Exhibit 10.a
EMPLOYMENT AGREEMENT
Integrated Measurement Systems, Inc. (Company), whose address is 9525 S.W.
Gemini Drive, Beaverton, Oregon 97005, and KEITH L. BARNES (Executive), enter
this agreement, effective March 15, 1996.
Executive is an experienced manager of Company's business, and Company
believes Executive's continued employment by Company enhances shareholder value
and will contribute to Company's future success.
The parties agree as follows:
1. EMPLOYMENT.
1.0.1 LENGTH. Executive's employment with Company will continue
until ended as this Agreement provides.
1.1 FULL TIME. Executive will work full time. Executive will devote
his good faith efforts in support of Company's operations and goals, during the
entire term of this Agreement. While Executive's employment by Company under
this Agreement continues, Executive will not engage in any other employment
without Company's advanced written consent. Company consents to service on
boards and commissions, both commercial and public, to the extent that service
does not interfere with Executive's commitments and obligations to Company.
1.2 EXECUTIVE'S DUTIES. Executive will serve in the Position shown
on Exhibit A, and in that position will assume such duties and perform such
tasks as Company from time to time requires.
2. COMPENSATION PLAN.
2.1 SALARY. Company will pay Executive initially at the rate per
year shown as the Base Salary on Exhibit A, payable in equal increments on
Company's standard payroll schedules. Executive's Base Salary will not be
reduced during the first year of employment. With that limitation, Executive's
compensation will otherwise be reviewed on an annual basis, as with other
executives of the Company.
2.2 BONUS. Company will pay Executive an annual bonus of up to the
amount shown on Exhibit A as "Annual Bonus", which will be disbursed quarterly
in accordance with the conditions established in the Company's approved annual
bonus plan, as applicable to the Executive.
2.3 STOCK. Executive has been or may in the future be granted rights
to purchase stock or stock options in IMS on the exercise and vesting schedules
and terms and conditions shown in the grant documents. These are referred to as
"options" herein.
2.4 OTHER COMPENSATION. Company will also provide medical insurance,
life insurance, disability insurance, 401(k) plan, vacation time, sick leave,
and other fringe benefits in accordance with Company's then-existing policies
applicable generally to senior executives.
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2.5 OTHER BENEFITS. Any other benefits particularly applicable to
Executive are shown on Exhibit A.
3. TERM AND TERMINATION.
3.1 AT WILL, CONDITIONS. Executive is hired for employment at will,
subject to the agreements described here.
3.2 TERMINATION BY COMPANY. Company may terminate Executive's employment
with or without cause. A termination is effective as of the date specified in
the Notice of termination.
3.3 CAUSE. For the purposes of this Agreement, termination is "with
cause" if the Executive's employment is terminated because Executive is
convicted of a crime involving the company's business; or has misappropriated
Company monies or assets; or has committed fraud; or has been grossly negligent
in or willfully fails to accomplish the performance of his duties; and if the
Company has given Executive five days' Notice of the allegations with an
opportunity to respond and provide evidence refuting them within that period.
3.4 EFFECT OF VOLUNTARY RESIGNATION OR WITH CAUSE TERMINATION. If
Executive resigns voluntarily, or is properly terminated for cause, pay and
benefits will cease as of the effective date of the resignation or termination.
Executive will also forfeit any entitlement to the rights on change in control
described in Section 4. Executive will use good faith efforts to provide
Company as much notice as possible of any such resignation.
3.5 COMPENSATION ON TERMINATION WITHOUT CAUSE BY COMPANY. If Executive
is terminated without cause, however, Company will give Executive severance
benefits as follows.
3.5.1 COMPENSATION EARNED THROUGH TERMINATION DATE. On
termination by Company without cause, Company will pay Executive's Base
Salary, any commissions, and any bonuses, all as earned through the
termination date, and a buyout of all accumulated but unused vacation and
sick leave time, to be paid within thirty days of termination.
3.5.2 BASE PAY. On termination by Company without cause, Company
will in addition pay Executive's Base Salary and benefits for the Severance
Period defined in Exhibit A. Payment of the Executive's Base Salary shall
be made on Company's standard payroll schedules from the date of
termination, as if the Executive had not been terminated.
3.5.3 OPTIONS. As of the date of termination, Company will
accelerate the exercise schedule of those options held by Executive that
would have vested during the Severance Period, or alternatively, pay
Executive the in-the-money value of those options, calculated according to
the fair market value of the stock those options represent as of the
termination date.
3.6 COMMITMENT CONCERNING COMPETITION. While Company continues to pay
Executive's base salary during Executive's employment or after termination,
unless Company
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consents in writing, Executive will not consult for, be employed by, serve on
the board of, or otherwise take other than a passive investor role in, any
company that is in the business of integrated circuit verification,
characterization, or virtual test; nor will Executive encourage, influence, or
assist any employee or former employee of the Company in securing other
employment with a competitor so defined.
