EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT, made as of November 18, 1999, by and between ZYGO CORPORATION, a
Delaware Corporation with an office at Laurel Brook Road, Middlefield,
Connecticut 06455 (the "Company"), and GARY K. WILLIS, residing at 3 Matson
Ridge, Old Lyme, Connecticut 06371 ("Executive").
WITNESSETH:
WHEREAS, Executive and the Company are parties to that certain Employment
Agreement, dated as of February 3, 1992 as amended by the Amendment to
Employment Agreement, dated as of August 26, 1993, and by Second Amendment to
Employment Agreement, dated as of March 10, 1995 (as amended, the "1992
Agreement"); and
WHEREAS, the Company and Executive desire that the 1992 Agreement be
terminated (except for Sections 12(a), 13, 16 and 18 thereof, which Sections
specifically survive such termination), and that this Agreement, providing for
the employment of Executive by the Company upon the terms and conditions herein
set forth, replace the 1992 Agreement, all effective as of the date hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises, representations and covenants herein contained, the parties hereto
agree as follows:
1. EMPLOYMENT.
The Company hereby employs Executive and Executive hereby accepts such
employment, subject to the terms and conditions herein set forth. Executive
shall hold the position of Chairman of the Board of Directors of the Company
(assuming he is then serving as a member of the Board of Directors of the
Company). The Company shall nominate Executive for election as a director of the
Company for all periods during the term of this Agreement.
2. TERM.
The term of employment under this Agreement shall begin on the date hereof
(the "Employment Date") and shall continue through November 17, 2002, 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 three-year term together
with
all such additional one-year period(s) of employment, if any, are collectively
referred to herein as the "employment 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 to Executive and Executive
agrees to accept, an annual salary of $137,500.00, or such higher amount as the
Board of Directors of the Company may determine from time to time, subject in
all such instances to such payroll deductions as are required by law and
deductions for applicable employee contributions to the normal benefit programs
of the Company. The annual salary provided for hereunder shall be payable in
equal installments commencing at the Employment Date, in accordance with the
Company's practice.
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 restrictions and shall keep records in compliance with the
Company's policy and procedure related to travel and entertainment expenses.
5. AUTOMOBILE
The Company shall, during the employment term, provide Executive with a
monthly allowance for an automobile in the amount of $900 in lieu of any expense
reimbursement for Company use of an automobile.
6. INSURANCE AND OTHER BENEFITS.
(a) During the employment term, Executive shall be entitled to participate
in and receive any other health and welfare benefits customarily provided by the
Company (including any profit sharing, pension, health insurance, dental
coverage, key man life insurance, AD&D and short and long-term disability in
accordance with the terms of such plans), all as determined from time to time by
the Board of Directors of the Company or appropriate committee thereof; it being
understood that as a part-time employee of the Company, Executive is not
expected to be compensated for or to receive any paid vacation time.
(b) The Company shall, during the employment term, and at the Company's
sole cost and expense, provide Executive with the use of his present office and
secretarial support at the Company's corporate headquarters in Middlefield,
Connecticut, or in lieu thereof shall provide Executive with alternative office
space and secretarial support at the corporate headquarters in Middlefield,
Connecticut or elsewhere in the Middlefield area. Any such alternative space and
support must be acceptable to Executive, in his discretion, and shall be
comparable to Executive's present space and support.
(c) For so long as Executive is rendering consulting services to the
Company hereunder (as provided in Section 10 hereof) and has not attained the
age 65, and to the extent otherwise permitted pursuant to the terms of the
Company's then existing applicable plans and the then existing policies of the
plan providers, Executive shall be entitled to continue to participate in the
health insurance plan and short and long-term disability plans provided by the
Company for its employees, as determined from time to time by the Board of
Directors of the Company or appropriate committee thereof; provided, however,
that during such continued coverage period, Executive shall pay to the Company
the applicable employee contribution for his participation in such plans.
(d) For so long as Executive is rendering employment or consulting services
to the Company hereunder and has not attained the age of 65, and to the extent
otherwise permitted pursuant to the terms of the insurance policy and the then
existing policies of the insurer, the Company shall continue in effect the
existing term life insurance policy in the amount of $600,000 on the life of
Executive. The entire cost and expense of such continued coverage, including the
premiums paid therefor, shall be borne by (i) the Company, during the employment
term, and (ii) Executive, subsequent to the employment term.
(e) For so long as Executive is rendering employment or consulting services
to the Company hereunder and has not attained the age of 65, and to the extent
otherwise permitted pursuant to the terms of the insurance policy and the then
existing policies of the insurer, the Company shall continue in effect the
existing key man life insurance policy in the amount of $1 million on the life
of Executive. During such time, the cost of such continued coverage, including
the premiums paid therefore, shall be borne by the Company. Upon the death of
Executive, any proceeds actually received by the Company from such policy, after
deducting (i) all costs and expenses paid by the Company for or in any way
associated with such policy from the date hereof and thereafter, together with
(ii) a five percent (5%) annual rate of return on the capital outlay for such
policy (i.e., the total of all costs and expenses incurred in instituting and
maintaining such policy, including all premiums paid thereunder, shall be paid
to Executive's designated beneficiary under such policy (or if none designated,
to Executive's estate).
7. CHANGE IN CONTROL.
(a) Definition. A "Change in Control" shall mean the occurrence of any of
the following events:
(i) The Company is merged with or consolidate 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 goup of persons or entities
becomes the holder of more than 51% of the Company's outstanding shares of
Common Stock.
(b) Payments. If a Change in Control occurs during the employment term and
either (i) Executive's employment is terminated by the Company at any time
thereafter for any reason other than death, disability or justifiable cause, or
Executive resigns for "good reason" within one year of the Change in Control, or
(ii) Executive resigns within ninety (90) days after the Change in Control for
any reason which would not constitute "good reason" (collectively, a "Change in
Control Termination"), the Company shall (x) pay to Executive, in one lump sum
payment, on the date of such termination or within seven (7) days of such
resignation, as the case may be, in the case of (i) above, the greater of (a)
one year's base salary then being paid to Executive, but in no event less than
$137,500.00 and (b) the entire amount of Executive's salary, as provided in
Section 3 hereof, otherwise still to be paid to Executive through November 17,
2002, and in the case of (ii) above, one year's base salary then being paid to
Executive, but in no event less than $137,500.00; and (y) continue, at
Executive's sole cost and expense, all existing health insurance, dental
coverage, key may life insurance, AD&D and long-term disability coverage in
effect for Executive at the time of his termination or resignation (or, if
greater, the benefits in existence immediately prior to the Change in Control),
in all instances until Executive attains the age of 65; provided, however, that
during the applicable period in which benefits are being paid by the Company,
Executive agrees to maintain a consulting relationship with the Company as
provided in Section 10 hereof.
(c) Good Reason. For purposes of this Agreement, "good reason" for
resignation shall mean the occurrence of either of the following:
(i) The Company materially diminishes Executive's duties or
responsibilities or employment conditions in a manner which is
inconsistent with his status as a senior executive officer (it
being understood that Executive's failure to continue to hold the
position of Chairman of the Board of Directors of the Company
will not constitute "good reason" for resignation); or
(ii) The company fails to perform or breaches its obligations under
any other material provision of this Agreement.
8. DUTIES.
(a) Executive shall perform such duties and functions as the 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 the Board of Directors.
(b) During the employment term, Executive agrees to devote up to one-half
(1/2) of his entire working time, attention and energies to the performance of
the business of the Company and of any of its subsidiaries or affiliates 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 of the Company.
