EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT made as of the 14th day of May, 1998 by and
between Trikon Technologies, Inc., a California corporation (the "Corporation"),
Trikon Technologies Limited, an English corporation and a wholly owned
subsidiary of the Corporation ("Trikon Limited"), and CHRISTOPHER D. DOBSON
("Executive").
WHEREAS, the Corporation, Trikon Limited and Executive wish to enter
into a formal employment contract which will govern the terms and conditions
applicable to Executive's employment with the Corporation and the payout of the
special bonus to which Executive may become entitled in connection with the
restructuring of the Corporation's capital structure.
NOW, THEREFORE, the parties hereto agree as follows:
PART ONE -- DEFINITIONS
For purposes of this Agreement, the following definitions shall be in
effect:
Board shall mean the Corporation's Board of Directors.
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Cause shall mean the termination of Executive's employment by the
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Corporation for (i) a material breach of Section 7 of this Agreement
or (ii) any other intentional misconduct by Executive adversely
affecting the pecuniary interests of the Corporation in a material
manner.
Disability shall mean the Executive's inability, by reason of any
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physical or mental injury or illness, to substantially perform the services
required of him hereunder for a period in excess of ninety (90) consecutive
days, and Executive shall be deemed to have terminated employment by reason
of Disability on the last day of such ninety (90)-day period.
EBITDA shall mean the Corporation's earnings, determined before
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deduction of the following expenses: interest, taxes, depreciation and
amortization. EBITDA shall be computed at the close of each fiscal quarter
in accordance with generally accepted accounting principles, consistently
applied. However, EBITDA shall, solely for purposes of this Agreement, be
subject to the following special adjustments: (i) any up-front technology
license fees paid to the Corporation shall be treated as if paid in twelve
(12) successive equal monthly installments, beginning with the month in
which such fees are paid to the Corporation, and (ii) any incremental
license fees paid to the Corporation in connection with the Corporation's
MORI source technology (other than the fees paid under the Licenses), to
the extent paid to the Corporation in fiscal year 1998, shall be deemed to
be paid in fiscal year 1999 in a series of twelve (12) successive equal
monthly installments during that year.
Employment Period shall mean the period of Executive's employment
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with the Corporation pursuant to the terms and provisions of this
Agreement. Such Employment Period will begin as of the date hereof and
will end when Executive's employment is terminated in accordance with
Paragraph 10 of this Agreement.
Exchange Offer shall mean the following formal offers,
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collectively, made by the Company: (i) the offer to exchange each $1,000
principal amount of its 7-1/8% Convertible Subordinated Notes due October
15, 2001 (the "Notes"), into (a) 262.7339 shares of Common Stock, (b)
34.7826 shares of Series G Preferred Stock and (c) 0.3393 shares of Series
I Preferred Stock; (ii) the solicitation of the conversion of each share of
Series G Preferred Stock into one share of Common Stock in exchange for a
conversion payment of 1.1251 shares of Common Stock and 0.0027 shares of
Series I Preferred Stock; and (iii) the offer to exchange each warrant to
purchase its Common Stock issued in connection with the issuance of its
Series G Preferred Stock into one share of its Common Stock.
Full Business Time shall mean the Executive's performance of at
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least 320 hours of service for the Corporation per quarter, which shall
include all of Executive's efforts devoted to the Company's research and
development projects and other matters wherever conducted.
Incentive Award Agreement shall mean that agreement of even date
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herewith between the Corporation and Executive pursuant to which Executive
has been awarded special incentives in the form of a restricted stock grant
and a participating interest in certain proceeds payable in connection with
a change in ownership or control of Corporation partially as an additional
incentive for him to remain in the Corporation's employ.
Licenses shall mean (i) the license of the Corporation's MORI
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source technology to Applied Materials, Inc. pursuant to the MORI Source
Technology License Agreement dated November 12, 1997 and the (ii) license
of the Corporation's MORI source technology to Lam Research Corporation
pursuant to the MORI Source Technology License Agreement dated March 18,
1998.
Pik Preferred shall mean dividends paid from time to time on the
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Series H Preferred Stock issued in the Exchange Offer, to the extent those
dividends are paid in the form of additional shares of the preferred stock
of the Corporation.
Proprietary Information and Inventions Agreement shall have the
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meaning set forth in Paragraph 8.
Restructuring shall mean the restructuring of the Corporation's
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capital structure effected through the consummation of the Exchange Offer,
the
consolidation of Corporation's business operations in the United
Kingdom and relocation of the corporate offices to Newport, Gwent, United
Kingdom.
