EXHIBIT 10.3
RETIREMENT AGREEMENT
--------------------
This Retirement Agreement ("Agreement") is between Xxxxxx X. Xxxxx
("you") and CyberOptics Corporation (the "Company"). In consideration of the
mutual promises contained in this Agreement, you and the Company agree as
follows:
1.0 Employment Term. Subject to your compliance with this Agreement and
with the other normal responsibilities of your employment, your employment with
the Company will continue through December 31, 2002 (the "Final Employment
Date"). Effective at the close of business on the Final. Employment Date, you
will retire and your employment with the Company will terminate, although you
may continue as a member of the Board of Directors of the Company after the
Final Employment Date.
You agree that this Agreement, and the compensation that is provided in
paragraph 2.0 of this Agreement, may be terminated early by the Company in the
event you breach any of your obligations under this Agreement or the
Confidential Information and Inventions Agreement referred to in 5.0 below.
2.0 Compensation. In consideration for your release contained in
paragraph 7.0 below, and the agreement to provide the Company with post
employment management consulting services contained in paragraph 8.0, the
Company will amend, and by our mutual signatures below is amending, the option
agreements listed in the attached Appendix A (the "Options") to accelerate the
vesting of those Options so that they are fully vested and exercisable from and
after the Final Employment Date and remain exercisable until December 31, 2004.
You understand and agree that, because of the extension of those
Options past the Final Employment Date, all of the Options will become options
that are not qualified (not "incentive stock options") under Section 422 of the
Internal Revenue Code and understand and agree to the tax consequences of this
change.
3.0 Forfeiture of Options Resulting From Certain Activities.
3.1 If, at any time while the Options remain outstanding you engage in
any Forfeiture Activity (as defined below), then the Options shall immediately
terminate effective as of the date any such activity first occurred.
3.2 As used herein, you shall be deemed to have engaged in a Forfeiture
Activity if you (i) directly or indirectly, engage in any business activity on
your own behalf or as a partner, stockholder (other than as a holder of less
than 5% of the shares of a publicly traded entity), director, trustee,
principal, agent, employee, consultant or otherwise of a Competitor or solicit,
entice or induce any employee or representative of the Company to engage in any
such activity, (ii) directly or indirectly solicit, entice or induce (or assist
any other person or entity in soliciting, enticing or inducing) any customer or
potential customer (or agent, employee or consultant of any customer or
potential customer) with whom you had contact in the course of your employment
with the Company to deal with a Competitor, or (iii) fail to hold in a fiduciary
capacity for the benefit of the Company all confidential information, knowledge
and data, including customer lists and information, business plans and business
strategy ("Confidential
Data") relating in any way to the business of the Company for so long as such
Confidential Data remains confidential. For purposes of this Section 3.2, a
"Competitor" shall mean any of the companies listed in the attached Appendix B,
or any subsidiary or other company controlled by a company listed in Appendix B.
3.3 If any court of competent jurisdiction shall determine that the
foregoing forfeiture provision is invalid in any respect, the court so holding
may limit such covenant either or both in time, in area or in any other manner
which the court determines such that the covenant shall be enforceable against
you.
4.0 Health Insurance and other Benefit Programs. In full satisfaction
of the terms of your offer letter of employment, the Company will provide you
with a post-retirement health insurance benefit. Through the Final Employment
Date, you will be entitled to the same health and dental coverage as you have
received prior to the date of this Agreement. Following the Final Employment
Date, and pursuant to COBRA, you may voluntarily elect to continue group health
and dental coverage, in accordance with the Company's policies for employees,
for a period not to exceed eighteen (18) months. The Company will pay 100% of
the cost of this coverage for you and your spouse. After your COBRA period
expires, and provided that you are not eligible to participate in another
employer-sponsored group medical plan, you will have the right to convert from
the Group plan to an individual plan. The Company will pay you an amount equal
to 100% of the cost for employee plus spouse coverage in the company's employee
plan, through the month in which you turn 65 (January 2011). This payment will
be made on or about April 1 of each year for the upcoming year, and will include
an additional 25% to defray tax expense of the benefit. You will receive a 1099
each year reflecting this payment.
The Company will pay for PriceWaterhouseCoopers LLP to prepare your
2002 Income Tax returns. Your participation in all other company benefit
programs will cease on your Final Employment Date.