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 of the Company
that Executive's performance of his duties has not been fully
satisfactory for any reason which would not constitute
justifiable cause (as hereunder defined) upon five (5) days'
prior written notice to Executive; or
(ii) Immediately upon determination by the Board of Directors of the
Company 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) below).
(c) For the purposes 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) months 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 any of 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 any of 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 or any of 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 the engaging by Executive in any
business or activities other than the business of the Company and its
subsidiaries which interferes with the performance of his duties, except as
specifically permitted herein. Upon termination of Executive's employment by the
Company for justifiable cause, this Agreement shall terminate immediately and
Executive shall not be entitled to any amount or benefits hereunder other than
such portion of Executive's annual salary and reimbursement of expenses pursuant
to Section 4 hereof as has been accrued through the date of his termination of
employment.
(e) If 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 and reimbursement of expenses pursuant to Section 4 hereof 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 thirty (30) days
after which Executive shall have received written notice of the Company's
election to terminate. Notwithstanding anything to the contrary contained
herein, during any period that Executive fails to perform his duties hereunder
as a result of his disability (but prior to receiving the notice of termination
specified in this Section 9(f), (i) Executive shall continue to receive his full
salary at the rate then in effect and all benefits provided in Section 5 and 6
hereof, provided that payments made to Executive pursuant to this Section 9(f)
shall be reduced by the sum of the disability benefit plan or program of, or
provided by the Company, and (ii) the Company shall have the right to hire any
other individual or individuals to perform such duties and functions as the
Company shall desire, including those duties heretofore performed by Executive.
(g) Notwithstanding any provision to the contrary contained herein, in the
event that Executive's employment is terminated by the Company at any time
during the employment term for any reason other than justifiable cause,
disability or death, the Company shall (i) pay to Executive, in one lump sum
payment on the date of such termination, the greater of (x) one year's base
salary then being paid to Executive, as provided in Section 3 hereof, and (y)
the entire amount of Executive's salary, as provided in Section 3 hereof,
otherwise still to be paid to Executive through November 17, 2002, and (ii)
continue, at Executive's election and at his sole cost and expense, all existing
health insurance, dental coverage, key may life insurance, AD&D and long-term
disability coverage in effect for Executive at the time of his termination, in
all instances until Executive attains the age of 65; provided, however, that
during the applicable period in which benefits are being paid by the Company,
Executive agrees to maintain a consulting relationship with the Company as
provided in Section 10 hereof. The payment and benefits provided for under this
Section 9(g) shall be paid as liquidated damages, and not as a penalty, and
shall be in lieu of any and all other payments due and owing to Executive under
the terms of this Agreement.
10. CONSULTING AGREEMENT.
(a) Consulting Term. In recognition of the fact that the Company desires to
continue to have the benefit from time to time, and to avail itself, of the
knowledge and expertise of Executive after the expiration of the employment term
of this Agreement, the Company hereby agrees to retain Executive as a consultant
to the Company, and Executive agrees to be so retained by the Company, for a
period commencing on the date of the expiration of the employment term of this
Agreement and continuing until the date upon which Executive attains the age of
65 (the "Consulting Period"); provided, however, that the obligations contained
in this Section 10 shall cease to exist (and/or shall not arise) in the event
Executive's employment or consultancy hereunder shall be terminated for
justifiable cause.
(b) Duties. During the Consulting Period, Executive agrees to advise and
consult with respect to the business and affairs of the Company, it being
understood that such services are expected to be performed by telephone or in
writing with the senior management and directors of the Company upon requests
for such services, and to draw upon the knowledge and expertise of Executive
gained while in the full-time employ of the Company. Executive shall perform
such services on an as needed basis, at mutually agreeable dates, times and
locations, provided that such services shall in no way interfere with any other
then existing obligations of Executive.
(c) Compensation. In consideration of the consulting services to be
furnished by Executive hereunder and for being available for consultation in
accordance with this Agreement, the Company shall pay to Executive an annual
consulting fee of $1,200, payable in equal monthly payments (in addition to the
benefits to be continued with respect to Executive during the Consulting
Period).
