NANOMETRICS INCORPORATED
Exhibit 10.1
NANOMETRICS INCORPORATED
August 9, 2017
Xxxxxxx X. Xxxxxx, Ph.D.
0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
RE: Transition and Consulting Agreement
Dear Xxx:
As you know, you have notified the Board of Directors (the “Board”) of your plans to retire from your positions as President and Chief Executive Officer of Nanometrics Incorporated (the “Company”) and thereby terminate your employment with the Company, but have agreed to stay on until a successor CEO has been named. This letter sets forth the terms of the transition and consulting agreement (the “Agreement”) that the Company is offering to you in connection with your retirement and employment transition.
(b)Transition Period Salary and Bonus. During the Transition Period, you will continue to be paid a base salary at the rate of $41,666.66 per month (which is equivalent to $500,000 per year), which base salary shall be paid according to the Company’s regular payroll practices (the “Base Salary”). You also will continue to remain eligible to earn (i) an annual bonus for Fiscal Year 2017 in accordance with the performance goals previously established and communicated to you under the terms of the Company’s Executive Performance Bonus Program, as approved by the Board (the “Bonus Plan”), with a target bonus of $500,000 for such Fiscal Year, and (ii) an annual bonus for Fiscal Year 2018 under the Bonus Plan fixed at $500,000, which, in each case, will be subject to standard deductions and withholdings and (except as set forth below) prorated for any partial employment during the year in which the Retirement Date
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occurs. As an additional benefit under this Agreement, in the event that the Retirement Date occurs prior to December 31, 2017, and provided that your employment has not terminated for Cause (as defined below): (i) the Company will continue to pay your Base Salary in the form of severance payments, subject to standard deductions and withholdings, from the Retirement Date through December 31, 2017; and (ii) notwithstanding your employment termination prior to the end of Fiscal Year 2017, which would otherwise reduce your eligibility for a bonus to a prorated bonus amount, you will remain eligible to receive, without proration, your full year annual bonus for 2017, as determined in accordance with the performance goals previously established and communicated to you pursuant to the terms and conditions of the Bonus Plan, and such bonus amount, if awarded, will be paid to you on or before March 15, 2018, as an additional severance payment and subject to standard deductions and withholdings. In addition, in the event the Retirement Date has not occurred by January 31, 2018, the Company shall discuss with you and consider in good faith what if any additional compensation should become payable to you with respect to Fiscal Year 2018 in light of the anticipated duration and responsibilities of your continued service as CEO in that Fiscal Year.
(e)Employment Termination. Nothing in this Agreement alters your employment at will status. Either you or the Company may terminate your employment at any time during the Transition Period, with or without Cause (as defined below), upon notice to the other. If the Company terminates your employment without Cause, then you will remain eligible to be retained by the Company as a consultant (as defined and described in Paragraph 7 below), provided that you satisfy all conditions set forth in Paragraph 7 below for such engagement. If prior to the Retirement Date you resign your employment or the Company terminates your employment for Cause, then you will not be entitled to be retained as a consultant as set forth below. For purposes of this Agreement, “Cause” for termination will mean any one or more of
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the following: (i) your willful gross misconduct; (ii) your unjustifiable neglect of your duties (as determined in the good faith judgment of the Board); (iii) your acting in any manner that has a direct, substantial and adverse effect on the Company or its reputation; (iv) your repeated material failure or repeated refusal to comply with reasonable written policies, standards and regulations established by the Company from time to time which failure, if curable, is not cured to the reasonable satisfaction of the Board during the thirty (30) day period following written notice of such failure from the Company; (v) any tortious act, unlawful act or malfeasance which causes or reasonably could cause (for example, if it became publicly known) material harm to the Company’s standing, condition or reputation; (vi) any material breach by you of the provisions of any confidential information agreement with the Company or other material improper disclosure of the Company’s confidential or proprietary information; (vii) your theft, dishonesty, or falsification of any Company records; (viii) your being found liable in any Securities and Exchange Commission or other civil or criminal securities law action or entering any cease and desist order with respect to such action (regardless of whether or not you admit or deny liability); or (ix) you (A) obstructing or impeding; (B) endeavoring to influence, obstruct or impede, or (C) failing to materially cooperate with, any investigation authorized by the Board or any governmental or self-regulatory entity (an “Investigation”). However, your failure to waive attorney-client privilege relating to communications with your own attorney in connection with an Investigation will not constitute “Cause.”