3.7 OFFSET. To the extent permissible under applicable law, without
prejudice to other remedies, Company may offset any amounts Executive owes
Company against any amounts (net of taxes and other deductions) due employee
upon termination or thereafter.
4. CHANGE IN CONTROL AGREEMENTS.
4.1 "CONTROL CHANGE." A "Control Change" is the sale of substantially all
Company's assets to, or acquisition of a majority of Company's voting stock or
entry into a voting or common control agreement covering a majority of the
company's voting stock by, an entity (or a set of entities under effective
common control) in which those controlling the acquiring entity or entities are
not the same as those who have majority ownership and effective control of
Company before the sale or acquisition.
4.2 "CONTROL CHANGE WINDOW." The Control Change Window begins sixty days
before the LOI Date, and ends one year after the date of closing of the control
change.
4.3 "LOI DATE." The "LOI Date" is the date a letter of intent, term
sheet, or other similar document is first executed by the Company or one or more
of its Shareholders and by anyone acting on behalf of an entity (or collection
of entities under common control) who acquires substantially all the Company's
assets or majority control of the Company's stock, that evidences an agreement
in principle to pursue a course of action that is intended to result in a
Control Change.
4.4 ACCELERATION OF OPTIONS ON CONTROL CHANGE. Company shall accelerate
the exercise date of all stock options held by Executive so that they become
fully exercisable upon a Control Change.
4.5 TERMINATION DURING CONTROL CHANGE WINDOW, BEFORE CONTROL CHANGE. If
Executive is terminated without cause before a Control Change occurs, the
vesting and expiration date for all options beyond those that would have vested
during the Severance Period (called the "Future Options" here) is modified as of
the Executive's employment termination date, as follows. As of the employment
termination date, the vesting condition is changed, so that the Future Options
will become vested upon a Control Change. The expiration date of the Future
Options is changed, so that they expire either: 1) Sixty days following the
termination date, if the employment termination does not occur during a Control
Change Window; or 2) ninety days following a Control Change, if the employment
termination occurs during a Control Change Window.
4.5 TERMINATION DURING CONTROL CHANGE WINDOW. If Executive is terminated
without cause before a Control Change takes place, but within a Control Change
Window, then Company shall accelerate the exercise date of all Executive's
options, both those that would have become vested during the Severance Period
("Severance Options") and those that would have
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become vested after the Severance Period ("Future Options"), so that all become
fully exercisable immediately prior to the termination date. If as of the
employment termination date, it is not yet known whether a Control Change will
occur, Company may accelerate or not accelerate the exercise date of all
Executive's Future Options, at its choice.
4.5.1 Usual Effect of Non-Acceleration. If the Company elects not
to accelerate Future Options as of the employment termination date, then
the vesting and expiration dates for all Future Options is modified as
follows. As of the employment termination date, the vesting conditions are
changed, so that the Future Options will become vested upon a Control
Change. The expiration date of the Future Options is changed, so that they
expire either: 1) Sixty days following the termination date, if the
employment termination does not occur during a Control Change Window; or 2)
ninety days following a Control Change, if the employment termination
occurs during a Control Change Window.
4.5.2 SPECIAL EFFECT OF NON-ACCELERATION IN PURCHASE TRANSACTIONS.
If the Company elects not to accelerate the Future Options, and it later
becomes apparent that the termination was within a Control Change Window
with respect to a transaction that cannot be accounted for through pooling
accounting for reasons independent of any employment agreement issued by
the Company, then on the date the transaction embodying the Control Change
closes, the Company shall pay Executive the in-the-money value of all
options held by Executive on the termination date and not subsequently
exercised. That value shall be measured as of the date of closing of the
Control Change or as of the date of employment termination, whichever value
is greater.
4.5.3 COMPUTATION OF IN-THE-MONEY VALUE. The "in-the-money value"
means, with respect to each share of stock represented by the options, the
difference between the exercise price for that option and the fair market
value as of the measurement date. For purposes of this calculation,
options as to which there is no in-the-money value, or as to which the in-
the-money value is negative, shall not be included in the calculation of
the amount due.
5. CONFIDENTIALITY.
5.1 CONFIDENTIALITY. Executive will keep Company's data confidential. In
doing so, Executive will not disclose Company's data directly or indirectly to
any person, other than an employee of Company or a person to whom disclosure is
reasonably necessary or appropriate to further Company's business, either during
or after Executive's employment.
5.2 COMPANY DATA. Company's data consists of any trade secret or
proprietary or confidential information of Company or of any Company affiliate.
Company data includes, but is not limited to, records, files, memoranda,
reports, price lists, software, customer lists, personnel information, designs
and inventions whether or not patentable or copyrightable, drawings, sketches,
documents, equipment, know-how and negative know-how, and the like relating to
Company's business which Executive uses, prepares, or comes in contact with
during the course of his work for Company. Any information known generally to
the public or any information of a type not otherwise generally considered
confidential by persons engaged in the same business will not be treated as
confidential.
