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EXHIBIT 10.48
AG ASSOCIATES. INC.
EMPLOYMENT AGREEMENT
This Agreement is entered into as of _____________________, 1997 by and
between AG Associates, Inc., a California corporation (the "Company"), and
_____________________________ ("Employee"). In consideration of the terms and
conditions set forth in this Agreement, the parties agree as follows:
1. DEFINITIONS.
1.1 For purposes hereof "Cause" for termination of any Employee's
employment will exist at any time after the happening of one or more of the
following events: (a) the Employee's conviction of a felony involving moral
turpitude; (b) any willful act or acts of dishonesty undertaken by the Employee
and intended to result in substantial gain or personal enrichment of the
Employee, directly or indirectly, at the expense of the Company or a Successor,
Parent, Subsidiary or Affiliate of the Company (as such terms are defined in the
Company's 1994 Stock Option Plan); (c) any willful act or misconduct which is
materially and demonstrably injurious to the Company or a Successor, Parent,
Subsidiary or Affiliate of the Company; (d) substantial and repeated neglect of
the Employee's responsibility, or malfeasance thereof, that remains uncured
after 30 days written notice of such neglect or malfeasance; or (e) the
Employee's death or disability (within the meaning of Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended.
1.2 A "Merger" shall mean (a) a merger or consolidation in which
the Company is not the surviving corporation (other than a merger or
consolidation with a wholly owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings), or (b) a merger in which the Company is the surviving corporation but
after which the stockholders of the Company (other than any stockholder which
merges (or which owns or controls another corporation which merges) with the
Company in such merger) cease to own at least 50% of the issued and outstanding
capital stock or other equity interests in the Company.
1.3 A "Sale" means a Merger, the sale of all or substantially all
of the assets of the Company as a going concern in a single transaction or
series of related transactions or the sale or transfer of a majority of the
outstanding shares of the Company by the stockholders of the Company in a single
transaction or a series of related transactions other than market transactions
to unrelated purchasers.
1.4 A "Transaction "means:
(a) a dissolution or liquidation of the Company;
(b) a merger or consolidation in which the Company is not
the surviving corporation (other than a merger or consolidation with a
wholly owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial
change in the stockholders of the Company);
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(c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company (other than any stockholder
which merges (or which owns or controls another corporation which merges) with
the Company in such merger) cease to own at least 50% of the issued and
outstanding capital stock or other equity interests in the Company;
(d) the sale of all or substantially all of the assets of the
Company; or
(e) any other transaction which qualifies as a "corporate
transaction" under Section 424(a) of the Internal Revenue Code of 1986, as
amended, wherein the stockholders of the Company give up all of their equity
interest in the Company (except for the acquisition, sale or transfer of all or
substantially all of the outstanding shares of the Company from or by the
stockholders of the Company).
2. Employment. The Company hereby continues to employ Employee and
Employee hereby continues to accept employment with the Company upon the terms
and conditions set forth in this Agreement. Employee hereby represents and
warrants to the Company that he is free to enter into and fully perform this
Agreement and the Proprietary Rights and Confidentiality Agreement he has signed
for the benefit of the Company (the "Confidentiality Agreement").
3. Salary and Benefits. For the performance of all of Employee's
obligations under this Agreement, the Company shall set the Employee's salary
and bonuses from time to time, which salary and bonuses will be payable as
earned in accordance with the payroll policies of the Company as constituted
from time to time. During the term of this Agreement, Employee shall be entitled
to receive fringe benefits of employment generally available to the Company's
other similarly situated employees as he becomes eligible for them.
4. Term. Employee's employment with the Company is not for a specified
term, is at will and may be terminated by either party with or without cause as
described in this Section 4. Employee, in his sole discretion, may, at any time,
terminate his employment, with or without cause (which will also terminate this
Agreement) after giving the Company two weeks prior written notice. The Company,
in its sole discretion, may terminate the employment of Employee, with or
without cause, immediately upon giving Employee written notice, but may not
terminate this Agreement. This Agreement shall also terminate upon the first to
occur of the fifth anniversary of this Agreement (except as provided in Section
5.2 below as to any effective employment or consulting obligations subsequent to
a Sale), the death of Employee or upon written notice given by the Employee to
the Company.
