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EXHIBIT 10.17
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of August 14, 2000
(the "Effective Date"), by and between Advanced Thermal Technologies, Inc., a
Delaware corporation (the "Company") and Xxxxxxx Xxxxxxx (the "Executive").
RECITALS
WHEREAS, the Company wishes to employ the Executive and the Executive
wishes to accept such employment on the terms and conditions hereafter set
forth; and
WHEREAS, the Company wishes to make secure for itself the experience,
abilities and services of the Executive and to prevent the loss of such
experience, services and abilities;
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto, each intending to
be legally bound, do hereby agree as follows:
l. Employment. The Company shall employ the Executive, and the Executive shall
perform services for and continue in the employment of the Company, for an
initial period of three (3) years commencing on the Effective Date and ending
three (3) years thereafter, whereupon the Executive's employment hereunder shall
automatically be extended from year to year thereafter, until either the Company
or the Executive gives the other party at least thirty (30) days written notice
prior to the then-applicable "Expiration Date" (as hereinafter defined) of its
or his desire to terminate this Agreement, unless such employment shall have
been sooner terminated as hereinafter set forth. For purposes of this Agreement
(i) the term "Employment Period" shall mean the initial three (3) year period
and all extensions thereof, if any, as aforesaid, and (ii) the term "Expiration
Date" shall mean the date three (3) years from the Effective Date or the date
this Agreement is last in effect in the event that the Employment Period is
extended on and after the date three (3) years from the Effective Date.
2. Position and Duties. The Executive shall serve the Company in the capacity of
Vice President and Chief Financial Officer of the Company or in such other
position as the President and Chief Operating Officer ("President") of the
Company, his designee or the Board of Directors of the Company ("Board") may
designate from time to time, and shall be accountable to, and shall have such
other executive powers, duties and responsibilities, consistent with this
capacity, as may from time to time be prescribed by the President, his designee
or the Board. The Executive shall perform and discharge, faithfully, diligently
and to the best of his ability, such duties and responsibilities. The Executive
shall devote all of his working time and efforts to the business and affairs of
the Company.
3. Compensation.
(a) Salary. During the Employment Period, the Executive shall receive a
salary (the "Salary") payable at the rate of $170,000 per annum. Such rate may
be adjusted from time to time by the President or his Designee; provided,
however, that it shall at no time be adjusted below $170,000 per annum. The
Salary shall be payable biweekly or in accordance with the Company's current
payroll practices, less all required deductions. The Salary shall be pro-rated
for any period of service less than a full year.
(b) Incentive Bonus. The Executive will be eligible to participate in the
Company's Incentive Plan. The incentive bonus due the Executive for his first
twelve (12) months of employment shall be no
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less than fifty (50) percent of the Salary.
(c) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable business expenses
incurred by him on behalf of the Company.
(d) Fringe Benefits. During the Employment Period, the Executive shall be
entitled to participate in or receive benefits under any life or disability
insurance, health, pension, retirement and accident plans or arrangements made
generally available by the Company to its Executives, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements. In accordance with the Company policy, the Executive shall
also be entitled to paid vacation in any fiscal year during the Employment
Period as well as all paid holidays given by the Company to its Executives.
(e) Options. The President will recommend that the Board approve the grant
of 50,000 options on the Company's shares upon the commencement of the
Executive's employment hereunder. The grant of such options is contingent upon
approval by the Board. Thereafter throughout the Employment Period the Executive
shall be entitled to participate in any applicable option grant of the Company.
(f) Automobile. Without limiting the generality of the foregoing during
the Employment Period the Executive shall be furnished with an automobile
allowance of $800 per month.
4. Termination and Compensation Thereon.
(a) Termination Date. The term "Termination Date" shall mean the earlier
of (i) the Expiration Date; or (ii) if the Executive's employment is terminated
(x) by his death, the date of his death; or (y) for any other reason, the date
on which such termination is to be effective pursuant to the notice of
termination given by the party terminating the employment relationship.
(b) Death. The Executive's employment hereunder shall terminate upon his
death. In such event, the Company shall pay to such person as the Executive
shall have designated in a notice filed with the Company, or, if no such person
shall have been designated, to this estate, an amount equal to the Salary that
would have been due to the Executive had this Agreement been in effect from the
date of his death until the Expiration Date.
(c) Incapacity. If in the reasonable judgment of the Board, as a result of
the Executive's incapacity due to physical or mental illness or otherwise, the
Executive shall for at least six consecutive months during the term of this
Agreement have been unable to perform his duties under this Agreement on a
full-time basis, the Company may terminate the Executive's employment hereunder
by notice to the Executive. In such event, the Company shall continue to pay the
Executive his Salary (at the rate in effect as of the Termination Date) and (to
the extent legally practicable) extend to him the applicable fringe benefits
referred to in Section 3(d) hereof until the Expiration Date. Any dispute
between the Board and the Executive with respect to the Executive's incapacity
shall be settled by reference to a competent medical authority mutually agreed
to by the Board and the Executive, whose decision shall be binding on all
parties.
