Exhibit 10.7
EXECUTIVE EMPLOYMENT AGREEMENT
PARTIES:
XXXXXX X. XXXXXXXX, Vice President, Engineering ("Executive")
00000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx Xxxxxxx, XX 00000
AUGUST TECHNOLOGY CORPORATION ("Company")
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Dated this 19th day of August, 1999.
RECITALS
A. The parties desire to provide for employment of Executive by Company as its
Vice President, Engineering.
B. Company desires reasonable protection of Company's confidential business
and technical information which has been developed over the years by
Company at substantial expense.
Company and Executive, each intending to be legally bound, covenant and agree as
follows:
1. EMPLOYMENT. Upon the terms and conditions set forth in this Agreement,
Company hereby employs Executive, and Executive accepts such employment as
its Vice President, Engineering. Except as expressly provided herein,
termination of this Agreement by either party shall also terminate
Executive's employment by Company.
2. DUTIES. Executive shall devote his full-time and best efforts to Company
and fulfilling the duties of his position which shall include such duties
as may from time to time be assigned him or her by the CEO or Board of
Directors of the Company; provided that such duties are reasonably
consistent with Executive's education, experience and background.
3. EMPLOYMENT DATE. Executive's employment shall commence as of the date
hereof ("Employment Date"), and continue until terminated as provided
herein. In any event, the Agreement shall automatically terminate without
notice when the Executive reaches 70 years of age. If employment is
continued after the age of 70 by mutual agreement, it shall be terminable
at will by either party.
4. COMPENSATION.
(a) BASE SALARY. For all services rendered under this Agreement during
the term of Executive's employment, Company shall pay Executive a Base
Salary ("Base Salary" shall mean regular cash compensation paid on a
periodic basis exclusive of benefits, bonuses or incentive payments)
at the annual rate of $104,000,
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payable twice monthly subject to adjustment by the Board of
Directors at least annually. If the Executive's salary is adjusted
during the term of this Agreement, the adjusted amount shall be the
Base Salary until further adjusted by the Board of Directors.
(b) BONUS AND INCENTIVE. Bonus or incentive compensation shall be in
accordance with the August Technology Annual Award Plan (Exhibit-A).
Company reserves the right to alter, amend or eliminate any bonus or
incentive plans in accordance with their terms.
(c) FRINGE BENEFITS. In addition to the compensation payable to Executive
as provided in paragraphs 4(a) and (b) above:
i) VACATION. Executive shall be entitled to accrue three (3)
weeks paid vacation for each year of employment, which shall be
calculated in arrears on a monthly basis commencing as of the
end of the month following the Employment Date. Vacation shall
accumulate, so that if the full vacation that is earned and
accrued in a particular year of employment is not taken in that
particular year of employment, any unused portion will be
carried into and may be taken in the following year of
employment only.
ii) OTHER BENEFITS. The Executive shall be entitled to participate
in all other benefit programs offered by the Company to its
full-time executive employees, including, but not limited to,
health/medical/cafeteria plans; retirement benefits through the
Company's 401k plans; personal days off benefits; and other
benefits that may be offered from time to time by the Company.
(d) STOCK OPTIONS. Company hereby agrees to grant the Executive Incentive
Stock Options under the Company's 1997 Stock Option Plan to purchase
up to 45,000 shares of its common stock. Such options shall have an
exercise price equal to fair market value (FMV) as determined by the
Board of Directors, or shall be set equal to the share price achieved
during an equity offering (if offering occurs within 120 days of this
Agreement). Options shall expire seven (7) years from the date of
hereof shall vest 20% per year commencing August 30, 1999 (subject to
paragraph 10 hereof), and shall have other provisions generally
included in stock option agreements of the Company. Such stock
options shall be governed by the terms of the Company's applicable
stock option plan(s) and a stock option agreement with Executive. It
is the intention of the Board of Directors, from time to time, to make
additional options available to executives based on performance.
5. BUSINESS EXPENSES. Company shall, in accordance with, and to the extent
of, its policies in effect from time to time, bear all ordinary and
necessary business expenses incurred by the Executive in performing his
duties as an employee of Company, provided that Executive accounts promptly
for such expenses to Company in the manner prescribed from time to time by
Company.