5. Termination in Connection with Transaction.
5.1 Continuation of Employment. In the event of a Transaction,
then the Employee's employment may be continued with the successor company, if
any, under such terms as the Employee and the successor company may mutually
agree and:
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(a) any or all shares of the Company's capital stock,
with respect to the vesting thereof, and any options for the purchase of
the same (collectively, as to all such shares and options, "Awards")
shall be assumed, converted, substituted or replaced by the successor
company, if any, by options or shares that are substantially equivalent
to the Awards, which assumption, conversion or replacement will be
binding on Employee; or
(b) subject to Section 5.4 below, the successor
corporation may provide substantially similar consideration to Employee
as was provided to stockholders with respect to any options to purchase
the Company's capital stock (after taking into account the existing
provisions. of the Awards) and provide, with respect to shares of the
Company's capital stock, the same consideration as provided to
stockholders of the Company subject to repurchase restrictions no less
favorable to the Employee.
With respect to a Sale of the Company, if the successor company or any of its
affiliates, if any, does not offer Employee a position with the successor or any
of its affiliates that is within Employee's expertise and is reasonably similar
in duties and responsibilities to Employee's position with the Company, and as a
result, Employee declines employment with the successor company or any of its
affiliates, then (a) such failure shall be deemed a termination in connection
with the Sale with notice as provided in Section 5.2.1 below, (b) Employee shall
be deemed an employee for 12 months subsequent to the closing of the Sale
entitled to the benefits of Section 5.2.1 below, it being understood that
Employee may, at Employee's option during such 12-month period, seek and obtain
full-time employment elsewhere to the exclusion of the Company and its
successor, without affecting his rights under Section 5.2.1 below and (c)
Employee shall perform consulting services and be entitled to the benefits
provided in Section 5.2.3 below.
5.2 Termination on a Sale.
5.2.1 Notice and Continuation of Employment Upon a Sale.
The Employee's employment may not be terminated by the Company or any potential
acquirer in connection with the Sale without the acquirer giving the Employee 12
months prior written notice of termination at the closing of the Sale (the
"Effective Date"). During the period of such notice, if any, the Employee will
be paid an amount for the 12-month period that is equal to his then current
salary and bonuses, whether or not the Employee's services are actually required
by the Company, its successor or this Agreement during the notice period, which
annual amount will be payable in 12 equal monthly installments, as earned, in
accordance with the Company's normal payroll policy in effect from time to time,
and the Employee will be obligated to render consulting services to the Company
as specified in Section 5.2.3 below. Employee benefits will continue, and the
Employee's options and shares of Common Stock will continue to vest, during the
12-month period after the Effective Date of the Sale so long as the Employee's
employment is not terminated for Cause.
5.2.2 Notice and Continuation of Employment During the
Year after Sale. During the 12-month period after the Sale, assuming the notice
of termination described in Section 5.2.1 above was not given, the Employee's
employment may be terminated by the Company (which, for purposes of this Section
5.2.2 and Section 5.2.3 below, shall mean the Company
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or its successor) for Cause at any time and may be terminated without Cause by
the Company only if such termination is effective on the date 12 months after
the Effective Date of the Sale. Such termination, whether with or without Cause,
must be effected by giving the Employee at least 14 days prior written notice.
Employee benefits will continue, and the Employee's options and shares of Common
Stock will continue to vest, during the 12-month period after the Effective Date
of the Sale so long as the Employee's employment is not terminated for Cause.
5.2.3 Consulting Obligations. If the Employee's employment
is terminated upon the Sale as described in Section 5.2.1 above or is terminated
by the Company without Cause during the 12-month period after the Effective Date
of the Sale as described in Section 5.2.2 above, the Employee will be obligated
to hold himself available to consult, at the request of the Company and on such
projects within the Employee's professional expertise as the Company shall
designate, during the 12-month period following the first anniversary of the
Effective Date. Such services will be rendered for up to 10 hours per month and
will be paid an hourly rate equal to $300 for each hour actually worked, payable
monthly, as earned, in accordance with the Company's normal payroll policy in
effect from time to time. For so long as the Employee's consulting obligation is
not terminated for Cause, each of his options and shares will continue to vest
while the consulting arrangement is in effect, the Board having determined that
the Employee will be performing substantial services for the Company during that
time. The Employee's services as a consultant may be terminated by the Company
for Cause upon 14 days advance written notice.
5.2.4 Supersede Other Rights, Unless Greater. Subject to
any greater rights granted to Employee under any Award, this provision will
supersede and replace any other provision for accelerated vesting that applies
to such Award held by the Employee, whether such Award is now granted or is
granted in the future and whether such Award is now owned or will be owned in
the future.
