This
AMENDED AND RESTATED SEVERANCE AGREEMENT (“Agreement”)
is made as of June 9, 2006, by and among APPLIED FILMS CORPORATION, a Colorado
corporation, APPLIED MATERIALS, INC., a Delaware corporation (“Parent”)
and XXXXXX XXXXX (“Executive”). Capitalized terms
not otherwise defined herein shall have the meanings ascribed to them in the Severance
Agreement and in the Merger Agreement (each as defined below).
RECITALS
WHEREAS,
pursuant to an Agreement and Plan of Merger (“Merger
Agreement”) dated May 4, 2006, among Parent, BLUE ACQUISITION,
INC., a Colorado corporation and a wholly-owned subsidiary of Parent
(“Merger Sub”), and Applied Films, pursuant to which Merger
Sub is to merge with and into Applied Films, the separate existence of Merger Sub is to
cease and Applied Films is to continue as the surviving corporation and become a wholly
owned subsidiary of Parent (the merger of Merger Sub and Applied Films being referred to
as the “Merger”); and
WHEREAS, Parent
and the Executive desire to enter into an employment relationship pursuant to which the
Executive will be employed by Parent effective as of the Effective Time (as defined in
the Merger Agreement); and
WHEREAS,
Applied Films and Executive entered into that certain Severance Agreement, dated as of
July 26, 2002 (the “Severance Agreement”); and
WHEREAS,
Applied Films and Executive wish to amend the Severance Agreement in the manner provided
herein in order to induce Parent and Merger Sub to consummate the Merger and the
transactions contemplated therewith; and
WHEREAS,
Parent desires to assume Applied Films’ rights and obligations under the Severance
Agreement as amended by this Agreement, in connection with the Merger and Executive’s
employment with Parent.
AGREEMENT
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound, Applied Films, Parent, and
Executive hereby agree as follows:
1. Term
This
Agreement shall take effect as of the Effective Time, and is conditioned on the
successful closing of the Merger. If the Merger does not close, this Amendment shall be
null and void, and even if executed by the parties, shall not be binding. This Agreement
shall continue in effect for twenty-four (24) months from the Effective Time, provided
that Section 9.2 shall survive termination of the Agreement.
2. Definitions.
Whenever
used in this Agreement, the following terms shall have the meanings set forth below and,
when the meaning is intended, the initial letter of the word is capitalized.
| |
2.1 |
“Base
Salary”means the salary of record paid to the Executive as annual salary, excluding
amounts received under incentive or other bonus plan, whether or not deferred. |
| |
2.2 |
“Beneficial
Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General
Rules and Regulations under the Exchange Act. |
| |
2.3 |
“Beneficiary”means
the persons or entities designated or deemed designated by the Executive pursuant to
Section 11.3. |
| |
2.4 |
"Board"
means the Company's Board of Directors. |
| |
2.5 |
“Cause” means:
(a) the Executive’s willful and continued failure to substantially perform his
duties with the Company (other than any such failure resulting from Disability), after a
written demand for substantial performance is delivered to the Executive that
specifically identifies the manner in which the Company believes that the Executive has
willfully failed to substantially perform his duties, and after the Executive has failed
to resume substantial performance of his duties on a continuous basis within fourteen
(14) calendar days of receiving such demand; (b) the Executive’s willfully engaging
in conduct (other than conduct covered under (a) above) which is demonstrably and
materially injurious to the Company; monetarily or otherwise; or (c) the Executive’s
having been convicted of a felony For purposes of this subparagraph, no act, or failure
to act, on the Executive’s part shall be deemed “willful”unless done
omitted to be done, by the Executive not in good faith and without reasonable belief that
the actor or omission was in the best interests of the Company. The termination of the
Executive’s employment by reason of the Executive’s death or Disability shall
be deemed a termination for Cause. |
| |
2.6 |
This
Section intentionally omitted. |
| |
2.7 |
"Code"
means the United States Internal Revenue Code of 1986, as amended. |
| |
2.8 |
“Committee”means
the Compensation Committee of the Board or any other committee appointed by the Board to
perform the functions of the Compensation Committee. |
| |
2.9 |
"Company"
means, Parent, or any successor thereto as provided in Section 10. |
