EXECUTIVE EMPLOYMENT AGREEMENT
PARTIES:
XXXX XXXXXXX XXXXXX, Vice President, Intellectual Property ("Executive")
0000 Xxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
AUGUST TECHNOLOGY CORPORATION ("Company")
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx, XX 00000
Dated this 8th day of May, 2000.
RECITALS
A. The parties desire to provide for employment of Executive by Company as its
Vice President, Intellectual Property and General Counsel.
B. Company desires reasonable protection of Company's confidential business
and technical information which has been developed over the years by
Company at substantial expense.
Company and Executive, each intending to be legally bound, covenant and agree as
follows:
1. EMPLOYMENT. Upon the terms and conditions set forth in this Agreement,
Company hereby employs Executive, and Executive accepts such employment as
its Vice President, Intellectual Property and General Counsel. Except as
expressly provided herein, termination of this Agreement by either party
shall also terminate Executive's employment by Company.
2. DUTIES. Executive shall devote his full-time (40+ hours per week) and best
efforts to Company and fulfilling the duties of his position which shall
include such duties as may from time to time be assigned him or her by the
CEO or Board of Directors of the Company; provided that such duties are
reasonably consistent with Executive's education, experience and
background. Currently such duties are defined in Appendix A.
3. EMPLOYMENT DATE. Executive's employment shall commence as of May 22, 2000
("Employment Date"), and continue until terminated as provided herein. In
any event, the Agreement shall automatically terminate without notice when
the Executive reaches 70 years of age. If employment is continued after the
age of 70 by mutual agreement, it shall be terminable at will by either
party.
4. COMPENSATION.
(a) BASE SALARY. For all services rendered under this Agreement during the
term of Executive's employment, Company shall pay Executive a Base
Salary ("Base Salary" shall mean regular cash compensation paid on a
periodic basis exclusive of benefits, bonuses or incentive payments) at
the annual rate of $135,000, payable twice monthly subject to review
and possible adjustment by the Board of Directors at least annually. If
the Executive's salary is adjusted during the term of this Agreement,
the adjusted amount shall be the Base Salary until further adjusted by
the Board of Directors.
(b) BONUS AND INCENTIVE. Bonus or incentive compensation shall be in
accordance with the August Technology Annual Award Plan (Appendix B).
Company reserves the right to alter, amend or eliminate any bonus or
incentive plans in accordance with their terms.
(c) FRINGE BENEFITS. In addition to the compensation payable to Executive
as provided in paragraphs 4(a) and (b) above:
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i) VACATION. Executive shall be entitled to accrue three (3) weeks
paid vacation for the first two years of employment and four weeks
thereafter, which shall be calculated in arrears on a monthly
basis commencing as of the end of the month following the
Employment Date. Vacation shall accumulate, so that if the full
vacation that is earned and accrued in a particular year of
employment is not taken in that particular year of employment, any
unused portion will be carried into and may be taken in the
following year of employment only.
ii) OTHER BENEFITS. The Executive shall be entitled to participate in
all other benefit programs offered by the Company to its full-time
executive employees, including, but not limited to,
health/medical/cafeteria plans; retirement benefits through the
Company's 401k plans; personal days off benefits; and other
benefits that may be offered from time to time by the Company.
(d) STOCK OPTIONS. Company hereby agrees to grant the Executive Incentive
Stock Options under the Company's 1997 Stock Option Plan to purchase up
to 75,000 shares of its common stock. Such options shall have an
exercise price equal to *fair market value (FMV) as determined by the
Board of Directors, or shall be set equal to the share price achieved
during an equity offering (if offering occurs within 120 days of this
Agreement). Options shall expire seven (7) years from the date of
hereof, shall vest 20% per year commencing on your start date (subject
to paragraph 10 hereof), and shall have other provisions generally
included in stock option agreements of the Company. Such stock options
shall be governed by the terms of the Company's applicable stock option
plan(s) and a stock option agreement with Executive. It is the
intention of the Board of Directors, from time to time, to make
additional options available to executives based on performance. (*See
attached definition of Fair Market Value in Appendix G.)
(e) MBO. It is anticipated that an MBO will be developed by the
CEO/President, subject to Board of Director approval. Objectives will
be based upon meeting a target number of commercially viable patents
filed and approved by an internal committee (to be established by the
CEO/President) within the Fiscal Year 2000.
5. BUSINESS EXPENSES. Company shall, in accordance with, and to the extent of,
its policies in effect from time to time, bear all ordinary and necessary
business expenses incurred by the Executive in performing his duties as an
employee of Company, provided that Executive accounts promptly for such
expenses to Company in the manner prescribed from time to time by Company.
