EMPLOYMENT AGREEMENT
THIS AGREEMENT between Tegal
Corporation (“Tegal”) and Xxx Xxxx (“Mika”) is dated and entered into
as of this 12th day of August, 2002. Tegal and Mika hereby agree as follows:
RECITALS
Mika
and Tegal have decided to enter into an employment agreement and have agreed upon the
terms of such employment, which terms are set forth herein.
AGREEMENT
1. |
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Employment. As of the date hereof, Tegal will employ Mika, and Mika will
accept employment with Tegal, as its Executive Vice President & Chief
Financial Officer, with such duties and responsibilities consistent with such
offices. |
2. |
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Other Business. Mika will devote his time, attention and effort to
Tegal’s business on a substantially full-time basis. Notwithstanding the
foregoing, Mika shall be entitled to serve on the Board of Directors of other
corporations, as Mika may elect from time to time, so long as such service is
approved by the Board. |
3. |
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Term. This Agreement shall continue until the twelve-month anniversary of
the date hereof. |
4. |
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Salary. Mika’s base salary (the “Base Salary”) shall be
$175,000.00 per year. Mika’s salary will be temporarily reduced by 20%, to
$140,000.00, until such time as cost reduction measures are lifted and full pay
is reinstated to all Tegal employees. Mika’s salary will be paid in
bi-weekly installments at the same intervals as other employees of Tegal and is
subject to discretionary increases in accordance with Tegal’s normal review
procedures and policies. |
5. |
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Annual Bonus. In addition to his Base Salary, and subject to the
achievements of certain goals established in accordance with this Section 5,
Mika shall be paid an annual bonus (the “Bonus”) during the term of
this Agreement in an amount not less than 35% of Base Salary. Each year the
Board shall approve objective, quantifiable, and reasonably attainable annual
goals, which shall be reduced to writing and presented by the CEO to the Board
on or before the 60th day following the commencement of each fiscal
year during the term of this Agreement. The actual Bonus paid shall be evaluated
using the Board-approved Bonus plan methodology. The Bonus shall be paid in cash
when bonuses are generally paid to other senior executives of Tegal for the
relevant fiscal year. |
6. |
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Stock Offering. Upon signing of this Agreement, the Board will xxxxx
Xxxx, as soon as practical, the option to purchase 100,000 shares of Tegal
Common Stock with a four-year vesting period, at the prevailing price
established by the Board of Directors. This grant is subject to the terms and
conditions of the Tegal Stock Option Plan. |
7. |
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Reimbursement of Expenses. Tegal shall reimburse Mika for all reasonable
out-of-pocket expenditures incurred by Mika in performing his obligations
hereunder, including, without limitation, telephone, fax, and travel-related
expenses. All reimbursable expenses shall be reimbursed in accordance with
Tegal’s standard practices as in effect from time to time, upon delivery by
Mika of an itemized statement, accompanied by appropriate receipts, describing
the reimbursable expenses incurred and approved by Xxxx Xxxxxx. Tegal shall
reimburse Mika for all car and related expenses for the term of this Agreement
to a maximum of $600.00 per month. |
8. |
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Relocation Costs. Tegal will reimburse Mika for up to a maximum of
$15,000.00 in expenses associated with his relocation (above and beyond the move
itself), including any broker’s fees or closing costs related to the sale
of the Maryland property. These expenses will be reimbursed through a receipted
expense report, approved by Xxxx Xxxxxx. The actual move will be handled by
corporate movers, arranged by Tegal, and directly billed to the Company. Please
contact Xxxxx Xxxxx when you are ready to begin this process. |
9. |
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Benefits. During the term of the Agreement, Mika will be entitled to
participate in all fringe benefit programs as shall be provided from time to
time to Tegal’s employees. Currently, those benefits include medical and
dental plans, a flexible spending account, 401(k) savings plan, Employee
Qualified Stock Purchase Plan, life insurance, short and long-term disability
insurance, sick pay, and an employee assistance program. |
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According
to the current Tegal Vacation Policy, Mika will earn two (2) weeks vacation during the
first year of employment with hours accruing monthly. The vacation accrual rate will
increase one day per year for your second through fifth years of employment. |
10. |
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Termination. Employment of Mika pursuant to this Agreement may be
terminated as follows:
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10.1 |
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With or without cause, Tegal may terminate the employment of Mika at any time during the
term of employment, upon 30 days’ prior written notice to Mika. |
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10.2 |
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Mika may terminate his employment at any time upon
30 days prior written notice to Tegal.
