EXHIBIT 10.22
EMPLOYMENT AGREEMENT
AGREEMENT made as of May 24, 1999, between ZYGO CORPORATION, a Delaware
corporation with an office at Xxxxxx Xxxxx Road, Middlefield, Connecticut 06455
(the "Company"), and XXXXX X. XXXXX, residing at 0 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX
00000, (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires that Executive be employed to serve in a
senior executive capacity with the Company, and the Executive desires to be so
employed by the Company upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of these premises and of the mutual
promises, representations and convents herein contained, the parties hereto
agree as follows:
1. EMPLOYMENT.
The Company hereby employs Executive and Executive hereby accepts such
employment, such to the terms and conditions herein set forth. Executive shall
hold the office of Vice President - Sales & Marketing.
2. TERMS.
The initial term of employment under this Agreement shall begin on July 1,
1999 (the "Employment Date") and shall continue for a period of (1) year from
that date, subject to prior termination in accordance with the terms hereof.
Thereafter, this Agreement shall automatically be renewed for successive one
year terms unless either party shall give the other thirty (30) days prior
written notice of its or his intent not to renew this Agreement. The initial
one-year term together with all such additional one-year period(s) of
employment, if any, are collectively referred to herein as the "term" of this
Agreement.
3. COMPENSATION.
As compensation for the employment services to be rendered by Executive
hereunder, including all services as an officer or director of the Company and
any of its subsidiaries, the Company agrees to pay, or cause to be paid, to
Executive, and Executive agrees to accept, payable in equal installments in
accordance with Company practice an annual salary which shall in no event be
less than $175,000 or such higher amount as the Board of Directors may determine
from time to time. In addition, Executive shall be entitled to additional
contingent compensation from time to time in accordance with the terms of the
Company's "Proposed Contingent Compensation Plan for Officers" attached as
Exhibit A or as amended, from time to time by the Compensation Committee of the
Board.
4. EXPENSES.
The Company shall pay or reimburse Executive, upon presentment of suitable
vouchers, for all reasonable business and travel expenses which may be incurred
or paid by Executive in connection with his employment hereunder. Executive
shall comply with such restrictions and shall keep such records as the Company
may deem necessary to meet the requirements of the Internal Revenue Code of
1986, as amended from time to time, and regulations promulgated thereunder.
5. AUTOMOBILE.
The Company shall, during the term of the Executive's employment hereunder,
provide Executive with an annual allowance for an automobile in the amount of
$10,800 in lieu of any expense reimbursement for Company use of an automobile.
6. INSURANCE AND OTHER BENEFITS.
Executive shall be entitled to such vacations and to participate in and
receive any other benefits customarily provided by the Company (including any
profit sharing, pension, health insurance, dental coverage, AD&D and short and
long-term disability in accordance with the terms of such plans) and including
stock options, all as determined from time to time by the Board of Directors of
the Company or appropriate committee thereof. Unused annual vacations may be
carried over to the extent permitted by Company policy.
7. STOCK OPTIONS.
In accordance with the resolution of the Company's Amended and Restated
Non-Qualified Stock Option Plan Committee (the "Committee"), the Company and
Executive will enter into a Non-Qualified Stock Option Agreement dated the date
Executive commences employment with the Company, providing for ten (10) year
stock options to purchase 20,000 shares of the Company's Common Stock, at the
market price on the date of commencement of Employment, with 25% of the option
vesting at the end of each of the first four years. In addition, Executive may
receive additional options, from time to time, at the discretion of the
Committee. The form of Stock Option Agreement is attached hereto as Exhibit B.
8. DUTIES.
(a) Executive shall perform such duties and functions as the Chairman and
Chief Executive Officer, the President and Chief Operating Officer and Board of
Directors of the Company shall from time to time determine and Executive shall
comply in the performance of his duties with the policies of, and be subject to,
the direction of such officers and the Board of Directors.
(b) Executive agrees to devote substantially all his working time,
attention and energies to the performance of the business of the Company and of
any of its subsidiaries by which he may be employed; and Executive shall not,
directly or indirectly, alone or as a member of any partnership or other
organization, or as an officer, director or employee of any other corporation,
partnership or other organization, be actively engaged in or concerned with any
other duties or pursuits which interfere with the performance of his duties
hereunder, or which, even if non-interfering, may be inimical, or contrary,
to the best interests of the Company, except those duties or pursuits
specifically authorized by the Board of Directors.
9. TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION.
(a) Executive's employment hereunder may be terminated at any time upon
written notice from the Company to Executive,
(i) upon the determination by the Board of Directors that Executive's
performance of his duties has not been fully satisfactory for any reason
which would not constitute justifiable cause (as hereinafter defined) upon
five (5) days' prior to written notice to Executive; or
(ii) immediately upon determination by the Board of Directors that
justifiable cause exists for such termination.
