EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT") is entered into as of
June 1, 1998, but shall be effective only at the Effective Date as set forth
below, by and between RF Power Products, Inc., a New Jersey corporation (the
"COMPANY"), having its principal place of business at Voorhees, New Jersey,
and Xxxxxx Xxxxx ("EXECUTIVE"), an individual resident of the State of New
Jersey.
R E C I T A L S
A. Executive has heretofore been employed as an executive officer of
Company.
B. Company, Advanced Energy Industries, Inc., a Delaware corporation
("PARENT"), and Warpspeed, Inc., a New Jersey corporation and wholly owned
subsidiary of Parent ("MERGER SUB"), are parties to that certain Agreement
and Plan of Reorganization, dated as of June 1, 1998 (the "REORGANIZATION
AGREEMENT"), pursuant to which Merger Sub shall be merged with and into
Company (the "MERGER"), and pursuant to which Company shall be a wholly owned
subsidiary of Parent.
C. Company desires to retain the services of Executive and Executive
desires to be employed by Company subsequent to the effective time of the
Merger (the "EFFECTIVE DATE") as such date is defined in Section 1.3 of the
Reorganization Agreement.
In consideration of the promises, the respective undertakings of
Company and Executive set forth below, and as an inducement to Parent and
Merger Sub to effect the Merger described above, Company and Executive agree
as follows:
1. POSITION. During the term of this Agreement, Company will employ
Executive, and Executive will serve as President and Chief Executive Officer
of Company, and as a Senior Vice President of Parent. Executive's
responsibilities and authority in such capacity, subject to Section 2 hereof,
may be different than those pertaining to Executive's position on the date of
this Agreement. Executive will report to the CEO of Parent ("PARENT CEO").
2. DUTIES. Executive will serve Company and its affiliated business
entities in such capacities and with such duties and responsibilities
consistent with Executive's position as the Board of Directors of Company
(the "COMPANY BOARD") and Parent CEO may from time to time determine. Such
duties and responsibilities shall include, without limitation, researching,
design engineering, and exploring the application of radio frequency ("RF")
products, and evaluating potential business acquisitions of Parent and its
affiliated business entities. Executive shall devote his best efforts and
the equivalent of full time employment to the performance of services
customarily incident to Executive's office and to such other services as may
be reasonably requested by Company Board and Parent CEO, PROVIDED HOWEVER,
that nothing in this Agreement shall preclude Executive from devoting
reasonable periods of his own time required for (i) participating in
professional, educational, philanthropic, public interest, charitable, social
or community activities, (ii) serving as a director or advisor of any
corporation, trade association or
other entity that Executive is serving as of the Effective Date or that is
not in direct competition with Company or (iii) managing his personal
investments, provided that in any such case that such activities do not
materially interfere with Executive's regular performance of his duties and
responsibilities hereunder. Executive will perform his principal duties
under this Agreement at the offices of Company in Voorhees, New Jersey, and
neither Company nor Parent shall require Executive to relocate permanently
from the State of New Jersey to perform his duties under this Agreement,
unless Executive agrees to do so. Executive may be required to do a
reasonable amount of traveling in connection with the performance of his
duties hereunder. Executive hereby represents and warrants that he is free
to enter into and fully perform this Agreement and the agreements referred to
herein without breach of any agreement or contract to which he is a party or
by which he is bound.
3. OBLIGATION NOT TO COMPETE. Executive hereby agrees that (a)
while he is employed by Company and (b) for a period of one (1) year
following the earlier of (i) the fifth (5th) anniversary of the Effective
Date or (ii) the date Executive's employment is terminated as set forth in
Section 7 hereunder (the "RESTRICTED PERIOD"), Executive shall not engage in
or provide services to any business that is competitive with any present
business of Company or Parent known to Executive in any geographic area where
Company or Parent engages in such business or maintains sales or service
representatives or employees at the time Executive separates from Company.