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5.3 THIRD PARTY DATA. Executive will also keep third party data
confidential as required by Company obligations to the third party, for at least
as long as is required for Company data, but longer if required by any agreement
Company enters into with the third party.
5.4 RETURN ON TERMINATION. Executive will return all Company data and
third party data held by Executive, on termination of Executive's employment or
upon any earlier request.
6. INVENTIONS.
6.1 DEFINITIONS. "Inventions" means new ideas, improvements, or
discoveries, whether or not patentable or copyrightable, as well as other newly
discovered or newly applied information or concepts. An Invention is a "Covered
Invention" if it relates to Company's actual or anticipated business; or was
developed in any part using Company resources (time, supplies, facilities, or
data); or if it results from or is suggested by a task assigned to, or work
performed for Company by, Executive. As used in this Section 6, "Company"
includes Company's sister corporations or subsidiaries and Company's clients,
consultants, and contractors.
6.2 ASSIGNMENT. All Executive's right, title and interest to any Covered
Inventions that Executive makes or conceives while employed by Company, belong
to Company. This Agreement operates as a prospective assignment of all those
rights to Company.
6.3 OBLIGATION SURVIVES. The provisions of this Section 6 shall survive
termination of this Agreement.
7. OTHER MATTERS.
7.1 NOTICE. Notice to Executive shall be sent to Executive's most recent
address shown in Company's personnel records. Notice to Company shall be sent
to Company's headquarters address, marked attention: Chief Financial Officer.
Either party may change its address by Notice. Notice shall be effective when
the person to whom it is sent actually gets it, if sent by any method that
leaves a paper or electronic record in the hands of the recipient. If sent
certified or registered mail, postage prepaid, return receipt requested, to the
proper address this section defines, notice shall be considered effective
whether or not actually received on the date the return receipt shows the notice
was accepted, refused, or returned undeliverable.
7.2 SEVERABILITY. Each clause of this agreement is severable. If any
clause is ruled void or unenforceable, the balance of the agreement shall
nonetheless remain in effect.
7.3 NON-WAIVER. A waiver of one or more breaches of any clause of this
agreement shall not act to waive any other breach, whether of the same or
different clauses.
7.4 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of Company, its successors and assigns and shall be binding upon and
inure to the benefit of Executive, and Executive's administrators, executors,
legatees, and heirs. This Agreement shall not be assigned by Executive.
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7.5 GOVERNING LAW. This agreement is entered in, and is governed by, the
laws of the state of Oregon.
7.6 JURISDICTION, SERVICE, INJUNCTIVE RELIEF. Jurisdiction over disputes
arising under this Agreement rests exclusively in the state or federal courts
located in Multnomah County, Oregon, and each party consents to that
jurisdiction. Each party consents to service of process through the method
prescribed for notice. As violation of the non-competition or non-solicitation
obligations of this agreement, or those related to rights in intellectual
property, would result in damage to Company that could not be cured by an award
of money alone, Company shall be entitled to injunctive relief in cases where a
violation of those obligations is shown.
7.7 ATTORNEYS' FEES. The prevailing party in any suit, action,
arbitration, or appeal filed or held concerning this agreement shall be entitled
to reasonable attorneys' fees and the actual, reasonably necessary costs of the
proceeding, as determined by the court.
7.8 INTEGRATION. This agreement supersedes all prior employment
agreements between the parties, written or oral, provided that the parties
preserve to the Executive the commitments made by IMS in Executive's employment
agreement dated May 10, 1995, with respect to the Executive's stock options for
stock of Cadence Design Systems, Inc. This agreement may be modified only in
writing signed by the original parties hereto, or by their successors or
superiors in office.
KEITH L. BARNES INTEGRATED MEASUREMENT SYSTEMS, INC.
Sign: By:
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Exhibit A to Employment Agreement
Compensation Package for
KEITH L. BARNES
as of
March 15, 1996
1. POSITION: President and Chief Executive Officer
2. ANNUAL SALARY: $200,000
3. BONUS: $100,000
4. SEVERANCE PERIOD: 24 months
5. OTHER BENEFITS: $6,000 per year car allowance; $4,000 per year club
dues allowance. If Company reassigns Executive,
changes his title, or reduces Executive's compensation
without Executive's consent, or directs him to report
other than directly to the Board of Directors actually
in charge of the Company without Executive's consent,
Executive may, at the Executive's option, decline to
accept the change in title or the new assignment or
reduction in salary or indirect reporting, and elect
instead to treat the reassignment as effective
termination by Company, without cause.
KEITH L. BARNES INTEGRATED MEASUREMENT SYSTEMS
By: By:
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Title: Title:
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Date: Date:
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