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6. TERMINATION. Subject to the respective continuing obligations of the
parties, pursuant to paragraphs 7, 8, 9, 10, 11 and 12, this Agreement may
be terminated as follows:
(a) BY THE COMPANY. The Company may terminate this Agreement under the
following circumstances:
(i) WITH CAUSE, ETC. Company may terminate this Agreement
immediately for cause, which for purposes of this agreement
shall include without limitation, fraud, misrepresentation,
theft or embezzlement of Company assets, material intentional
violations of law or Company policies, actions involving moral
turpitude or a material breach of the provisions of this
Agreement, including specifically the repeated failure to
perform his duties as required by paragraph 2 after notice of
such failure from Company and the expiration of thirty (30)
days without corrective action having been undertaken by
Executive.
2. WITHOUT CAUSE. Company may terminate this Agreement without
cause on sixty (60) days' advance written notice subject to the
severance payment provisions set forth in paragraph 7.
(b) BY EXECUTIVE. Executive may terminate this Agreement without cause on
sixty (60) days' notice.
(c) DEATH. If Executive should die during the term of this Agreement,
this Agreement shall thereupon terminate; provided, however, that the
Company shall pay to the Employee's beneficiary or estate, the
compensation as provided in paragraph 7 below.
(d) PERMANENT DISABILITY. In the event the Executive should became
permanently disabled during the term of this Agreement, then this
Agreement shall terminate. For the purposes hereof a permanent
disability shall mean that disability resulting from injury, disease
or other cause, whether mental or physical, which incapacitates the
Executive from performing his normal duties as an employee, appears to
be permanent in nature and contemplates the continuous, necessary and
substantially complete loss of all management and professional
activities for a continuous period of six (6) months.
(e) PARTIAL DISABILITY. If the Executive should become partially
disabled, he shall be entitled to his salary as provided herein for a
period of six (6) months. At the end of said period of time, if such
Executive remains partially disabled, the disabled Executive's salary
shall be reduced according to the amount of time the disabled
Executive is able to devote to the Company's business.
(f) In the event the Executive should become disabled, but such disability
is not permanent, as defined above, such disabled Executive shall be
entitled to his
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salary for a period of six (6) months. If such temporary
disability continues longer than said period of time, then the
disabled Executive shall be deemed to have become permanently
disabled for the purposes of this Agreement at the end of said six
(6) month period.
7. REMEDIES FOR EARLY TERMINATION.
(a) In the event of termination pursuant to paragraph 6, Base Salary and
any other compensation shall be paid as follows:
(i) In the event of termination pursuant to paragraph 6(a)(i), Base
Salary shall continue to be paid on a semimonthly basis
prorated through the date of termination specified in any
notice of termination and Executive shall be entitled to
continue to participate in those benefit programs provided by
Subparagraph 4(c)(ii) for the minimum time period required by
law following termination at his own cost.
(ii) In the event of termination pursuant to paragraph 6(a)(ii),
Base Salary shall continue to be paid on a semi-monthly basis
for three (3) months following the date of termination
specified in any notice of termination, and Executive shall be
entitled to continue to participate in those benefit programs
provided by Subparagraph 4(c)(ii) for the longer of three (3)
months or the minimum time period required by law following
termination, provided that the Company shall bear the cost of
such benefits for no longer than three (3) months.
(iii) In the event of termination pursuant to paragraph 6(b),
compensation shall continue to be paid as follows: if the
notice of termination is given by Executive at any time, Base
Salary shall continue to be paid on a semi-monthly basis
prorated through the date of termination specified in such
notice and Executive shall be entitled to continue to
participate in those benefit programs provided by Subparagraphs
4(c)(ii) for the minimum time period required by law following
termination at his own cost.
(iv) In the event of termination of this Agreement by reason of
Executive's death, payment of Base Salary shall terminate as of
the end of the month following the Executive's death.
(v) In the event of disability, payment of Base Salary shall
terminate as of the end of the month in which the last day of
the three (3) month period of Executive's inability to perform
his duties occurs.
(b) In the event of termination by reason of Executive's death or
disability (clauses (a)(iv) and (a)(v) above):
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(i) Executive shall receive a pro rata portion (prorated through
the last day Base Salary is payable pursuant to clauses
(a)(iii) and (a)(iv), respectively) of any bonus or incentive
payment (for the year in which death or disability occurred),
to which he/she would have been entitled had he/she remained
continuously employed for the full fiscal year in which death
or disability occurred and continued to perform his duties in
the same manner as they were performed immediately prior to the
death or disability; and
(ii) The exercise of any options then held by Executive shall be
governed by the terms of the applicable Company stock option
plan.
