Exhibit 10.8
EMPLOYMENT AGREEMENT
This Employment Agreement is dated as of October 23, 2001 (the
"Agreement"), and is by and among ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Executive"), PRI
Automation, Inc., a Massachusetts corporation ("PRI,") and ▇▇▇▇▇▇ Automation,
Inc., a Delaware corporation ("▇▇▇▇▇▇").
WHEREAS, Executive presently serves as President and Chief Executive
Officer of PRI, and Executive and PRI have entered into a Retention Agreement
dated as of October 23, 2000 (the "Retention Agreement"), a Confidentiality,
Non-Competition and Assignment of Inventions Agreement dated as of May 6, 1996
(the "Non-Competition Agreement") and an Indemnification Agreement dated as of
November 30, 2000 (the "Indemnification Agreement");
WHEREAS, pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") dated of even date herewith by and among PRI, ▇▇▇▇▇▇ and PRI
Acquisition Corp. ("▇▇▇▇▇▇ Merger Sub"), PRI will be merged into ▇▇▇▇▇▇ Merger
Sub (the "Merger") and become a wholly-owned subsidiary of ▇▇▇▇▇▇ (the
"Company");
WHEREAS, the Company wishes to retain the services of Executive during
the six-month period following the Merger (the "Transition Period") and to
confer other benefits to Executive as set forth herein;
WHEREAS, the Executive wishes to accept such employment with the
Company during the Transition Period pursuant to the terms of the Agreement and,
in connection therewith, agrees to release all rights and benefits he is
entitled to under the terms of the Retention Agreement and Non-Competition
Agreement;
WHEREAS, Executive, as a director and chief executive officer of PRI,
has highly valuable and confidential knowledge of the business and affairs of
PRI and has developed relationships with PRI's customers, suppliers and others
upon whom the business conducted by PRI is dependent; and
WHEREAS, Executive is willing to refrain from competing with the
Company on the terms and conditions hereof;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall become
effective as of the "Effective Time," as defined in the Merger Agreement (such
date referred to herein as the "Effective Date"). When this Agreement becomes
effective pursuant to this SECTION 1, this Agreement shall supersede each of the
Retention Agreement and the Non-Competition Agreement but not the
Indemnification Agreement or any stock option agreements between the Executive
and PRI.
2. EMPLOYMENT. Executive shall serve as Special Assistant to the Chief
Executive Officer of ▇▇▇▇▇▇, advising said President regarding strategic
opportunities available to ▇▇▇▇▇▇
and otherwise engaging in such activities as are assigned by the President and
are otherwise compatible with the duties and responsibilities ordinarily
attendant to a senior executive position, or in such other capacity and under
such other title as the parties may agree, to serve in such capacity through the
Transition Period. It is further understood and agreed that Executive shall not
be required to perform such services at any location that is more than 25 miles
from PRI's existing offices in Billerica, Massachusetts.
3. COMPENSATION AND BENEFITS
3.1 BASE SALARY. Executive shall be paid a base salary of
$182,000 during the Transition Period, payable in accordance with the payroll
practices of the Company for its executives generally.
3.2 BENEFITS. Executive shall retain all current fringe
benefits and perquisites during the Transition Period, including without
limitation vacation and participation in 401(k) and employee stock purchase
plans, and shall be eligible to participate in all insurance or other benefit
programs for the Company's employees, on the same basis as other employees of
similar status and compensation but in any case on terms at least as favorable
to Executive as the terms of his present benefits package.
3.3 RETENTION BONUS. Executive shall be paid a bonus in the
amount of $364,000 (the "Retention Bonus") if employed on the last day of the
Transition Period or if Executive's employment terminates in accordance with
Section 6.1 herein; PROVIDED, HOWEVER, no Retention Bonus shall be paid if the
Executive's employment terminates in accordance with Section 6.2 or 6.3 herein.
3.4 BUSINESS EXPENSES. The Company shall pay or reimburse
Executive during the Transition Period for all reasonable business expenses
incurred or paid by him in the performance of his services, subject to
reasonable substantiation and documentation.
3.5 EXECUTIVE ASSISTANT. Executive's current executive
assistant shall continue to be assigned in such capacity during the Transition
Period, and shall not be terminated by the Company during the Transition Period
except for cause in accordance with the Company's employment policies.
4. ACCELERATION OF OPTIONS. On the Effective Date the terms of each
option granted on or prior to October 8, 2001 shall be modified so that (a) it
shall thereafter be exercisable in full regardless of any vesting provisions in
any agreement relating to such option; (b) such option shall be exercisable for
a period ending on the earlier of (i) three years from the Effective Date, or
(ii) its originally scheduled expiration date.
5. SECTION 280G GROSS-UP. In the event that any payment or benefit
received or to be received by Executive, whether in connection with Executive's
employment or the termination of Executive's employment and whether pursuant to
the terms of this Agreement or any other plan, arrangement or agreement with the
Company or any affiliate, parent or subsidiary of the Company (all such payments
and/or benefits, including the payments and benefits, if any,
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under this Agreement, being hereinafter referred to as the "Payments") would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
or any interest or penalties are incurred by Executive with respect to such
Section 4999 excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Company shall pay to Executive an additional payment (a "Gross-Up Payment")
in an amount such that, after payment by Executive of all taxes, including
without limitation, any federal or state income, employment and excise taxes
imposed upon the Gross-Up Payment (including any interest or penalties imposed
with respect to such taxes), Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. In the event of any
controversy with the Internal Revenue Service (or other taxing authority) with
regard to the Excise Tax, the Executive shall permit the Company to control
issues related to the Excise Tax.
6. TERM AND TERMINATION OF EMPLOYMENT. The term of Executive's
employment under this Agreement shall begin on the Effective Date and shall
continue until and terminate at the end of the Transition Period, unless earlier
terminated in accordance with the provisions of this SECTION 6. Executive's
employment may be terminated in accordance with this SECTION 6 by (a)
Executive's death or Disability, (b) the Company, for Cause, or (c) Executive,
as set forth below.
6.1 TERMINATION FOR DEATH OR DISABILITY. Executive's
employment hereunder shall terminate upon Executive's death automatically or
upon his Disability (as defined below) as provided herein. If Executive (or any
personal representative of Executive) determines in good faith that the
Disability of Executive has occurred, Executive (or such representative) may
terminate his employment with the Company immediately by giving written notice
of such termination to the Company. If the Board of Directors of the Company
determines in good faith that the Disability of Executive has occurred, the
Company may give Executive written notice of its intention to terminate
Executive's employment hereunder. In such event, Executive's employment with the
Company shall terminate as of the 30th day after the date on which Executive
shall receive such written notice from the Company, but only if Executive shall
not have returned to full-time performance of his duties hereunder within such
thirty (30) day period. Until such termination for Disability, Executive shall
continue to receive his salary and benefits as provided herein. For purposes of
this Agreement, "Disability" shall mean that Executive has been unable to
perform his duties as a full-time employee of the Company as the result of
incapacity due to physical or mental illness, and, at least 26 weeks after its
commencement, such inability is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to Executive or
his legal representative (such agreement as to acceptability not to be
unreasonably withheld).
6.2 TERMINATION BY THE COMPANY FOR CAUSE. The Company may
terminate Executive's employment hereunder for Cause at any time upon written
notice to Executive setting forth in reasonable detail the nature of such Cause.
For purposes hereof, "Cause" shall mean (i) the conviction of Executive of a
felony involving moral turpitude, (ii) conduct of Executive involving any
immoral acts which would impair the reputation of Executive or the Company,
(iii) fraud or embezzlement committed by Executive against the Company, or (iv)
habitual neglect by Executive of his duties assigned to him hereunder, which has
not been
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remedied after there has been delivered to him at least thirty (30) days prior
thereto a written demand for performance from the Company which describes the
basis for the belief by the Company that Executive has not performed his duties.
6.3 TERMINATION BY EXECUTIVE. Executive may terminate his
employment hereunder at any time upon thirty (30) days written notice to the
Company in accordance with SECTION 14 herein.
7. EFFECTS OF TERMINATION. In the event of termination of Executive's
employment for any reason, Executive shall be entitled to receive any and all
salary, bonus, expenses, perquisites or fringe benefits, earned but not yet
paid, PROVIDED, HOWEVER, that regardless of the foregoing clause any payment of
the Retention Bonus shall be solely as provided in Section 3.3. With respect to
any amount payable periodically, Executive shall be deemed to have earned a
portion of such amount equal to the portion of the period that shall have
elapsed at the date of termination, and such amount shall be paid at the time it
would be normally paid. In addition, neither the Company nor Executive shall
make any public statement pertaining to the termination of Executive's
employment other than a statement agreed upon by the Company and Executive;
PROVIDED, HOWEVER, that ▇▇▇▇▇▇ may make public statements as are necessary to
comply with the law.
8. PROPRIETARY RIGHTS AND NONCOMPETITION. Executive acknowledges that
the Company is engaged in a continuous program of research, development and
production in connection with its business, present and future, and hereby
covenants as follows:
8.1. CONFIDENTIALITY. Executive will maintain in confidence
and will not disclose or use, either during or after the term of this Agreement,
any proprietary or confidential information, trade secrets or know-how belonging
to the Company ("Proprietary Information"), whether or not in written form,
except to the extent required to perform duties on behalf of the Company. For
purposes of this Agreement, "Proprietary Information" shall mean any
information, not generally known in the relevant trade or industry, which was
obtained from the Company, or which was learned, discovered, developed,
conceived, originated or prepared by Executive in connection with this
Agreement. Such Proprietary Information includes, without limitation, software,
technical and business information relating to the Company's inventions or
products, research and development, production processes, manufacturing and
engineering processes, machines and equipment, finances, customer lists and
potential customer lists, marketing and production and future business plans,
information belonging to customers or suppliers of the Company disclosed
incidental to Executive's performance under this Agreement, and any other
information which is identified as confidential by the Company, but only so long
as the same is not generally known in the relevant trade or industry.
8.2. INVENTIONS. For purposes of this Agreement, "Inventions"
shall mean any new or useful art, discovery, contribution, finding or
improvement, whether or not patentable, and all related know-how. Inventions
shall include, without limitation, all designs, discoveries, formulae,
processes, manufacturing techniques, semiconductor designs, computer software,
inventions, improvements and ideas.
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Executive will promptly disclose and describe to the Company all
Inventions which he may solely or jointly conceive, develop or reduce to
practice during the term of his employment (i) which relate at the time of
conception, development, or reduction to practice of the Invention to the
Company's current business or actual or demonstrably anticipated research or
development, (ii) which were developed, in whole or in part, on the Company's
time or with the use of any of the Company's equipment, supplies, facilities or
trade secret information, or (iii) which resulted from any work performed by
Executive for the Company (collectively, the "the Company Inventions").
Executive hereby assigns all of his right, title and interest worldwide in the
Company Inventions and in all intellectual property rights based upon the
Company Inventions.
8.3. DOCUMENTS AND MATERIALS. Upon termination of this
Agreement or at any other time upon the Company's request, Executive will
promptly deliver to the Company, without retaining any copies, all documents and
other materials furnished to him by the Company, prepared by him for the Company
or otherwise relating to the Company's business, including, without limitation,
all written and tangible material in his possession incorporating any
Proprietary Information.
8.4. COMPETITIVE EMPLOYMENT. For a period of two (2) years
beginning on the date on which Executive's employment with the Company is
terminated for any reason (the "Non-Competition Term"), Executive agrees that
Executive, directly or indirectly, shall not, whether as an employee, owner,
partner, shareholder, investor, director, consultant, agent, lender, guarantor,
surety or otherwise, or through any person or third party: (x) engage or attempt
to engage in any employment, consulting or other activity or otherwise aid or
assist, directly or indirectly, any person or entity, anywhere in the world,
which competes with the Company's (for purposes of SECTION 8, "Company" shall
include ▇▇▇▇▇▇ Automation, Inc. and all of its current subsidiaries and
affiliates and including PRI and its affiliates as of the Effective Date and
after giving effect to the Merger) Product Line (as defined below); or (y)
engage or attempt to engage in any employment, consulting or other activity or
otherwise aid or assist, directly or indirectly, any person or entity, anywhere
in the world, which competes with the Company's business as of the Effective
Date after giving effect to the Merger. For purposes of this Agreement, the
term: (A) "employment" shall include the retention or engagement of Executive as
an employee, consultant, agent, independent contractor or otherwise; and (B)
"Product Line" shall mean all of the Company's products developed or under
development as of the date of the termination of Executive's employment
(together with all technology, "know-how" and proprietary information related
thereto) regardless of whether such products are manufactured, operated,
distributed or used by the Company or a successor business unit of the Company
or any other business unit of the Company. Executive acknowledges that
Executive's participation in the conduct of any such business alone or with any
person other than the Company will materially impair the business and prospects
of the Company. Nothing in this SECTION 8 shall preclude Executive from (i)
making investments as a passive investor of less than three percent (3%) of the
capital stock or publicly traded notes or debentures of a publicly held company
or (ii) making passive investments in the securities of any business enterprise
that is not competitive with the Company or, if the proposed investment is in a
business enterprise that is competitive with the Company, then after written
disclosure to and approval by the Board of Directors of the Company.
