Exhibit 10.1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
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as of May 16, 1997, between Therma-Wave, Inc., a Delaware corporation (the
"Company"), and Xxxxx Xxxxxxxxxx ("Executive").
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The Company and Executive are parties to an Executive Stock Agreement
dated May 16, 1997 (the "Stock Agreement") pursuant to which (i) the Company
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will sell shares of capital stock to Executive and (ii) the Company will grant
Executive options to acquire shares of the Company's capital stock.
Company and Executive intend that this Agreement supersede in its
entirety the Employment Agreement dated as of October 30, 1991, as amended on
January 24, 1996, between Executive and the Company (the "Prior Agreement").
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In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive
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hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and ending
as provided in Section 6 hereof (the "Employment Period").
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2. Position and Duties.
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(a) During the Employment Period, Executive shall serve as the
Chairman of the Board, President and Chief Executive Officer of the Company and
shall have the normal duties, responsibilities and authority of the Chairman of
the Board, President and Chief Executive Officer, subject to the overall
direction and authority of the Company's board of directors (the "Board").
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(b) Executive shall report to the Board, and Executive shall devote
his best efforts and his full business time and attention to the business and
affairs of the Company and its Subsidiaries.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any
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corporation of which the securities having a majority of the voting power in
electing directors are, at the time of determination, owned by the Company,
directly or through one or more Subsidiaries.
3. Base Salary and Benefits.
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(a) During the Employment Period, Executive's base salary shall be
at least $400,000 per annum, subject to review by the Board on an annual basis
(the "Base Salary"), which salary shall be payable in regular installments in
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accordance with the Company's general payroll practices and shall be subject to
customary withholding. Beginning on January 1, 1998, the Base Salary shall be
adjusted annually by an amount which, at a minimum, reflects comparable
adjustments in the seventy-fifth percentile of the Xxxxxxx Survey, as approved
by the Board of Directors. In addition, during the Employment Period, Executive
shall be entitled to the fringe benefits listed on Exhibit A attached hereto and
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(to the extent not listed on Exhibit A) shall be entitled to participate in all
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of the Company's employee benefit programs for which senior executive employees
of the Company and its Subsidiaries are generally eligible (collectively, the
"Benefits").
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(b) Executive shall be entitled to personal time off ("PTO") on the
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same terms and conditions as Executive is entitled to pursuant to the Therma-
Wave, Inc. Employee Handbook.
(c) The Company shall reimburse Executive for all reasonable
expenses incurred by him in the course of performing his duties under this
Agreement which are consistent with the Company's policies in effect from time
to time with respect to travel, entertainment and other business expenses,
subject to the Company's requirements with respect to reporting and
documentation of such expenses.
(d) In addition to the Base Salary, for each of the Company's fiscal
years beginning with the 1998 fiscal year, Executive will be eligible to earn a
bonus (the "Bonus") based on the Company achieving certain corporate performance
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goals and Executive achieving certain individual goals. The target amount of
the Bonus, the corporate performance goals and the individual goals each shall
be set annually by the Board. The amount of the Bonus shall be determined in
accordance with the procedures set forth on Exhibit B attached hereto.
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4. Deferred Signing Bonus.
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(a) If, as of May 16, 2002 (the "Fifth Anniversary"), Executive
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continues to be employed by the Company, the Company shall pay to the Executive
a deferred signing bonus (the "Deferred Bonus") to the extent that the
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cumulative earnings before interest, taxes, depreciation and amortization of the
Company ("EBITDA") from May 16, 1997 through the Fifth Anniversary (the "Actual
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EBITDA") exceeds $133.275 million (the "Floor Amount"). If Actual EBITDA is (i)
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less than or equal to the Floor Amount, no Deferred Bonus will be paid, (ii)
equal to or greater than $177 million (the "Planned EBITDA"), then a Deferred
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Bonus equal to $8,346,031.25 (the "Maximum Bonus") will be paid, and (iii)
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between the Floor Amount and the Planned EBITDA, a Deferred Bonus equal to the
result of (x) the Maximum Bonus multiplied by (y) a fraction, the numerator of
which is the amount by which the Actual EBITDA exceeds the Floor amount and the
denominator of which is $43.725 million will be paid. Actual EBITDA shall be
determined as promptly as practicable after the Fifth Anniversary by reference
to the Company's annual audited financial statements (for all completed fiscal
years) and quarterly or other interim financial statements provided to the
Company's lenders (for interim periods). The Deferred Bonus shall be paid
within five days after the determination of Actual EBITDA (the date of such
payment, the "Bonus Payment
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Date"); provided that if (i) Executive has exercised any Management Options (as
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defined in the Stock Agreement) prior to such date and issued to the Company a
promissory note or notes as payment of the exercise price therefor and (ii) any
of such promissory notes are outstanding on the Fifth Anniversary, then the
"Bonus Payment Date" shall be the date all of such notes are paid in full (it
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being understood that Executive at any time after the Fifth Anniversary may
request payment of the Deferred Bonus payable to him and use the proceeds to
repay any such promissory notes), but in any event no later than the tenth
anniversary of the date hereof.