Each of the following activities shall, without limitation, be deemed to
constitute engaging in business within the meaning of this Section 3: to
engage in, work with, have an interest or concern in, advise, lend money to,
guarantee the debts or obligations of, or permit one's name or any party
thereof to be used in connection with, an enterprise or endeavor, either
individually, in partnership, or in conjunction with any person or persons,
firms, associations, companies, or corporations, whether as a principal,
agent, shareholder, employee, officer, director, partner, consultant or in
any other manner whatsoever; PROVIDED HOWEVER, that Executive shall retain
the right to invest in or have an interest in securities traded on any
national stock exchange or recognized over-the-counter market, if such
interest does not exceed two percent (2%) of the voting control of such
entity if an equity interest and in any case any traded debt. In addition,
Executive may make passive investments in privately held entities that are
determined by Company Board or Parent CEO not to be competitors of Company or
Parent. Executive also agrees that he shall not in any manner attempt to
induce or assist others to attempt to induce any customer or client of
Company or Parent to terminate association with Company or Parent, nor do
anything directly or indirectly to interfere with the relationship between
Company or Parent and any such persons or concerns through the Restricted
Period. Executive is privy to trade secrets and confidential proprietary
information of Company, and hereby agrees that this clause is necessary to
protect that information from willful or inevitable disclosure, among other
reasons.
4. TERM OF AGREEMENT. This Agreement will commence on the Effective
Date, and will terminate as of the fifth (5th) anniversary date of the
Effective Date as set forth in Section 7 of this Agreement.
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5. COMPENSATION AND BENEFITS.
5.1 BASE SALARY. Company agrees to pay Executive a base salary
("BASE SALARY") of $250,000 per year during the term of this Agreement.
Executive's salary will be payable as earned, in accordance with Company's
customary payroll practice. Executive's Base Salary shall be reviewed
annually by the Parent Board of Directors (the "PARENT BOARD") for
consideration of appropriate merit increases.
5.2 ADDITIONAL BENEFITS. Executive will be eligible to
participate in Company's and Parent's employee benefit plans of general
application, including without limitation Parent's 401(k) pension plan that
shall match fifty percent (50%) of Executive's contributions to such plan up
to six percent (6%) of Executive's Base Salary (subject to IRS limitations),
and any plans covering pension and profit sharing, stock purchases, stock
options, and those plans covering life, health, and dental insurance in
accordance with the general rules established for individual participation in
any such plan and applicable law. Executive will receive such other
benefits, including fringes, perquisites and holidays and leave policies , as
Company and Parent generally provide to its employees holding similar
positions as that of Executive. Company shall provide Executive four (4)
weeks paid vacation per year and an annual physical at company expense.
Company will continue to reimburse Executive for New Jersey living expenses
until he disposes of his former Florida home, in accordance with prior
Company Practice.
5.3 STOCK OPTIONS. On the Effective Date, Executive shall be
granted an option to purchase Two Hundred Twenty-Five Thousand (225,000)
shares of Common Stock of Parent at the fair market value as determined by
Compensation Committee of Parent on the date of grant. To the extent
permitted by IRS regulations, such options shall be Incentive Stock Options.
Twenty percent (20%) of such options shall become exercisable ("vest") on the
Effective Date and the balance shall vest pro rata on a monthly basis at the
end of each of the first forty-eight months following the Effective Date.
5.4 OFFICERS' COMPENSATION PLAN. Executive will also be
eligible to participate in the executive officers' incentive compensation
plan of Parent under guidelines determined by the Compensation Committee of
Parent, with a target bonus of $200,000 if applicable bonus targets are
achieved. Such annual bonuses shall be consistent with the Company's
variable compensation plans for its executives. Executive shall also
participate in any long-term incentive compensation plan of Parent on terms
equivalent to similarly situated executives.
5.5 AUTOMOBILE. Company shall provide Executive with a Company
owned or leased automobile (which shall be a Mercedes SL 600 or an equivalent
model).