| |
2.10 |
“Disability” means
that, as a result of the Executive’s incapacity due to physical or mental illness,
the Executive shall have been absent from the full-time performance of his duties with
the Company for twelve (12) consecutive months and, within thirty (30) calendar days
after written notice of suspension due to Disability is given, the Executive shall not
have returned to the full-time performance of his duties. |
| |
2.11 |
“Earned
Bonus” means the executive bonus paid or payable to the Executive with respect to
any fiscal year of the Company. |
| |
2.12 |
“Effective
Date of Termination” means (i) the date on which a Qualifying Termination occurs
which triggers the payment of Severance Benefits under this Agreement, (ii) if the
Executive dies, the date of his death, (iii) if the Executive becomes disabled, the date
of his Disability, or (iv) if the Executive’s termination of employment is not a
Qualifying Termination and not because of his death or Disability, the date specified in
a written notice given pursuant to Section 11.1 prior to termination specifying the
effective date of such termination. |
| |
2.13 |
"Effective
Time" means the time as of which the Merger becomes effective, as provide in the
Merger Agreement. |
| |
2.14 |
"Exchange
Act" means the United States Securities Exchange Act of 1934, as amended. |
| |
2.15 |
“Good
Reason”shall mean, without the Executive’s express written consent, the
occurrence of any one or more of the following: |
| |
(a) |
A
material diminution of the Executive’s duties and responsibilities as
compared with the Executive’s duties and responsibilities as of
the Effective Time as outlined in the offer letter agreement dated
June 9, 2006; |
| |
(b) |
The
Company’s requiring the Executive without his consent to be based at a
location which is fifty (50) miles farther from the Company’s
Santa Clara, California headquarters, except for required travel on
the Company’s business; |
| |
(c) |
A
material reduction by the Company in the Executive’s Base Salary or a
material reduction in the target for Executive’s incentive cash
bonus or target for other incentive compensation opportunities, in
either case as in effect as of the Effective Time or as the same
shall be increased from time to time; provided, however, that
reductions in either case shall not be deemed to be “Good Reason” if
the reduction in Executive’s Base Salary or target for Executive’s
incentive cash bonus or target for other incentive compensation
opportunities is part of an overall reduction of salaries or target
incentive cash bonuses of other Executives who have positions
commensurate with the Executive’s position; |
| |
(d) |
A
material reduction in the Executive’s level of participation in any of
the Company’s employee benefit or retirement plans, policies,
practices, or arrangements in which the Executive participates as of
the Effective Time; provided, however, that reductions in the levels
of participation in any such plans shall not be deemed to be “Good
Reason” if the Executive’s reduced level of participation
in each such program remains substantially consistent with the
average level of participation of other Executives who have positions
commensurate with the Executive’s position; |
| |
|
The Executive’s
continued employment shall not constitute a waiver of the Executive’s rights with
respect to any circumstance constituting Good Reason. |
| |
2.16 |
"Notice
of Termination" has the meaning set forth in Section 3.7. |
| |
2.17 |
“Person” shall
have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof, including a “group”as provided in Section
13(d). |
| |
2.18 |
“Qualifying
Termination” means the events described in Section 3.2, the occurrence of which
triggers the payment of Severance Benefits under this Agreement. |
| |
2.19 |
"Severance
Benefits" means the payment of severance compensation as provided in Section 3.3. |
3. Severance Benefits
| |
3.1 |
Right
To Severance Benefits. The Executive shall be entitled to receive from the Company
Severance Benefits, as described in Section 3.3, if, within twenty-four (24) months
following the Effective Time, the Executive’s employment with the Company shall end
for the reason specified in Section 3.2 and provided that Executive has executed,
and not revoked, a binding general release of claims in the form attached hereto as
Exhibit A. |
The Executive shall not be entitled
to receive Severance Benefits if he is terminated for Cause or due to a voluntary
termination of employment by the Executive for any reason.