6. TERMINATION. Subject to the respective continuing obligations of the
parties, pursuant to paragraphs 7, 8, 9, 10, 11 and 12, this Agreement may
be terminated as follows:
(a) BY THE COMPANY. The Company may terminate this Agreement under the
following circumstances:
(i) WITH CAUSE, ETC. Company may terminate this Agreement immediately
for cause, which for purposes of this agreement shall include
without limitation, fraud, misrepresentation, theft or
embezzlement of Company assets, material intentional violations of
law or Company policies, actions involving moral turpitude or a
material breach of the provisions of this Agreement, including
specifically the repeated failure to perform his duties as
required by paragraph 2 after notice of such failure from Company
and the expiration of thirty (30) days without corrective action
having been undertaken by Executive.
(ii) WITHOUT CAUSE. Company may terminate this Agreement without cause
on sixty (60) days' written notice subject to the severance
payment provisions set forth in paragraph 7. Company shall set
the date of termination which shall be no less than sixty (60)
days from date of notice, unless Company pays executive for the
balance of the sixty (60) day notice period.
(b) BY EXECUTIVE. Executive may terminate this Agreement without cause on
sixty (60) days' notice. August Technology shall then set the date of
termination which shall be no less than sixty (60) days from date of
notice, unless company pays executive for the balance of the 60 day
notice period.
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(c) DEATH. If Executive should die during the term of this Agreement, this
Agreement shall thereupon terminate; provided, however, that the
Company shall pay to the Employee's beneficiary or estate, the
compensation as provided in paragraph 7 below.
(d) PERMANENT DISABILITY. In the event the Executive should become
permanently disabled during the term of this Agreement, then this
Agreement shall terminate. For the purposes hereof, a permanent
disability shall mean that disability resulting from injury, disease or
other cause, whether mental or physical, which incapacitates the
Executive from performing his normal duties as an employee, appears to
be permanent in nature and contemplates the continuous, necessary and
substantially complete loss of all management and professional
activities for a continuous period of six (6) months.
(e) PARTIAL DISABILITY. If the Executive should become partially disabled,
he shall be entitled to his salary as provided herein for a period of
six (6) months. At the end of said period of time, if such Executive
remains partially disabled, the Executive's salary shall be adjusted to
reflect the amount of time the Executive is able to devote to the
Company's business.
(f) TEMPORARY DISABILITY. In the event the Executive should become
disabled, but such disability is not permanent, as defined above, such
Executive shall be entitled to his salary for a period of six (6)
months. If such temporary disability continues longer than said period
of time, then the Executive shall be deemed to have become permanently
disabled for the purposes of this Agreement at the end of said six (6)
month period.
7. REMEDIES FOR EARLY TERMINATION.
(a) In the event of termination pursuant to paragraph 6, Base Salary and
any other compensation shall be paid as follows:
(i) In the event of termination pursuant to paragraph 6(a)(i), Base
Salary shall continue to be paid on a semi-monthly basis prorated
through the date of termination specified in any notice of
termination and Executive shall be entitled to continue to
participate in those benefit programs provided by Subparagraph
4(c)(ii) for the minimum time period required by law following
termination at his own cost.
(ii) In the event of termination pursuant to paragraph 6(a)(ii), Base
Salary shall continue to be paid on a semi-monthly basis for three
(3) months following the date of termination specified in any
notice of termination, and Executive shall be entitled to continue
to participate in those benefit programs provided by Subparagraph
4(c)(ii) for the longer of three (3) months or the minimum time
period required by law following termination, provided that the
Company shall bear the cost of such benefits for no longer than
three (3) months.
(iii)In the event of termination pursuant to paragraph 6(b),
compensation shall continue to be paid as follows: if the notice
of termination is given by Executive at any time, Base Salary
shall continue to be paid on a semi-monthly basis prorated through
the date of termination specified in such notice and Executive
shall be entitled to continue to participate in those benefit
programs provided by Subparagraphs 4(c)(ii) for the minimum time
period required by law following termination at his own cost.
(iv) In the event of termination of this Agreement by reason of
Executive's death, payment of Base Salary shall terminate as of
the end of the month following the Executive's death.
(v) In the event of disability, payment of Base Salary shall terminate
as of the end of the month in which the last day of the three (3)
month period of Executive's inability to perform his duties
occurs.
(b) In the event of termination by reason of Executive's death or
disability (clauses (a)(iv) and (a)(v) above):
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(i) Executive shall receive a pro rata portion (prorated through the
last day Base Salary is payable pursuant to clauses (a)(iii) and
(a)(iv), respectively) of any bonus or incentive payment (for the
year in which death or disability occurred), to which he/she would
have been entitled had he/she remained continuously employed for
the full fiscal year in which death or disability occurred and
continued to perform his duties in the same manner as they were
performed immediately prior to the death or disability; and
(ii) The exercise of any options then held by Executive shall be
governed by the terms of the applicable Company stock option plan.