5.6 PROMISSORY NOTE. As of the Effective Date, Executive shall
deliver to Parent a promissory note (the "NOTE"), substantially in the form
of EXHIBIT A hereto, which will state an original principal amount of
approximately One Hundred Seventy-Five Thousand Dollars ($175,000), and which
shall be payable to Parent in accordance with the terms set forth in the
Note. Upon delivery of such Note, Parent shall pay the proceeds to Executive
by wire transfer to any bank account designated by Executive at a bank
located in the United States. The Note shall
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bear interest at the rate of six percent (6%) per annum. The repayment terms
set forth in the Note notwithstanding, Executive shall pay the following
amounts toward repayment of the Note until such time that the Note is paid in
full: (a) fifteen percent (15%) of Executive's Base Salary, payable at such
times such Base Salary is paid, in accordance with Company's customary
payroll practice, (b) sixty percent (60%) of annual bonuses paid to Executive
by Company or Parent pursuant to Section 5.4, and (c) sixty percent (60%) of
all proceeds from the sale of Common Stock of Company received in connection
with the Merger and beneficially held by Executive. The Note shall be due
immediately in full upon termination of Executive pursuant to Sections 7.1(a)
or 7.1(c) hereunder.
5.7 LIFE INSURANCE. Company shall maintain a term life
insurance policy with a life insurance company rated "A" by A.M. Best Company
covering Executive, with a death benefit payable to such beneficiary as
Executive properly may designate, in the minimum amount of $1,000,000. Such
amount shall include any amount of term life insurance provided to Executive
or his beneficiary under employee benefit plans of general application of
Company and Parent.
5.8 EXPENSES. Company will reimburse Executive for all
reasonable and necessary expenses incurred by Executive in connection with
Company's business including, without limitation, professional society dues
of Executive and reasonable relocation expenses incurred by Executive in
connection with his relocation from Florida to New Jersey.
6. PROPRIETARY RIGHTS. Executive hereby agrees to execute an
Executive Invention, Assignment and Confidentiality Agreement with Parent and
Company in substantially the form attached hereto as EXHIBIT B.
7. TERMINATION.
7.1 EVENTS OF TERMINATION. Executive's employment with
Company shall terminate upon any one of the following:
(a) Company's determination made in good faith that it is
terminating Executive for "cause" as defined under Section 7.2 below
("TERMINATION FOR CAUSE");
(b) the effective date of a written notice sent to
Executive stating that Company is terminating his employment, without cause,
which notice can be given by Company at any time after the Effective Date at
Company's sole discretion, for any reason or for no reason ("TERMINATION
WITHOUT CAUSE");
(c) the effective date of a written notice sent to Company
from Executive stating that Executive is electing to terminate his employment
with Company ("VOLUNTARY TERMINATION"); or
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(d) termination of employment by reasons of Executive's
disability (determined in accordance with the requirements for eligibility of
benefits under Company's long-term disability insurance plan).
7.2 "CAUSE" DEFINED. For purposes of this Agreement, "cause"
for Executive's termination will exist at any time after the happening of one
or more of the following events: (i) the conviction of Executive of a felony
under the laws of the United States or any state thereof; (ii) the willful
misconduct of Executive, or the willful or continued failure by Executive to
substantially perform his duties hereunder, in either case which has a
material adverse effect on Company; or (iii) the fraud or material dishonesty
of Executive in connection with his performance of duties to Company.
However, in no event shall Executive's employment be considered to have been
terminated for "Cause" unless and until Executive receives a copy of a
resolution adopted by the Parent Board finding that, in the good faith
opinion of the Parent Board, Executive is guilty of acts or omissions
constituting Cause, which resolution has been duly adopted by an affirmative
vote of a majority of the Parent Board. Any such vote shall be taken at a
meeting of the Parent Board called and held for such purpose, after
reasonable written notice is provided to Executive setting forth in
reasonable detail the facts and circumstances claimed to provide a basis of
termination for Cause and Executive is given an opportunity, together with
counsel, to be heard before the Parent Board. Executive shall have the
opportunity to cure any such acts or omissions within 30 days of Executive's
receipt of such resolution. The foregoing shall not limit the right of
Company to suspend Executive from his day-to-day responsibilities with
Company pending the completion of such notice and cure procedures.
8. EFFECT OF TERMINATION.
8.1 TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION. In the event
of any termination of this Agreement pursuant to Sections 7.1(a) or 7.1(c),
Company's obligations under this Agreement, including without limitation
payment of Base Salary, shall cease and none of Executive, his
representatives, administrators or conservators nor his estate shall be
entitled thereafter to (i) any further payments of Base Salary, except for
unpaid Base Salary attributable to days worked prior to the effective date of
the termination, (ii) any benefits or reimbursements provided by Company to
Executive during the term of this Agreement, or (iii) any severance
compensation, except in any such case as required by applicable law or an
employee benefit plan or stock option or incentive compensation plan in which
Executive participates prior to termination.