PART TWO -- TERMS AND CONDITIONS OF EMPLOYMENT
1. DUTIES AND RESPONSIBILITIES.
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A. Executive shall serve as the Chief Executive Officer and Chief
Science Officer of the Corporation and shall in such capacities report directly
to the Board. As Chief Executive Officer, Executive shall have primary
responsibility for the formulation, implementation and execution of strategic
policies relating to the Corporation's business operations, financial objectives
and market growth and shall accordingly have overall responsibility for the
formulation of the business plan for each fiscal year to be submitted for Board
approval. As Chief Science Officer, Executive shall have primary responsibility
for the design and implementation of the Corporation's research and development
projects and the development, enhancement and commercialization of the
Corporation's technology worldwide. Executive shall continue to serve as
Chairman of the Board during the Employment Period, and the Corporation shall
use its best efforts to maintain him as Chairman of the Board throughout such
period by taking all action necessary to nominate him for re-election to such
position at each shareholders meeting at which Board members are to be elected.
B. During the Employment Period, Executive shall perform in good
faith and to the best of his ability all services which may be reasonably
required of Executive hereunder and to be available to render such services at
all reasonable times and places in accordance with such reasonable directives
and requests made by the Corporation acting by majority vote of the Board.
C. Executive shall, during the Employment Period, devote his Full
Business Time to the performance of his duties and responsibilities hereunder.
Executive shall be based at the Corporation's principal offices in Newport,
Gwent, United Kingdom, but he may also perform his duties hereunder from his
office at Cambridge University in Cambridge, England. In addition, Executive
may be required to travel to other geographic locations in connection with the
performance of his executive duties hereunder. Notwithstanding the foregoing,
after a new Chief Executive Officer has been successfully recruited and
commences Employment as such (the "New Chief Executive Officer"), Executive may
devote less than his Full Business Time.
2. PERIOD OF EMPLOYMENT.
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A. Executive's employment with the Corporation shall be governed by
the provisions of this Agreement during the Employment Period. Executive shall
continue to serve as the Corporation's Chief Executive Officer until such time
as the New Chief Executive Officer commences employment as such. Thereafter,
Executive shall continue to serve as Chief Science Officer of the Corporation
without any reduction in his compensation hereunder, provided he devotes his
Full Business Time to the performance of his
duties in such capacity. If after the commencement of the employment of the New
Chief Executive Officer as such, Executive devotes less than seventy-five
percent (75%) of his Full Business Time to the performance of his
duties, his base salary shall be reduced to fifty percent (50%) of the amount
set forth in Paragraph 3.A.
3. COMPENSATION.
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A. BASE SALARY. Executive shall be paid by Trikon Limited a base
salary at the annual rate of One Hundred Ninety-Two Thousand British Pounds
((Pounds)192,000). Base salary shall be paid at periodic intervals in
accordance with Trikon Limited's payroll practices for salaried employees.
B. SPECIAL BONUS. In consideration for the services Executive has
rendered the Corporation in connection with (i) the negotiation and closing of
the Licenses, (ii) the consummation of the Exchange Offer and (iii) the
Restructuring, the Board has authorized a special bonus for the Executive in the
amount of One Million Five Hundred Thousand Dollars (U.S.$1,500,000) (the
"Bonus"). The Bonus shall become fully vested and earned upon the consummation
of the Exchange Offer, and no further services shall be required of Executive as
a condition to his entitlement to the Bonus. However, the Bonus shall not
actually be paid to Executive until the Corporation's is deemed to be in a
sufficiently sound financial condition to make such payment, as measured by the
Corporation's attainment of the following performance milestones:
- the Corporation shall have paid all accrued and unpaid dividends
on the Series H Preferred Stock issued in the Exchange Offer and redeemed
for cash all outstanding shares of Pik Preferred; and
- the Corporation shall have had at least Eight Million Dollars
(U.S $8,000,000) of cumulative EBITDA for the two fiscal quarters
immediately preceding the payment date of the Bonus.
Payment of the Bonus shall be made by Trikon Limited within thirty
(30) business days after the close of such fiscal period, but in no event shall
the Bonus be paid prior to June 30, 1999.
C. Executive shall not be entitled to any additional bonuses with
respect to future licenses of the Corporation's MORI source technology.
D. Trikon Limited shall deduct and withhold from the compensation
payable to Executive hereunder any and all applicable withholding taxes and any
other amounts required to be deducted or withheld by the Corporation under
applicable statutes, regulations, ordinances or orders governing the withholding
or deduction of amounts otherwise payable as compensation or wages to employees.