5.0 Confidential Information. You executed a Confidential Information
and Inventions Agreement with the Company, a copy of which is attached hereto as
Exhibit C. Nothing in this Agreement negates or supercedes the Confidential
Information and Inventions Agreement and all the provisions of the Confidential
Information and Inventions Agreement which, by their terms survive the Final
Employment Date and termination of your employment, continue in full force and
effect and are not negated or otherwise affected by this Agreement.
6.0 Return of Company Property. You acknowledge that, on or before the
Final Employment Date, you will return all Company property in your possession,
including, but not limited to, all files, memoranda, documents, records, copies
of the foregoing, any Company credit card, fax machine, printer, copier, keys,
access cards, and any other property of the Company in your possession, , except
those applicable to directors to the extent you remain a member of the Company's
Board of Directors and with the exception of any other items mutually agreed
upon by you and the Company.
7.0 Release. As an inducement to the Company to enter into this
Agreement, you fully release and discharge the Company, and its predecessors,
successors, assigns, subsidiaries, and affiliates, and any of such entities'
respective officers, directors, employees, agents, and
-2-
shareholders from all liability for damages or claims of any kind arising out of
any actions, decisions, alleged omissions, or events occurring prior to your
signing of this Agreement, including, but not limited to, your termination from
employment, but not including any liability of the Company for indemnity with
respect to your capacity as an officer of the Company through the Final
Employment Date or with respect to your capacity as a director through such the
date of your service as a director. You understand that this release includes
claims under the Minnesota Human Rights Act, Minn. Stat. xx.xx. 363.01, et seq.;
Title VII of the Civil Rights Act, 42 U.S.C. xx.xx. 2000e, et seq.; the Age
Discrimination in Employment Act, 29 U.S.C. xx.xx. 621, et 5N.; and any other
federal, state, or local law, rule, or regulation. You further understand that
this release includes all claims that you have or may have for wrongful
discharge, discrimination, breach of contract, promissory estoppel or breach of
an expressed or implied promise, misrepresentation or fraud, retaliation,
infliction of emotional distress, defamation, or any other common law theory of
recovery, or otherwise based on any other theory, whether legal or equitable,
whether developed or undeveloped, arising from or related to your employment
with the Company, your termination from employment with the Company, or any
other actions, decisions, alleged omissions, or events occurring prior to your
signing of this Agreement.
You agree that you will not institute any lawsuit against the Company,
and its predecessors, successors, assigns, subsidiaries, and affiliates, and any
of such entities' respective officers, directors, employees, agents, and
shareholders, arising from or related to your employment with the Company, your
termination from employment with the Company, or any other actions, decisions,
alleged omissions, or events occurring prior to your signing of this Agreement
(except to the extent necessary to enforce your rights to indemnity as an
officer or director of the Company). You also waive the right to monetary
damages or other individual legal or equitable relief awarded by any
governmental agency related to any claim against the Company, and its
predecessors, successors, assigns, subsidiaries, and affiliates, and any of such
entities' respective officers, directors, employees, agents, and shareholders,
arising from or related to your employment with the Company, your termination
from employment with the Company, or any other actions, decisions, alleged
omissions, or events occurring prior to your signing of this Agreement (except
to the extent of your rights to indemnity). Appendix D sets forth the statutory
periods during which you may consider this release and this agreement and the
periods of your statutory right to rescind.
8.0 Post Employment Consulting. You agree to provide management
consulting services as requested by the Company under the terms established in
the Consulting Agreement of APPENDIX E.
9.0 Breach. If you breach any of the provisions of this Agreement, the
Company shall have the right to terminate its obligations under this Agreement
to you or others whose rights may derive from you.
10.0 No Admission. This Agreement is not an admission by the Company
that it has acted wrongfully or unlawfully, and the parties agree that it will
not be interpreted as such.
11.0 Governing Law. This Agreement shall be governed by the laws of the
State of Minnesota. If any part of this Agreement is construed to be in
violation of any law, rule, or
-3-
regulation, such part shall be modified to achieve the objective of the parties
to the fullest extent permitted, and the balance of this Agreement shall remain
in full force and effect.
12.0 Entire Agreement. You agree that this Agreement (including the
attached Exhibits) contains the entire agreement between the parties with
respect to the subject matter of this Agreement. Any modification of or addition
to this Agreement must be in writing, signed by an officer of the Company and
you.
