
association or company other than the Company, any material referred to in
Section 2(b) above or any confidential and/or proprietary information regarding
the business methods, business policies, procedures, techniques, research or
development projects or results, trade secrets, or other knowledge or processes
of or developed by the Company or any names and addresses of customers or
clients or any data on or relating to past, present or prospective customers or
clients or any other confidential information relating to or dealing with the
business operations or activities of the Company, made known to Executive or
learned or acquired by Executive while in the employ of the Company.
Notwithstanding the foregoing, it is understood that this Section 2(c)(ii) is
not intended to cover information that is generally known in the trade or
industry (other than through a breach of this Agreement) or information that is
not gained as a result of a breach of this Agreement, and his own skill and
experience.
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(iii) Any and all writings, inventions, improvements, processes and/or
techniques which Executive may make, conceive, discover or develop, either
solely or jointly with any other person or persons, at any time during the term
of this Agreement, whether during working hours or at any other time and
whether at the request or upon the suggestion of the Company or otherwise,
which relate to or are useful in connection with any business now or hereafter
carried on or contemplated by the Company, including developments or expansions
of its present fields of operations, shall be the sole and exclusive property
of the Company. Executive shall make full disclosure to the Company of all
such writings, inventions, improvements, processes, procedures and techniques,
and shall do everything necessary or desirable to vest the absolute title
thereto in the Company. Executive shall write and prepare all specifications
and procedures regarding such inventions, improvements, processes, procedures
and techniques and otherwise aid and assist the Company so that the Company can
prepare and present applications for copyright or Letters Patent therefor and
can secure such copyright or Letters Patent wherever possible, as well as
reissues, renewals, and extensions thereof, and can obtain the record title to
such copyright or patents so that the Company shall be the sole and absolute
owner thereof in all countries in which it may desire to have copyright or
patent protection. Executive shall not be entitled to any additional or
special compensation or reimbursement regarding any and all such writings,
inventions, improvements, processes, procedures and techniques.
(iv) Executive acknowledges that the restrictions contained in the
foregoing subsections (i), (ii) and (iii), in view of the international nature
of the business in which Company is engaged, are reasonable and necessary in
order to protect the legitimate interests of the Company, and that any
violation thereof would result in irreparable injuries to the Company, and
Executive therefore acknowledges that, in the event of his violation of any of
these restrictions, the Company shall be entitled to obtain from any court of
competent jurisdiction preliminary and permanent injunctive relief as well as
damages and an equitable accounting of all earnings, profits and other benefits
arising from such violation, which rights shall be cumulative and in addition
to any other rights or remedies to which the Company may be entitled.
Executive further acknowledges and represents that he possesses skill and
ability which can be applied in business areas which do not compete with the
Company, and therefore the restrictions contained in this Agreement will not
prevent him from securing gainful employment after termination of this
Agreement.
(v) If the period of time or the area specified in subsection (i) above
should be adjudged unreasonable in any proceeding, then the period of time
shall be reduced by such number of months or the area shall be reduced by the
elimination of such portion thereof or both so that such restrictions may be
enforced in such area and for such time as is adjudged to be reasonable. If
Executive violates any of the restrictions contained in the foregoing
subsection (i), the restrictive period shall not run in favor of Executive from
the time of the commencement of any such
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violation until such time as such violation shall be cured by Executive to the
satisfaction of Company.
(VI) For purposes of Sections 2(b) and 2(c) of this Agreement, the term
"Company" shall mean SubMicron Systems Corporation and its direct and indirect
subsidiaries.
3. TERM OF EMPLOYMENT. This Agreement shall become effective as of September
8, 1997, (the "Effective Date") and shall remain in effect until Executive's
employment is terminated in accordance with Section 6; provided, however, that
the provisions of Sections 2(b), 2(c), 6(d)(iii), 7, 8 and 9 shall survive such
termination.
4. PLACE OF PERFORMANCE. In connection with this Agreement, Executive shall
maintain an office at the Company's current principal executive offices in
Allentown, Pennsylvania.