(b) Notwithstanding the foregoing, if, prior to the Fifth Anniversary,
a Sale of the Company occurs (as defined in the Stock Agreement), then Actual
EBITDA shall mean the sum of (i) cumulative actual EBITDA of the Company for the
period from May 16, 1997 through the end of the last completed calendar month
prior to such sale (determined as set forth in Section 4(a) above) and (ii)
projected EBITDA utilized to sell the Company for the remaining portion of the
period through the Fifth Anniversary (which will not be greater than the EBITDA
planned for such period as reflected in a performance plan for the Company
attached hereto as Exhibit C).
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(c) If Executive has been terminated prior to the Fifth Anniversary,
on the Bonus Payment Date, the Company will pay to Executive a Deferred Bonus
equal to the result of (x) the Deferred Bonus Executive would have received
pursuant to Section 4(a) if he were employed as of the Fifth Anniversary (the
"Target Bonus") multiplied by (y) a fraction, the numerator of which is the
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number of completed 3-Month Periods elapsed between May 16, 1997 and the date of
termination and the denominator of which is 20; provided that if, as of the date
of Executive's termination, the Company's cumulative actual EBITDA for the
period from April 1, 1997 through the end of the Company's then most recently
completed fiscal year (determined by reference to the Company's annual audited
financial statements) equals or exceeds the applicable cumulative EBITDA target
(the "Management Target") set forth below, then the Deferred Bonus to be paid to
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the Key Employee shall equal the result of (i) the Target Bonus multiplied by
(ii) a fraction, the numerator of which is the number of 3-Month Periods elapsed
between May 16, 1997 and the date of Executive's termination plus 10, and the
denominator of which is 20, but in any event not more than the Target Bonus.
Fiscal Year Ending Management Target
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3/31/98 $16.5 million
3/31/99 $42.2 million
3/31/00 $81.0 million
3/31/01 $127.3 million
3/31/02 $177.7 million
(d) Notwithstanding anything to the contrary in this Section 4 if,
prior to the Bonus Payment Date, Executive (i) resigns (other than for Good
Reason where the applicable Performance Hurdle (as defined below) has been met),
(ii) is terminated for Cause, (iii) is terminated without Cause after March 31,
1998 and the applicable Performance Hurdle has not been met, (iv) Competes in
any material respect with the Company or breaches Section 7 hereof or Section 11
of the Stock Agreement, no Deferred Bonus will be paid; provided that the
Company shall notify
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Executive of any breach referred to in clause (iv) and, if such breach is
capable of being cured, provided Executive with 10 days to cure such breach.
(e) The "Performance Hurdles" shall equal: (i) if Executive is
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terminated after the end of the Company's fiscal year ending March 31, 1998 but
prior to the end of the second quarter of the Company's fiscal year ending Xxxxx
00, 0000, XXXXXX for the twelve-month period ending as of the end of the month
immediately preceding the termination of at least $6 million; (ii) if Executive
is terminated after the end of the second quarter of the Company's fiscal year
ending March 31, 1999 but prior to the end of the Company's fiscal year ending
Xxxxx 00, 0000, XXXXXX for the twelve-month period ending as of the end of the
month immediately preceding the termination of at least $9 million; (iii) if
Executive is terminated after the end of the Company's fiscal year ending March
31, 1999 but prior to the end of the Company's fiscal year ending Xxxxx 00,
0000, XXXXXX for the twenty-four month period ending as of the end of the month
immediately preceding the termination of at least $24 million; and (iv) if
Executive is terminated after the end of the Company's fiscal year ending Xxxxx
00, 0000, XXXXXX for the twenty-four month period ending as of the end of the
month immediately preceding the termination of at least $28 million. For
purposes of determining whether the Performance Hurdle has been achieved, the
Company's actual cumulative EBITDA will be determined by reference to the
Company's annual audited financial statements (for all completed fiscal years
within the measurement period) and monthly or other interim financial statements
provided to the Company's lenders (for interim periods).