(d) Expenses. Executive shall be entitled to reimbursement from the
Company, upon presentation of suitable vouchers, for all out-of-pocket expenses
incurred by him in connection with the performance of his obligations hereunder,
in accordance with the policies and practices of the Company.
11. 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.
(b) Executive agrees to submit to a medical examination and to cooperate
and supply such other information and documents as may be required by any
insurance company in
connection with Executives' inclusion in any insurance or fringe benefit plan or
program as the Company shall determine from time to time to obtain.
12. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION; NON-DISPARAGEMENT.
(a) Executive previously has executed that certain "Zygo Corporation
Non-Disclosure Agreement" (the "Confidentiality Agreement"), all the terms and
provisions of which are incorporated herein as fully set forth herein. In
furtherance of the foregoing, and without limitation thereto, it is expressly
agreed that Section 1 of the Confidentiality Agreement shall include all
knowledge, information and materials regarding (i) any one or more of the
Company's employees, officers and directors, and (ii) the Company's
organizational structure.
(b) Executive agrees not to, directly or indirectly, (i) make any
disparaging statements concerning the Company or any of its subsidiaries,
officers, directors or employees and (ii) disparage or tortuously interfere in
any way with the present or future business activities of the Company (including
of any subsidiary thereof).
13. NON-COMPETITION.
(a) Executive agrees that during his employment by the Company, and for a
period of one (1) year after termination of Executive's employment hereunder,
(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
engage 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 an
amount not to exceed any one time one percent (1%) of any class of stock or
securities of such corporation. 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 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. Notwithstanding the
foregoing, in the event the Company is required to pay Executive, after the
termination of his employment hereunder, an amount which is greater than one
year's base salary for Executive, pursuant to the terms of Section 7(b) or 9(g)
hereof, the Non-Competitive Period shall extend through November 17, 2002.
(b) If any portion of the restrictions set forth in this Section 13 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.
(c) Executive acknowledges that the Company conducts business on a
world-wide basis, that its sales and marketing prospects are for continue
expansion into world markets and that, therefore, the territorial and time
limitations set forth in this Section 13 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 as 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.
14. RIGHT TO INJUNCTION.
Executive recognizes that the services to be rendered by him hereunder are
of 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
this Agreement or of the provisions of Section 13 of the 1992 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 or contained in the 1992
Agreement. 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.
15. 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.
16. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of Connecticut
applicable to agreements made and to be performed therein.
17. SEVERABILITY.
The holding of any provision of this Agreement to be invalid or
unenforceable by court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect.
18. NOTICES.
Any notices 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 addresses 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.
19. 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.
20. 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.
This Agreement replaces and supercedes in its entirety the 1992 Agreement,
except that the provisions of Sections 12(a), 13, 16 and 19 of the 1992
Agreement shall specifically survive.
21. SURVIVAL.
The termination of Executive's employment hereunder shall not affect the
enforceability of Sections 6, 7, 9, 10, 11(a), 12, 13, 14, 16, 20 and 21 hereof.
22. NON-ASSIGNABILITY.
This Agreement is entered into in consideration of the personal qualities
of Executive and may not be, nor may any right or interest hereunder be,
assigned by him without the prior written consent of the Company. It is
expressly understood and agreed that this Agreement, and the rights accruing and
obligations owed to the Company hereunder, and the obligations to be performed
by the Company hereunder, may be assigned at any time, without the consent of
Executive, by the Company to any of its successors or assigns.
23. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one
and the same instrument.
24. FURTHER ASSURANCES.
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.
25. HEADINGS.
This Section headings 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, amend or affect its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ZYGO CORPORATION
By: /s/ J. Bruce Robinson
-----------------------------
Name: R. Bruce Robinson
Title: President
EXECUTIVE
/s/ Gary K. Willis
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Gary K. Willis