5. SALARY, BONUS, EXPENSES AND BENEFITS.
(A) SALARY. While employed by the Company, the Company shall pay
Executive a salary of $200,000 per year, payable in regular periodic payments
in accordance with the Company policy. Such salary shall be prorated for any
partial year of employment on the basis of a 365-day fiscal year. Executive's
salary shall be reviewed and revised (if appropriate) at least annually by the
Compensation Committee of the Board (the "Committee") and may, at the
Committee's sole discretion, be adjusted based upon Executive's job
performance, the Company's financial condition and performance and the salary
and compensation levels of executives in similar companies with similar
responsibilities but in any event not less than $200,000 per year without
Executive's prior written consent.
(B) BONUSES. The Committee may, in its sole discretion and without the
vote of Executive (if Executive is a member of the Committee), award bonus or
other performance-based compensation to Executive.
(C) OPTIONS. The Company shall grant Executive no later than the
Effective Date an option to purchase 125,000 shares (inclusive of currently
outstanding shares) of the Company's Common Stock (the "Stock Option") at an
exercise price equal to the fair market value of the Common Stock on the date
of grant in the form attached hereto as Exhibit A. The Company shall promptly
file with the Securities and Exchange Commission, and during the term of the
Stock Option maintain the effectiveness of, a Form S-8 registration statement
(or another form of registration statement if such form is not available)
covering all of the shares of Common Stock subject to the Stock Option.
(D) RELOCATION ASSISTANCE. The Company will provide Executive with the
following relocation assistance: (i) the Company shall reimburse Executive for
all reasonable expenses
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associated with the sale of Executive's residence in Danville, California,
including the realtor's commission, any attorneys' fees and expenses and any
transfer or stamp taxes; (ii) the Company shall reimburse Executive for all
expenses incurred by Executive in acquiring a residence in or near Allentown,
Pennsylvania, including any fees or "points" paid to the lender for a loan to
fund such acquisition, all costs associated with any inspection or reports on
such residence and any attorneys' fees and expenses; (iii) the Company shall
reimburse Executive for all reasonable expenses incurred by Executive in
connection with packing and moving his personal property from Danville,
California to Allentown, Pennsylvania, including the costs of transporting his
automobiles; (iv) the Company shall reimburse Executive for his and his
immediate family's reasonable travel expenses in connection with their
relocation to Pennsylvania; and (v) the Company shall reimburse Executive for
any reasonable temporary housing in or about Allentown, Pennsylvania (for up to
90 days) or storage of personal property pending Executive's occupancy of a
permanent residence. In addition, the Company shall gross-up any reimbursement
payments to or on behalf of Executive pursuant to this Section 5(d) so as to
hold Executive harmless from any adverse federal, state or local tax effect.
(E) PARTICIPATION IN WELFARE AND BENEFIT PLANS. Executive shall be
entitled to participate in, personally and/or for the benefit of his family or
other beneficiaries, any welfare, insurance, pension or other employment
benefit plans as are at the time made generally available to other executives
of the Company to the same extent as generally made available to such
executives. Executive shall be eligible to receive during the term hereof all
benefits for which executives of the Company are eligible under every such plan
or program to the extent permissible under the general terms and provisions of
such plans or programs and in accordance with the provisions thereof.
(F) BENEFIT TIME. Executive shall be entitled to six weeks' benefit time
each year, during which time his compensation shall be paid in full. Unless
otherwise directed by the Committee, Executive shall have the discretion to
take benefit time on the dates he determines to be appropriate and not
detrimental to the Company.
(G) HOLIDAYS, LEAVE DAYS, ETC. Executive shall be entitled to such
holidays, sick leave, leaves of absence and other absences as are at the time
made generally available to other executives of the Company of comparable
tenure and positions.
(H) AUTOMOBILE. During the term of this Agreement, the Company shall make
an automobile available to Executive under such terms and conditions as are
presently applied or may be applied from time to time to other executives of
the Company of comparable tenure and position. In connection therewith, the
Company shall bear all reasonable expenses relating to such automobile,
including insurance, maintenance and repair, gas and oil. Upon termination of
this Agreement (other than by the Company without cause or by Executive for
good reason, in which case Section 7(c) shall govern), the Company shall offer
Executive the right to purchase the
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automobile then being operated by Executive at the depreciated value of such
automobile or to assume the Company's lease of such automobile and shall
execute and deliver to Executive all documentation necessary to establish
Executive's ownership or leasing of such automobile upon proper payment or
assumption thereof.
(I) LIFE INSURANCE. If the Company maintains group life insurance, the
Company shall pay for and provide life insurance for each year of this
Agreement for the benefit of Executive under the Company's group life insurance
plan to the same extent as other executives of the Company.