(f) For purposes hereof, "3-Month Period" means a periods of three
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months (i) beginning on May 16 and ending on the next following August 16, (ii)
beginning on August 16 and ending on the next following November 16, (iii)
beginning on November 16 and ending on the next following February 16, or (iv)
beginning on February 16 and ending on the next following May 16.
5. Board Membership. With respect to all regular elections of
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directors during the Employment Period, the Company shall nominate and shall
cause Executive to be elected to serve as a member and Chairman of the Board.
Upon the termination of the Employment Period, Executive shall resign as a
director of the Company and its Subsidiaries, as the case may be.
6. Term.
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(a) The Employment Period shall end on May 16, 2002; provided that
the Employment Period (i) shall terminate upon Executive's resignation (other
than for Good Reason) or death (ii) shall terminate upon Executive's Disability,
(iii) may be terminated by the Company at any time for Cause (as defined below)
or without Cause and (iv) may be terminated by Executive for Good Reason.
(b) If the Employment Period is terminated by the Company without
Cause, by Executive for Good Reason or as a result of Executive's Disability,
Executive shall be entitled to receive the Base Salary, the Bonus (which during
the Severance Period will be equal to 50% of the Base Salary in effect
immediately prior to the termination) and the Benefits (the "Severance
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Payment"), in each case until the date which is thirty months after the date of
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such termination (the "Severance Period"); provided that the portion of the
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Bonus that Executive would have been entitled to receive for the fiscal year in
which the Severance Period terminates shall be reduced
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proportionately by the ratio of the number of days of such fiscal year not
included in the Severance Period to the total number of days in such fiscal
year. The Severance Payment will be payable at such times as such payments would
have been payable had Executive not been terminated. Notwithstanding anything in
this Agreement to the contrary, the Company shall have no obligation to pay any
part or all of the Severance Payment if at any time during the Severance Period
Executive Competes with the Company or its Subsidiaries or Executive breaches
Section 7 hereof or Section 11 of the Stock Agreement; provided that the Company
shall notify Executive of any such breach and, if such breach is capable of
being cured, provide Executive with 10 days to cure such breach. As a condition
to the Company's obligations (if any) to make the Severance Payment pursuant to
this Section 6(b), Executive will execute and deliver a general release in form
and substance satisfactory to the Company; provided that such release shall
cease to be effective if the Company fails to pay any amounts owed to Executive
pursuant to this Section 6(b).
(c) If the Employment Period is terminated by the Company for Cause
or is terminated pursuant to subsection 6(a)(i) above, Executive shall be
entitled to receive the Base Salary through the date of termination.
(d) All of Executive's rights to Benefits and bonuses which accrue
or become payable after the termination of the Employment Period by the Company
for Cause or pursuant to subsection 5(a)(i) above shall cease upon such
termination.
(e) For purposes of this Agreement, "Disability" shall mean any
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physical or mental illness or incapacity of Executive if, as determined by the
Board, such illness or incapacity results in Executive's inability to perform
his full-time duties and responsibility for the Company (i) for a period of
three consecutive months, (ii) for a period of 6 months in any twelve month
period, or (iii) at such time when satisfactory medical evidence exists that
Executive has a physical or mental illness or incapacity that will likely
prevent him from returning to the performance of his work duties for 6 months or
longer.
(f) For purposes of this Agreement, removal of the Executive from
office shall not be deemed for "Cause" unless:
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(i) such removal shall have been the result of embezzlement on
the part of the Executive; or
(ii) there has occurred a willful breach of Section 7 of this
Agreement or Section 11 of the Stock Agreement which materially and adversely
injures the Company; or
(iii) Executive has been convicted of or has pled guilty or no
contest to any felony and such conviction or plea has had or, in the reasonable
opinion of the Board may have, a material adverse effect upon the business or
operations of the Company;
(iv) Executive has interfered in any material respect in the
initiation or completion of a sale of all or substantially all of the Company's
capital stock or assets or other change in control transaction involving the
Company or a public offering of the Company's or any of its Subsidiaries' debt
or equity securities proposed by the Board; or
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(v) Executive has materially failed to discharge his duties,
responsibilities or obligations under this Agreement in a way which materially
and adversely injures the Company provided, however, that if any such
determination is based on a course of conduct (rather than any specific event,
transaction or omission), the Board shall not terminate this Agreement or remove
the Executive pursuant to this subparagraph unless (x) the Board shall have
notified the Executive and given him an opportunity to explain such course of
conduct to the Board and (y) the Board shall have reasonably concluded, after
any such presentation the Executive may make, that (a) it is unlikely that the
Executive will be able to properly resume and fully discharge his duties and
obligations hereunder or (b) such course of conduct has materially and adversely
affected the Company and that Executive was aware of the foregoing effect at the
time he engaged in the misconduct.
