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EXHIBIT 10.12
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of July 12,
2000 (the "Effective Date"), by and between Advanced Thermal Technologies, Inc.,
a Delaware corporation (the "Company") and Amin J. Khoury (the "Executive").
RECITALS
WHEREAS, the Company wishes to employ the Executive and the Executive
wishes to accept such employment on the terms and conditions hereafter set
forth; and
WHEREAS, the Company wishes to make secure for itself the experience,
abilities and services of the Executive and to prevent the loss of such
experience, services and abilities;
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto, each intending to
be legally bound, do hereby agree as follows:
l. Employment. The Company shall employ the Executive, and the Executive shall
perform services for and continue in the employment of the Company, for an
initial period of five (5) years commencing on the Effective Date and ending
five (5) years thereafter, whereupon the Executive's employment hereunder shall
automatically be extended from year to year thereafter, until either the Company
or the Executive gives the other party at least thirty (30) days written notice
prior to the then-applicable "Expiration Date" (as hereinafter defined) of its
or his desire to terminate this Agreement, unless such employment shall have
been sooner terminated as hereinafter set forth. For purposes of this Agreement
(i) the term "Employment Period" shall mean the initial five (5) year period and
all extensions thereof, if any, as aforesaid, and (ii) the term "Expiration
Date" shall mean the date five (5) years from the Effective Date or the date
this Agreement is last in effect in the event that the Employment Period is
extended on and after the date five (5) years from the Effective Date.
2. Position and Duties. The Executive shall serve the Company in the capacity of
Chairman of its Board of Directors and Chief Executive Officer ("Chairman and
CEO") of the Company and, shall be accountable to, and shall have such other
executive powers, duties and responsibilities, consistent with this capacity, as
may from time to time be prescribed by the Board of Directors of the Company
(the "Board"). The Executive shall perform and discharge, faithfully, diligently
and to the best of his ability, such duties and responsibilities; provided that
Executive shall only be required to devote as much time as Executive determines
is reasonably necessary to discharge his duties as Chairman and CEO, and,
subject to Paragraph 5 below, Executive may engage in other business activities
during the Employment Term.
3. Compensation.
(a) Salary. During the Employment Period, the Executive shall receive
a salary (the "Salary") payable at the rate of $100,000 per annum. Such rate may
be adjusted from time to time by the Board; provided, however, that it shall at
no time be adjusted below $100,000 per annum. The Salary shall be payable
biweekly or in accordance with the Company's current payroll practices, less all
required deductions. The Salary shall be pro-rated for any period of service
less than a full year.
(b) Incentive Bonus. The Executive may receive a performance bonus as
determined by the Board after the end of each fiscal year during the term hereof
and is to be paid as soon as practicable after
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the close of the fiscal year.
(c) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable business expenses
incurred by him on behalf of the Company.
(d) Fringe Benefits. During the Employment Period, the Executive
shall be entitled to participate in or receive benefits under any life or
disability insurance, health, pension, retirement and accident plans or
arrangements made generally available by the Company to its Executives, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. In accordance with the Company
policy, the Executive shall also be entitled to paid vacation in any fiscal year
during the Employment Period as well as all paid holidays given by the Company
to its Executives.
(e) Options. Through the Employment Period the Executive shall be
entitled to participate in any applicable option grant of the Company.
4. Termination and Compensation Thereon.
(a) Termination Date. The term "Termination Date" shall mean the
earlier of (i) the Expiration Date; or (ii) if the Executive's employment is
terminated (x) by his death, the date of his death; or (y) for any other reason,
the date on which such termination is to be effective pursuant to the notice of
termination given by the party terminating the employment relationship.
(b) Death. The Executive's employment hereunder shall terminate upon
his death. In such event, the Company shall pay to such person as the Executive
shall have designated in a notice filed with the Company, or, if no such person
shall have been designated, to this estate, an amount equal to the Salary that
would have been due to the Executive had this Agreement been in effect from the
date of his death until the Expiration Date.