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11. Termination Payments.
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11.1 |
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Termination by Employer. If Tegal terminates Mika’s employment prior to his
relocation to the Petaluma Area and without cause, Mika shall continue to receive his then
effective Base Salary and benefits, pursuant to Section 9 hereof, for twelve (12) months
following the effective date of such termination (the “Salary and Benefits
Continuance”). If Tegal terminates Mika’s employment after his relocation to the
Petaluma Area and without cause, Mika shall continue to receive his then effective Base
Salary and benefits for twelve (12) months following the date of such termination and the
Salary and Benefits Continuance shall be extended beyond the first twelve (12) months on a
month-to-month basis, to a maximum of eighteen (18) months, should Mika remain
continuously unemployed following the effective date of termination. |
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11.2 |
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Termination by Employee. In the case of voluntary termination of Mika’s
employment by Mika, except when he terminates his employment because of good reason or
breach of the Agreement by Tegal, Mika shall not be entitled to a Salary and Benefits
Continuance. If Mika terminates his employment because of good reason, as hereinafter
defined, Mika shall be entitled to the Salary and Benefits Continuance. For Purpose of the
Agreement, “good reason” shall mean (i) any material breach of this Agreement by
Tegal; (ii) the assignment to Mika of any duties, or the substantial reduction of
Mika’s duties, either of which is inconsistent with Mika’s position as Executive
Vice President and Chief Financial Officer; or (iii) any change in Mika’s reporting
relationship which results in his not reporting directly to the President and CEO. |
12.
Termination; Definitions: Special Provisions.
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12.1 |
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Cause. Wherever reference is made in this Agreement to Termination being with or
without cause, “cause” means cause given by Mika to Tegal and is limited to the
following: |
(a) |
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Repeated failure or refusal to carry out the reasonable directions of the
President and CEO, which directions are consistent with Mika’s duties as
set forth herein; |
(b) |
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Conviction for violation of a state or federal criminal law involving the
commission of a felony; or |
(c) |
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Any material breach of the Agreement, if not corrected as provided in Section
12.2 below. |
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12.2 |
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Breach. Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by a party pursuant to any provision of this Agreement,
before such action is taken, the party asserting the breach shall give the other party at
least 90 days’ prior written notice of the existence and nature of the breach and the
opportunity to correct it during the 90-day period. |
13. General Provisions.
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13.1 |
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Severability. In the event that any provision of this Agreement shall be determined
by any court of competent jurisdiction to be unenforceable or otherwise invalid as
written, the same shall be enforced and validated to the extent permitted by law. All
provisions of this Agreement are severable, and the unenforceability or invalidity of any
single provision hereof shall not affect the remaining provisions. |
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13.2 |
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Employment. Nothing in this Agreement shall obligate Tegal to continue to retain
Mika as an employee. Mika understands that this means that Tegal has and will continue to
have the right to terminate his employment for any reason, with or without cause or prior
notice. |
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13.3 |
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Entire Agreement. This Agreement contains the sole and entire agreement and
understanding between Tegal and Mika with respect to the subject matter hereof, and
supersedes and replaces any prior agreement to the extent any such agreement is
inconsistent herewith. This Agreement can be amended, modified, released or changed in
whole or in part only by a written agreement executed by Tegal and Mika. |
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IN
WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date set
forth above. |
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TEGAL
CORPORATION |
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Dated: 8/12/02 |
By:
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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Chairman of
the Board,
President
or Vice
President
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Dated 8/12/02 |
By:
/s/ Xxx
Xxxx
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Xxx Xxxx |
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Executive Vice
President
and
Chief
Financial
Officer |
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