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EXHIBIT (C)(4)
EXECUTIVE NONCOMPETITION
AGREEMENT
This Executive Noncompetition Agreement ("Agreement") is
entered into this 30th day of June, 1997, by and among Xxxxx Corporation, an
Ohio corporation, having its principal place of business at Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000-0000 ("Parent"), Xxxx X. Xxxxxxxx ("Executive") and Fusion
Systems Corporation, a Delaware corporation having its principal place of
business at 0000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Company").
WHEREAS, pursuant to an Agreement and Plan of Merger ("Merger
Agreement") of even date herewith by and among Parent, a subsidiary of Parent
("Subsidiary"), and the Company, the Company and Parent have agreed to commence
a tender offer to purchase all of the outstanding shares of the Company's common
stock, par value $.01 per share, and the associated preferred share purchase
rights, and the parties thereto have agreed, subject to the terms and provisions
thereof, that Subsidiary shall be merged with and into the Company (the
"Merger");
WHEREAS, Parent and the Company desire by this Agreement to
provide for certain items and conditions relating to the continued employment of
the Executive by the Company after consummation of the Merger and for the
protection of the goodwill and proprietary rights of Parent and the Company;
WHEREAS, the Executive desires to continue to be employed
by the Company upon the terms and conditions stated herein; and
WHEREAS, the Executive and the Company have entered into an
employment agreement dated March 8, 1993 (the "Existing Agreement"), providing
for payments to the Executive following a change of control of the Company.
NOW, THEREFORE IN CONSIDERATION OF THE MUTUAL COVENANTS
CONTAINED HEREIN, INTENDING TO BE LEGALLY BOUND, PARENT, THE
COMPANY AND THE EXECUTIVE HEREBY AGREE AS FOLLOWS:
Section 1. Definitions
Unless otherwise specifically defined herein, terms used
herein which are initially capitalized herein shall have the same meaning as in
the Existing Agreement.
Section 2. Stock Option
(A) Grant of Option. The Parent shall grant to the Executive,
effective upon the consummation of the Merger, an option to purchase 12,000
shares of the common stock of Parent ("Parent Option"). The per-share option
price of the Parent
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Option shall be the fair market value of a share of the common stock of Parent
on the date of grant. The Parent Option shall have a ten-year term. Subject to
the terms and conditions set forth in this Agreement, the Parent Option shall
become exercisable only after five years have elapsed since the date of grant,
and only if the Executive remains continuously employed by the Company or
Parent during that five-year period. The other terms of the Parent Option shall
be in accordance with the terms of the option plan of Parent under which it is
granted.
(B) Other Benefit Upon Termination. If the Executive's
employment terminates under the conditions set forth in Paragraph 10 or 11 of
the Existing Agreement (except that the reference in each such Paragraph to
"three years following the Change in Control Date" shall, for purposes of this
Section 2(B) only, be deemed to refer to the period of five years beginning on
the date on which the Merger is consummated), the Parent Option shall remain in
effect, shall become fully exercisable on the fifth anniversary of the date of
grant, and shall be exercisable throughout the remainder of its ten-year term in
accordance with its terms. If the Executive's employment terminates other than
as described in the preceding sentence (including without limitation as a result
of the Executive's death or disability) or if the Executive breaches any of the
covenants set forth in Section 17 or 18 of the Existing Agreement or of Section
3 of this Agreement (all such covenants being referred to collectively as the
"Covenants"), the Parent Option shall terminate.
Section 3. Covenants
(A) Non-Competition. The Executive hereby consents to the
amendment of Addendum E of the Existing Agreement by the Company to add products
of Parent's semiconductor equipment operations. Furthermore, in addition to the
Covenants set forth in the Existing Agreement, in consideration of the grant of
the Parent Option and other good and valuable consideration, the Executive
hereby agrees that during the Restricted Period (as defined below), the
Executive shall not, as a shareholder, employee, officer, director, partner,
lender, investor, advisor, consultant or otherwise (whether or not being
compensated in any way in any such capacity), engage directly or indirectly in
any business or enterprise which is in Competition with Parent/Company (as
defined below);
(B) "Competition with Parent/Company" shall mean any of the
following:
(i) Competition with the semiconductor equipment
business of the Parent, of any entity controlled by Parent or of the respective
successors and assigns of Parent or any such entity;
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(ii) Competition with the Company or an entity
controlled by it or the respective successors and assigns of the Company or any
such entity;
(iii) Any business activity which is the same as or
comparable to any business activity of the Company or any other entity described
in clause (ii) above or of the semiconductor equipment business of Parent or of
any other entity described in clause (i) above, in any case from time to time
during the Restricted Period in any geographic area throughout the world in
which Parent or the Company or any such entity is engaged in such business
activity.
Notwithstanding the foregoing, nothing in this Section 3 shall prevent the
Executive from purchasing and holding for investment less than one percent of
the shares of any corporation.
(C) "Restricted Period" shall mean the two-year period
beginning on the date upon which the Executive's employment with the Company,
with Parent or with any entity controlled by Parent terminates for any reason.
(D) Enforcement. With respect to any Covenant finally
determined by a court of competent jurisdiction to be unenforceable in whole or
in part, the Executive, Parent and the Company hereby agree that such court
shall have jurisdiction to reform the Existing Agreement and/or this Agreement
or any provision thereof or hereof so that such Covenant is enforceable to the
maximum extent permitted by law, and the parties agree to abide by such court's
determination. If any of the Covenants is determined to be wholly or partially
unenforceable in any jurisdiction, such determination shall not be a bar to or
in any way diminish the right of the Company, Parent and their respective
affiliates and successors to enforce any such Covenant in any other
jurisdiction. The Executive acknowledges and agrees that: (i) the purpose of the
Covenants is to protect the goodwill, trade secrets and other confidential
information of the Company being acquired by Parent, that because of the nature
of the businesses in which the Company, Parent and their respective affiliates
and successors are engaged and because of the nature of the Confidential
Information to which the Executive has access, it would be impractical and
excessively difficult to determine the actual damages of the Company, Parent and
their respective affiliates and successors in the event the Executive breached
any of the Covenants, and that remedies at law (such as monetary damages) for
any breach of the Executive's obligations under the Covenants would be
inadequate. The Executive therefore agrees and consents that if he commits any
breach of any Covenant or threatens to commit any such breach, the Company,
Parent and their respective affiliates and successors shall have the right (in
addition to, and not in lieu of, any other right or remedy that may be available
to it) to temporary
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and permanent injunctive relief from a court of competent jurisdiction, without
posting any bond or other security and without the necessity of proof of actual
damage.
Section 4. Effect on Existing Agreement.
The date on which the Merger is consummated will be the Change
in Control Date for purposes of the Existing Agreement, and no other transaction
contemplated by the Merger Agreement will constitute a Change in Control nor
will it be considered to give rise to any other Change in Control Date. Except
as specifically amended by this Agreement, the Existing Agreement shall remain
in full force and effect after the date hereof without amendment. This Agreement
shall be null and void ab initio if the Merger is not consummated.
Section 5. Governing Law
This Agreement shall be governed and construed in accordance
with the laws of the State of Maryland.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from their Boards of
Directors, the Company and the Parent have caused this Executive Noncompetition
Agreement to be executed in their names on their behalf, all as of the day and
year first above written.
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
XXXXX CORPORATION
By /s/ Xxxxxx X. Xxxxxxxx
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FUSION SYSTEMS CORPORATION
By /s/ Xxxxxx X. Xxxxxx
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