(c) Incapacity. If in the reasonable judgment of the Board, as a
result of the Executive's incapacity due to physical or mental illness or
otherwise, the Executive shall for at least six consecutive months during the
term of this Agreement have been unable to perform his duties under this
Agreement on a full-time basis, the Company may terminate the Executive's
employment hereunder by notice to the Executive. In such event, the Company
shall continue to pay the Executive his Salary (at the rate in effect as of the
Termination Date) and (to the extent legally practicable) extend to him the
applicable fringe benefits referred to in Section 3(d) hereof until the
Expiration Date. Any dispute between the Board and the Executive with respect to
the Executive's incapacity shall be settled by reference to a competent medical
authority mutually agreed to by the Board and the Executive, whose decision
shall be binding on all parties.
(d) Change of Control. If a "Change of Control" (as that term is
defined in the Company's 2000 Directors' Stock Option Plan) occurs during the
Employment Period and, as a result of such Change of Control, this Agreement or
the Executive's employment is terminated for any reason, or the Executive
resigns his employment because any of the Executive's position, powers, duties
or responsibilities under Section 2 above are changed without his agreement, or
any compensation or benefit payable or otherwise extended to the Executive
hereunder (including without limitation Salary, incentive bonus, expenses,
fringe benefits and options set forth in Section 3 above) is eliminated or
reduced, the Company or its successor in interest shall:
(i) give prompt notice to the Executive of any such termination,
change, elimination or reduction;
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(ii) within thirty (30) days after the Termination Date, pay to
the Executive (or in the event of the Executive's subsequent death, such person
as the Executive shall have designated in a notice filed with the Company, or,
if no such person shall have been designated, to his estate) a lump sum amount
equal to the Executive's Salary in effect as of the Termination Date, which lump
sum amount shall not be pro-rated and shall be paid in addition to the Salary
due and payable under (iii) below;
(iii) until the Expiration Date, continue to pay to the Executive
(or in the event of the Executive's subsequent death, such person as the
Executive shall have designated in a notice filed with the Company, or, if no
such person shall have been designated, to his estate) his Salary (in effect as
of the date of the Change of Control), and to extend to him the incentive bonus,
expenses, fringe benefits and options set forth in Section 3 above.
The obligations of the Company pursuant to this Section 4(d)
shall survive any termination of this Agreement or the Executive's employment or
any resignation of such employment by the Executive pursuant to this Section
4(d).
(e) Consulting Period Upon Termination. If the Company fails to
extend the Executive's employment hereunder for a period of at least one year
beyond Expiration Date at his then current Salary and otherwise on the terms and
conditions set forth herein, then the Company shall have the option, at its sole
discretion, of retaining the Executive as a consultant to perform such services
as the Company may reasonably request, in consideration for which services the
Company shall continue to pay the Executive the same Salary and (to the extent
legally practicable) extend to him the applicable fringe benefits referred to in
Section 3(d), as in effect on the Termination Date for the period commencing on
the Termination Date and ending on the date one year after the Termination Date
or on such earlier date as the Company may otherwise specify.
(f) Severance Pay. Upon a termination for any reason of the
Executive's employment under Section 1 hereof or retention as a consultant under
Section 4(e) hereof, or upon any resignation by the Executive due to any change
in his position, powers, duties or responsibilities under Section 2 hereof or in
his compensation under Section 3 hereof, the Executive shall be entitled to the
continuation of his then current Salary and medical and dental benefits as in
effect at the expiration of the Employment Period, or any extension thereof, for
a period of twelve (12) months.
5. Proprietary Rights and Non-Competition. 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:
(a) Confidentiality. Executive will maintain in confidence and will
not disclose or use, either during or after the Employment Term, any proprietary
or confidential information or know-how belonging to the Company ("Proprietary
Information" hereinafter defined), 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 to 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, customers, 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.
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(b) Inventions.
(i) Definition of 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.
(ii) Disclosure and Assignment of Inventions. 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 Employment Term
(A) which relate at the time of conception, development, or reduction to
practice of the Invention to the Company's business or actual or demonstrably
anticipated research or development, (B) which were developed, in whole or in
part, in the Company's time or with the use of any of the Company's equipment,
supplies, facilities or trade secret information, or (C) which resulted from any
work performed by Executive for the Company (the "Company's Inventions").