4. EXPENSE REIMBURSEMENT. Executive shall be entitled to
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reimbursement from the Corporation, in accordance with the Corporation's
reimbursement policies as in effect from time to time, for all reasonable
business expenses incurred by Executive in the performance of his duties
hereunder, provided Executive furnishes the Corporation with vouchers, receipts
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and other details of such expenses in the form required by the Corporation
sufficient to substantiate a deduction for such business expenses under
applicable rules and regulations of the
taxing authorities. In no event, however, shall Executive be entitled to any
reimbursement or other dollar allowance in connection with the use of his
personal automobile for business purposes.
5. FRINGE BENEFITS.
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A. Executive shall, throughout the Employment Period, be eligible to
participate in all employee benefit programs and other executive perquisites
which are made available to the Corporation's executives and for which Executive
qualifies.
B. Executive shall accrue paid vacation benefits during the
Employment Period at the rate at which he accrued such benefits immediately
prior to the date of this Agreement and may take his accrued vacation at such
times as are mutually convenient to Executive and the Corporation.
6. DEATH OR DISABILITY. Upon Executive's death or Disability during
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the Employment Period, the employment relationship created pursuant to this
Agreement shall immediately terminate, and no further compensation shall become
payable to Executive pursuant to Paragraph 3. However, Trikon Limited shall pay
Executive or his estate (i) any unpaid base salary earned under Paragraph 3 for
services rendered through the date of his death or Disability, (ii) the value of
all accrued and unused vacation benefits based upon Executive's most recent
level of base salary and (iii) any other incentive compensation which becomes
due and payable for the calendar year of the Executive's death or Disability,
pro-rated in amount for the portion of the year completed prior to Executive's
death or Disability. In addition, Trikon Limited shall remain liable for
payment of the Bonus to the Executive or his estate, and such Bonus shall be
paid when due and payable in accordance with the terms and conditions of
Paragraph 3.B.
7. NON-COMPETITION.
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A. During the Employment Period, Executive shall not directly or
indirectly own, manage, operate, join, control or participate in the ownership,
management, operation or control of, or be employed by or connected in any
manner with, any enterprise which is engaged in the semiconductor equipment
manufacturing industry; provided, however, that such restriction shall not apply
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to (i) any investment representing an interest of less than two percent (2%) of
an outstanding class of publicly-traded securities of any corporation or other
enterprise or (ii) his professorial duties at Cambridge University.
B. During the Employment Period and for an additional two (2)-year
period thereafter, Executive shall not, directly or indirectly,
(i) encourage or solicit any of the Corporation's employees to leave
the Corporation's employ for any reason or interfere in any other
manner with employment relationships at the time existing between the
Corporation and its current or prospective employees; or
(ii) solicit the business of any licensor, licensee or customer of the
Corporation, induce any of the Corporation's licensors,
licensees or customers to terminate their existing business
relationships with the Corporation or interfere in any other manner
with any existing business relationship between the Corporation and
any licensor, licensee, customer or other third party.
Executive hereby acknowledges that monetary damages may not be
sufficient to compensate the Corporation for any economic loss which may be
incurred by reason of his breach of the foregoing restrictive covenants.
Accordingly, in the event of any such breach, the Corporation shall, in addition
to the termination of this Agreement and any remedies available to the
Corporation at law, be entitled to obtain equitable relief in the form of an
injunction precluding Executive from continuing such breach.
8. PROPRIETARY INFORMATION AND OWNERSHIP RIGHTS. Executive shall
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sign the Corporation's Proprietary Information and Inventions Agreement in
substantially the form attached hereto as Exhibit A (the "Proprietary
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Information and Inventions Agreement"), and nothing in this Agreement shall be
deemed to modify or affect Executive's duties and obligations under that other
agreement.
10. TERMINATION OF EMPLOYMENT.
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A. The Corporation, acting by majority vote of the Board, may
terminate Executive's employment under this Agreement at any time for any
reason, with or without cause, by giving at least thirty (30) days prior written
notice of such termination to the Executive. However, such thirty (30)-day
notice requirement shall not apply to the termination of Executive's employment
for Cause under Paragraph C below. The Corporation may, at the time such
termination notice is given to Executive, immediately relieve Executive of some
or all of his duties hereunder.
B. Executive may terminate his employment under this Agreement at any
time by giving the Corporation at least thirty (30) days prior written notice of
such termination.
C. The Corporation, acting by majority vote of the Board, may at any
time, upon written notice, terminate the Executive's employment with the
Corporation hereunder for Cause. Such termination shall be effective
immediately upon such notice.