(J) HEALTH INSURANCE. The Company shall provide medical, dental and
vision insurance for Executive under the Company's insurance plan(s).
(K) DISABILITY INSURANCE. The Company shall provide disability insurance
for Executive pursuant to the Company's directors' and officers' disability
policy according to the Company's policy established by the Committee, if the
Company maintains such insurance.
(L) REIMBURSEMENT OF EXPENSES. The Company shall pay or reimburse
Executive, in accordance with Company's standard practices, for reasonable
travel, entertainment, promotional and other expenses incurred by Executive in
the performance of his obligations under this Agreement. Executive must submit
timely detailed expense reports for appropriate review prior to reimbursement.
(M) OTHER FRINGE BENEFITS. Executive shall be entitled to any and all
other fringe benefits according to the Company's policy as set by the
Committee.
(N) INDEMNITY AGREEMENT. On or before the Effective Date, the Company and
Executive shall enter into an Indemnity Agreement in the form attached hereto
as Exhibit B. In addition, the Company shall maintain a policy of directors'
and officers' liability insurance covering Executive in accordance with policy
limits and other terms to be determined by the Board.
(O) COMPENSATION COMMITTEE. If from time to time there is no committee
of the Board designated as the "Compensation Committee," the references to the
"Committee" herein shall be deemed to be references to the Board (or other
committee established by the Board for purposes of administering this
Agreement) for purposes of interpretation of provisions of this Agreement
applicable during such times.
6. TERMINATION OF EMPLOYMENT. Executive's employment under this Agreement may
be terminated by the Company or Executive as herein provided, without further
obligation or liability except as expressly provided in this Agreement.
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(A) RESIGNATION, DEATH OR DISABILITY. Executive's employment hereunder
shall be terminated at any time by Executive's resignation (other than a
resignation for good reason as provided in Section 6(d)), or by Executive's
death or disability. In the event Executive wishes to resign, he shall give
the Board not less than 30 days prior notice of such resignation, which notice
shall indicate the proposed resignation date. Following receipt of such
notice, the Company, through an action by its Board, shall have the right to
accelerate the date of Executive's resignation and to cause his resignation to
become effective at any time prior to the resignation date set forth in
Executive's original notice; provided, however, that such acceleration or
changed effective date of resignation shall not affect in any manner the
delivery of any benefits or payments to which Executive may be entitled under
Section 7 of this Agreement. For purposes of this Agreement, disability shall
be deemed to have occurred only after the following procedure has been
satisfied. If within 30 days after notice of proposed termination for
disability is given to Executive by the Company, Executive has not returned to
the performance of substantially all his duties, the Company may terminate
Executive's employment by giving notice of termination for disability. The
notice of proposed termination may only be given by the Company following
Executive's substantial and material absence from Executive's duties by reason
of physical or mental disability for a period of 180 calendar days.
(B) TERMINATION FOR CAUSE. Executive's employment hereunder may be
terminated by the Company for cause. For purposes of this Agreement, "cause"
shall mean any of the following:
(i) Executive's willful breach or habitual neglect of his material
duties and responsibilities as an employee and officer of the Company; provided,
however, that merely unsatisfactory performance by Executive of such duties and
responsibilities shall not constitute "cause" for purposes of this Agreement;
and provided further that Executive has received written notice of such breach
or neglect from the Board, has had an opportunity to respond to the notice in a
meeting with the Board or a duly appointed committee thereof, and has failed to
substantially cure such breach or neglect within 30 days of such notice;
(ii) a material violation by Executive of Section 2(b) or 2(c) of this
Agreement; provided that Executive has received written notice of such event
from the Board, has had an opportunity to respond to the notice in a meeting
with the Board or a duly appointed committee thereof and has not cured such
violation within 30 days following notice thereof;
(iii) conviction of Executive of any felony materially and negatively
affecting the Company's business; or
(iv) fraud, breach of trust or other act of dishonesty materially and
negatively affecting the Company's business; provided that Executive has
received written notice of such event
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from the Board, and has had an opportunity to respond to the notice in a
meeting with the Board or a duly appointed committee thereof.
Any notice of termination given pursuant to this Section 6(b) shall effect
termination as of the date specified in such notice or, in the event no such
date is specified, on the last day of the month in which such notice is
delivered or deemed delivered as provided in Section 9(j) below.
(C) TERMINATION WITHOUT CAUSE. The Company shall have the right,
exercisable at any time during the term of this Agreement on a written notice
to Executive, to terminate Executive's employment without cause upon 30 days
prior notice. If Executive's employment is terminated without cause, he shall
be entitled to receive the severance benefits pursuant to Section 7(c).
(D) RESIGNATION FOR GOOD REASON.
(i) During the term hereof, Executive may regard Executive's
employment as being constructively terminated and may, therefore, resign within
30 days of Executive's discovery of the occurrence of one or more of the
following events, any of which will constitute "good reason" for such
resignation:
(1) a change in Executive's status, title, position or
responsibilities (including reporting responsibilities) which, in Executive's
reasonable judgment, represents a material adverse change from his status,
title, position or responsibility as provided for in this Agreement; the
assignment to Executive of any duties or responsibilities which, in Executive's
reasonable judgment, are inconsistent with his status, title, position or
responsibilities as provided for in this Agreement; or any removal of Executive
from or failure to reappoint or re-elect him to any of such offices or
positions, except in connection with the termination of his employment for cause
or as a result of his resignation, death or disability in accordance with the
other provisions of this Section 6;
(2) a reduction in Executive's base salary or any failure to pay
Executive any compensation or benefits to which he is entitled within five days
of notice thereof;
(3) the Company's requiring Executive to be based at any place
outside a 25-mile radius from Executive's primary place of employment, except
for reasonably required travel on the Company's business;
(4) any material breach by the Company of any material provision
of this Agreement;
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(5) a material breach by the Company of any material provision of
the Stock Option; or
(6) the failure of the Company to obtain an agreement,
satisfactory to Executive, from any Successors and Assigns to assume and agree
to perform this Agreement, as contemplated in Section 9(d) hereof.
(ii) In the event of the occurrence of any of the events or conditions
described in clauses (1) through (5) of Section 6(d)(i) and in the event
Executive wishes to resign on the basis of occurrence of such event, Executive
shall give the Company notice of his proposed resignation within 30 days of the
discovery of such event, and, except as provided in Section 8(a)(ix), the
Company shall have 30 days following its receipt of such notice to remedy the
breach or occurrence giving rise to such proposed resignation, following which,
if the Company fails to so remedy said breach or occurrence, Executive shall be
deemed to have resigned from his employment with the Company for good reason
pursuant to this Section 6(d).
(iii) Any event or condition described in clauses (1) through (5) of
Section 6(d)(i) which occurs prior to a Change in Control but which Executive
reasonably demonstrates was at the request of a Third Party (as defined below),
or otherwise arose in connection with, or in anticipation of, a Change in
Control which actually occurs, shall be deemed to have occurred after the Change
in Control for purposes of Section 8.
(iv) Executive's right to terminate his employment pursuant to this
Section 6(d) shall not be affected by his incapacity due to disability.
(e) TERMINATION OBLIGATIONS. Executive here acknowledges and agrees that
all personal property of the Company, including, without limitation, all books,
manuals, records, reports, notes, contracts, lists, and other documents,
proprietary information, copies of any of the foregoing, and equipment furnished
to or prepared by Executive in the course of or incident to his employment,
belong to the Company and shall be promptly returned to the Company upon
termination of his employment for any reason. Executive shall retain the rights
to remove all of his personal property from the premises of the Company and any
personal property of the Company as may be mutually agreed upon between the
Company and Executive.
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7. PAYMENTS TO EXECUTIVE UPON TERMINATION.
(A) DISABILITY OR DEATH. In the event of termination of Executive's
employment because of disability or death, the Company shall pay Executive or
Executive's estate, as applicable, all accrued salary and a pro rata portion of
the maximum potential annual bonus (if Executive is a participant in a plan or
other arrangement that provides for a maximum or a target bonus), and all
benefits generally available to the Company's executives as of the date of such
an event as determined by the Committee shall be payable to Executive or
Executive's estate, without reduction, in accordance with the terms of any plan,
contract, understanding or arrangement forming the basis for such payment,
including but not limited to, payments under the plans identified in Section
5(e). Executive shall be entitled to such other payments as might arise from any
plan, contract, understanding or arrangement between Executive and the Company
at the time of any such event pursuant to Section 5(e), (i), or (k) hereof.
(B) TERMINATION FOR CAUSE OR RESIGNATION WITHOUT GOOD REASON. In the
event Executive's employment is terminated by the Company for cause as provided
in Section 6(b) or Executive resigns for other than good reason as defined in
Section 6(d), the Company shall have no further obligation or liability of any
nature to Executive under this Agreement or otherwise, except to the extent
provided in any plan identified in Section 5(e), or in Section 8 or as may be
expressly required by law.
(C) TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON. In the
event Executive's employment is terminated by the Company without cause, or
Executive resigns for good reason as defined in Section 6(d), the Company shall
pay promptly to Executive a lump-sum equal to Executive's salary for 12 months
at the rate paid to Executive immediately prior to such event and an amount
equal to the greater of (x) the total bonus compensation paid to Executive for
the preceding fiscal year and (y) 25% of Executive's base salary at the rate
paid to Executive immediately prior to such event; provided, however, upon the
written request of Executive, the Company shall pay such amounts to Executive in
equal installments no more frequently than the Company's standard pay cycle, for
a period not to exceed 12 months, beginning one pay period from the date
Executive ceases working for the Company. In the event Executive elects to
continue his coverages under Section 5(j) hereof pursuant to COBRA, the Company
make the required payments for such coverages under COBRA for 12 months
following Executive's termination of employment. The Company's obligation
hereunder with respect to making payments for the benefits under Section 5(j)
shall terminate upon Executive's ceasing to be eligible for continuation of such
benefits from SubMicron under COBRA. Executive shall promptly notify the Company
in the event Executive becomes covered by another benefit plan during such
12-month period. In addition, subject to more favorable provisions such as those
included in the Stock Option, any options to purchase the capital stock of the
Company held by Executive, including the Stock
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Option, which would vest in the 12 months following termination of Executive's
employment shall vest immediately as of the date of such termination.
(D) PAYMENTS TO EXECUTIVE UPON CHANGE IN CONTROL. In the event that
Executive is entitled to receive payments upon termination of employment
pursuant to Section 8 hereof, the provisions of Section 8 shall determine all
amounts and other rights of Executive upon termination of employment, and the
provisions of Section 7(a)-(c) shall not be applicable.
8. CHANGE IN CONTROL.
(a) DEFINITIONS.
(i) ACCRUED COMPENSATION. For purposes of this Section 8, "Accrued
Compensation" shall mean an amount which shall include all amounts earned or
accrued through the "Termination Date" as defined below but not paid as of the
Termination Date including (A) base salary, (B) reimbursement for reasonable and
necessary expenses incurred by Executive on behalf of the Company ending on the
Termination Date, (C) benefit time pay (to the extent provided by the Company
policy or applicable law), and (D) bonuses and incentive compensation (other
than the "Pro Rata Bonus" (as defined below)).
(ii) BASE AMOUNT. For purposes of this Section 8, "Base Amount" shall
mean the greater of (A) Executive's annual base salary at the rate in effect
immediately prior to the Change in Control and (B) Executive's annual base
salary at the rate in effect on the Termination Date, and shall include all
amounts of his base salary that are deferred under the qualified and
non-qualified employee benefit plans of the Company or any other agreement or
arrangement.
(iii) BONUS AMOUNT. For purposes of this Section 8, "Bonus Amount"
shall mean the greater of (A) Executive's maximum potential annual bonus
(without giving effect to any pro ration) for the fiscal year in which a Change
in Control has occurred (if Executive is a participant in a plan or other
arrangement that provides for a maximum or a target bonus), (B) Executive's
maximum potential annual bonus (without giving effect to any pro ration) for the
fiscal year in which the Termination Date occurs (if Executive is a participant
in a plan or other arrangement that provides for a maximum or a target bonus),
and (C) the actual annual bonus paid to Executive in the fiscal year immediately
preceding the Change in Control.
(iv) CHANGE IN CONTROL. For purposes of this Agreement, a "Change in
Control" shall mean any of the following events:
(1) An acquisition (other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any "Person" (as
the term person is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended
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(the "1934 Act")) immediately after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of thirty
percent or more of the combined voting power of the Company's then outstanding
Voting Securities; provided, however, that in determining whether a Change in
Control has occurred, Voting Securities which are acquired in a "Non-Control
Acquisition" (as defined below) shall not constitute an acquisition which would
cause a Change in Control. A "Non-Control Acquisition" shall mean an acquisition
by (1) an employee benefit plan (or a trust forming a part thereof) maintained
by (x) the Company or (y) any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest is owned directly
or indirectly by the Company (a "Subsidiary"), (2) the Company or any
Subsidiary, or (3) any Person in connection with a "Non-Control Transaction."
(2) The individuals who, as of the date hereof, are members of the Board
(the "Incumbent Board"), cease for any reason to constitute at least two-thirds
of the Board; provided, however, that if the election, or nomination for
election by the Company's stockholders, of any new director was approved by a
vote of at least two-thirds of the then Incumbent Board, such new director
shall, for purposes of this Agreement, be considered as a member of the
Incumbent Board; provided further, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened "Election Contest" (as described in
Rule 14a-11 promulgated under the 0000 Xxx) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board (a "Proxy Contest") including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest; or
(3) Approval by stockholders of the Company of:
A. A merger, consolidation or reorganization involving the Company,
unless
i. the stockholders of the Company, immediately before such
merger, consolidation or reorganization, own, directly or indirectly,
immediately following such merger, consolidation or reorganization, at least
seventy percent of the combined voting power of the outstanding Voting
Securities of the corporation resulting from such merger or consolidation or
reorganization (the "Surviving Corporation") in substantially the same
proportion as their ownership of the Voting Securities immediately before such
merger, consolidation or reorganization, and
ii. the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such merger,
consolidation or reorganization constitute at least two-thirds of the members of
the board of
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directors of the Surviving Corporation or a corporation beneficially owning,
directly or indirectly, a majority of the Voting Securities of the Surviving
Corporation, and
III. no Person (other than the Company, any Subsidiary, any employee
benefit plan (or any trust forming a part thereof) maintained by the Company,
the Surviving Corporation or any Subsidiary, or any Person who, immediately
prior to such merger, consolidation or reorganization had Beneficial Ownership
of fifteen percent or more of the then outstanding Voting Securities) owns,
directly or indirectly, fifteen percent or more of the combined voting power of
the Surviving Corporation's then outstanding voting securities, and
IV. a transaction described in clauses i through iii shall herein be
referred to as a "Non-Control Transaction";
B. A complete liquidation or dissolution of the Company; or
C. A sale or other disposition of all or substantially all of the assets
of the Company to any Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person,
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Company,
and after such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.
(4) Notwithstanding anything contained in this Agreement to the contrary,
if Executive's employment is terminated prior to a Change in Control and
Executive reasonably demonstrates that such termination (i) was at the request
of a third party who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control and who effectuates a Change in
Control (a "Third Party") or (ii) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs, then for all
purposes of this Agreement, the date of a Change in Control with respect to
Executive shall mean the date immediately prior to the date of such termination
of Executive's employment.
(V) COMPANY. The "Company" shall include the Company's "Successors and
Assigns" (as defined below).
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(VI) NOTICE OF TERMINATION. "Notice of Termination" shall mean a written
notice of termination of Executive's employment from the Company which
indicates the specific termination provision in this Agreement relied upon and
which, if applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated.
(VII) PRO RATA BONUS. "Pro Rata Bonus" shall have the meaning ascribed to
such term in any agreement between Executive and the Company or any of its
affiliates, or if no such agreement with respect to such term exists, shall
mean an amount equal to (a) the Bonus Amount, if any, multiplied by a fraction,
(i) the numerator of which is the number of days from the first day of the
Company's fiscal year in which Executive ceases to be employed by the Company
until the Termination Date, and (ii) the denominator of which is 365, less (b)
any bonus included in the Bonus Amount in respect of such fiscal year and
previously paid.
(VIII) SUCCESSORS AND ASSIGNS. "Successors and Assigns" shall mean a
corporation or other entity acquiring all or substantially all the assets and
business of the Company whether by operation of law or otherwise.
(IX) TERMINATION DATE. For purposes of this Section 8, "Termination Date"
shall mean (a) in the case of Executive's death, his date of death, (b) in the
case of good reason, the last day of his employment, and (c) in all other
cases, the date specified in the Notice of Termination; provided, however, that
if Executive's employment is terminated by the Company due to disability, the
date specified in the Notice of Termination shall be at least 30 days from the
date the Notice of Termination is given to Executive, provided that in the case
of disability Executive shall not have returned to the full-time performance of
his duties during such period of at least 30 days.