(d) Change of Control. If a "Change of Control" (as that term is defined
in the Company's 2000 Directors' Stock Option Plan) occurs during the Employment
Period and, as a result of such Change of Control, this Agreement or the
Executive's employment is terminated for any reason, or the Executive resigns
his employment because any of the Executive's position, powers, duties or
responsibilities under Section 2 above are changed without his agreement, or any
compensation or benefit payable or otherwise extended to the Executive hereunder
(including without limitation Salary, incentive bonus, expenses, fringe benefits
and options set forth in Section 3 above) is eliminated or reduced, the Company
or its
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successor in interest shall:
(i) give prompt notice to the Executive of any such termination,
change, elimination or reduction;
(ii) within thirty (30) days after the Termination Date, pay to the
Executive (or in the event of the Executive's subsequent death, such person as
the Executive shall have designated in a notice filed with the Company, or, if
no such person shall have been designated, to his estate) a lump sum amount
equal to the Executive's Salary in effect as of the Termination Date, which lump
sum amount shall not be pro-rated and shall be paid in addition to the Salary
due and payable under (iii) below;
(iii) until the Expiration Date, continue to pay to the Executive
(or in the event of the Executive's subsequent death, such person as the
Executive shall have designated in a notice filed with the Company, or, if no
such person shall have been designated, to his estate) his Salary (in effect as
of the date of the Change of Control), and to extend to him the incentive bonus,
expenses, fringe benefits and options set forth in Section 3 above.
The obligations of the Company pursuant to this Section 4(d) shall
survive any termination of this Agreement or the Executive's employment or any
resignation of such employment by the Executive pursuant to this Section 4(d).
(e) Consulting Period Upon Termination. If the Company fails to extend the
Executive's employment hereunder for a period of at least one year beyond
Expiration Date at his then current Salary and otherwise on the terms and
conditions set forth herein, then the Company shall have the option, at its sole
discretion, of retaining the Executive as a consultant to perform such services
as the Company may reasonably request, in consideration for which services the
Company shall continue to pay the Executive the same Salary and (to the extent
legally practicable) extend to him the applicable fringe benefits referred to in
Section 3(d), as in effect on the Termination Date for the period commencing on
the Termination Date and ending on the date one year after the Termination Date
or on such earlier date as the Company may otherwise specify.
(f) Severance Pay. Upon a termination for any reason of the Executive's
employment under Section 1 hereof or retention as a consultant under Section
4(e) hereof, or upon any resignation by the Executive due to any change in his
position, powers, duties or responsibilities under Section 2 hereof or in his
compensation under Section 3 hereof, the Executive shall be entitled to the
continuation of his then current Salary and medical and dental benefits as in
effect at the expiration of the Employment Period, or any extension thereof, for
a period of twelve (12) months.
5. Proprietary Rights and Non-Competition. Executive acknowledges that the
Company is engaged in a continuous program of research, development and
production in connection with its business, present and future and hereby
covenants as follows:
(a) Confidentiality. Executive will maintain in confidence and will not
disclose or use, either during or after the Employment Term, any proprietary or
confidential information or know-how belonging to the Company ("Proprietary
Information" hereinafter defined), whether or not in written form, except to the
extent required to perform duties on behalf of the Company. For purposes of this
Agreement, "Proprietary Information" shall mean any information, not generally
known to the relevant trade or industry, which was obtained from the Company, or
which was learned, discovered, developed, conceived, originated or prepared by
Executive in connection with this Agreement. Such Proprietary Information
includes, without limitation, software, technical and business information
relating to the Company's inventions or products, research and development,
production processes, manufacturing and
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engineering processes, machines and equipment, finances, customers, marketing
and production and future business plans, information belonging to customers or
suppliers of the Company disclosed incidental to Executive's performance under
this Agreement, and any other information which is identified as confidential by
the Company, but only so long as the same is not generally known in the relevant
trade or industry.
(b) Inventions.
(i) Definition of Inventions. For purposes of this Agreement,
"Inventions" shall mean any new or useful art, discovery, contribution, finding
or improvement, whether or not patentable, and all related know-how. Inventions
shall include, without limitation, all designs, discoveries, formulae,
processes, manufacturing techniques, semiconductor designs, computer software,
inventions, improvements and ideas.
