EXHIBIT 10.1
SEPARATION AGREEMENT
This Agreement is made as of the 29th day of August, 2002, by and between
Xxxxxx X. Xxxx, an individual residing at 000 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000
("XX. XXXX"), and ADE Corporation, a Massachusetts corporation with its
principal place of business at 00 Xxxxxx Xxx, Xxxxxxxx, XX 00000 ("ADE")
(collectively, the "PARTIES"). The Parties to this Agreement hereby agree as
follows:
1. RESIGNATION. Xx. Xxxx has resigned his employment with ADE and all
positions as an officer of ADE effective June 20, 2002 (the "TERMINATION DATE").
Xx. Xxxx has received separate, written notification of his rights under COBRA
to continue his participation in ADE's group medical insurance plan(s). Should
Xx. Xxxx elect to continue medical insurance coverage under COBRA, ADE shall pay
the same percentage of the monthly premiums for such coverage as ADE was paying
just prior to the Termination Date, until the first anniversary of the
Termination Date or, if earlier, until the day on which Xx. Xxxx'x eligibility
for COBRA coverage ceases. Thereafter, Xx. Xxxx shall be solely responsible for
timely paying COBRA premiums. Except as otherwise provided above or as otherwise
required by applicable law, effective as of the Termination Date, Xx. Xxxx'x
right to participate in ADE's benefit plans shall cease.
2. SEVERANCE PAY; OPTIONS. On the second business day after the expiration
of the non-revocation period specified in Paragraph 13 below (the date on which
such non-revocation period expires is herein referred to as the "SEVERANCE
DATE"), ADE shall pay to Xx. Xxxx a lump sum severance payment of $131,923.00,
and thereafter ADE shall make twelve (12) equal monthly severance payments to
Xx. Xxxx in the amount of $14,583.33 each, minus withholdings required by law,
payable on the first business day of each month, commencing with the month
following the month in which the Severance Date occurs. Such payments shall be
in full satisfaction of all claims for compensation, accrued vacation, paid time
off and other amounts which are or may be due to Xx. Xxxx through the Severance
Date (other than payment prior to the Severance Date of $43,077 for 40 days of
accrued vacation time through the Severance Date, receipt of which Xx. Xxxx
hereby acknowledges). In addition, after the expiration of such non-revocation
period, on the Severance Date the expiration date of Xx. Xxxx'x 50,000 options
to acquire ADE stock shall be extended to June 20, 2005 and any written stock
option agreements between Xx. Xxxx and ADE regarding such options shall be
deemed amended as set forth in this sentence.
3. CONSULTING.
(a) Commencing on the Severance Date, and continuing for three (3) years
thereafter (the "CONSULTING PERIOD"), Xx. Xxxx shall provide consulting services
("CONSULTING SERVICES") to ADE on such matters and at such times as may be
reasonably requested by the Board of Directors of ADE, or a committee thereof,
or by any officer or senior manager of ADE other than Xxxxx X. Xxxxxxxxxxx,
PROVIDED that Xx. Xxxx shall not be required to report to Xxxxx X.
Xxxxxxxxxxx. The Parties anticipate that such Consulting Services will be
focused on, but not limited to, the matters described on SCHEDULE A attached
hereto and in Section 7 hereof. During the Consulting Period, ADE shall provide
Xx. Xxxx with such documents, electronic access and/or other information as are
reasonably requested by Xx. Xxxx in connection with, and deemed necessary by ADE
for, his performance of the Consulting Services. Xx. Xxxx will use his best
efforts to provide such Consulting Services in a knowing and professional
manner, and at no time during the Consulting Period shall Xx. Xxxx (a) knowingly
act in any manner contrary to the interests of ADE, or (b) assume or create any
obligation or responsibility, express or implied, on behalf of, or in the name
of, ADE, or bind ADE in any manner, without ADE's express, written permission.
Mr. Xxxx xxx provide the Consulting Services through Abbe Enterprises, provided
that the Consulting Services are performed by Xx. Xxxx personally and not
delegated to any other person without the prior written consent of ADE. The
Parties agree that in addition to providing ADE with the Consulting Services,
Xx. Xxxx shall be free to engage in any other activities during and after the
Consulting Period, provided such activities do not conflict with Xx. Xxxx'x
obligations under this Agreement.