| |
3.2 |
Qualifying
Termination. The occurrence of one or more of the following events within twenty-four
(24) months following the Effective Time shall trigger the payment of Severance Benefits
to the Executive under this Agreement: |
| |
(a) |
An
involuntary termination of the Executive’s employment by the Company other
than for Cause; or |
| |
(b) |
A
voluntary termination by the Executive for Good Reason. |
| |
3.3 |
Description
Of Severance Benefits. If the Executive becomes entitled to receive Severance
Benefits, as provided in Sections 3.1 and 3.2, the Company shall pay to the Executive
and provide him with the following: |
| |
(a) |
A
lump sum cash amount equal to: (i) one and one-half times the highest rate of
the Executive’s annualized Base Salary rate in effect within the
three (3) years up to and including the Effective Date of
Termination, plus (ii) one and one-half times the Executive’s
average Earned Bonus over the two (2) full fiscal years prior to the
Effective Time; if the Executive has not been eligible for an Earned
Bonus for two (2) fiscal years, such average Earned bonus shall be
deemed to be the Executive’s target bonus for the current fiscal
year multiplied by the decimal equivalent of the average percentage
of target bonus paid to the Company’s Executive Management Team
in the last two (2) fiscal years; if the Executive has been eligible
for an Earned Bonus for the last fiscal year but not for the last two
(2) full fiscal years, such Average Earned Bonus shall be the average
of (i) the Executive’s actual Earned Bonus for the last full
fiscal year, and (ii) the Executive’s target bonus for the
current fiscal year multiplied by the decimal equivalent of the
average percentage of target bonus paid to the Company’s
Executive Management Team in the penultimate full fiscal year prior
to the Effective Time; provided, that any amount to be paid pursuant
to this Section 3.3(a) shall be reduced by any other amount of
severance relating to salary or bonus continuation’ to be
received by the Executive upon termination of employment of the
Executive under any salary or bonus continuation guideline, plan,
agreement, policy or arrangement of the Company and any severance
payments the Company is required to make pursuant to the requirements
of any United States or foreign law or regulation. The Executive
shall not be entitled to and is not eligible to participate in the
Talent Mobility Program or any other Company (or subsidiary)
sponsored severance benefit programs for employees. Provided further,
any amount to be paid pursuant to this Section 3.3(a) shall be
reduced by any retention bonus payments paid to the Executive after
the Effective Time pursuant to Executive’s employment with the
Parent (or any subsidiary of Parent). |
| |
(b) |
A
lump sum cash amount equal to the sum of (i) the Executive’s unpaid Base
Salary and accrued-vacation pay through the Effective Date of
Termination, (ii) the Executive’s average Earned Bonus over the
two (2) full fiscal years prior to the Effective Time, multiplied by
a fraction, the numerator of which is the number of days completed in
the then-existing fiscal year through the Effective Date of
Termination, and the denominator of which is three hundred sixty-five
(365) less any Earned Bonus already paid to the Executive with
respect to such Fiscal year; if the Executive has not been eligible
for an Earned Bonus for two (2) fiscal years, such average Earned
bonus shall be deemed to be the Executive’s target bonus for the
current fiscal year multiplied by the decimal equivalent of the
average percentage of target bonus paid to the Company’s
Executive Management Team in the last two (2) fiscal years; if the
Executive has been eligible for an (b) Earned Bonus for the last full fiscal
year but not for the last two (2) full fiscal years, such Average
Earned Bonus shall be the average of (i) the Executive’s actual
Earned Bonus for the last full fiscal year, and (ii) the Executive’s
target bonus for the current fiscal year multiplied by the decimal
equivalent of the average percentage of target bonus paid to the
Company’s Executive Management Team in the penultimate full
fiscal year prior to the Effective Time; (iii) any Earned Bonus for
the previous fiscal year which has not yet been paid, and (iv) any
compensation previously deferred by the Executive other than pursuant to any
deferred stock plan or any tax qualified plan (together with any