8.2 TERMINATION WITHOUT CAUSE. In the event of any termination
of this Agreement pursuant to Section 7.1(b),
(a) through the fifth (5th) anniversary of the Effective
Date, Company shall continue to pay Executive his Base Salary under Section
5.1 above, less applicable withholding taxes, payable on Company's normal
payroll dates.
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(b) Executive's rights under Company's benefit plans of
general application shall be determined under the provisions of each such
plan and any applicable provisions of law.
(c) Company shall provide to Executive all payments accrued
but unpaid under any incentive compensation plan in which Executive
participates for any completed year or performance period (as applicable), as
well as a pro rata payment for any partial period through the date of
termination, based on the target bonus amount measured at the end of the year
(not including personal subjective bonus criteria).
8.3 TERMINATION FOR DISABILITY. In the event of any termination
of this Agreement pursuant to Section 7.1(d),
(a) through the fifth (5th) anniversary of the Effective
Date, Company shall continue to pay or cause to be paid to Executive sixty
percent (60%) of his Base Salary under Section 5.1 above, less applicable
withholding taxes, payable on Company's normal payroll dates.
(b) Executive's rights under Company's benefit plans of
general application shall be determined under the provisions of each such
plan and any applicable provisions of law.
(c) Company shall provide to Executive all payments accrued
but unpaid under any incentive compensation plan in which Executive
participates for any completed year or performance period (as applicable), as
well as a pro rata payment for any partial period through the date of
termination, based on the target bonus amount measured at the end of the year
(not including personal subjective bonus criteria).
8.4 RESIGNATIONS. Upon termination of his employment, Executive
shall be deemed to have resigned from all offices and directorships then held
with Company and Parent and its affiliated business entities, and will
execute a letter of resignation if requested.
9. NON-SOLICITATION. So long as Executive is an employee of Company
or Parent and for the Restricted Period, Executive shall not, directly or
indirectly, either for himself or for any other person or entity, directly or
indirectly, solicit, induce or attempt to induce any employee of Company to
terminate his or her employment with Company or Parent.
10. MISCELLANEOUS.
10.1 ARBITRATION. Executive and Company shall submit to
mandatory binding arbitration in any controversy or claim arising out of, or
relating to, Executive's employment, this Agreement or any breach hereof;
PROVIDED HOWEVER, that Company retains its right to, and shall not be
prohibited, limited or in any other way restricted from, seeking or obtaining
equitable relief with respect to Sections 3 or 9 hereof from a court having
jurisdiction over the parties. This provision includes, but is not limited
to, statutory claims of employment discrimination. Such
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arbitration shall be conducted in the State of New Jersey in accordance with
the commercial arbitration 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.
Executive's obligations under this Section 10.1 shall survive termination of
his employment and the expiration of this Agreement.
10.2 SEVERABILITY. If any provision of this Agreement shall be
found by any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then 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.
10.3 REMEDIES. Company and Executive acknowledge that the
service to be provided by Executive is of a special, unique, unusual,
extraordinary and intellectual character, which gives it peculiar value the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law. Accordingly, Executive hereby consents and agrees that for
any breach or violation by Executive of Sections 3 and 9 of this Agreement, a
restraining order and/or injunction may be issued against Executive, in
addition to any other rights and remedies Company may have, at law or equity,
including without limitation the recovery of money damages.
10.4 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 as a waiver of the
provision itself. 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.
10.5 ASSIGNMENT. This Agreement and all rights hereunder are
personal to Executive and may not be transferred or assigned by Executive at
any time. Company may assign its rights, together with its obligations
hereunder, to any 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 Company's obligations hereunder.
10.6 WITHHOLDING. All sums payable to Executive hereunder shall
be reduced by all federal, state, local and other withholding and similar
taxes and payments required by applicable law.
10.7 INDEMNIFICATION. Company agrees to provide to Executive
all rights of indemnification and all director's and officer's insurance
coverage required under Section 5.16 of the Reorganization Agreement.