(b) Executive's employment shall terminate upon:
(i) the death of the Executive; or
(ii) the "disability" of Executive (as hereinafter defined pursuant to
subsection (c) herein).
(c) For the purpose of this Agreement, the term "disability" shall mean the
inability of Executive, due to illness, accident or any other physical or mental
incapacity, to perform his duties in a normal manner for a period of three (3)
consecutive months or for a total of six (6) month (whether or not consecutive)
in any twelve (12) month period during the term of this Agreement.
(d) For the purposes hereof, the term "justifiable cause" shall mean and be
limited to: any willful breach by Executive of the performance of any of his
duties pursuant to this Agreement; Executive's conviction (which, through lapse
of time or otherwise, is not subject to appeal) of any crime or offense
involving money or other property of the Company or its subsidiaries or which
constitutes a felony in the jurisdiction involved; Executive's performance of
any act or his failure to act, for which if he were prosecuted and convicted, a
crime or offense involving money or property of the Company or its subsidiaries,
or which constitutes a felony in the jurisdiction involved, would have occurred;
any disclosure by Executive to any person, firm or corporation other than the
Company, its subsidiaries and its and their directors, officers and employees,
of any confidential information or trade secret of the Company or any of its
subsidiaries; any attempt by Executive to secure any personal profit in
connection with the business of the Company or any of its subsidiaries; or
engaging by Executive in any business other than the business of the Company and
its subsidiaries which interferes with the performance of his duties hereunder.
(e) If the Executive shall die during the term of his employment hereunder,
this Agreement shall terminate immediately. In such event, the estate of
Executive shall thereupon be entitled to receive such portion of Executive's
annual salary as has been accrued through the date of his death.
(f) Upon Executive's "disability", the Company shall have the right to
terminate Executive's employment. Notwithstanding any inability to perform his
duties, Executive shall be entitled to receive his compensation as provided
herein until the termination of his employment for disability. Any termination
pursuant to this subsection (f) shall be effective on the date 30 days after
which Executive shall have received written notice of the Company's election to
terminate.
(g) Notwithstanding any provision to the contrary contained herein, in the
event that Executive's employment is terminated by the Company, at any time for
any reason other than justifiable cause, disability or death, the Company shall
pay Executive's salary (payable in such amount and in such manner as set forth
in Section 3 herein) from and after the date of such termination for a period
ending six (6) months after the date of termination which amount shall be in
lieu of any and all other payments due and owing to Executive under the terms of
this Agreement; provided, however, that if such termination without justifiable
cause occurs after a "Change in Control" (as defined in subsection (h) below),
the Company shall (I) continue existing health insurance, dental coverage, AD&O
and long term disability coverage in effect for Executive at the time of
termination for a period of the lesser of six months or until covered by another
plan; and (II) continue Executive's salary for a period of six (6) months after
the date of termination, provided, however, that to the extent the Company's
benefit programs do not provide for the continuation of benefits after
termination of employment, the Company will pay to Executive the funds necessary
to obtain reasonable equivalent coverage.
(h) A "Change in Control" shall mean the occurrence of any of the following
events:
(i) The Company is merged with or consolidated with another
corporation in a transaction in which (x) the Company is not the surviving
corporation and (y) the Company's stockholders immediately prior to such
transaction do not own at least 70% of the outstanding voting securities of
the surviving corporation immediately following the transaction; or
(ii) Any person or entity or affiliated group of persons or entities
becomes the holder of more than 51% of the Company's outstanding shares of
Common Stock (it being understood that Wesleyan University, Canon Inc. and
Messrs. Xxxxxx, Xxxxxx and Xxxxxx shall not be deemed "affiliated" for
purposes of the provision).
10. REPRESENTATIONS AND AGREEMENTS OF EXECUTIVE.
(a) Executive represents and warrants that he is free to enter into this
Agreement and to perform the duties required hereunder, and that there are no
employment contracts or understandings, restrictive covenants or other
restrictions, whether written or oral, preventing the performance of his duties
hereunder. Executive further represents and warrants that he is in full
compliance with all existing agreements between himself and the Company.