interest and earnings thereon), in each case to the extent not
previously paid. |
| |
(c) |
To
the extent permitted by the then existing applicable plans and policies, and
the conversion rights, if any, thereunder, continuation of the
welfare benefits of health care, life and accidental death and
dismemberment, and disability insurance coverage for eighteen (18)
months after the Effective Date of Termination. These benefits shall
be provided to the Executive at the same premium cost, and at the
same coverage level, as in effect as of the Executive’s
Effective Date of Termination. If, however, the premium cost and/or
level of coverage shall change for all employees of the Company, the cost
and/or coverage level, likewise, shall change for each Executive in a
corresponding manner. The continuation of these welfare benefits
shall be discontinued prior to the end of the eighteen (18) month
period or the date on which the Executive has available substantially
similar benefits from a subsequent employer, as determined by the
Committee. The Company may, in its sole discretion, provide the
aforementioned continuation of welfare benefits through participation
in COBRA, through separate insurance policies, or conversion of any
existing policies. The Executive understands and agrees to cooperate
in the timely completion of any paperwork necessary to effect the
continuation of such benefits through COBRA, any separate insurance
policy or policy conversion. |
| |
(d) |
To
the extent not previously paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be
paid or provided or which the Executive is eligible to receive under
any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies through the Effective Date of
Termination, and the payments received and the times over which
benefits are payable under Section 3.3(a) shall be included for
determining participation eligibility, vesting and the amount of any
benefit. |
| |
(e) |
The
restrictions set forth in Executive’s Letter Agreement dated May 15,
2006 on the exercisability of the Accelerated Options (as defined in
such letter Agreement) shall become null and void as of the Effective
Date of Termination. |
| |
3.4 |
Vesting
of Options. This Section intentionally omitted in favor of 3.3(e). |
| |
3.5 |
Termination
For Disability. Following the Effective Time, if the Executive’s employment is
terminated due to Disability, the Executive shall receive his full Base Salary and
accrued but unused vacation through the Effective Date of Termination, at the rate then
in effect, at which point in time the Executive’s benefits shall be determined in
accordance with the Company’s disability, insurance, and other applicable plans and
programs then in effect, and the Company shall have no further obligations to the
Executive under this Agreement. |
| |
3.6 |
Termination
For Death. Following the Effective Time, if the Executive’s employment is
terminated by reason of his death, the Executive shall receive his full Base Salary and
accrued but unused vacation through the Effective Date of Termination, at the rate then
in effect, t which point in time the Executive’s benefits shall be determined in
accordance with the Company’s survivor’s benefits, insurance, and other
applicable plans and programs of the Company then in effect, and the Company shall have
no further obligations to the Executive under this Agreement. |
| |
3.7 |
Termination
For Cause Or Voluntary Resignation of Executive Other Than for Good Reason. Following
the Effective Time, if the Executive’s employment is terminated either: (a) by the
Company for Cause; or (b) by the Executive other than for death or Disability and other
than for Good Reason, the Company shall pay the Executive his full Base Salary and
accrued but unused vacation through the Effective Date of Termination, at the rate then
in effect, plus all other amounts to which the Executive is entitled under any
compensation plans of the Company, at the time such payments are due, and the Company
shall have no further obligations to the Executive under this Agreement. |
| |
3.8 |
Notice
Of Termination. Any termination by the Company for Cause or by the Executive for Good
Reason shall be communicated by a Notice of Termination. For purposes of this Agreement,
a “Notice of Termination” shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination
of the Executive’s employment under the provision so indicated. |
4. Form
and Timing of Severance Benefits.
| |
4.1 |
Form
And Timing Of Severance Benefits. Subject to compliance with Section 409A of the Code
as provided in Section 4.3, the Severance Benefits described in Sections 3.3(a), 3.3(b),
3.3(d) and 5.1 shall be paid in cash to the Executive in a single lump sum as soon as
practicable following the Effective Date of Termination, but in no event beyond thirty
(30) days from such date. |
| |
4.2 |
Withholding
Of Taxes. The Company shall be entitled to withhold from any amounts payable under
this Agreement all taxes which are legally required to be withheld (including, without
limitation; any United State federal taxes and any other state, city, or local taxes or
foreign taxes), and are actually paid to such governmental authority by the Company. |
| |
4.3 |
Code
Section 409A Compliance. Because of the uncertainty of the application of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), to
payments pursuant to this Agreement, including, without limitation, payments pursuant to
Section 3.3 (a), 3.3(b), and 3.3(d) hereof, Executive agrees that if, in the sole
determination of the Company, any such payments are subject to the provisions of Section
409A of the Code by reason of this Agreement, or any part thereof, being considered a
“nonqualified deferred compensation plan” pursuant to Section 409A of the Code,
then such payments, and any other cash severance payments pursuant to this Agreement or
otherwise, shall be made in accordance with, and this Agreement automatically shall be
amended to comply with, Section 409A of the Code, including, without limitation, any
necessary delay of six (6) months applicable to payment of deferred compensation to a
“specified employee”(as defined in Section 409A(2)(B)(i) of the Code) upon
separation from service. In the event that a six month delay is required, on the first
regularly scheduled pay date following the conclusion of the delay period the Executive
shall receive a lump sum payment in an amount equal to six (6) months of Executive’s
Base Salary and thereafter, any remaining severance benefits shall be paid on the same
basis and at the same time as previously paid and subject to employment tax withholdings
and deductions. |
5. Excise
Tax Equalization Payment.
| |
5.1 |
Excise
Tax Equalization Payment: If the Executive becomes entitled to Severance Benefits or
any other payment or benefit under this Agreement, or under any other agreement with or
plan of the Company (in the aggregate, the “Total Payments”), if all or any
part of the Total Payments will be subject to the tax (the Excise Tax”) imposed by
Section 4999 of the Code (or any similar tax that may hereafter be imposed), the Company
shall pay to the Executive in cash an additional amount (the “Gross-Up Payment”)
in such amount such that after payment by the Executive of any federal, state, and local
income tax, penalties, interest, and Excise Tax upon the Gross-Up Payment provided for by
this Section 5.1 (including FICA and FUTA), the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax upon the Total Payments. Such payment shall be
made by the Company to the Executive as soon as practical following the Effective Date of
Termination, but in no event beyond thirty (30) days from such date. |
| |
5.2 |
Tax
Computation.For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amounts of such Excise Tax: |
| |
(a) |
Any
other payments or benefits received or to be received by the Executive in
connection with the Executive’s termination of employment
pursuant to the terms of this Agreement or any other plan,
arrangement, or agreement with the Company, shall be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of the Code,
and all “excess parachute payments” within the meaning of
Section 280G(b)(1) shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel as supported by the Company’s
independent auditors and acceptable to the Executive, such other
payments or benefits (in whole or in part) do not constitute
parachute payments, or unless such excess parachute payments (in
whole or in part) represent reasonable compensation for services
actually rendered within the meaning of Section 280G(b)(4) of the
Code in excess of the base amount within the meaning of Section
280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax; |
| |
(b) |
The
amount of the Total Payments which shall be treated as subject to the Excise
Tax shall be equal to the lesser of: (i) the total amount of the
Total Payments; or (ii) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) (after applying clause (a)
above); and |
| |
(c) |
The
value of any noncash benefits or any deferred payment or benefit shall be
determined by the Company’s independent auditors in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code. |
| |
|
For purposes
of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay
federal income taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made, and to pay state and local
income taxes at the highest marginal rate of taxation in the state and locality of the
Executive’s residence on the Effective Date of Termination, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such state
and local taxes. |
| |
5.3 |
Subsequent
Recalculation. If the Internal Revenue Service adjusts the computation of the Company
under Section 5.2 so that the Executive did not receive the intended net benefit, the
Company shall reimburse the Executive for the full amount necessary to make the Executive
whole, including a market rate of interest as determined by the Committee. |
6. The
Company’s Payment Obligations.
| |
|
The Company’s
obligation to make the payments and the arrangements provided for herein shall be
absolute and unconditional, and shall not be affected by any circumstances, including,
without limitation, any offset, counterclaim, recoupment, defense, or other right which
the Company may have against the Executive or anyone else, except as expressly agreed in
Section 3.3(a), and excepted further that the Company shall have the right to set off any
indebtedness of the Executive to the Company for borrowed money which indebtedness is
represented by a promissory note. All amounts payable by the Company hereunder shall be
paid without notice or demand. Each and every payment made hereunder by the Company shall
be final, and the Company shall not seek to recover all or any part of such payment from
the Executive or from whomsoever may be entitled thereto, for any reasons whatsoever. |
| |
|
The Executive
shall not be obligated to seek other employment in mitigation of the amounts payable or
arrangements made under any provision of this Agreement, and the obtaining of any such
other employment shall in no event effect any reduction of the Company’s obligations
to make the payments and arrangements required to be made under this Agreement, except to
the extent provided in Section 3.3(c). |
7. Legal
Remedies.
| |
7.1 |
Payment
Of Legal Fees. To the extent permitted by law, the Company shall reimburse the
Executive for all legal fees, costs of litigation, prejudgment interest, and other
expenses incurred in good faith by the Executive as a result of the Company’s
refusal to provide the Severance Benefits to which the Executive becomes entitled under
this Agreement, or as a result of the Company’s contesting the validity,
enforceability, or interpretation of this Agreement, or as a result of any conflict
between the parties pertaining to this Agreement, if the Executive prevails with respect
to any one material issue of dispute in connection with such legal action. |
| |
7.2 |
Arbitration. The
Executive shall have the right and option to elect (in lieu of litigation) to have any
dispute or controversy arising under or in connection with this Agreement settled by
arbitration, conducted before a panel of three (3) arbitrators sitting in a location
selected by the Executive within fifty (50) miles from the location of his employment
with the Company, in accordance with the rules of the American Arbitration Association
then in effect. |
| |
|
Judgment may
be entered on the award of the arbitrator in any court having proper jurisdiction. All
expenses of the arbitrators shall be borne by the Company. If the Executive prevails with
respect to any one material issue of dispute in connection with such arbitration, the
Company shall pay to the Executive the fees and expenses of the counsel for the Executive
incurred with respect to the arbitration. |
8. Outplacement
Assistance.
| |
|
Following a
Qualifying Termination (as described in Section 3.2), the Executive shall be reimbursed
by the Company for the costs of all outplacement services obtained by the Executive
within the two (2) year period after the Effective Date of Termination; provided,
however, that the total reimbursement shall be limited to an amount equal to the lesser
of fifteen percent (15%) of the Executive’s Base Salary, or Twenty-Five Thousand and
No/100 Dollars ($25,000). |
9. Obligations
of the Executive.
| |
9.1 |
This
Section intentionally omitted. |
| |
9.2 |
Confidential
Information and Non-Solicitation. |
| |
(a) |
The
Executive acknowledges that, as an employee of the Company, he will be making
use of, acquiring and adding to confidential information of a special and
unique nature and value relating to the Company and its strategic plan and
financial operations. The Executive further recognizes and acknowledges that
all confidential information is the exclusive property of the Company, is
material and confidential, and is critical to the successful conduct of the
business of the Company. Accordingly, the Executive covenants and agrees that
he will use confidential information for the benefit of the Company only and
shall not at any time, directly or indirectly, during the term of this
Agreement or thereafter divulge, reveal or communicate any confidential
information to any person, firm, corporation or entity whatsoever, or use any
confidential information for his own benefit or for the benefit of others. The
Executive also agrees not to engage in any business involving the production or
design of any products that are similar to any of the principal products of the
Company (as determined on the Effective Date of Termination), directly or
indirectly, whether as an employee, proprietor, partner, shareholder,
consultant or otherwise, for one (1) year after the Effective Date of
Termination. The Executive also agrees not to hire or solicit for hire,
directly or indirectly, any employee on the payroll of the Company for any
third party during the term of this Agreement and for one (1) year after the
Date of Termination without the prior written consent of the Company. |
| |
(b) |
Any
termination of the Executive’s employment or of this Agreement shall have
no effect on the continuing operation of this Section 9.2. |