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10.8 GUARANTEE. By execution of this Agreement, Parent hereby
agrees to guarantee the performance by Company of all of its obligations
under this Agreement and to be jointly and severally liable to Executive for
all financial liabilities of Company hereunder.
10.9 NO MITIGATION OR OFFSET. Executive shall not be required
to seek other employment or to reduce any severance benefit payable to him
under Section 8.2 hereof, and no such severance benefit shall be reduced on
account of any compensation received by Executive from other employment.
Company's obligations to Executive under this Agreement, including, without
limitation, any obligation to provide severance benefits, shall not be
subject to set-off or counterclaim in respect of any debts or liabilities of
Executive to Company except for payments on the Note as set forth in
Section 5.6.
10.10 ENTIRE AGREEMENT. This Agreement constitutes the entire
and only agreement between the parties relating to employment of Executive
with Company, and this Agreement supersedes and cancels any and all previous
contracts, arrangements or understandings with respect thereto, including,
without limitation, that certain employment agreement between Executive and
Company, dated as of December 1, 1993.
10.11 AMENDMENT. This Agreement may be amended, modified,
superseded, canceled, renewed or extended only by an agreement in writing
executed by the parties hereto.
10.12 NOTICES. All notices and other communications required or
permitted under this Agreement shall be in writing and hand delivered, sent
by Telecopier, sent by certified first class mail, postage pre-paid, or sent
by nationally recognized express courier service. Such notices and other
communications shall be effective upon receipt if hand delivered or sent by
telecopier, five (5) days after mailing if sent by mail, and one (1) day
after dispatch if sent by express courier, to the following addresses, or
such other addresses as any party shall notify the other parties:
If to Company:
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
With copies to:
Xxx X. Xxxxxxxxx, Esq.
Xxxxxx, Xxxx & Priest LLP
000 Xxxx Xxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
If to Executive:
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx
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With copies to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx, Esq.
10.13 BINDING NATURE. This Agreement shall be binding upon, and
inure to the benefit of, the successors and personal representatives of the
respective parties hereto.
10.14 HEADINGS. 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, the masculine gender includes
both male and female referents, and the word "or" is used in the inclusive
sense.
10.15 COUNTERPARTS. 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.
10.16 GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereto shall be construed in accordance with the
laws of the State of New Jersey, without giving effect to the principles of
conflict of laws (except as otherwise specified herein).
IN WITNESS WHEREOF, Company and Executive have executed this
Employment Agreement as of the date first above written.
EXECUTIVE: Xxxxxx Xxxxx
/S/ XXXXXX XXXXX
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COMPANY: RF Power Products, Inc.
By: /S/ XXXX X. XXXX
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Name: XXXX X. XXXX
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Title: TREASURER AND CONTROLLER
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PARENT (as Guarantor): Advanced Energy Industries, Inc.
By: /S/ XXXXXXX X. XXXXXX
----------------------------
Name: XXXXXXX X. XXXXXX
--------------------------
Title: PRESIDENT, CEO & CHAIRMAN
OF THE BOARD
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EXHIBIT A
UNSECURED PROMISSORY NOTE
$175,000.00 Voorhees, New Jersey
October 8, 1998
For value received, the undersigned, Xxxxxx Xxxxx, ("OBLIGOR"),
promises to pay to the order of Advanced Energy Industries, Inc., a Delaware
corporation (collectively with its successors and assigns, "HOLDER"), in
lawful money of the United States and in immediately available funds, the
principal sum of ONE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($175,000.00) and
interest on the outstanding principal amount in accordance with the terms of
this Note, until paid in full.
1. ISSUANCE. This Note is issued pursuant to the terms of that
certain Employment Agreement (the "EMPLOYMENT AGREEMENT") by and among
Obligor and RF Power Products, Inc., a New Jersey corporation (the
"COMPANY"), dated as of the date hereof, pursuant to which Obligor has agreed
to issue this Note as consideration for the delivery by Holder of One Hundred
Seventy-Five Thousand Dollars ($175,000.00). Capitalized terms used but not
otherwise defined in this Note have the meanings given them in the Employment
Agreement.