13.0 Acknowledgment. YOU AFFIRM THAT YOU HAVE READ THIS AGREEMENT. YOU
ACKNOWLEDGE THAT YOU WERE PROVIDED WITH A REASONABLE AND SUFFICIENT PERIOD OF
TIME TO CONSIDER WHETHER OR NOT TO ACCEPT THIS AGREEMENT PRIOR TO SIGNING THIS
AGREEMENT. YOU AGREE THAT THE PROVISIONS OF THIS AGREEMENT ARE UNDERSTANDABLE TO
YOU, THAT YOU HAVE ENTERED INTO THIS AGREEMENT FREELY AND VOLUNTARILY, AND THAT
YOU WERE PROVIDED WITH AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY FOR ADVICE IN
CONNECTION WITH THIS AGREEMENT IN WITNESS WHEREOF, the parties have executed
this Agreement by their signatures below.
Dated: 13 Sept. 02 /s/ Xxxxxx X. Xxxxx
------------------------ ---------------------------------------
Xxxxxx X. Xxxxx
CYBEROPTICS CORPORATION
Dated: 13 Sept. 02 By /s/ Xxxxxx X. Case
------------------------ -----------------------------------
Its Chairman
-----------------------------------
-4-
AMENDMENT TO RETIREMENT AGREEMENT
---------------------------------
This Amendment to Retirement Agreement ("Amendment"), dated as of this
21 day of November, 2002, amends that certain Retirement Agreement dated as of
September 13, 2002, by and between CyberOptics Corporation (the "Company") and
Xxxxxx X. Xxxxx ("you").
WHEREAS, the Retirement Agreement specifies the financial arrangements
that the Company will provide to you upon your separation from employment with
the Company under the circumstances described therein; and
WHEREAS, the Company has agreed to employ you on a half-time basis as
its General Manager in its Portland, Oregon facility effective January 1, 2003
at an annualized pay rate of $80,000, until no later than December 31, 2003 on
an at-will basis, and you have accepted such employment; and
WHEREAS, the parties desire to amend the Retirement Agreement in the
manner set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1.0 Paragraph 1.0 of the Retirement Agreement is hereby amended to read in
its entirety as follows:
1.0 Employment Term. Subject to your compliance with this
Agreement and with the other normal responsibilities of your
employment, your employment with the Company will continue
until no later than December 31, 2003, or such earlier date as
your employment is terminated (the "Final Employment Date").
Effective at the close of business on the Final Employment
Date, you will retire and your employment with the Company
will terminate, although you may continue as a member of the
Board of Directors of the Company after the Final Employment
Date.
You agree that this Agreement, and the compensation that is
provided in paragraph 2.0 of this Agreement, may be terminated
early by the Company in the event you breach any of your
obligations under this Agreement or the Confidential
Information and Inventions Agreement referred to in paragraph
5.0 below.
2.0 Paragraph 2.0 of the Retirement Agreement is hereby amended to read in
its entirety as follows:
2.0 Compensation. In consideration for your release contained in
paragraph 7.0 below, and the agreement to provide the Company
with post-employment management consulting services contained
in paragraph 8.0, the Company will amend, and by our mutual
signatures below is amending, the option agreements listed in
the attached Appendix A (the
"Options") to accelerate the vesting of those Options so that
they are fully vested and exercisable from and after December
31, 2002 and remain exercisable until December 31, 2004. You
understand and agree that, because of the extension of those
Options past the Final Employment Date, all of the Options
will become options that are not qualified (not "incentive
stock options") under Section 422 of the Internal Revenue Code
and understand and agree to the tax consequences of this
change.
3.0 This Amendment constitutes an amendment of the Retirement Agreement in
conformity with and pursuant to the terms of paragraph 12.0 of the
Retirement Agreement. Except as expressly amended herein, all terms set
forth in the Retirement Agreement shall continue in full force and
effect.
4.0 This Amendment shall be governed by the laws of the State of Minnesota.
If any part of this Amendment is construed to be in violation of any
law, rule, or regulation, such part shall be modified to achieve the
objective of the parties to the fullest extent permitted, and the
balance of this Amendment shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first written above.
Dated: 21 November 02 /s/ Xxxxxx X. Xxxxx
-------------------- ---------------------------------
Xxxxxx X. Xxxxx
CYBEROPTICS CORPORATION
Dated: 21 November 02 By /s/ Xxxxx Xxxxxxx
-------------------- -----------------------------
Its President and COO
-----------------------------