8. CONFIDENTIAL INFORMATION.
(a) For purposes of this paragraph 8, the term "Confidential Information"
means information which is not generally known and which is
proprietary to Company or which has been made available to the Company
in a manner reasonably understood to require confidential treatment,
including (i) trade secret information about Company and its products;
and (ii) information relating to the business of Company as conducted
at any time within the previous two (2) years or anticipated to be
conducted by Company, and to any of its past, current or anticipated
products, including, without limitation, information about Company's
research, development, manufacturing, purchasing, accounting,
engineering, marketing, selling, leasing or servicing. All
information that Executive has a reasonable basis to consider
Confidential Information or which is treated by Company as being
Confidential Information shall be presumed to be Confidential
Information, whether originated by Executive or by others, and without
regard to the manner in which Executive obtains access to such
information.
(b) Executive will be governed by the terms of the Employee Assignment and
Disclosure Agreement attached hereto as Exhibit-B.
9. INVENTIONS.
(a) For purposes of this paragraph 9, the term "Inventions" means
discoveries, improvements and ideas (whether or not in writing or
reduced to practice) and works of authorship, whether or not
patentable or copyrightable, (1) which relate directly to the business
of Company, or to Company's actual or demonstrably anticipated
research or development, (2) which result from any work performed by
Executive for Company, (3) for which equipment, supplies, facilities
or trade secret information of Company is utilized, or (4) which were
developed during the time Executive was obligated to perform the
duties described in paragraph 2.
(b) Executive will be governed by the terms of the Employee Assignment and
Disclosure Agreement attached hereto as Exhibit-B.
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10. NO ADEQUATE REMEDY. The parties declare that it is impossible to measure
in money the damages which will accrue to either party by reason of a
failure to perform any of the obligations under this Agreement. Therefore,
if either party shall institute any action or proceeding to enforce the
provisions hereof such person against whom such action or proceeding is
brought hereby waives the claim or defense that such party has an adequate
remedy at law, and such person shall not urge in any such action or
proceeding the claim or defense that such party has an adequate remedy at
law.
11. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of Company, whether
by way of merger, consolidation , operation of law, assignment,
purchase or other acquisition of substantially all the assets or
business of Company and shall only be assignable under the foregoing
circumstances and shall be deemed to be materially breached by Company
if any such successor or assign does not absolutely and
unconditionally assume all of Company's obligations hereunder. Any
such successor or assign shall be included in the term "Company" as
used in this Agreement.
(b) NOTICES. All notices, requests and demands given to or made pursuant
hereto shall, except as otherwise specified herein, be in writing and
be delivered or mailed to any such party at its address which:
In the case of the Executive shall be:
Xxxxxx Xxxxxxxx
00000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx Xxxxxxx, XX 00000
In the case of Company shall be:
August Technology Corporation
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Either party may, by notice hereunder, designate a changed address. Any
notice, if mailed properly addressed, postage prepaid, registered or
certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within
the second business day thereafter or when it is actually received,
whichever is sooner.
(c) CAPTIONS. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of
this Agreement.
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(d) GOVERNING LAW. The validity, construction and performance of this
Agreement shall be governed by the laws of the State of Minnesota and
any and every legal proceeding arising out of or in connection with
this Agreement shall be brought in the appropriate courts of the State
of Minnesota, each of the parties hereby consenting to the exclusive
jurisdiction of said courts for this purpose.
(e) CONSTRUCTION. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
(f) WAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a
waiver thereof nor shall any single or partial exercise of any right
or remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right or remedy granted hereby or by any
related document or by law.
(g) MODIFICATION. This Agreement may not be and shall not be modified or
amended except by written instrument signed by the parties hereto.
(h) ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement and
understanding between the parties hereto in reference to all the
matters herein agreed upon; provided, however, that this Agreement
shall not deprive Executives of any other rights Executives may have
now or in the future, pursuant to law or the provisions of Company
benefit plans.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
_______________________________________
Xxxxxx Xxxxxxxx
AUGUST TECHNOLOGY CORPORATION
By _______________________________________
Its: _______________________________________
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