4.Expense Reimbursement. You agree that, within thirty (30) days of the Retirement Date, you will submit your documented expense reimbursement statement reflecting all business expenses you incurred through the Retirement Date, if any, for which you seek reimbursement. The Company will reimburse you promptly for such expenses pursuant to its regular business practice.
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(a)Board Status. For the duration of your Board membership, you will serve as a non-executive member of the Board who is not an independent member. Accordingly, you will not serve on any committees of the Board.
(a)Consulting Period. The consulting relationship will be deemed to have commenced on the Retirement Date and will continue until March 31, 2020, unless terminated earlier pursuant to Paragraph 7(i) below or extended by agreement of you and the Company (the
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“Consulting Period”). Any agreement to extend the Consulting Period after the initial period must be set forth in writing signed by you and a duly authorized officer or director of the Company.
(e)Equity Awards. Vesting of your outstanding Equity Awards will continue during the Consulting Period; provided, however, that except with respect to any tranches of PSUs scheduled to vest in 2018, which shall vest (if at all) in accordance with their
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terms, the vesting schedule of the PSUs shall be converted to a time-based schedule, such that each tranche shall vest on its Vesting Date (as defined in the documentation evidencing such PSUs) at the target level so long as you remain a consultant under this Agreement without regard to any achievement of performance criteria above or below such level. Your Equity Awards will otherwise continue to be governed by the terms of the applicable Equity Award documents; provided that upon a Change in Control, your Equity Awards will vest in full. Your service as a consultant during the Consulting Period under this Agreement shall constitute Continuous Status as a Service Provider for purposes of the 2005 Plan.
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(i)Termination of Consulting Period. The Consulting Period will terminate upon a Change in Control, at which time any unvested Equity Awards will vest in full. Without waiving any other rights or remedies, the Company may terminate immediately the Consulting Period and its corresponding obligation to pay you Consulting Fees for Cause. In addition, you may terminate the Consulting Period at any time, for any reason, upon written notice to the Company. Upon termination of the Consulting Period upon a Change in Control, by the Company for Cause or by you for any reason, the Company will pay only those Consulting Fees earned and expenses incurred through and including the date on which the termination of the Consulting Period becomes effective, and your obligations under this Agreement will remain in full force and effect.
8.No Other Compensation or Benefits. You agree and acknowledge that you are not entitled to any severance benefits in connection with your employment resignation, whether pursuant to that certain General Severance Benefits and Change in Control Severance Benefits Agreement between you and the Company, dated May 19, 2015 (the “Severance Agreement”), or otherwise. By executing this Agreement, you hereby further agree and acknowledge that any such compensation or benefits are extinguished, including without limitation that you are no longer eligible for and you waive all rights you may have to benefits under the Severance Agreement. You further agree and acknowledge that the consideration provided in this Agreement is in lieu of (or in satisfaction of) and supersedes any other compensation or benefits that you may be entitled to receive from the Company or its predecessors or affiliates under any other agreement or promise (including but not limited to any wages, severance benefits, bonuses, incentive pay, equity, or other compensation or benefits) other than benefits that had vested as of the date of this Agreement. You further acknowledge that, except as expressly provided in this
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Agreement, you have not earned and will not receive from the Company any additional fees, compensation, severance, or benefits on or after the Retirement Date.
12.Release of Claims.
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(a)General Release. In exchange for the consideration provided to you under this Agreement to which you would not otherwise be entitled, you hereby generally and completely release the Company, and its parents, subsidiaries, successors, predecessors, and affiliated entities, and each of such entities’ respective current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, insurers, affiliates, and assigns (collectively, the “Released Parties”) of and from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to or on the date you sign this Agreement (collectively, the “Released Claims”).
(b)Scope of Release. The Released Claims include, but are not limited to: (i) all claims arising out of or in any way related to your employment with the Company, or the decision to terminate such employment; (ii) all claims related to your compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, paid time off, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (iii) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (iv) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (v) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, the Worker Adjustment and Retraining Notification Act, the California Labor Code (as amended), and the California Fair Employment and Housing Act (as amended).
(c)Excluded Claims and Protected Rights. Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (i) any rights or claims for indemnification you may have pursuant to any written indemnification agreement with the Company to which you are a party, the charter, bylaws, or operating agreements of the Company, or under applicable law; (ii) any rights which are not waivable as a matter of law; and (iii) any claims for breach of this Agreement. In addition, you understand that nothing in this Agreement limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). You further understand this Agreement does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. While this Agreement does not limit your right to receive an award for information provided to the Securities and Exchange Commission, you understand and agree that, to maximum extent permitted by law, you are otherwise waiving any and all rights you may have to individual relief based on any claims that you have released and any rights you have waived by signing this Agreement. You hereby represent and warrant that, other than the Excluded Claims, you are not aware of any claims you have or might have against any of the Released Parties that are not included in the Released Claims.
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(d)ADEA Waiver. You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you may have under the ADEA, and that the consideration given for the waiver and release in this Paragraph 12(d) is in addition to anything of value to which you are already entitled. You further acknowledge that you have been advised, as required by the ADEA, that: (i) your waiver and release do not apply to any rights or claims that may arise after the date that you sign this Agreement; (ii) you should consult with an attorney prior to signing this Agreement (although you may choose voluntarily not to do so); (iii) you have twenty-one (21) days in which to consider this Agreement (although you may choose voluntarily to sign it earlier); (iv) you have seven (7) days following the date you sign this Agreement to revoke the Agreement (by providing written notice of your revocation to the Board); and (v) this Agreement will not be effective until the date upon which the revocation period has expired, which will be the eighth day after the date that this Agreement is signed by you provided that you do not revoke it.
(e)Waiver of Unknown Claims. In giving the releases set forth in this Agreement, which include claims which may be unknown to you at present, you acknowledge that you have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” You hereby expressly waive and relinquish all rights and benefits under that section and any law or legal principle of similar effect in any jurisdiction with respect to your release of claims herein, including but not limited to the release of unknown and unsuspected claims.
(a)The payments and benefits provided under this Agreement are intended to be exempt from, or comply with, the provisions of Section 409A of the Internal Revenue Code of 1986, as amended and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) and this Agreement shall be interpreted accordingly. Any payments and benefits provided pursuant to this Agreement which constitute “deferred compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A that are paid or provided on termination of service shall not commence until you have incurred a “separation from service,” as such term is defined in Section 409A (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to you without causing you to incur the additional 20% tax under Section 409A.
(b)For purposes of Section 409A, your right to receive any installment payments under this Agreement (whether severance payments, reimbursements or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each
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installment payment hereunder shall at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary in this Agreement, if the Company (or, if applicable, the successor entity thereto) determines that any payments upon your Separation From Service set forth herein and/or under any other agreement with the Company constitute “deferred compensation” under Section 409A and you are, on your Separation From Service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the payments upon your Separation From Service shall be delayed until the earlier to occur of: (a) the date that is six months and one day after your Separation From Service or (b) the date of your death (such applicable date, the “Specified Employee Initial Payment Date”). On the Specified Employee Initial Payment Date, the Company (or the successor entity thereto, as applicable) shall (A) pay you a lump sum amount equal to the sum of the payments upon your Separation From Service that you would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of the severance benefits had not been so delayed pursuant to this section and (B) commence paying the balance of the severance benefits in accordance with the applicable payment schedules set forth in this Agreement.
(c)With respect to reimbursements or in-kind benefits provided to you hereunder (or otherwise) that are not exempt from Section 409A, the following rules shall apply: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any one of your taxable years shall not affect the expenses eligible for reimbursement, or in-kind benefit to be provided in any other taxable year, (ii) in the case of any reimbursements of eligible expenses, reimbursement shall be made on or before the last day of your taxable year following the taxable year in which the expense was incurred, (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. If payments or benefits hereunder are subject to the execution of a valid release and the release revocation period could cross two years, amounts will be paid or provided in the second of the two years, to the extent necessary to avoid adverse tax treatment under Section 409A.
16.Miscellaneous. This Agreement, including its exhibits and together with your signed At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement, constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to its subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This Agreement may not be modified or amended except in a written agreement signed by both you
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and a duly authorized officer of the Company. This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, and their heirs, successors and assigns. This Agreement shall not be terminated by the voluntary or involuntary dissolution of the Company or by any merger or consolidation where the Company is not the surviving corporation, or upon any transfer of all or substantially all of the Company’s stock or assets. In the event of such merger, consolidation or transfer, the provisions of this Agreement shall be binding upon and shall inure to the benefit of the surviving corporation or corporation to which such stock or assets of the Company shall be transferred. As used in this Agreement, “Company” shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question shall be deemed modified so as to be rendered enforceable in a manner consistent with the intent of the parties, insofar as possible under applicable law. Any ambiguity in this Agreement shall not be construed against either party as the drafter. Any waiver of a breach of this Agreement, or rights hereunder, shall be in writing and shall not be deemed to be a waiver of any successive breach or rights hereunder. This Agreement shall be deemed to have been entered into, and shall be construed and enforced, in accordance with the laws of the State of California without regard to conflicts of law principles. This Agreement may be executed in counterparts, each of which shall be deemed to be part of one original, and facsimile and electronic signatures shall be equivalent to original signatures.
If this Agreement is acceptable to you, please sign below on or within 21 days after the date of this Agreement, and send me the fully signed Agreement. If you do not sign and return it to the Company within the aforementioned timeframe, the Company’s offer to enter into this Agreement will expire.
Sincerely,
Nanometrics Incorporated
By:/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
General Counsel
Understood and Agreed:
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Date: 8-9-17___________________
Unvested RSUs and PSUs Held by You
As of August 9, 2017
|
|
Grant Date |
Number of Shares |
|
RSUs |
2/8/2017 |
26,500 |
|
2/22/2016 |
30,000 |
|
|
2/24/2015 |
13,333 |
|
|
PSUs |
2/8/2017 |
26,500 |
|
2/22/2016 |
30,000 |
|
|
3/18/2015 |
13,333 |
Retirement Date Release
(To be signed and returned on or within twenty-one (21) days after the Retirement Date.)
In consideration for the benefits provided to me by Nanometrics Incorporated (the “Company”) pursuant to the terms of the transition and consulting agreement between me and the Company dated August 9, 2017 (the “Agreement”) which I would otherwise not be entitled to receive, I hereby release Company, and its parents, subsidiaries, successors, predecessors, and affiliated entities, and each of such entities’ current or former officers, directors, agents, servants, employees, partners, representatives, shareholders, attorneys, employee benefit plans, successors, and assigns (collectively, the “Released Parties”), of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, arising out of or in any way related to any agreements, events, acts or conduct at any time prior to and including the date I sign this Retirement Date Release (the “Release”) (collectively, the “Released Claims”). The Released Claims include, but are not limited to: (i) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (ii) all claims related to compensation or benefits from the Company, including salary, bonuses, commissions, vacation, paid time off, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership, equity, or profits interests in the Company; (iii) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (iv) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (v) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, the Worker Adjustment and Retraining Notification Act, the California Labor Code (as amended), and the California Fair Employment and Housing Act (as amended).
The following are not included in the Released Claims (the “Excluded Claims”): (i) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party or under applicable law; (ii) any rights which cannot be waived as a matter of law; (iii) any rights I have to file or pursue a claim for workers’ compensation or unemployment insurance; and (iv) any claims for breach of this Agreement. In addition, I understand that nothing in this Agreement limits my ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). I further understand this Agreement does not limit my ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. While this Agreement does not limit my
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right to receive an award for information provided to the Securities and Exchange Commission, I understand and agree that, to maximum extent permitted by law, I am otherwise waiving any and all rights I may have to individual relief based on any claims that I have released and any rights I have waived by signing this Agreement. I represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.
I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA (“the “Release ADEA Waiver”), and that the consideration given for the Release ADEA Waiver is in addition to anything of value to which I am already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) my waiver and release does not apply to any rights or claims that may arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release (although I may voluntarily decide not to do so); (c) I have twenty-one (21) days to consider this Release (although I may choose voluntarily to sign this Release sooner); (d) I have seven (7) days following the date I sign this Release to revoke it (in a written revocation sent to and received by the Company’s Board of Directors); and (e) this Release will not be effective until the date upon which the revocation period has expired, unexercised, which will be the eighth day after I sign it.
In giving the general release herein, which includes claims which may be unknown to me at present, I acknowledge that I have read and understand Section 1542 of the California Civil Code, which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law or legal principle of similar effect in any other jurisdiction of with respect to my release of claims contained herein, including but not limited to the release of unknown and unsuspected claims.
I hereby confirm that I have been paid all salary and other compensation owed to me for my services to the Company through the Retirement Date; I have received all leave and leave-related benefits to which I was entitled during my employment with the Company, pursuant to the federal Family and Medical Leave Act, the California Family Rights Act, or any other applicable law or Company policy; and I have not suffered any workplace injury or illness for which I have not already filed a claim.
By:
Xxxxxxx X. Xxxxxx
Date:
B-2