(g) For purposes of this Agreement, "Good Reason" shall mean the
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occurrence (without Executive's consent) of any one of the following acts by the
Company, or failure by the Company to act: (i) the assignment to Executive of
duties that represent a substantial adverse alteration in the nature or status
of his responsibilities as Chairman of the Board, President and Chief Executive
Officer of the Company, except in the event Executive is unable to or fails to
perform his normal full-time duties and responsibility with the Company as a
result of incapacity due to physical or mental illness or incapacity; (ii) a
reduction in the Base Salary as in effect on the date hereof; (iii) the
relocation of the Company's principal executive offices to a location outside
the counties of Alameda and Contra Costa or the Company's requiring Executive to
be based anywhere other than the Company's principal executive offices (but not
including required travel on the Company's business); (iv) the wrongful failure
by the Company to pay to Executive any portion of the Base Salary, Bonus or
Benefits, or to pay to Executive any portion of an installment of deferred
compensation or Benefits under any deferred compensation or benefits program of
the Company, within 45 days of the date such Base Salary, Bonus, compensation or
Benefit is due; (v) the occurrence of a Sale of the Company in which no Option
Shares (as defined therein) become vested pursuant to Section 1(c) of the Option
Agreement, dated as of the date hereof, between Executive and the Investors
named therein; or (vi) any other material breach of this Agreement by the
Company.
7. Noncompetition; Confidentiality; Nonsolicitation.
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(a) Noncompetition. Executive agrees that while he is employed by
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the Company he will not Compete with the Company or any of its Subsidiaries.
For purposes of this Agreement, "Compete" or "Competing" shall mean without the
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prior written consent of the Company, providing consultive service, owning,
managing, operating, joining, controlling, participating in, or being connected
as a stockholder, partner or otherwise with any business, individual, partner,
firm corporation or other entity that (i) is in competition with the Company or
any Subsidiary or Related Entity (as defined in Section 7(d) below) to the
extent its products are similar or materially related to those of the Company or
any Subsidiary or Related Entity (including products under development by the
Company or any Subsidiary or Related Entity during the time Executive was
employed by the Company) or (ii) otherwise engages in any business in which the
Company or any Subsidiary or Related Entity is engaged or proposes to engage, in
either case as of the date of the termination of Executive's employment;
provided that "Compete" and "Competing" shall not mean being a
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passive owner of not more than 2% of the outstanding stock of any class of a
corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.
(b) Confidential Information. Executive agrees that while he is
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employed by the Company and for a period of five years thereafter, he will not,
directly or indirectly, divulge, furnish or make accessible to any party or
otherwise use or exploit any of the proprietary or confidential information or
knowledge, including without limitation, any financial information, marketing
plans, strategies, trade secrets (as defined by California Civil Code Section
3426), data, know-how, processes, techniques, patents, patent applications,
improvements, inventions, formulas and other Proprietary Information, as such
term is used in the Proprietary Information and Employee Inventions Agreement
between the Company and Executive, of the Company or its subsidiaries,
affiliates, vendors, suppliers or customers, other than in the course of
performing his duties hereunder and with the consent of the Company in
accordance with the Company's policies and regulations, as established from time
to time, for the protection of the Company's Proprietary Information. The
provisions of this Section 7(b) shall not apply to any information, documents or
materials which are, as shown by appropriate written evidence, in the public
domain, other than by reason of a default by Executive of his obligations
hereunder.
(c) Right to Company Materials. Executive agrees that all styles,
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designs, lists, materials, books, files, reports, correspondence, data, records,
and other documents pertaining to his employment or to any confidential
information referred to above ("Company Material") used or prepared by, or made
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available to, Executive, shall be and shall remain the property of the Company
or its designees. Upon the termination of Executive's employment or the
expiration of this Agreement, all Company Materials shall be returned
immediately to the Company, and Executive shall not make or retain any copies or
excerpts thereof. Notwithstanding the foregoing, Executive may, in any
litigation contesting whether a termination of Executive by the Company was for
Cause or whether a resignation by Executive was for Good Reason (or any
substantially similar question), retain copies or excerpts of Company Materials
to the extent such materials are utilized by Executive in connection with such
litigation; provided that Executive shall return all such materials immediately
upon resolution or cessation of such litigation or proceedings.