(B) TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN CONTROL.
(I) SEVERANCE PAY AND BENEFITS. If Executive shall cease to be employed
by the Company prior to the expiration of 15 months after the occurrence of a
Change in Control, in lieu of the payments and benefits described in Section 7,
Executive shall be entitled to the following compensation and benefits:
(1) If Executive's employment with the Company shall be terminated (other
than by reason of Executive's death and other than for disability) (x) by the
Company for any reason other than for cause or (y) by Executive as a result of
resignation for good reason, Executive shall be entitled to the following:
A. The Company shall pay Executive all Accrued Compensation and a Pro-Rata
Bonus;
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b. The Company shall pay Executive as severance pay and in lieu of any
further compensation for periods subsequent to the Termination Date, in a
single payment an amount in cash equal to one times the sum of (A) the Base
Amount and (B) the Bonus Amount; and
c. In the event Executive elects to continue his coverages under Section
5(j) hereof pursuant to COBRA, the Company make the required payments for such
coverages on behalf of Executive and his dependents and beneficiaries under
COBRA for 12 months following Executive's termination of employment (the
"Continuation Period"). The Company's obligation hereunder with respect to
making payments for the foregoing benefits shall terminate upon Executive's
ceasing to be eligible for continuation of such benefits from SubMicron under
COBRA. Executive shall promptly notify the Company in the event Executive
becomes covered by another benefit plan during the Continuation Period. This
paragraph c shall not be interpreted so as to limit any benefits to which
Executive, his dependents or beneficiaries may be otherwise entitled under any
of the Company's employee benefit plans, programs or practices following
termination of Executive's employment, including without limitation, retiree
medical and life insurance benefits, if any.
(2) If Executive's employment with the Company shall be terminated (x) by
reason of Executive's death or (y) for disability or (z) by Executive by
resignation other than for good reason, the Company shall pay to Executive the
Accrued Compensation plus the Pro Rata Bonus.
(3) If Executive's employment with the Company shall be terminated by the
Company for cause, the Company shall pay to Executive the Accrued Compensation.
(ii) PAYMENT FORM. The amounts provided for in paragraphs a and b of
Sections 8(b)(i) and Sections 8(b)(i)(2) and 8(b)(i)(3) shall be paid in a
single lump sum cash payment within five days after Executive's Termination
Date (or earlier, if required by applicable law); provided, however, upon the
written request of Executive, the Company shall pay such amounts to Executive
in equal installments no more frequently than the Company's standard pay cycle,
for a period not to exceed 12 months, beginning one pay period from Executive's
Termination Date.
(iii) NO MITIGATION. Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment or otherwise and no such payment shall be offset or reduced by the
amount of any compensation or benefits provided to Executive in any subsequent
employment.
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(IV) OTHER SEVERANCE ARRANGEMENTS. Whether or not any Change in Control
shall occur, the following shall apply:
(1) This Agreement shall continue in full force and effect in accordance
with its terms.
(2) Executive's entitlement to any other compensation or benefits or any
indemnification shall be determined in accordance with the Company's employee
benefit plans, bonus plan and other applicable programs, policies and practices
or any indemnification agreement then in effect.
(C) NOTICE OF TERMINATION. Following a Change in Control, any purported
termination of Executive's employment by either party shall be communicated by
Notice of Termination to the other party. For purposes of this Agreement, no
such purported termination shall be effective without such Notice of
Termination.
(D) EXCISE TAX LIMITATION.
(I) Notwithstanding anything contained in this Agreement to the contrary,
to the extent that the payments and benefits provided under this Agreement and
benefits provided to, or for the benefit of, the Executive under any other
Company plan or agreement (such payments or benefits are collectively referred
to as the "Payments") would be subject to the excise tax (the "Excise Tax")
imposed under Section 4999 of the Internal Revenue Code of 1986, as amended,
the Payments shall be reduced (but not below zero) if and to the extent
necessary so that no Payment to be made or benefit to be provided to the
Executive shall be subject to the Excise Tax (such reduced amount is
hereinafter referred to as the "Limited Payment Amount"). Unless Executive
shall have given prior written notice specifying a different order to the
Company to effectuate the foregoing, the Company shall reduce or eliminate
Payments, by first reducing or eliminating the portion of Payments which is not
payable in cash and then by reducing or eliminating cash payments, in each case
in reverse order beginning with payments or benefits which are to be paid the
farthest in time from the Determination (as defined below). Any notice given
by Executive pursuant to the preceding sentence shall take precedence over the
provisions of any other plan, arrangement or agreement governing Executive's
rights and entitlements to any benefits or compensation.