2. PAYMENT. Payment shall be made in the following manner:
(a) PRINCIPAL PAYMENT AMOUNTS. Obligor shall pay to Holder the
following amounts until such time that the unpaid outstanding principal
amount under this Note is paid in full:
(i) Fifteen percent (15%) of Obligor's Base Salary at
such times Base Salary is paid (each such date, a "SALARY DEDUCTION DATE"),
in accordance with Company's customary payroll practice;
(ii) Sixty percent (60%) of annual bonuses paid to Obligor
by Company or Holder pursuant to Section 5.4 of the Employment Agreement;
(iii) Sixty percent (60%) of all proceeds from the sale of
Common Stock of Holder received in connection with the Merger and
beneficially held by Obligor, within three (3) business days after such
proceeds are payable to Obligor or his designated representative.
(b) INTEREST. Obligor shall pay to Holder interest on the
outstanding principal amount under this Note at a fixed interest rate equal
to six percent (6%) (computed on the basis of a 360-day year). Obligor shall
pay interest to Holder on each Salary Deduction Date.
3. ACCELERATION OF PAYMENT. The entire sum of unpaid principal
amount under this Note and all interest accrued thereon shall become due and
payable upon termination of Obligor's employment with the Company pursuant to
Sections 7.1(a) or 7.1(c) of the Employment Agreement.
4. METHOD OF PAYMENT. The payment hereunder shall be made by
payment in immediately available funds to Holder at 0000 Xxxxx Xxxxx Xxxxx,
Xxxx Xxxxxxx, XX 00000, or by wire transfer to any bank account designated
by Holder at a bank located in the United States, or at such other place as
Holder may specify to Obligor in writing.
5. PREPAYMENT. Notwithstanding the foregoing, any amounts due
hereunder may be prepaid in whole or in part at any time by Obligor without
penalty or premium.
6. WAIVER. Obligor, to the extent allowed by law, waives any
applicable statute of limitations, presentment, demand for payment, protest
and notice of dishonor in connection with the delivery, acceptance,
performance, default or enforcement of this Note.
7. GOVERNING LAW. This Note shall be governed by, and construed,
interpreted and enforced in accordance with, the laws of the State of New
Jersey, excluding the body of law relating to conflicts of law.
8. EXPENSES; ATTORNEYS' FEES. In the event action is instituted to
enforce any of the provisions contained in this Note, the party prevailing in
such action shall be entitled to recover from the other party thereto
reasonable attorneys' fees and costs of such suit as part of the judgment.
IN WITNESS WHEREOF, Obligor has executed this Unsecured Promissory
Note as of the day and year first above written.
OBLIGOR: Xxxxxx Xxxxx
/S/ XXXXXX XXXXX
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EXHIBIT B
CONFIDENTIALITY AGREEMENT
THIS AGREEMENT is entered into as of the 8th day of October, 1998,
between Advanced Energy Industries, Inc. and its subsidiaries, divisions, and
other related entities (the "Company") and Xxxxxx Xxxxx (the "Employee").
WHEREAS, the Employee is considered a valuable member of the Company and
as such has accepted either initial or continued employment with the Company
through the parent company or any of its related entities, or has accepted an
increase in compensation or other beneficial charge of position by the
Company; and
WHEREAS, out of respect for the Employee's integrity and abilities the
Company is placing trust in the Employee by placing him/her in a position
where the Employee may have access to or may be exposed to Confidential
Information; and
WHEREAS, the Company's present and future competitive position in the
international marketplace is largely dependent upon the confidentiality of
such information;
NOW, THEREFORE, the parties agree as follows:
1. CONFIDENTIAL INFORMATION: As used in this Agreement, Confidential
Information shall include all information considered by the Company to
provide it a competitive advantage to the extent it cannot be clearly
established that such information either was known by the Employee prior to
the Employee's employment by the Company or is publicly available as
assembled information from one library source. As an example, but without
limitations, Confidential Information shall include the information set forth
in Exhibit A.
2. NONDISCLOSURE OF CONFIDENTIAL INFORMATION: The Employee agrees that
he/she shall take all reasonable steps to maintain and hold confidential all
Confidential Information only for the benefit of the Company. The Employee
understands that all documents and materials which contain Confidential
Information are the property of the Company; the Employee agrees to return
all such items and any copies thereof upon any termination of employment with
the Company or upon the request of the Company.