(b) ADE will make the following payments to Xx. Xxxx or, upon Xx. Xxxx'x
written request, to Abbe Enterprises, as compensation for his Consulting
Services: (i) during the first year of the Consulting Period, a monthly retainer
in the amount of $26,196.58, payable monthly in arrears on the first business
day of each calendar month; and (ii) during the remainder of the Consulting
Period, a monthly retainer in the amount of $17,863.25, payable monthly in
arrears on the first business day of each month. All such payments shall be made
regardless of the amount of Consulting Services that Xx. Xxxx provides, PROVIDED
that Xx. Xxxx does not fail or refuse to provide Consulting Services when
requested to do so in accordance with this Agreement. ADE will also reimburse
Xx. Xxxx for reasonable out of pocket expenses incurred in connection with his
performance of the Consulting Services, PROVIDED that such expenses are
supported by documentation reasonably satisfactory to ADE, and PROVIDED, FURTHER
that ADE shall not be obligated to reimburse Xx. Xxxx for his own office,
computer, secretarial assistance and other overhead costs or for travel to any
of ADE's business locations in the greater Boston area. During the Consulting
Period, Xx. Xxxx shall be an independent contractor to ADE, and shall be solely
responsible for withholding and payment of all applicable federal, state and
local income taxes and social security and Medicare taxes and all other
legally-required payments on sums received as compensation for his Consulting
Services. During the Consulting Period Xx. Xxxx shall not be entitled to
participate in ADE's benefit plans, except as described in Paragraph 1 above.
4. CONFIDENTIAL INFORMATION; INTELLECTUAL PROPERTY; ASSIGNMENT OF RIGHTS.
(a) Xx. Xxxx acknowledges that, during the course of his employment by ADE
and during the Consulting Period, he has learned or developed, and may learn or
develop, Confidential Information (defined below) developed or owned by ADE or
entrusted to it by others. Xx. Xxxx agrees that he will not, after his
employment by ADE, during the Consulting Period or at any time thereafter, use
or disclose any Confidential Information for his own benefit or the benefit of
any other person or entity. Mr. Xxxx xxx not disclose any Confidential
Information except (a) to employees, consultants or agents of ADE and to actual
or potential customers of ADE designated by ADE, in each case to whom disclosure
is necessary to the performance of this Agreement or (b) to the extent required
in any administrative, judicial or
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other legal proceeding or by a judicial order or subpoena, PROVIDED that prior
written notice of such disclosure and an opportunity to oppose or limit
disclosure is given to ADE. For purposes of this Agreement, "Confidential
Information" means any and all information of ADE or any of its affiliates that
is not generally available to the public. Confidential Information includes but
is not limited to (i) ADE's development, research and marketing activities, (ii)
ADE's products and services, (iii) ADE's costs, sources of supply and strategic
plans, and (iv) the identity and special needs of ADE's clients and
organizations with whom ADE has business relationships and those relationships.
Confidential Information also includes such information as ADE may receive or
has received belonging to customers or others who do business with it.
(b) All documents, records and files, in any media of whatever kind and
description, relating to the business of ADE or any of its affiliates created or
acquired in connection with Xx. Xxxx'x employment by ADE, his service as a
Director of ADE or his performance of the Consulting Services, and any copies,
in whole or in part, thereof (the "DOCUMENTS"), whether or not prepared by Xx.
Xxxx, shall be the sole and exclusive property of ADE. Xx. Xxxx shall safeguard
all Documents and shall return to ADE on the Severance Date all Documents in his
possession or control as of August 1, 2002 except those created or acquired by
Xx. Xxxx in connection with his service as a Director of ADE, which Mr. Xxxx xxx
retain but shall not dispose of. Thereafter, at the end of the Consulting
Period, or at such earlier time or times as ADE may specify, Xx. Xxxx shall
return all Documents and all other property of ADE then in his possession or
control.