| |
(c) |
The
Executive acknowledges and agrees that the Company will have adequate remedy at
law, and could be irreparably harmed if the Executive breaches or threatens to
breach any of the provisions of this Section 9.2. The Executive agrees that the
Company shall be entitled to equitable and/or injunctive relief to prevent any
breach or threatened breach of this Section 9.2, and to specific performance of
each of the terms hereof in addition to any other legal or equitable remedies
that the Company may have: The Executive further agrees that he shall not, in
any equity proceeding relating to the enforcement of the terms of this Section
9.2, raise the defense that the Company has an adequate remedy at law. |
10. Successors
and Assignment
| |
10.1 |
Successors
To The Company |
| |
(a) |
This
Agreement shall not be terminated by any merger or consolidation of the Company
whether the Company is or is not the surviving or resulting corporation or as a
result of any transfer of all or substantially all of the assets of the
Company. In the event of any such merger, consolidation or transfer of assets,
the provisions of this Agreement shall be binding upon the surviving or
resulting corporation or the person or entity to which such assets are
transferred. |
| |
(b) |
The
Company agrees that concurrently with any merger, consolidation or transfer of
assets referred to in Section 10.1(a), it will cause any successor or
transferee unconditionally to assume, by written instrument delivered to the
Executive (or his Beneficiary 11 or estate), all of the obligations of the
Company hereunder. Failure of the Company to obtain such assumption prior to
the effectiveness of any such merger, consolidation or transfer of assets shall
be a breach of this Agreement and shall entitle the Executive to compensation
and other benefits from the Company in the same amount and on the same terms as
the Executive would be entitled hereunder if the Executive’s employment
were terminated following the Effective Time without Cause or for Good Reason.
For purposes of implementing the foregoing, the date on which any such merger,
consolidation or transfer becomes effective shall be deemed the Effective Date
of Termination. |
| |
10.2 |
Assignment
By The Executive. This Agreement shall inure to the benefit of and be enforceable by
the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive dies while any
amount would still be payable to him hereunder had he continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive’s Beneficiary. If the Executive has not named a
Beneficiary, then such amounts shall be paid to the Executive’s devisee, legatee, or
other designee, or if there is no such designee, to the Executive’s estate. |
11. Miscellaneous
| |
11.1 |
Notices. For
purposes of this Agreement, all notices, including without limitation, a Notice of
Termination, and other communications required or permitted hereunder shall be in writing
and shall be deemed to have been duly given when delivered or five (5) days after deposit
in the United States mail certified and return receipt requested, postage prepaid,
addressed (1) if to the Executive, to 000 Xxxxxxx Xxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx
00000, and if to the Company, to [Applied Materials], Inc. 0000 Xxxxx Xxxxxxxxx, M/S 2064
Xxxxx Xxxxx, XX 00000 Attention: Xxxxxx Xxxxxxx, Senior Vice President, General Counsel
and Corporate Secretary, or (2) to such other address as either party may have furnished
to the other in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt. |
| |
11.2 |
Employment
Status. Except as may be provided under any other agreement between the Executive and
the Company, the employment of the Executive by the Company is “at will,” and
may be terminated by either the Company or the Executive at any time, subject to
applicable law and subject to the respective obligations, of the Company and the
Executive under the terms of this Agreement. |
| |
11.3 |
Waiver
of Benefits Under Severance Agreement. The parties agree that the employment position
Executive has accepted with Parent, and the adjustments in Executive’s duties,
responsibilities and reporting relationship resulting from the Merger and the Company’s
becoming a subsidiary corporation of Parent, do not constitute a reduction,
inconsistency, or alteration within the meaning of, or otherwise sufficient to trigger
Good Reason for termination as defined in subsection 2.15(a) of the Severance Agreement.
By entering into this Amended and Restated Severance Agreement, Parent agrees to assume,
and hereby does assume, all of Applied Films’ obligations and duties to the
Executive under that certain Severance Agreement between the Executive and Applied Films
dated July 26, 2006, as amended by this Amended and Restated Severance Agreement. |
| |
11.4 |
Beneficiaries. The
Executive may designate one or more persons or entities as the primary and/or contingent
Beneficiaries of any Severance Benefits owing to the Executive under this Agreement. Such
designation, must be in the form of a signed writing acceptable to the Committee. The
Executive may make or change such designations at any time. |
| |
11.5 |
Severability.