3. ENFORCEABILITY: The Employee understands that the Company's
competitive position is highly dependent on its Confidential Information.
Accordingly, the Employee recognizes that any disclosure of Confidential
Information will cause immediate, irreparable harm to the Company. Any
breach or threatened breach of this Agreement, therefore, may be presented
without notice to either a court or arbitration panel for enforcement by both
injunction and damages. All obligations of this Agreement shall survive any
termination of employment for the Company whether by the Employee or the
Company and shall remain in effect for the longer of a four year period
following any termination of employment with the Company and so long
thereafter as each particular item of Confidential Information remains not
rightfully and publicly available as assembled information from one library
source. In the event litigation or arbitration is instituted seeking the
enforcement of this Agreement, the prevailing party shall be entitled to
recover reasonable attorney fees and costs incurred in such litigation or
arbitration; however, such attorney fees and costs shall not be assessed
against the Employee in the event that the Employee consents, prior to a
preliminary hearing, to a permanent injunction as requested by the Company.
4. GENERAL PROVISIONS. This Agreement shall be construed and enforced
in accordance with the laws and jurisdiction of the State of Colorado in the
United States of America and all parties submit to jurisdiction and venue in
Larimer County, Colorado except to the extent such enforcement must be and is
required to be enforced by the law of another state, country, or other such
forum, in which case, and only to the extent required, such law and/or
jurisdiction shall control. Recognizing that the Employee is submitting to
resolution of any dispute in the parent Company's jurisdiction, venue, and
law, the Company agrees that should it lose any such dispute, the court or
arbitrator shall have discretion to award the reasonable out of pocket travel
costs of the Employee. In the event any provision of this Agreement is found
to be unenforceable, void, or invalid or to be unreasonable in scope, such
provision shall be modified to the extent necessary to make it enforceable,
and as so modified, this Agreement shall remain in full force and effect.
Failure to exercise any rights contained in this Agreement shall not be
construed as a waiver of such rights. All terms of this Agreement shall be
independent and unconditional so that the performance of any one term shall
not be subject to any setoff or counterclaim. This Agreement shall be freely
assignable by the Company only. In the event of any conflict between the
terms of this Agreement and any statement of employees policies or other
document of the Company, the terms of this Agreement shall be deemed superior
and shall supersede such conflicting terms. Other than that injunctive
relief by the Company which must be pursued in a court, the parties agree to
submit any dispute arising hereunder or in any way arising from the
employment relationship to binding arbitration pursuant to the rules of the
American Arbitration Association or such other rules as may be decided by a
majority of the arbitrators, and each party hereby submits to such
arbitration in Fort Xxxxxxx, Colorado, unless oterwise agreed in writing.
Entered into as of the day referenced above.
Advanced Energy Industries, Inc.
/S/ XXXXXX XXXXX By: /S/ XXXXXXX X. XXXX
-------------------------- ---------------------------
Employee Signature
EXHIBIT A
As used in the associated document, "Confidential Information" shall
include by example, but not as a limitation, the following information:
1. All development or design information relating to existing products of
the Company or relating to products under development or planned by the
Company or on its behalf, such as the information contained in:
a. schematics
b. circuitry descriptions and drawings
c. parts designed by the Plaintiff or on its behalf
d. descriptions of product problems or limitations
e. technical and scientific information
f information relating to key research and development areas
g. consulting source's documents, notes and correspondence
h. descriptions of development efforts, whether successful or not
i. flow charts
j. source code listings
2. All manufacturing information of existing products of and products under
development or planned by the Company or on its behalf such as:
a. materials sources
b. vendors
c. costs
d. manufacturing methods
e. purchasing sources
3. All business, marketing and financial information of the Company
including but not limited to:
a. research and development strategies
b. employee responsibilities other than generic titles
c. development schedules
d. business forecasts
e. client and customer lists
f past, present and future financial information about the Company
g. consultant identities and capabilities
h. materials and component supplies
i. Company opportunity lists or items
4. All other information which is or may be subject to trade secret,
copyright, mask, or other proprietary protection whether or not registration
has been sought for such.
5. All information relative to patents either issued, pending, or
contemplated by the Company.