(c) Xx. Xxxx further agrees that all "Works", as defined below, shall be
the sole property of ADE. Xx. Xxxx hereby assigns and agrees to assign to ADE
his full right, title and interest, if any, to any and all Works and agrees that
all copyrightable Works that are created by him during the Consulting Period
shall be considered "work made for hire." Xx. Xxxx agrees to execute, without
additional compensation, any further documentation that ADE may request in order
to effect the above obligations. ADE shall reimburse Xx. Xxxx for any reasonable
out-of-pocket expenses he may incur in executing such documentation. For
purposes of this Agreement, the term "Works" means all inventions, patents,
discoveries, compositions, concepts, books, articles, presentations, films,
ideas and the like (whether or not patentable or copyrightable or constituting
trade secrets) conceived, made, created, developed or reduced to practice by Xx.
Xxxx (whether alone or with others, whether or not during normal business hours
and whether on or off ADE's premises) prior to the Severance Date or during the
Consulting Period, PROVIDED that "Works" shall not include any of the foregoing
conceived, made, created, developed or reduced to practice by Xx. Xxxx during
the Consulting Period that do not relate to the Consulting Services or the
business of ADE.
5. NONCOMPETITION AND OTHER RESTRICTIVE COVENANTS. During the Consulting
Period and for a period of six (6) months thereafter, Xx. Xxxx shall not,
directly or indirectly, for himself or on behalf of any other person or entity
(whether as a contractor, consultant, agent, partner, principal, investor,
employee, officer, director or otherwise), except with the prior written consent
of ADE as authorized by its Board of Directors (which may be granted or withheld
in the sole discretion of the Board of Directors):
(a) engage, or assist others engaged, in whole or in part, in any business
in competition with the business of ADE or any of its affiliated entities (Xx.
Xxxx'x ownership of
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not more than five percent (5%) of the outstanding stock of a publicly traded
corporation shall not, by itself, violate this Paragraph 5(a));
(b) solicit or accept business from any person or entity that is a client
or active prospect of ADE or any of its affiliated entities, or that was such a
client or active prospect during Xx. Xxxx'x employment with ADE or during the
Consulting Period, or induce or encourage any such client or prospect to sever
its relationship with ADE or any of its affiliated entities; or
(c) solicit, recruit or hire (whether as an employee, principal, consultant
or otherwise) any employee or consultant of ADE or any of its affiliated
entities, or any person who was such an employee or consultant during the six
(6) month period prior to the solicitation, recruitment or hiring, or induce or
encourage any such person to terminate his or her association with ADE or any of
its affiliated entities; except that Mr. Xxxx xxx retain independent consultants
on a part-time basis PROVIDED that such retention shall not violate Sections
5(a) or 5(b) hereof, interfere with or take precedence over any consulting work
being provided by such consultant to ADE or reduce or interfere with any
relationship such consultant may have with ADE.
Any request by Xx. Xxxx for consent of ADE under this Paragraph 5 shall be
considered and decided by the Board of Directors no later than at its next
meeting following receipt of such request.
6. ENFORCEMENT OF COVENANTS. Xx. Xxxx acknowledges that he has carefully
read and considered all the terms and conditions of this Agreement, including
the restraints imposed on him pursuant to Paragraphs 4 and 5 hereof. The Parties
agree that said restraints are necessary for the reasonable and proper
protection of ADE and its affiliates and that each and every one of the
restraints is reasonable. Xx. Xxxx further acknowledges that were he to breach
any of the covenants contained in such Paragraphs 4 and 5, the damage to ADE and
its affiliates would be irreparable. Xx. Xxxx therefore agrees that ADE, in
addition to any other remedies available to it, shall be entitled to preliminary
and permanent injunctive relief against any breach or threatened breach by Xx.
Xxxx of any of said covenants in Paragraphs 4 and 5. The Parties further agree
that, in the event that any provision of such Paragraphs 4 and 5 shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its being extended over too great a time, too large a geographic area or too
great a range of activities, such provision shall be deemed to be modified to
permit its enforcement to the maximum extent permitted by law.
7. CONTINUING COOPERATION. Xx. Xxxx agrees that during and after the
Consulting Period, he will cooperate fully with ADE in the resolution of any
matters in which he was involved during the course of his employment by ADE or
in which he may be involved during the Consulting Period, and in the defense or
prosecution of any claims or actions now in existence (including, without
limitation, the pending actions (the "KLA ACTIONS") between KLA-Tencor and ADE)
or which may be brought or threatened in the future against or on behalf of ADE,
including any claims or actions against its officers, directors and employees.