In the event any provision of this Agreement shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of the
Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid
provision had not been included. Further, the captions of this Agreement are not part of
the provisions hereof and shall have no force and effect. |
| |
11.6 |
Modification.
Except as provided in Section 4.3 herein, no provision of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and by an authorized member of the Committee, or by
the respective parties’ legal representatives and successors. |
| |
11.7 |
Applicable
Law. To the extent not preempted by the laws of the United States, the laws of the
state of Colorado shall be the controlling law in all matters relating to this Agreement. |
| |
11.8 |
Counterparts. This
Amendment may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. |
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the
undersigned have executed this AGREEMENT as of the day and year first set forth
above.
|
APPLIED FILMS:
By: _____________________________
Name:___________________
Title:__________________
PARENT:
By: _____________________________
Name:___________________
Title:__________________
EXECUTIVE:
_________________________________
|
EXHIBIT A
GENERAL RELEASE
(TO BE SIGNED AND
RETURNED TO THE COMPANY IN THE EVENT OF SEVERANCE ELIGIBILITY)
In exchange for the consideration
under the Amended and Restated Severance Agreement, to which I would not otherwise be
entitled, I hereby generally and completely release APPLIED MATERIALS, Inc. and its
directors, officers, employees, shareholders, partners, agents, attorneys, and
subsidiaries, predecessors, successors, insurers, affiliates and assigns (collectively the
“APPLIED MATERIALS Affiliates”) 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 my signing this General Release.
This General Release includes, but is not limited to: (1) all claims arising out of or in
any way related to my employment with any of the APPLIED MATERIALS Affiliates or the
termination of that employment; (2) all claims related to my compensation or benefits
from any of the APPLIED MATERIALS Affiliates, including salary, bonuses, commissions,
vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock
options, or any other ownership interests in any of the APPLIED MATERIALS Affiliates; (3)
all claims for breach of contract, wrongful termination, and breach of the implied
covenant of good faith and fair dealing (other than pursuant to this General Release, the
Amended and Restated Severance Agreement and that certain offer letter agreement dated as
of June 9, 2006); (4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) 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 (“ADEA”), the Colorado Civil Rights Act, and
the California Fair Employment and Housing Act (as amended). Notwithstanding anything
contained herein to the contrary, this General Release shall not apply to (i) any actions
to enforce rights arising under, or any claim for benefits which may be due me pursuant
to, the Merger Agreement, (ii) any rights or claims that may arise as a result of events
occurring after the date this General Release is executed, (iii) any indemnification
rights I may have as a former officer or director of the Company, (iv) any claims for
benefits under any employee benefit plan which I participated in prior to my termination
of employment which is subject to the Employee Retirement Income Security Act of 1974, as
amended, including, without limitation, my right to continuation of health coverage, and
(v) any rights to receive earned but unpaid salary, or reasonable, unreimbursed business
expenses, incurred by me in performing my duties as an employee.
I acknowledge that I am knowingly and
voluntarily waiving and releasing any rights I may have under the ADEA (“ADEA
Waiver”). I also acknowledge that the consideration given for the ADEA Waiver and
General Release is in addition to anything of value to which I was already entitled. I
further acknowledge that I have been advised by this writing, as required by the ADEA,
that: (a) my ADEA Waiver does not apply to any rights or claims that may arise after the
day I sign this General Release; (b) I have been advised hereby that I have the right to
consult with an attorney prior to signing this General Release; (c) I have twenty-one (21)
days to consider this General Release (although I may choose to voluntarily sign this
General Release earlier); (d) I have seven (7) days following the day I sign this General
Release to revoke the ADEA Waiver; and (e) the ADEA Waiver will not be effective until the
date upon which the revocation period has expired, which will be the eighth day after I
sign this General Release. Nevertheless, my general release of claims, except for the ADEA
Waiver, is effective immediately, and not revocable.
In granting the release herein, which
includes claims that may be unknown to me at present, I acknowledge that I have read and
understood section 1542 of the Civil Code of the State of California, which reads as
follows: “A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release, which if known
by him must have materially affected his 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 jurisdiction with respect to my release of
unknown and unsuspected claims herein.
By: _________________________
____________________________ |
Date: _______________________ |