(d) Antisolicitation. Executive promises and agrees that while he
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is employed by the Company, during the Severance Period, and for a period of
thirty months thereafter (the "Antisolicitation Period"), he will not induce or
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attempt to induce any customer, supplier, licensee, licensor, franchisee or
other business relation of the Company or any of its present or future
subsidiaries or any affiliate of the Company to which the technology of the
Company is hereafter transferred and which at such time engages in activities
similar or materially related to those of the Company (a "Related Entity"),
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either directly or indirectly, to cease doing business with the Company or any
Subsidiary or Related Entity or in any way materially interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any Subsidiary or Related Entity.
(e) Soliciting Employees. Executive promises and agrees that for a
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period of thirty months following the date of termination of employment
hereunder, he will not directly or indirectly (i) solicit any management
employee of the Company to work for any business, individual, partnership, firm,
corporation, or other entity in competition with the business of the Company or
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any subsidiary of the Company or Related Entity at any time during such period
or (ii) hire any person who was a management employee of the Company or any
Subsidiary or Related Entity at any time during the last year of the Employment
Period.
(f) Disclosure to Company; Inventions as Sole Property of the
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Company.
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(i) Executive agrees promptly to disclose to the Company any and
all inventions, discoveries, improvements, trade secrets, formulas,
techniques, processes, and know-how, whether or not subject to patent,
trademark, copyright, trade secret or mask work protection and whether or
not reduced to practice, conceived or learned by Executive during his
employment with the Company or any subsidiary or affiliate of the Company
(including periods prior to the Effective Date of this Agreement), either
alone or jointly with others, which relate to or result from the actual or
planned business, work, research or investigations of the Company or any
subsidiary or affiliate of the Company, or which result, to any material
extent, from its use of the Company's premises or property (the work being
hereinafter collectively referred to as the "Inventions").
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(ii) Executive acknowledges and agrees that all the Inventions
shall be the sole property of the Company or any other entity designated by
it and Executive hereby assigns to the Company his entire right and
interest in and to all the Inventions; provided, however, that such
assignment does not apply to any Invention which qualifies under the
provisions of Section 2870 of the California Labor Code. The Company or
any other entity designated by it shall be the sole owner of all domestic
and foreign rights pertaining to the Inventions. Executive further agrees
as to all the Inventions to assist the Company or entity designated by it
in every way (at the Company's expense) to obtain and from time to time
enforce patents on the Inventions in any and all countries. To that end,
by way of illustration but not limitation, Executive will testify in any
suit or other proceeding involving any of the Inventions, execute all
documents which the Company reasonably determines to be necessary or
convenient for use in applying for and obtaining patents thereon and
enforcing same, and execute all necessary assignments thereof to the
Company or entity designated by it. Executive's obligation to assist the
Company or entity designated by it in obtaining and enforcing patents for
the Inventions shall continue for a period of eight years beyond the
termination of his employment with the Company, but the Company shall
compensate Executive at a reasonable rate (including all expenses and loss
of income) after such termination for the time actually spent by Executive
at the Company's request on such assistance.
(g) List of Prior Inventions. Attached hereto as Exhibit D is a
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complete list of all inventions, discoveries or improvements relating to the
Company's actual and current business activities (or the actual and current
business activities of any Subsidiary or affiliate of the Company) which have
been made by Executive prior to the date of the Prior Agreement and which are
not owned by the Company (or any Subsidiary or affiliate thereof). Executive
represents and warrants that such list is complete and accurate in all respects
and acknowledges and agrees that the Company owns the entire right and interest
to each of the inventions, discoveries or improvements relating to the Company's
or any Subsidiary's or affiliate's actual and current business that have been
made by Executive and not listed in Exhibit D.
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(h) Injunction. Executive agrees that it would be difficult to
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measure damages to the Company from any breach by Executive of the promises set
forth in subsections (a) through (g) of this Section 7, that injury to the
Company from any such breach would be impossible to calculate, and that money
damages would therefore be an inadequate remedy for any such breach.