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8.5. NONSOLICITATION. During the Non-Competition Term,
Executive agrees that he shall not knowingly attempt to or assist any other
person, directly or indirectly, in attempting to do any of the following: (i)
encourage any customer, client, supplier or other business relationship of the
Company or any subsidiary or affiliate to terminate or alter such relationship,
whether contractual or otherwise, to the disadvantage of the Company or any
subsidiary or affiliate; as the case may be; (ii) encourage any prospective
customer or supplier not to enter into a business relationship with the Company
or any subsidiary or affiliate; (iii) impair or attempt to impair any
relationship, contractual or otherwise, written or oral, between the Company or
any subsidiary or affiliate and any customer, supplier or other business
relationship of the Company or any subsidiary or affiliate; or (iv) attempt to
or assist any other person in attempting to solicit any director, officer,
employee, or agent of the Company or any subsidiary or affiliate, or encourage
any such person to terminate such relationship with the Company from the date of
this Agreement until the end of the Non-Competition Term; PROVIDED, HOWEVER,
that this restriction shall not apply to, and Executive shall be entitled to
offer employment to and to employ, Executive's current executive assistant;
PROVIDED FURTHER, that all references in this Section 8.5 to the Company shall
refer to the Company and all affiliates as defined in Section 8.4.
8.6. ACTS TO SECURE PROPRIETARY RIGHTS
8.6.1 FURTHER ACTS. Executive agrees to perform, during
and after the term hereof, all acts deemed necessary or desirable by the Company
to permit and assist it, at its expense, in perfecting and enforcing the full
benefits, enjoyment, rights and title throughout the world in the Company
Inventions. Such acts may include, without limitation, execution of documents
and assistance or cooperation in the registration and enforcement of applicable
patents and copyrights or other legal proceedings.
8.7 CONSIDERATION FOR NON-COMPETITION, ETC.
8.7.2. PAYMENT. As consideration for Executive's
agreements contained in this SECTION 8, during the Non-Competition Term the
Company shall pay to Executive $546,000 each year, paid in equal monthly
installments of $45,500, in arrears.
8.7.2. BENEFITS. During the Non-Competition Term,
Executive shall be eligible, to the fullest extent possible, to participate in
all insurance or other benefit programs for employees on the same basis as other
employees of similar status and compensation, and in any case on the same basis
as he was eligible to participate during his employment. Notwithstanding the
foregoing, if Executive is ineligible to participate in any insurance or other
benefit program to the extent provided herein by reason of his age or employment
status or for any other reason, then Employer shall instead promptly pay
Executive such amounts in cash as are sufficient (after payment of federal,
state and local income taxes, if any) to enable him to procure substantially
equivalent benefits on an individual basis. Notwithstanding the foregoing,
Executive shall not be eligible to receive benefits as provided in this SECTION
8.7.2 if Executive's employment is terminated for "Cause" as defined in SECTION
6.2 above.
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8.8. NO CONFLICTING OBLIGATIONS. Executive's performance of
this Agreement does not breach and will not breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by him.