Xx. Xxxx'x cooperation in connection with such matters, actions and claims shall
include, without limitation, being available at such times as may be reasonably
requested by ADE to meet with ADE and its
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counsel regarding matters in which he has been involved, or about which he has
knowledge, to prepare for any proceeding (including, without limitation,
depositions, consultation, discovery or trial); to provide truthful affidavits;
to assist with any audit, inspection, proceeding or other inquiry; and to act as
a witness to provide truthful testimony in connection with any litigation or
other legal proceeding affecting ADE. ADE shall pay Xx. Xxxx a fee of $200 per
hour for any such cooperation and assistance provided after the Consulting
Period, except that no fee shall be paid for giving testimony, and shall
reimburse Xx. Xxxx for his reasonable out of pocket expenses incurred in
rendering such cooperation and assistance, PROVIDED such expenses are supported
by documentation reasonably satisfactory to ADE, and PROVIDED, FURTHER that ADE
shall not be obligated to reimburse Xx. Xxxx for his own office, computer,
secretarial assistance and other overhead costs or for travel to any of the
business locations of ADE or its counsel in the greater Boston area. Xx. Xxxx
further agrees that should he be contacted (directly or indirectly) by any
person or entity (for example, by any party representing an individual or
entity) adverse to ADE, he will promptly notify ADE.
8. CONFIDENTIALITY OF AGREEMENT. The Parties agree to hold as secret and
confidential (i) the terms of this Agreement and (ii) any information regarding
the negotiations leading to it ("AGREEMENT-RELATED MATTERS"), except as required
to seek legal counsel, financial, or tax advice and except for public disclosure
required to be made by ADE under applicable law, rules and regulations, until
ADE files a copy of this Agreement with the Securities and Exchange Commission.
Further, each Party agrees not to discuss any Agreement-Related Matters with any
other person without the consent of the other Party, except that Mr. Xxxx xxx
discuss Agreement-Related Matters with his immediate family and his own legal,
financial and tax advisors and ADE may discuss Agreement-Related Matters with
its legal, financial and tax advisors and any director, officer, employee or
agent of ADE who has a need to know the same.
9. NONDISPARAGEMENT.
(a) Xx. Xxxx agrees not to make any statement, written or oral, that
disparages or criticizes ADE, its business, its management, or any of its
officers, directors or employees. Xx. Xxxx further agrees not to take any action
that is intended to, or that does in fact, damage the business or reputation of
ADE, or that interferes with, impairs or disrupts its normal operations PROVIDED
that this subparagraph (a) shall not apply to any action or statement by Xx.
Xxxx relating to his rights and ADE's obligations under this Agreement.
(b) ADE agrees, on behalf of its directors and officers, not to make any
statement, written or oral, that disparages or criticizes Xx. Xxxx, and not to
take any action that is intended to, or that does in fact, damage the business
or reputation of Xx. Xxxx or that interferes with, impairs or disrupts his
normal business operations, PROVIDED that such business and operations do not
conflict with Xx. Xxxx'x obligations under this Agreement, and PROVIDED, FURTHER
that this subparagraph (b) shall not apply to any action or statement by ADE,
its directors or officers relating to (i) Claims (defined below) arising out of
fraud or willful misconduct by Xx. Xxxx while serving as an officer or employee
of ADE, (ii) Claims of a derivative nature asserted by a person who is not a
director or officer of ADE against Xx. Xxxx arising out of or relating to Xx.
Xxxx'x service as a Director of ADE or (iii) ADE's rights and Xx. Xxxx'x
obligations under this Agreement.