11. NON-COMPETITION.
(a) Executive agrees that during his employment by the Company (which shall
be deemed to include the period in which Executive is receiving any severance
payments set forth in Section 9(g) hereto), and for a period of one (1) year
after the later of (i) the final severance payment, or (ii)
termination of Executive's employment hereunder, as the case may be (the
"Non-Competitive Period"), Executive shall not, directly or indirectly, as
owner, partner, joint venturer, stockholder, employee, broker, agent, principal,
trustee, corporate officer, director, licensor, or in any capacity whatsoever
engaged in, become financially interested in, be employed by, render any
consultation or business advice with respect to, or have any connection with,
any business engaged in the research, development, testing, design, manufacture,
sale, lease, marketing, utilization or exploitation of any products or services
which are designed for the same purpose as, are similar to, or are otherwise
competitive with, products or services of the Company or any of its subsidiaries
in any geographic area where, at the time of the termination of his employment
hereunder, the business of the Company or any of its subsidiaries was being
conducted or was proposed to be conducted in any manner whatsoever; provided,
however, that Executive may own any securities of any corporation which is
engaged in such business and is publicly owned and traded but in any amount not
to exceed at any one time one percent (1%) of any class of stock or securities
of such corporation; provided, further, the foregoing provisions shall not
restrict Executive from employment with an investment bank, leveraged buy-out
firm, venture capital firm or similar entity. In addition, Executive shall not,
directly or indirectly, during the Non-Competitive Period, request or cause
contracting parties, suppliers or customers with whom the Company or any of its
subsidiaries has a business relationship to cancel or terminate any such
business relationship with the Company or any of its subsidiaries or solicit,
interfere with or entice from the Company any employee (or former employee) of
the Company.
(b) Notwithstanding any provisions in this Section 11 hereto, if Executive
is terminated for any reason without "justifiable cause" the Non-Competitive
Period shall be a period of six months after the later of (i), the final
severance payment or (ii) termination of Executives' Employment.
(c) If any portion of the restrictions set forth in this Section 11 should,
for any reason whatsoever, be declared invalid by a court of Competent
jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected.
(d) Executive acknowledges that the Company conducts business on a
world-wide basis, that its sales and marketing prospects are for continued
expansion into world markets and that, therefore, the territorial and time
limitations set forth in this Section 11 are reasonable and properly required
for the adequate protection of the business of the Company and its subsidiaries.
In the event any such territorial or time limitation is deemed to be
unreasonable by a court of competent jurisdiction, Executive agrees to the
reduction of the territorial or time limitation to the area or period which such
court deems reasonable.
12. NON-DISCLOSURE AND INVENTIONS
AND DISCOVERIES AGREEMENT.
Executive will execute the form of "Zygo Corporation Non-Disclosure
Agreement" in the form of Exhibit C.
13. RIGHT TO INJUCTION.
Executive recognizes that the services to be rendered by him hereunder are
of a special, unique, unusual, extraordinary and intellectual character
involving skill of the highest order and giving them peculiar value the loss of
which cannot be adequately compensated for in damages. In the event of a breach
of the Agreement by Executive, the Company shall be entitled to injunctive
relief or any other legal or equitable remedies. Executive agrees that the
Company may recover by appropriate action the amount of the actual damage caused
the Company by any failure, refusal or neglect of Executive to perform his
agreements, representations and warranties herein contained. The remedies
provided in this Agreement shall be deemed cumulative and the exercise of one
shall not preclude the exercise of any other remedy at law or in equity for the
same event or any other event.
14. AMENDMENT OR ALTERATION.
No amendment or alteration of the terms of this Agreement shall be valid
unless made in writing and signed by both of the parties hereto.
15. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Connecticut
applicable to agreements made and to be performed therein.
16. SEVERABILITY.
The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect.
17. NOTICES.
Any notice required or permitted to be given hereunder shall be sufficient
if in writing, and if delivered by hand, or sent by certified mail, return
receipt requested to the address set forth above or such other address as either
party may from time to time designate in writing to the other, and shall be
deemed given as of the date of the delivery or mailing.
18. WAIVER OR BREACH.
It is agreed that a waiver by either party of a breach of any provision of
this Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.
19. ENTIRE AGREEMENT AND BINDING EFFECT.
This Agreement contains the entire agreement of the parties with respect to
the subject matter hereof and shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives, heirs,
distributors, successors and assigns. Notwithstanding the foregoing, all prior
agreements between Executive and the Company relating to the confidentiality of
information, trade secrets and patents shall not be affected by this Agreement.
20. SURVIVAL.
The termination of Executive's employment hereunder shall not affect the
enforceability of Sections 9, 11, 12, and 13 hereof.
21. FURTHER ASSURANCE.
The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.
Executive represents and warrants that he is free to enter into this Agreement
and to perform the duties required hereunder, and that there are no employment
contracts or understandings, restrictive covenants or other restrictions,
whether written or oral, preventing the performance of his duties under the
Agreement.
22. HEADINGS.
This Section heading appearing in this Agreement are for the purposes of
easy reference and shall not be considered a part of this Agreement or in any
way modify, demand or affect its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ZYGO CORPORATION XXXXX X. XXXXX
By: /s/ J. XXXXX XXXXXXXX By: /s/ XXXXX X. XXXXX
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Date: May 26, 1999 Date: May 24, 1999
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