8.9. SPECIFIC PERFORMANCE. Executive acknowledges and agrees
that the provisions set forth in this SECTION 8 are reasonable to protect the
Company's legitimate business interests. Executive further agrees that a breach
of any of the promises or agreements contained in this SECTION 8 could result in
irreparable and continuing damage to the Company for which it would have no
adequate remedy at law. Executive therefore agrees that the Company shall be
entitled to seek injunctive relief and/or a decree for specific performance, and
such other equitable relief as may be proper. The prevailing party in such legal
action will also be entitled to monetary damages and reasonable costs and
attorney fees.
9. WITHHOLDING. All payments made by the Company under this Agreement
shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law.
10. ASSIGNMENT. Neither the Company nor Executive may assign this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other party; PROVIDED, however, that the Company
may assign its rights and obligations under this Agreement without the consent
of Executive to any Successor of the Company. A "Successor" of the Company shall
mean any entity with which the Company may merge, consolidate or otherwise
combine or to which the Company may sell or otherwise transfer all or
substantially all of its assets. This Agreement shall inure to the benefit of
and be binding upon the Company, Executive and their respective successors,
executors, administrators, heirs and permitted assigns.
11. INDEMNIFICATION. To the maximum extent permitted under Delaware
law, as from time to time in effect, the Company hereby agrees to indemnify
Executive and hold him harmless from, against and in respect of any and all
damages, deficiencies, actions, suits, proceedings, demands, assessments,
judgments, claims, losses, costs, expenses, obligations and liabilities arising
from or related to the performance by Executive of his duties hereunder. The
Company agrees that Executive also shall be entitled to the benefit of the
Indemnification Agreement and any provision of its by-laws or certificate of
incorporation as now in effect, notwithstanding any subsequent modification
thereof, to the extent that any such benefit is superior to the first sentence
hereof.
12. WAIVER. The waiver by any party hereto of a breach of any provision
of this Agreement by any other party will not operate or be construed as a
waiver of any other or subsequent breach by such other party.
13. SEVERABILITY. If any part of this Agreement is found invalid or
unenforceable, that part will be deemed amended to achieve as nearly as possible
the same economic effect as the original provision, and the remainder of this
Agreement will remain in full force.
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14. NOTICES. Any notice or other communication in connection with this
Agreement shall be deemed to be delivered if in writing, addressed as provided
below and actually delivered at said address:
If to Executive, to him at the following address:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
c/o PRI Automation, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
Goulston & Storrs
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to ▇▇▇▇▇▇, to it at the following address:
▇▇▇▇▇▇ Automation, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Gesmer
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to PRI, to it at the following address:
PRI Automation, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
With a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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or to such other person or address as to which any party may notify the
other in accordance with this SECTION 14.
15. ARBITRATION. In the event of a dispute between the parties as to
the meaning or interpretation of this Agreement, or the performance of either
party hereunder, either party may submit the dispute for arbitration in Boston,
Massachusetts, to the American Arbitration Association, which is expressly
permitted and required hereby, to include the reasonable costs of arbitration,
including attorneys' fees, of the prevailing party, in its decision. If the
nonprevailing party should then fail to comply with such decision, the
nonprevailing party shall then pay the reasonable coats of enforcement,
including attorneys' fees, to the prevailing party. Such costs shall
specifically include any judicial proceeding to confirm such decision.
16. FAILURE OF CONDITION. If for any reason the Merger does not become
effective on or before July 31, 2002, then this Agreement shall not become
effective pursuant to SECTION 1 above, but instead shall become void and shall
be of no further force or effect whatsoever.
17. MISCELLANEOUS. Subject to SECTION 1 above, this Agreement
constitutes the entire understanding of the parties with respect to the subject
matter hereof and supersedes all prior and current understandings and
agreements, whether written or oral. This Agreement may be amended or modified
only by a written instrument signed by Executive and a duly authorized
representative of each of PRI and Buick. This Agreement may be executed in any
number of counterparts, which together shall constitute one instrument and shall
be governed by and construed and enforced in accordance with the laws (other
than the conflicts of law rules) of The Commonwealth of Massachusetts. If any
part of this Agreement is found invalid or unenforceable, that part will be
amended to achieve as nearly as possible the same economic effect as the
original provision, and the remainder of this Agreement will remain in full
force.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands,
as of the date first above written.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
PRI AUTOMATION, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name:
Title:
▇▇▇▇▇▇ AUTOMATION, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name:
Title:
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