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10. RELEASE BY XX. XXXX. Xx. Xxxx, for himself and his heirs, successors,
and assigns, hereby knowingly and voluntarily remises, releases and forever
discharges ADE, its current and former officers, directors, agents,
representatives, shareholders, and employees, parent companies, affiliates and
subsidiaries (collectively, the "ADE PARTIES"), from any and all debts, demands,
actions, causes of actions, accounts, covenants, contracts, agreements, claims,
damages, omissions, promises, and any and all claims and liabilities whatsoever,
of every name and nature, known or unknown, both in law and equity ("CLAIMS"),
which Xx. Xxxx now has or ever had against the ADE Parties from the beginning of
the world to the Severance Date; provided however that the foregoing release
shall not apply to Xx. Xxxx'x rights and ADE's obligations under this Agreement,
including Xx. Xxxx'x rights relating to his stock options as provided in
Paragraph 2 hereof. The foregoing release of Claims shall apply to any Claim of
any type, including, without limitation, any and all Claims of any type that Mr.
Xxxx xxx have arising under the common law or under Title VII of the Civil
Rights Act of 1964, as amended, the Age Discrimination in Employment Act of
1967, as amended, the Older Workers Benefit Protection Act, the Americans With
Disabilities Act, the Family and Medical Leave Act, Mass. Gen. Laws ch. 151B,
and any other federal, state or local statutes, regulations, ordinances or
common law creating employment-related causes of action, and shall further
apply, without limitation, to any and all Claims for wages, vacation, stock
options, severance (except as provided in Paragraph 1), attorneys' fees, costs
and other forms of compensation, and to any and all Claims in connection with,
related to or arising out of Xx. Xxxx'x employment, or the termination of his
employment, with ADE, PROVIDED, HOWEVER, that the foregoing release shall not
apply to Xx. Xxxx'x rights and ADE's obligations under this Agreement, including
without limitation Xx. Xxxx'x rights relating to his stock options as provided
in Paragraph 2 hereof. Xx. Xxxx agrees that he will not hereafter pursue any
individual Claim against the ADE Parties by filing a claim, complaint or charge
with any federal state or local court, any arbitration panel or any
administrative agency for or on account of anything that that is the subject of
the foregoing release; PROVIDED, HOWEVER, that nothing in this Paragraph 10
shall prevent Xx. Xxxx from seeking to enforce his rights under this Agreement.
11. RELEASE BY ADE. The ADE Parties hereby knowingly release, remise and
forever discharge Xx. Xxxx, his heirs, successors and assigns, from any and all
Claims which the ADE Parties now have or ever had against Xx. Xxxx from the
beginning of the world to the Severance Date; PROVIDED, HOWEVER, that the
foregoing release shall not apply to (i) Claims arising out of fraud or willful
misconduct by Xx. Xxxx while serving as an officer or employee of ADE (the ADE
Parties presently being unaware of the existence of any such Claims), (ii)
Claims of a derivative nature asserted by a person who is not a director or
officer of ADE against Xx. Xxxx arising out of or relating to Xx. Xxxx'x service
as a Director of ADE (the ADE Parties presently being unaware of the existence
of any such Claims), or (iii) ADE's rights and Xx. Xxxx'x obligations under this
Agreement. The foregoing release of Claims shall apply to any Claim of any type,
including, without limitation, any and all Claims of any type that the ADE
Parties may have arising under the common law or under any federal, state or
local statutes, regulations, or ordinances, and shall further apply, without
limitation, to any and all Claims related to or arising out of Xx. Xxxx'x
employment, or the termination of his employment, with ADE; PROVIDED, HOWEVER,
that the foregoing release shall not apply to (i) Claims arising out of fraud or
willful misconduct by Xx. Xxxx while serving as an officer or employee of ADE
(the ADE Parties presently being unaware of the existence of any such Claims),
(ii) Claims of a derivative nature asserted by a person who is not a director or
officer of ADE against Xx. Xxxx arising out of or
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relating to Xx. Xxxx'x service as a Director of ADE (the ADE Parties presently
being unaware of the existence of any such Claims), or (iii) ADE's rights and
Xx. Xxxx'x obligations under this Agreement. The ADE Parties agree that they
will not hereafter pursue any Claim against Xx. Xxxx by filing a claim,
complaint or charge with any federal state or local court, any arbitration panel
or any administrative agency for or on account of anything that that is the
subject of the foregoing release; PROVIDED, HOWEVER, that nothing in this
Paragraph 11 shall prevent the ADE Parties from seeking to enforce their rights
under this Agreement.