D. Upon the termination of Executive's employment for any reason
during the Employment Period, Executive shall be paid all salary and unused
vacation earned through the date of such termination. In addition, upon
termination of Executive's employment by the Corporation for any reason other
than Cause prior to the date three years after the date of this Agreement (the
"Severance Date"), Executive shall be paid an amount equal to the Executive's
salary (as of the date of termination) from the date of termination through the
Severance Date, such amount to be payable in regular installments in accordance
with Trikon Limited's payroll practices for salaried employees. Upon
termination of Executive's employment for any reason, Executive shall remain
entitled to the Bonus which shall be paid by Trikon Limited when due and payable
in accordance with the terms and conditions of Paragraph 3.B.
PART THREE -- MISCELLANEOUS PROVISIONS
11. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
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inure to the benefit of, and shall be binding upon, the Corporation, its
successors and assigns, Trikon Limited, its successors and assigns, and the
Executive, the personal representative of his estate and his heirs and legatees;
provided, however, that this Agreement shall not be assignable by the Company or
Trikon Limited without the written consent of Executive.
13. NOTICES.
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A. Any and all notices, demands or other communications required or
desired to be given hereunder by any party shall be in writing and shall be
validly given or made to another party if served either personally or if
deposited in the local post, certified or registered mail, postage prepaid,
return receipt requested. If such notice, demand or other communication shall
be served personally, service shall be conclusively deemed made at the time of
such personal service. If such notice, demand or other communication is given
by local post, such notice shall be conclusively deemed given forty-eight (48)
hours after the deposit thereof in the mail, addressed to the party to whom such
notice, demand or other communication is to be given as hereinafter set forth:
To the Corporation: Trikon Technologies, Inc.
Ringland Way
Newport, Gwent NP6 2TA
UNITED KINGDOM
Attention: President
With a copy to: Michael J. Kennedy, Esq.
Brobeck, Phleger & Harrison LLP
Spear Street Tower
One Market
San Francisco, CA 94105
To Trikon Limited: Trikon Technologies Limited
Ringland Way
Newport, Gwent NP6 2TA
UNITED KINGDOM
Attention: President
To Executive: Christopher Dobson
Elberton Manor
Elberton
Bristol BS35 3AA
UNITED KINGDOM
With a copy to: Rory Greiss, Esq.
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, NY 10022-3598
B. Any party hereto may change its address for the purpose of
receiving notices, demands and other communications as herein provided by a
written notice given in the manner aforesaid to the other party hereto.
14. GOVERNING DOCUMENT. This Agreement, together with (i) the
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Proprietary Information and Inventions Agreement, and (ii) the Incentive Award
Agreement, constitutes the entire agreement and understanding of the
Corporation, Trikon Limited and Executive with respect to the terms and
conditions of Executive's employment with the Corporation, including the
compensation payable to him, and supersedes all prior and contemporaneous
written or verbal agreements and understandings among Executive, the Corporation
and Trikon Limited relating to such subject matter. This Agreement may only be
amended by written instrument signed by Executive and an authorized officer of
the Corporation and Trikon Limited. Any and all prior agreements,
understandings or representations relating to the Executive's employment with
the Corporation are hereby terminated and cancelled in their entirety and are of
no further force or effect.
15. GOVERNING LAW. The provisions of this letter agreement will be
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construed and interpreted under the laws of California applicable to agreements
executed and to be wholly performed within California, except to the extent any
law of the United Kingdom is mandatorily applicable. If any provision of this
Agreement as applied to any party or to any circumstance should be adjudged by a
court of competent jurisdiction to be void or unenforceable for any reason, the
invalidity of that provision shall in no way affect (to the maximum extent
permissible by law) the application of such provision under circumstances
different from those adjudicated by the court, the application of any other
provision of this Agreement, or the enforceability or invalidity of this
Agreement as a whole. Should any provision of this Agreement become or be
deemed invalid, illegal or unenforceable in any jurisdiction by reason of the
scope, extent or duration of its coverage, then such provision shall be deemed
amended to the extent necessary to conform to applicable law so as to be valid
and enforceable or, if such provision cannot be so amended without materially
altering the intention of the parties, then such provision will be stricken and
the remainder of this Agreement shall continue in full force and effect.
16. REMEDIES. All rights and remedies provided pursuant to this
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Agreement or by law shall be cumulative, and no such right or remedy shall be
exclusive of any other. A party may pursue any one or more rights or remedies
hereunder or may seek damages or specific performance in the event of another
party's breach hereunder or may pursue any other remedy by law or equity,
whether or not stated in this Agreement.
17. COUNTERPARTS. This Agreement may be executed in more than one
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counterpart, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year written above.
TRIKON TECHNOLOGIES, INC.
By:
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Title:
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TRIKON TECHNOLOGIES LIMITED
By:
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Title:
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CHRISTOPHER D. DOBSON, EXECUTIVE
EXHIBIT A
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT