Exhibit 10.23
EMPLOYMENT AGREEMENT
Agreement (hereinafter "Agreement") dated as of October 25, 1999 by and
between CFM Technologies, Inc., a Pennsylvania Business Corporation having a
place of business at 000 Xxxxxxxx Xxxxxxxxx, Xxxxx, XX 00000 ("CFM"), and Xxxxx
X. Xxxxxxx, an individual residing at 000 X. Xxxxxxx Xxxx, Xxxx Xxxxxxx, XX
00000 ("Xxxxxxx").
WITNESSETH:
WHEREAS, based upon Xxxxxxx'x demonstrated commitment and unique
contributions to the Company, especially with respect to the timely raising of
equity capital, and a desire to motivate Xxxxxxx'x continued employment, CFM
desires to employ Xxxxxxx as Vice President - Finance, Secretary, Treasurer and
Chief Financial Officer and, Xxxxxxx desires to be employed by CFM as Vice
President - Finance, Secretary, Treasurer and Chief Financial Officer, all
pursuant to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants herein contained, and intending to be legally bound hereby, it is
agreed as follows:
1. EMPLOYMENT: DUTIES
CFM engages and employs Xxxxxxx, and Xxxxxxx hereby accepts engagement and
employment, as Vice President - Finance, Secretary, Treasurer and Chief
Financial Officer to direct, supervise and have responsibility for the finance
and administration functions of CFM and its subsidiaries and to perform such
other services and duties as the President of CFM, in his sole discretion, shall
reasonably determine.
Subject to Xxxxxxxxx 0, Xxxxxxx shall devote his full business time, energy
and skill to his duties hereunder and such level of effort shall be on a full
time basis. It is understood and agreed that Xxxxxxx may not engage in other
business activities during the term of this contract, whether or not for profit
or other pecuniary advantage; provided, however, that Xxxxxxx may make personal
financial investments which do not involve his active participation and may
engage in other activities, including service as a member of the board of
directors of any bank or other financial institution, or as a member of the
board of directors of Quad Systems Corporation, Two Technologies, Inc., Polymer
Chemistry Innovations, Inc. and any other corporation with written approval of
the Board, to the extent that none of such activities hinder or interfere with
the performance of his duties under this agreement or conflict with CFM's
policies concerning conflict of interest or the business of CFM in any material
way.
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2. COMPENSATION
As compensation for the performance of his duties on behalf of CFM, Xxxxxxx
shall be compensated as follows:
(a) A base salary of $165,000 per annum.
(b) Employee fringe benefits including, but not limited to, such health
insurance, long-term disability insurance, life insurance, company
savings and investment plan participation, vacations and holidays as
are made available to other employees, as such benefits may be changed
from time to time for other employees.
(c) Participation in an annual cash incentive bonus award program with a
target annual payment of not less than 30% of Xxxxxxx'x base salary.
Determination of Xxxxxxx'x payments hereunder shall be made in a
manner substantially similar for Xxxxxxx as shall be determined for
all other executive officers and key individual contributors of CFM.
3. TERM
This Agreement shall remain in full force and effect for a period of five
(5) years from the first date above (the "Initial Term") and shall renew for a
period of three (3) additional years unless CFM shall notify Xxxxxxx in writing,
a minimum of twelve (12) months prior to completion of the Initial Term.
4. REPRESENTATIONS AND WARRANTIES BY XXXXXXX AND CFM
Xxxxxxx hereby represents and warrants to CFM as follows:
(a) Neither the execution and delivery of this Agreement nor the
performance by Xxxxxxx of his duties and other obligations hereunder
violate or will violate any statute, law, determination or award, or
conflict with or constitute a default under (whether immediately, upon
the giving of notice or lapse of time or both) any prior employment
agreement, contract, or other instrument to which Xxxxxxx is a party
or by which he is bound.
(b) Xxxxxxx has the right, power and legal capacity to enter and deliver
this Agreement and to perform his duties and other obligations
hereunder. This agreement constitutes the legal, valid and binding
obligation of Xxxxxxx enforceable against him in accordance with its
terms. No approvals or consents of any persons or entities are
required for Xxxxxxx to execute and deliver this Agreement or perform
his duties and other obligations hereunder.
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CFM hereby represents and warrants to Xxxxxxx as follows:
(a) CFM is duly organized, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania, with all requisite corporate
power and authority to own its properties and conduct its business in
the manner presently contemplated.
(b) CFM has full power and authority to enter into this Agreement and to
incur and perform its obligations hereunder.
(c) The execution, delivery and performance by CFM of this Agreement does
not conflict with or result in a breach or violation of or constitute
a default under (whether immediately, upon the giving of notice or
lapse of time or both) the certificate of incorporation or by-laws of
CFM, or any agreement or instrument to which CFM is a party or by
which CFM or any of its properties may be bound or affected.
5. TERMINATION
Xxxxxxx'x employment hereunder began on or about January 9, 1995 and shall
continue until terminated upon the first to occur of the following events:
(a) THE DEATH OR DISABILITY OF XXXXXXX. CFM may, at its option, terminate
Xxxxxxx'x employment for "disability" (as hereinafter defined). In the
event of termination for death or disability, Xxxxxxx or his
designated beneficiary, shall be entitled to termination benefits
pursuant to Paragraph 5(d), which monthly benefits shall be reduced in
each month such benefit may be received by any amounts received by
Xxxxxxx from disability insurance during such month from a program
provided by CFM. For purposes of this Agreement, the term "disability"
means any physical or mental illness, disability or incapacity which
prevents Xxxxxxx from performing, with or without accommodation,
substantially all of his duties hereunder for a period totaling not
less than one hundred eighty (180) days during any period of twelve
(12) consecutive months.
(b) TERMINATION BY THE PRESIDENT, CHAIRMAN OR BOARD OF DIRECTORS OF CFM
FOR CAUSE. Any of the following actions by Xxxxxxx shall constitute
cause:
(i) Material breach by Xxxxxxx of the provisions of the CFM
Non-Disclosure and Invention Agreement which he is a party to, a
copy of which is attached hereto provided that Xxxxxxx has
received written notice of such breach from the President,
Chairman or Board of Directors of CFM, has had an opportunity to
respond to the notice in a meeting and has failed to
substantially cure such breach or neglect within thirty (30) days
of such notice; or
(ii) Theft; a material act of dishonesty or fraud; intentional
falsification of any employment or Company records; or the
commission of any criminal act which impairs Xxxxxxx'x ability to
perform appropriate employment duties under this Agreement; or
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(iii) Xxxxxxx'x conviction (including any plea of guilty or nolo
contendere) for a crime involving moral turpitude causing
material harm to the reputation and standing of the CFM; or
(iv) Gross negligence or willful misconduct in the performance of
Xxxxxxx'x assigned duties; provided however, that merely
unsatisfactory performance by Xxxxxxx of such duties and
responsibilities shall not constitute "cause" for purposes of the
Agreement; and provided further that Xxxxxxx has received written
notice of such breach or neglect from the President, Chairman or
Board of Directors of CFM, has had an opportunity to respond to
the notice in a meeting and has failed to substantially cure such
breach or neglect within thirty (30) days of such notice.
(c) TERMINATION BY XXXXXXX FOR GOOD REASON. Any of the following actions
or omissions by CFM shall constitute good reason:
(i) Material breach by CFM of any provision of this Agreement which
is not cured by CFM within fifteen (15) days of written notice
thereof from Xxxxxxx; or
(ii) Any action by CFM to intentionally harm Xxxxxxx; or
(iii) If following, at any time subsequent to the date of this
Agreement, a Change of Control Event and within eighteen (18)
months following the date of such Event, a change occurs in
Xxxxxxx'x status, title, position, compensation, or
responsibilities (including reporting responsibilities) which, in
Xxxxxxx'x reasonable judgment, represents a material adverse
change from his status, title, position, compensation, or
responsibility as provided for in this Agreement, Xxxxxxx may, at
his sole option by providing written notice within sixty (60)
days following such change, deem such change to be just cause
under this Section 5(c).
(iv) The failure of CFM to obtain an agreement, satisfactory to
Xxxxxxx, from any Successors and Assigns to assume and agree to
perform this Agreement.
(v) Xxxxxxx'x right to terminate his employment pursuant to this
Section 5(c) shall not be affected by his incapacity due to
disability.
(vi) In the event of termination by Xxxxxxx for good reason, (1) CFM
will retain Xxxxxxx as a consultant to the Company with duties as
Xxxxxxx and the Company may mutually agree for a period of
eighteen (18) months, which term may be extended by mutual
agreement between the parties, with monthly compensation equal to
one twelfth of Xxxxxxx'x then current annual base salary plus
annual target bonus and (2) all options to purchase common stock
of CFM held by Xxxxxxx shall vest immediately as of the date of
such termination.
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(d) TERMINATION BY THE PRESIDENT, CHAIRMAN OR BOARD OF DIRECTORS OF CFM
WITHOUT CAUSE.
(i) If such Termination shall occur, CFM will retain Xxxxxxx as a
consultant to the company with duties as Xxxxxxx and the company
may mutually agree and will pay Xxxxxxx monthly an amount equal
to one twelfth of Xxxxxxx'x then current annual base salary plus
annual target bonus commencing with the date of such termination
and ending twelve (12) months thereafter; and
(ii) Following the occurrence of a Change of Control Event during the
one year period following any Termination of Xxxxxxx under
5(d)(i), above, CFM shall immediately (1) extend the term of
Xxxxxxx'x consulting period as agreed to in 5(d)(i), above to a
total of eighteen (18) months from the initial date of
Termination and (2) grant to Xxxxxxx fully-vested options to
purchase a number of shares of common stock of CFM equal to the
number of unvested options held by Xxxxxxx and cancelled at the
time of such Termination (the "Cancelled Options"). The purchase
price of each such share shall equal the lowest share purchase
price of any of the Cancelled Options or the fair market value of
a share of common stock of CFM on the date of the Change of
Control Event, whichever shall be lower, and all other terms of
such newly granted options shall be substantially similar to the
terms of the Cancelled Options.
(e) TERMINATION BY XXXXXXX WITHOUT GOOD REASON. In the event Xxxxxxx
wishes to resign, he shall give not less than thirty (30) days prior
notice of such resignation and CFM shall have the option of
terminating Xxxxxxx'x duties and responsibilities at any time prior to
Xxxxxxx'x proposed termination date, subject to payment by CFM of the
lesser of Xxxxxxx'x then current base pay for a thirty (30) day
period, or such other period as may remain under the notice given by
Xxxxxxx.
6. CHANGE OF CONTROL
For purposes of this Agreement, a "Change of Control Event" shall mean any
of the following:
(a) An acquisition (other than directly from CFM) of any voting securities
of CFM (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 (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 (30%) or
more of the combined voting power of CFM's then outstanding Voting
Securities; provided, however, that in determining whether a Change of
Control Event 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 of Control Event. A
"Non-Control Acquisition" shall mean an acquisition by (1) an employee
benefit plan (or trust forming a part thereof) maintained by (x) CFM
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 CFM (a "Subsidiary"), (2) CFM or any
Subsidiary, or (3) any Person in connection with a "Non-Control
Transaction."
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(b) 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 CFM'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
(c) Approval by stockholders of CFM of:
(i) A merger, consolidation, or reorganization involving CFM, unless
(1) the stockholders of CFM, immediately before such merger,
consolidation or reorganization, own, directly or
indirectly, immediately following such merger, consolidation
or reorganization, at least seventy percent (70%) 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
(2) 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 directors of the Surviving Corporation or corporation
beneficially owning, directly or indirectly, a majority of
the Voting Securities of the Surviving Corporation, and
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(3) no Person (other than CFM, any Subsidiary, any employee
benefit plan (or any trust forming a part thereof)
maintained by CFM, the Surviving Corporation or any
Subsidiary, or any Person who, immediately prior to such
merger, consolidation or reorganization had Beneficial
Ownership of fifteen percent (15%) or more of the then
outstanding Voting Securities) owns, directly or indirectly,
fifteen percent (15%) or more of the combined voting power
of the Surviving Corporation's then outstanding voting
securities, and
(4) a transaction described in clauses 1 through 3 shall herein
be referred to as a "Non-Control Transaction";
(ii) A complete liquidation or dissolution of CFM, or
(iii) A sale or other disposition of all or substantially all of the
assets of CFM to any Person (other than a transfer to a
Subsidiary).
(d) Notwithstanding the foregoing, a Change of Control Event 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 CFM 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 CFM, and after such share
acquisition by CFM, 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.
(e) Notwithstanding anything contained in this Agreement to the contrary,
if Xxxxxxx'x employment is terminated prior to a Change of Control
Event and Xxxxxxx 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 of Control Event
and who effectuates a Change of Control Event (a "Third Party") or
(ii) otherwise occurred in connection with, or in anticipation of, a
Change of Control Event which actually occurs, then for all purposes
of this Agreement, the date of a Change of Control Event with respect
to Xxxxxxx shall mean the date immediately prior to the date of such
termination of Xxxxxxx'x employment and shall constitute grounds for
Termination for good reason by Xxxxxxx under Section 5(c) of this
Agreement.
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7. FEDERAL EXCISE TAX UNDER IRC SECTION 280G
(a) If (1) any amounts payable under this Agreement are characterized as
excess parachute payments pursuant to Section 4999 of the Internal
Revenue Code, and (2) Xxxxxxx thereby would be subject to any United
States federal excise tax due to that characterization, then (3)
Xxxxxxx may elect, in Xxxxxxx'x sole discretion, to reduce the amounts
payable under this Agreement or to have any portion of applicable
options not be granted or vest in order to avoid any "excess parachute
payment" under Section 280(G)(b)(1) of the Internal Revenue Code of
1986, as amended.
(b) Unless CFM and Xxxxxxx otherwise agree in writing, any determination
required under this Section 6 shall be made in writing by independent
public accountants agreed to by CFM and Xxxxxxx (the "Accountants"),
whose determination shall be conclusive and binding upon CFM and
Xxxxxxx for all purposes. For purposes of making the calculations
required by this Section 6, the Accountants may rely on reasonable,
good faith interpretations concerning the application of Sections 280G
and 4999 of the Code. CFM and Xxxxxxx shall furnish to the Accountants
such information and documents as the Accountants may reasonably
request in order to make the required determinations. CFM shall bear
all fees and expenses the Accountants may reasonably charge in
connection with the services contemplated by this Section 7.
8. EXTENDED MEDICAL AND DENTAL BENEFITS
In the event of an event of Termination under Section 5(a), 5(c) or 5(d) of
this Agreement, Xxxxxxx and Xxxxxxx'x dependents shall receive continued
provision of CFM's standard employee medical and dental benefits for twenty-four
(24) months for Termination under Section 5(a) or Section 5(d) and for thirty
(30) months for Termination under Section 5(c). Notwithstanding the foregoing,
in the event Xxxxxxx becomes covered as a primary insured (that is, not as a
beneficiary under a spouse's plan) under another employer's group health plan
during the extended benefit period provided for herein, Xxxxxxx shall promptly
inform CFM and CFM shall cease provision of continued group health benefits for
Xxxxxxx and any dependents.
9. RELEASE OF CLAIMS
CFM may condition payment of the cash termination benefits described in
Sections 5(c) or 5(d) of this Agreement upon the delivery by Xxxxxxx of a signed
release of claims in a form reasonably satisfactory to CFM; provided, however,
that Xxxxxxx shall not be required to release any rights Xxxxxxx may have to be
indemnified by CFM.
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10. NON-COMPETITION AND NON-SOLICITATION
During any period of post-Termination consulting, Xxxxxxx agrees not to (1)
engage in (as an employee, consultant, director, principal, partner, officer,
agent, advisor or otherwise) or be financially interested in any business
operating anywhere in the world which, in the reasonable judgment of the
Company, directly competes with the Company through the design, manufacture or
distribution of semiconductor wet processing equipment or (2) 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.
11. NOTICES
Any notice or other communication under this Agreement shall be in writing
and shall be deemed to have been given: (i) upon delivery when delivered
personally against receipt therefor; (ii) one (1) day after being sent by
Federal Express or similar overnight delivery; or (iii) three (3) days after
being mailed via registered or certified mail, postage prepaid, return receipt
requested, to either party at the address set forth above, or to such other
address as such party shall give by notice hereunder to the other party.
12. SEVERABILITY OF PROVISIONS
If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, such provision shall be interpreted so as to remain
enforceable to the maximum extent permissible consistent with applicable law and
the remaining conditions and provisions or portions thereof shall nevertheless
remain in frill force and effect and enforceable to the extent they are valid,
legal and enforceable, and no provision shall be deemed dependent upon any other
covenant or provision unless so expressed herein.
13. ARBITRATION
Any dispute or disagreement arising out of this Agreement or a claimed
breach, shall be resolved by arbitration in Xxxxxxx County, Pennsylvania under
the Voluntary Labor Arbitration Rules of the American Arbitration Association.
The arbitrator's decision shall be final and binding upon the parties and
judgment may be entered in any court.
14. SUCCESSORS
This Agreement shall be binding upon and shall inure to the benefit of CFM,
its Successors and Assigns and CFM 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 CFM would be required to perform it if no such succession
or assignment had taken place.
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15. ENTIRE AGREEMENT MODIFICATION
This Agreement contains the entire agreement of the parties relating to the
subject matter hereof and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
which are not set forth herein. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto
16. BINDING EFFECT
The rights, benefits, duties and obligations under this Agreement shall
inure to, and be binding upon, CFM, its successors and assigns, and upon Xxxxxxx
and his legal representatives. This Agreement constitutes a personal service
agreement, and the performance of Xxxxxxx'x obligations hereunder may not be
transferred or assigned by Xxxxxxx.
17. GOVERNING LAW
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the Commonwealth of Pennsylvania without regard to
principles of conflict of laws.
18. HEADINGS
The headings of paragraphs are inserted for convenience and shall not
affect any interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto. intending to be legally bound
hereby, have executed this Agreement as of the day and year first above written.
XXXXX X. XXXXXXX
/s/ Xxxxx X. Xxxxxxx 10/25/99
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Xxxxx X. Xxxxxxx Date
CFM TECHNOLOGIES, INC
/s/ Xxxxx X. Xxxxxxx 10/25/99
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Xxxxx X. Xxxxxxx Date
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