12. INDEMNIFICATION. Both during and after the Consulting Period, Xx. Xxxx
shall remain entitled to indemnification to the fullest extent authorized by
applicable law, ADE's by-laws and ADE's Director's and Officers Liability
Policies. Moreover, ADE, through its own counsel and at its own expense, will
continue to advise, defend and represent Xx. Xxxx in connection with any further
depositions of Xx. Xxxx or other matters involving Xx. Xxxx that may occur in
the KLA Actions.
13. TIME FOR SIGNING; REVOCATION. Xx. Xxxx agrees that ADE has informed him
of his right to consult, and that he should consult, an attorney with respect to
this Agreement. Xx. Xxxx has until twenty-one (21) days from the receipt of this
Agreement to decide whether or not to sign it. If Xx. Xxxx has not signed and
returned this Agreement (including Schedule A) to ADE within twenty-one (21)
days of Xx. Xxxx'x receipt of this Agreement, this Agreement (including Schedule
A) shall not be valid. In the event that Xx. Xxxx executes and returns this
Agreement (including Schedule A) to ADE within twenty-one days of the date of
its delivery to Xx. Xxxx, Xx. Xxxx shall have seven (7) days after executing
this Agreement to revoke his execution of this Agreement, which can be
accomplished by delivering a written notice of revocation to ADE before the
expiration of the seven (7) day revocation period. This Agreement shall not be
effective (and the Parties shall have no rights or obligations hereunder) until
the expiration of the seven (7) day revocation period.
14. GOVERNING LAW; JURISDICTION. This Agreement is intended to operate as a
contract under seal and shall be governed by, and enforced and interpreted in
accordance with, the laws of The Commonwealth of Massachusetts, and the Parties
hereby consent to jurisdiction in courts located in The Commonwealth of
Massachusetts with respect to all matters arising out of or related to this
Agreement.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between Xx. Xxxx and ADE and supersedes all other agreements
between Xx. Xxxx and ADE, except any written stock option agreements between Xx.
Xxxx and ADE, as amended as provided in Paragraph 2 hereof, which shall remain
in full force and effect in accordance with their terms as so amended. This
Agreement may be modified, altered or amended only by a document signed by Xx.
Xxxx and an authorized representative of ADE.
16. NO REPRESENTATIONS. By signing this Agreement, the Parties acknowledge
that they are doing so knowingly and voluntarily, and Xx. Xxxx acknowledges that
he is receiving compensation and benefits hereunder to which he is not otherwise
entitled. Each Party also acknowledges that he or it is not relying on any
representations or promises by any representative of the other Party concerning
the meaning or any aspect of this Agreement.
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17. ASSIGNMENT. Mr. Xxxx xxx not assign any of his rights or delegate any
of his duties or obligations under this Agreement, and his rights hereunder
shall inure to the benefit of his heirs, estate and representatives. The rights
and obligations of ADE under this Agreement shall automatically be assigned by
ADE to its successor resulting from any merger, consolidation or sale of all or
substantially all of its assets, and shall inure to the benefit of, and shall be
binding upon, such successor and assign of ADE in the same manner and to the
same extent as if no succession had taken place.
Signed under seal.
XXXXXX X. XXXX XXX CORPORATION
/S/ XXXXXX XXXX By: /S/ XXXXX XXXXX
------------------------------- ------------------------------------------
Date: August 29, 2002 Title: Executive Vice President and Chief
Financial Officer
Date: August 29, 2002
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SCHEDULE A
CONSULTING SERVICES
1. Continuing support relating to the KLA-Tencor lawsuits.
2. Support of the responsible ADE team with pertinent background and
technical information with respect to certain customers and customer
visits, which may involve attendance.
3. Provide guidance, technical and marketing information to the ADE teams
responsible for bringing the AWIS product line up to the required
acceptance level for both the wafer and device segments of the
semiconductor market.
4. Discussions with selected members of ADE's management on strategic product
planning issues as they may arise.
5. Consultations on ADE product capability and requirements to support the
market's future linewidth roadmap nodes.
6. Support ADE's efforts to maintain an active and relevant patent portfolio.
7. Periodic reports to ADE's Board of Directors including, upon request of
the Board, attendance at meetings of the Board.