(II) The determination of whether Payments shall be reduced to the Limited
Payment Amount pursuant to this Agreement and the amount of such Limited
Payment Amount shall be made, at the Company's expense, by an accounting firm
selected by the Company from among the six largest accounting firms in the
United States (the "Accounting Firm"). The Accounting Firm shall provide its
determination (the "Determination"), together with detailed
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supporting calculations and documentation to the Company and Executive within
ten days of the Termination Date, if applicable, or such other time as
requested by Company or by Executive (provided Executive reasonably believes
that any of the Payments may be subject to the Excise Tax) and if the
Accounting Firm determines that no Excise Tax is payable by Executive with
respect to the Payments, it shall furnish Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to any
such Payments. The Determination shall be binding, final and conclusive upon
the Company and Executive.
(E) NON-EXCLUSIVITY OF RIGHTS. Nothing in this Section 8 shall prevent or
limit Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company (except for any
severance or termination policies, plans, programs or practices (other than
such policies, plans, programs or practices set forth in this Agreement, which
in accordance with Section 8(b)(iv)(1) and subject to Section 9(a), shall
continue in full force and effect)) and for which Executive may qualify, nor
shall anything herein limit or reduce such rights as Executive may have under
any other agreements with the Company (except for any severance or termination
agreement). Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan or program of the Company shall be payable
in accordance with such plan or program, except as explicitly modified by this
Agreement. Notwithstanding anything in this Agreement to the contrary, upon
the occurrence of a Change in Control, any options to purchase shares of the
Company's Common Stock granted by the Company to Executive shall be governed by
the respective option documents granting such options.
9. GENERAL PROVISIONS.
(A) ENTIRE AGREEMENT. The terms and provisions of this Agreement shall
constitute the entire understanding between Executive and the Company with
respect to the subject matter hereof, and shall supersede any and all prior
agreements or understandings between Executive and the Company, whether written
or oral.
(B) AMENDMENTS. This Agreement may be amended or modified only by a
written instrument executed by Executive and the Company.
(C) ASSIGNMENT. The rights or obligations contained in this Agreement
shall not be assigned, transferred, or divided in any manner by Executive or
the Company, without the prior written consent of the other; provided, however,
that nothing in this Section 9(c) shall preclude Executive from designating a
beneficiary to receive any benefits hereunder upon his death, or the executors,
administrators or other legal representatives of Executive or his estate from
assigning any rights hereunder to the person(s) entitled hereto.
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(D) SUCCESSORS. This Agreement shall be binding upon and shall inure to
the benefit of the Company, its Successors and Assigns, and the Company shall
require any Successors and Assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.
(E) FEES AND EXPENSES. The Company shall pay all legal fees and related
expenses reasonably incurred by Executive as they become due in connection with
the preparation, negotiation and execution of this Agreement.
(F) GOVERNING LAW. This Agreement shall be governed by, interpreted and
enforced in accordance with Pennsylvania law as such laws are applied to
agreements between Pennsylvania residents entered into and to be performed in
Pennsylvania.
(G) SEVERABILITY. In the event that any terms or provisions of this
Agreement shall be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining terms and provisions hereof.
(H) WAIVER OF BREACH. Any waiver of any breach of employment terms set
forth herein shall not be construed to be a continuing waiver of consent to any
subsequent breach on the part of either Executive or the Company.
(I) HEADINGS. The headings of paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation and
performance of any of the provisions of this Agreement.
(J) NOTICES. All notices, requests, demands and other communications
hereunder (including any Notice of Termination) shall be in writing and shall be
deemed to have been duly given if personally delivered or if mailed by United
States certified or registered mail, prepaid, to the parties or their permitted
assignees at the following addresses (or at such other address as shall be given
in writing by either party to the other):
To: SubMicron Systems Corporation
0000 Xxxxxxxxx Xx., #000
Xxxxxxxxx, XX 00000
To: Xxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the day and year first written above.
SUBMICRON SYSTEMS CORPORATION
By: _____________________________________ _____________________________________
Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx
President and Chief Executive Officer
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