Executive hereby assigns all of his right, title and interest world-wide in the
Company's Inventions and in all intellectual property rights based upon the
Company's Inventions; provided, however, that Executive does not assign or agree
to assign any Inventions, whether or not relating in any way to the Company's
business or demonstrably anticipated research and development, which were made
by him prior to the date of this Agreement, or which were developed by him prior
to the date of this Agreement, or which were developed by him independently
during the term of this Agreement and not under the conditions stated in
subparagraph (B) above.
(c) Documents and Materials. Upon termination of this Agreement or
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.
(d) Competitive Employment. During the Employment Term and for a
period of twelve (12) months thereafter (collectively, the "Extended Term"),
Executive will not engage in any employment, consulting, or other activity in
any business competitive with the Company without the Company's written consent,
which consent shall not be unreasonably withheld; provided, however, that
nothing in this Section 5(d) shall preclude Executive from serving as a director
of any other corporation.
(e) Non-solicitation. During the Extended Term, Executive will not
solicit or encourage, or cause others to solicit or encourage, any employees of
the Company to terminate their employment with the Company.
(f) Acts to Secure Proprietary Rights.
(i) Further Acts. Executive agrees to perform, during and
after the Employment Term, 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's
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.
(ii) Appointment of Attorney-In-Fact. In the event that the
Company is unable, for any reason whatsoever, to secure Executive's signature to
any lawful and necessary document required to
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apply for or execute any patent, copyright or other applications with respect to
any of the Company's Inventions (including improvements, renewals, extensions,
continuations, divisions or continuations in part thereof), Executive hereby
irrevocably appoints the Company and its duly authorized officers and agents as
his agents and Attorneys-in-fact to execute and file any such application and to
do all other lawfully permitted acts to further the prosecution and issuance of
patents, copyrights or other rights thereon with the same legal force and effect
as if executed by him, intending hereby to create a so-called "durable power"
which will survive any subsequent disability.
(g) 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.
(h) Corporate Opportunities. Executive agrees that he will first
present to the Board, for its acceptance or rejection on behalf of the Company,
any opportunity to create or invest in any company which is or will be involved
in precision temperature control of semi-conductors or semi-conductor
manufacturing equipment, which comes to his attention and in which he, or any
affiliate, might desire to participate. If the Board rejects the same or fails
to act thereon in a reasonable time, Executive shall be free to invest in,
participate or present such opportunity to any other person or entity.
(i) Specific Performance. Executive acknowledges that a breach of any
of the promises or agreements contained herein could result in irreparable and
continuing damage to the Company for which ere may be no adequate remedy at law,
and the Company shall be entitled to seek injunctive relief and/or a decree for
specific performance, and such other relief as may be proper (including monetary
damages if appropriate).
6. Amendments. No amendment to this Agreement or any schedule hereto shall be
effective unless it shall be in writing and signed by each party hereto.
7. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered personally or sent by telecopy or three
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to the Company, to it at:
Advanced Thermal Technologies, Inc.
3355 East La Palma Avenue
Anaheim, CA 92806
Attention: General Counsel
If to the Executive, to him at:
2666 Sheltingham Drive
Wellington, FL 33414
8. Entire Agreement. This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersede all prior
and contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties.
9. Miscellaneous. The invalidity and unenforceability of any term or provision
hereof shall not affect the validity or enforceability of any other term or
provision hereof. The headings in this Agreement are
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for convenience of reference only and shall not alter or otherwise affect the
meaning hereof. This Agreement may be executed in any number of counterparts
which together shall constitute one instrument and shall be governed by and
construed in accordance with the laws (other than the conflict of laws rules) of
the State of California and shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
EXECUTIVE
/s/Amin J. Khoury
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Amin J. Khoury
ADVANCED THERMAL TECHNOLOGIES, INC.
/s/ R. Bruce Thayer
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R. Bruce Thayer
President and Chief Operating Officer
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