5.3 Termination of Awards on a Transaction. Except as provided in
this Section 5 and provided that the successor corporation (if any) does not
assume, replace, convert or substitute or pay for all outstanding Awards as
provided in Section 5.1 above, in the event of a Transaction, such Awards will
expire on such event at such time and on such conditions as the Board shall
determine upon 20 days advance written notice to Employee.
5.4 Other Treatment of Awards. Subject to any greater rights
granted to Employee under the foregoing provisions of this Section 5, in the
event of the occurrence of any Transaction, any outstanding Awards will be
treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation, sale of assets or other "corporate
transaction. "
6. Collateral Agreements. Employee and the Company acknowledge that the
Confidentiality Agreement previously entered into between Employee and the
Company will continue in full force and effect in accordance with its terms
irrespective of any termination of this Agreement.
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7. General Provisions.
7.1 Withholding. All sums payable to Employee under this
Agreement shall be reduced by all federal, state, local and other withholding
and similar taxes and payments required by applicable law.
7.2 Notices. All notices required under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered personally
or mailed by certified mail, return receipt requested, postage prepaid, to the
address of the relevant party as set forth below such party's signature hereto,
or as may be changed by notice given hereafter in accordance with the provisions
of this Section 7.2.
7.3 Arbitration. Employee and the Company shall submit to
binding arbitration in any controversy or claim arising out of, or relating to,
this Agreement or any breach hereof, provided, however, that the Company retains
its right to, and shall not be prohibited, limited or in any other way
restricted from, seeking or obtaining equitable relief from a court having
jurisdiction over the parties. Such arbitration shall be conducted in accordance
with the Rules of the American Arbitration Association in effect at that time,
and judgment upon the determination or award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.
7.4 Enforceability. If any provision of this Agreement shall be
found by any arbitrator or court of competent jurisdiction to be invalid. or
unenforceable, the parties hereby waive such provision to the extent that it is
found to be invalid or unenforceable and to the extent that to do so would not
deprive one of the parties of the substantial benefit of its bargain. Such
provision shall, to the extent allowable by law and the preceding sentence, be
modified by such arbitrator or court so that it becomes enforceable and, as
modified, shall be enforced as any other provision hereof, all the other
provisions continuing in full force and effect. Remedies provided for in this
Agreement are cumulative and are in addition to any other right or remedy
granted to any party by contract, at law, in equity or otherwise. ,
7.5 No Waiver. The failure by either party at any time to
require performance or compliance by the other of any of its obligations or
agreements shall in no way affect the right to require such performance or
compliance at any time thereafter. The waiver by either party of a breach of any
provision hereof shall not be taken or held to be a waiver of any preceding or
succeeding breach of such provision or any other provision of this Agreement. No
waiver of any kind shall be effective or binding, unless it is in writing and is
signed by the party against whom such waiver is sought to be enforced.
7.6 Assignment. This Agreement and all rights hereunder are
personal to Employee and may not be transferred or assigned by Employee at any
time. The Company may assign its rights, together with its obligations
hereunder, to any parent, subsidiary, affiliate or successor, in connection with
any sale, transfer or other disposition of all or substantially all of its
business and assets, provided, however, that any such assignee assumes the
Company's obli-
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gations hereunder. This Agreement shall be binding upon, and inure to the
benefit of, the permitted successors and representatives of the respective
parties hereto.
7.7 Entire Agreement; amendment. This Agreement constitutes the
entire and only agreement between the parties relating to employment of Employee
with the Company, and supersedes and cancels any and all previous contracts,
arrangements or understandings with respect thereto. This Agreement may be
amended, modified, superseded, canceled, renewed or extended only by an
agreement in writing executed by both parties hereto.
7.8 General Interpretation. The headings contained in this
Agreement are for reference purposes only and shall in no way affect the meaning
or interpretation of this Agreement. In this Agreement, the singular includes
the plural, the plural included the singular, and the masculine gender includes
both male and female referents. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which,
taken together, constitute one and the same agreement. This Agreement and the
rights and obligations of the, parties hereto shall be construed in accordance
with the laws of the State of California, without giving effect to the
principles of conflict of laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
EMPLOYEE:___________________ AG ASSOCIATES, INC.
____________________________ By:______________________________________________
(Signature) Xx. Xxxxx Gat, Chairman, CEO
Address:____________________ Address: 0000 Xxxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
____________________________ Attn: President
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