Accordingly, Executive agrees that if Executive shall breach any provision of
subsections (a) through (g) of this Section 7 or any of them, the Company shall
be entitled, in addition to all other remedies it may have, to injunctions or
other appropriate orders to restrain any such breach by Executive without
showing or proving any actual damage sustained by the Company.
8. Other Businesses. As long as Executive is employed by the Company
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or any of its Subsidiaries, Executive agrees that he will not, except with the
express written consent of the Board, become engaged in, or render services for,
any business other than the business of the Company, any of its Subsidiaries or
any corporation or partnership in which the Company or any of its Subsidiaries
have an equity interest; provided that Executive may devote a de minimis portion
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of his time to engaging in, or rendering services for, any such business if such
activities do not in any material way interfere with the performance by
Executive of his obligations hereunder and such activities do not in any way
materially and adversely affect the Company. Executive shall notify the Company
prior to engaging in any such activities. Nothing contained in this Section 8
shall limit the provisions of Section 7 above.
9. Executive's Representations. Executive hereby represents and
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warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and will not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has consulted
with independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.
10. Survival. Section 7 and the Company's obligation to make Severance
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Payments, if any, shall survive and continue in full force in accordance with
its terms notwithstanding any termination of the Employment Period.
11. Notices. Any notice provided for in this Agreement shall be in
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writing and shall be either personally delivered, mailed by first class mail,
return receipt requested, or delivered by express courier service, to the
recipient at the address below indicated:
Notices to Executive:
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Xxxxx Xxxxxxxxxx
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
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Notices to the Company:
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Therma-Wave, Inc.
x/x Xxxx Xxxxxxx, Xxx.
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
Xxxxx Xxxxxxx
With a copy to:
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Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or mailed.
12. Severability. Whenever possible, each provision of this Agreement
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shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
13. Complete Agreement. This Agreement, those documents expressly
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referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way
including, without limitation, the Prior Agreement.
14. No Strict Construction. The language used in this Agreement shall
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be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
15. Counterparts. This Agreement may be executed in separate
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counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
16. Successors and Assigns. This Agreement is intended to bind and
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inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and
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assigns, except that Executive may not assign his rights or delegate his
obligations hereunder without the prior written consent of the Company.
17. Choice of Law. All issues and questions concerning the
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construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of California, without giving effect to any choice
of law or conflict of law rules or provisions (whether of the State of
California or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of California.
18. Amendment and Waiver. The provisions of this Agreement may be
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amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
19. Adjustment of Performance Hurdles and Management Targets. If the
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Company acquires all or substantially all of the assets or capital stock of
another business or if the Company sells a substantial portion of its assets,
the Company and the Executive will negotiate in good faith to make any
appropriate adjustments to the Performance Hurdles and Management Targets based
on the EBITDA of the acquired business or the EBITDA associated with the sold
assets (as the case may be). In addition, for purposes of determining whether
the Performance Hurdles and the Management Targets have been achieved, EBITDA
shall be determined without giving effect to any (i) extraordinary items of loss
or gain, (ii) fees payable by the Company to Xxxx Capital, Inc. or its
Affiliates under the Advisory Agreement, dated May 16, 1997 or otherwise, (iii)
non-cash charges incurred in connection with the transactions contemplated by
the Recapitalization Agreement, dated as of December 18, 1996, among the
Company, the Investors named therein and the Sellers named therein or (iv) any
expenses incurred by the Company in connection with the modification of the
lease of the Company's Fremont facility in connection with the transaction
contemplated by the Recapitalization Agreement including, without limitation,
any expenses incurred by the Company as a result of any increased level of
letter of credit support required by such modification or any allowance
payments, for rent or otherwise, payable to Sobrato or his designees.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
THERMA-WAVE, INC.
By:
--------------------------------
Its:
-------------------------------
-----------------------------------
XXXXX XXXXXXXXXX
EXHIBIT "A"
1. Full medical, dental, vision coverage for employee and family
2. PTO as per corporate policy
3. Car allowance of $1,500 per month (not W2)
4. Education allowance (courses, seminars, etc.) of up to $15,000 per year
(not W2)
5. Tax and financial advice reimbursement
6. Life insurance for $3 million
7. Disability insurance of 60% of total compensation (base salary + 50% for
bonus)
8. Expense reimbursements as per corporate policy
9. Business class air travel on corporate business
10. Salary maintenance: to be maintained as the highest paid employee at all
times
EXHIBIT "D"
None
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