Exhibit 10.1
September 15, 2006
Mr. David M. Camp
8047 East Echo Canyon Street
Meza, AZ 85207
Dear David:
I am pleased to extend to you an offer to join Key Technology as its President
and Chief Executive Officer. The Search Committee of the Board is impressed with
the valuable experience and business acumen that you would bring to Key, and I
feel confident that this will be a very beneficial relationship for both you and
the Company.
The economic terms of Key's offer to you can be summarized as follows:
Base Salary: $275K per year
Cash Bonus Opportunity: Up to 100% of base if Target Performance met;
up to 200% of base if Target Performance
exceeded. Annual Target Performance, based on
revenues, earnings and return on
equity/investment, and percentage range above
and below target will be established by the
Compensation Committee after input from
management.
Stock Grant: (a) On the first business day following the
announcement of your hire, restricted stock
shares will be granted in the amount determined
by dividing $275,000 by the market price for
Key Technology's Common Stock. Documentation
will be pursuant to the Company's standard
restricted stock agreement.
o One-half of the restricted shares will
vest based on continued employment, in three
equal annual installments beginning on the
one-year anniversary of hire.
o One-half of the restricted shares will
vest based on financial performance criteria
over the same three-year period. The financial
performance criteria will be developed by the
Compensation Committee based on three factors:
(i) revenue growth component; (ii) earnings
based components; (iii) return on equity
component.
(b) An identical number of restricted shares
will be awarded on the first and second
anniversary hire dates based on continued
employment, with the new shares subject to the
same vesting criteria as used with the initial
award over the three-year period following the
grant.
Change of Control: In the event that a transaction occurs in which
substantially all of Key's assets or 50% or
more of its stock is acquired in one or more
related transactions, all previously issued
restricted stock shares will vest immediately;
if employment is terminated (actual or
constructive) by the Company or its successor
at or within 12 months of the change in control
event, severance will be paid equal to one
year's base salary.
Severance: If your employment is terminated by the Board
without cause in a non-change of control
environment, severance will be paid equal to
one year's base salary, subject to customary
general release documentation.
Key's relocation program will pay for house-hunting and for all the actual
expenses related to your move to Walla Walla. This program does not cover
expenses related to selling your current home or expenses related to the
purchase of a home in Walla Walla. However, Key will pay for temporary housing
and automobile expenses in Walla Walla for you until you have completed your
move to Walla Walla, up to 12 months in duration and capped at $40,000, an
amount which we expect will be sufficient and which may be used supplementally
as approved by the Compensation Committee of the Board.
Group health, dental, life and disability insurance will be provided and begins
on your first day of employment. You will be entitled to four weeks per year of
vacation.
You will be eligible to participate in the Key Technology 401(k) and Profit
Sharing Plan. You would also be eligible to participate in the Employee Stock
Purchase plan that allows employees to purchase Key Technology stock at a 15%
discount to market price and is administered through payroll deduction.
You will be asked to sign an Assignment and Work-Make-for-Hire Agreement on your
first day of employment, which will include noncompetition and nonsolicitation
provisions that extend 24 months beyond any termination of employment. As an
executive officer of the Company, you will be covered by Key's standard
indemnification agreement for officers and directors.
I trust that you will find this offer consistent with our discussions. I am
signing this offer letter as Chairman of the Board's Search Committee; if it is
acceptable, please sign it and send it back to me by facsimile c/o Tonkon Torp
LLP at (503) 972-3706. It will not become effective or binding unless and until
it is approved by Key's Board of Directors, which I anticipate to occur without
modifications. You may revoke your commitment to Key at any time prior to
confirmation of that approval.
We very much look forward to having you assume the reins as President and CEO at
Key.
Best regards,
/s/ Donald A. Washburn
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Donald A. Washburn
Chairman, Search Committee of the Board of
Directors of Key Technology, Inc.
ACCEPTED AND APPROVED:
/s/ David M. Camp
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David M. Camp