8. CONFIDENTIAL INFORMATION.
(a) For purposes of this paragraph 8, the term "Confidential Information"
means information which is not generally known and which is proprietary
to Company or which has been made available to the Company in a manner
reasonably understood to require confidential treatment, including (i)
trade secret information about Company and its products; and (ii)
information relating to the business of Company as conducted at any
time within the previous two (2) years or anticipated to be conducted
by Company, and to any of its past, current or anticipated products,
including, without limitation, information about Company's research,
development, manufacturing, purchasing, accounting, engineering,
marketing, selling, leasing or servicing. All information that
Executive has a reasonable basis to consider Confidential Information
or which is treated by Company as being Confidential Information shall
be presumed to be Confidential Information, whether originated by
Executive or by others, and without regard to the manner in which
Executive obtains access to such information.
(b) Executive will be governed by the terms of the Employee Assignment and
Disclosure Agreement attached hereto as Appendix C . -
9. INVENTIONS.
(a) For purposes of this paragraph 9, the term "Inventions" means
discoveries, improvements and ideas (whether or not in writing or
reduced to practice) and works of authorship, whether or not patentable
or copyrightable, (1) which relate directly to the business of Company,
or to Company's actual or demonstrably anticipated research or
development, (2) which result from any work performed by Executive for
Company, (3) for which equipment, supplies, facilities or trade secret
information of Company is utilized, or (4) which were developed during
the time Executive was obligated to perform the duties described in
paragraph 2.
(b) Executive will be governed by the terms of the Employee Assignment and
Disclosure Agreement attached hereto as Appendix C.
10. NO ADEQUATE REMEDY. The parties agree that it is impossible to measure in
money the damages which the Company will accrue to either party by reason
of a failure of an executive to perform any of the obligations under this
Agreement. Therefore, if the Company shall institute any action or
proceeding to enforce the provisions hereof, the Executive shall not urge
in any such action or proceeding the claim or defense that the Company has
an adequate remedy at law.
11. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of Company, whether by way
of merger, consolidation, operation of law, assignment, purchase or
other acquisition of substantially all the assets or business of
Company and shall only be assignable under the foregoing circumstances
and shall be deemed to be materially breached by Company if any such
successor or assign does not absolutely and unconditionally assume all
of Company's obligations hereunder. Any such successor or assign shall
be included in the term "Company" as used in this Agreement.
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(b) NOTICES. All notices, requests and demands given to or made pursuant
hereto shall, except as otherwise specified herein, be in writing and
be delivered or mailed to any such party at its address which:
In the case of the Executive shall be:
XXXX XXXXXXX XXXXXX
0000 Xxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
In the case of Company shall be:
AUGUST TECHNOLOGY CORPORATION
ATTN: CEO/PRESIDENT
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx XX 00000
Either party may, by notice hereunder, designate a changed address. Any
notice, if mailed properly addressed, postage prepaid, registered or
certified mail, shall be deemed dispatched on the registered date or
that stamped on the certified mail receipt, and shall be deemed
received within the second business day thereafter or when it is
actually received, whichever is sooner.
(c) CAPTIONS. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of
this Agreement.
(d) GOVERNING LAW. The validity, construction and performance of this
Agreement shall be governed by the laws of the State of Minnesota and
any and every legal proceeding arising out of or in connection with
this Agreement shall be brought in the appropriate courts of the State
of Minnesota, each of the parties hereby consenting to the exclusive
jurisdiction of said courts for this purpose.
(e) CONSTRUCTION. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
(f) WAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right
or remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right or remedy granted hereby or by any
related document or by law.
(g) MODIFICATION. This Agreement may not be and shall not be modified or
amended except by written instrument signed by the parties hereto. -
(h) ENTIRE AGREEMENT. This Agreement and the Appendices attached hereto
constitutes the entire Agreement and understanding between the parties
hereto in reference to all the matters herein agreed upon; provided,
however, that this Agreement shall not deprive Executives of any other
rights Executives may have now or in the future, pursuant to law or the
provisions of Company benefit plans. THE APPENDICES ATTACHED HERETO ARE
THE FOLLOWING:
APPENDIX A DUTIES/JOB DESCRIPTION
APPENDIX B ANNUAL AWARD PLAN
APPENDIX C EMPLOYEE ASSIGNMENT & DISCLOSURE AGREEMENT
APPENDIX D ADDENDUM OF COMPLETION
APPENDIX E STOCK PLAN
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APPENDIX F V.P. OF I.P./GENERAL COUNSEL 2000 STOCK OPTION AGREEMENT
APPENDIX G FAIR MARKET VALUE SHEET
IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
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Xxxx Xxxxxxx Xxxxxx
AUGUST TECHNOLOGY CORPORATION
By
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Its:
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