(ii) Disclosure and Assignment of Inventions. Executive will
promptly disclose and describe to the Company all Inventions which he may solely
or jointly conceive, develop, or reduce to practice during the Employment Term
(A) which relate at the time of conception, development, or reduction to
practice of the Invention to the Company's business or actual or demonstrably
anticipated research or development, (B) which were developed, in whole or in
part, in the Company's time or with the use of any of the Company's equipment,
supplies, facilities or trade secret information, or (C) which resulted from any
work performed by Executive for the Company (the "Company's Inventions").
Executive hereby assigns all of his right, title and interest world-wide in the
Company's Inventions and in all intellectual property rights based upon the
Company's Inventions; provided, however, that Executive does not assign or agree
to assign any Inventions, whether or not relating in any way to the Company's
business or demonstrably anticipated research and development, which were made
by him prior to the date of this Agreement, or which were developed by him prior
to the date of this Agreement, or which were developed by him independently
during the term of this Agreement and not under the conditions stated in
subparagraph (B) above.
(c) Documents and Materials. Upon termination of this Agreement or any
other time upon the Company's request, Executive will promptly deliver to the
Company without retaining any copies, all documents and other materials
furnished to him by the Company prepared by him for the Company or otherwise
relating to the Company's business, including, without limitation, all written
and tangible material in his possession incorporating any Proprietary
Information.
(d) Competitive Employment. During the Employment Term and for a period of
twelve (12) months thereafter (collectively, the "Extended Term"), Executive
will not engage in any employment, consulting, or other activity in any business
competitive with the Company without the Company's written consent, which
consent shall not be unreasonably withheld.
(e) Non-solicitation. During the Extended Term, Executive will not solicit
or encourage, or cause others to solicit or encourage, any employees of the
Company to terminate their employment with the Company.
(f) Acts to Secure Proprietary Rights.
(i) Further Acts. Executive agrees to perform, during and after the
Employment Term, all acts deemed necessary or desirable by the Company to permit
and assist it, at its expense, in perfecting and enforcing the full benefits,
enjoyment, rights and title throughout the world in the Company's Inventions.
Such acts may include, without limitation, execution of documents and assistance
or cooperation in the registration and enforcement of applicable patents and
copyrights or other legal
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proceedings.
(ii) Appointment of Attorney-In-Fact. In the event that the Company
is unable, for any reason whatsoever, to secure Executive's signature to any
lawful and necessary document required to apply for or execute any patent,
copyright or other applications with respect to any of the Company's Inventions
(including improvements, renewals, extensions, continuations, divisions or
continuations in part thereof), Executive hereby irrevocably appoints the
Company and its duly authorized officers and agents as his agents and
Attorneys-in-fact to execute and file any such application and to do all other
lawfully permitted acts to further the prosecution and issuance of patents,
copyrights or other rights thereon with the same legal force and effect as if
executed by him, intending hereby to create a so-called "durable power" which
will survive any subsequent disability.
(g) No Conflicting Obligations. Executive's performance of this
Agreement does not breach and will not breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by him.
(h) Corporate Opportunities. Executive agrees that he will first present
to the Board, for its acceptance or rejection on behalf of the Company, any
opportunity to create or invest in any company which is or will be involved in
precision temperature control of semi-conductors or semi-conductor manufacturing
equipment, which comes to his attention and in which he, or any affiliate, might
desire to participate. If the Board rejects the same or fails to act thereon in
a reasonable time, Executive shall be free to invest in, participate or present
such opportunity to any other person or entity.
(i) Specific Performance. Executive acknowledges that a breach of any of
the promises or agreements contained herein could result in irreparable and
continuing damage to the Company for which ere may be no adequate remedy at law,
and the Company shall be entitled to seek injunctive relief and/or a decree for
specific performance, and such other relief as may be proper (including monetary
damages if appropriate).
6. Amendments. No amendment to this Agreement or any schedule hereto shall
be effective unless it shall be in writing and signed by each party hereto.
7. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered personally or sent by telecopy or three
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to the Company, to it at:
Advanced Thermal Technologies, Inc.
0000 Xxxx Xx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
If to the Executive, to him at:
00000 Xxxxxx Xxxx Xxxx
Xxxxxx, XX 00000
8. Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and supersede all
prior and contemporaneous agreements,
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understandings, negotiations and discussions, whether oral or written, of the
parties.
9. Miscellaneous. The invalidity and unenforceability of any term or provision
hereof shall not affect the validity or enforceability of any other term or
provision hereof. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof. This
Agreement may be executed in any number of counterparts which together shall
constitute one instrument and shall be governed by and construed in accordance
with the laws (other than the conflict of laws rules) of the State of California
and shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
EXECUTIVE
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
ADVANCED THERMAL TECHNOLOGIES, INC.
/s/ R. Xxxxx Xxxxxx
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R. Xxxxx Xxxxxx
President and Chief Operating Officer
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