Exhibit 10.1
E XECUTIVE E MPLOYMENT A GREEMENT
This Executive Employment Agreement (the
“Agreement”) is between C REDENCE S YSTEMS C ORPORATION , a Delaware corporation (the
“Company”) and D AVID H OUSE , an
individual (“Executive”). This Agreement shall become
effective December 9, 2005 (the “Effective
Time”).
1. POSITIONS AND RESPONSIBILITIES
a. Position and Term.
Executive shall be employed by the
Company to serve as Executive Chairman of the Company’s Board
of Directors (the “Board”). Executive shall perform
such duties and responsibilities as are normally related to such
position in accordance with the standards of the industry and any
additional duties now or hereafter assigned to Executive by the
Board. During an initial term of six (6) months, the Company
and Executive contemplate that Execute shall devote approximately
eight (8) hours per week to the fulfillment of his duties and
responsibilities under this Agreement. Thereafter, Executive shall
devote such time as Executive, in his discretion after consultation
with the Board, deems necessary to fulfill his duties and
responsibilities under this Agreement.
b. Other Activities.
Except upon the prior written
consent of the Board (which approval shall not be reasonably
withheld), Executive shall not, during the term of this
Agreement, engage, directly or indirectly, in any other
business activity (whether or not pursued for pecuniary advantage)
that might interfere with Executive’s duties and
responsibilities hereunder or create a conflict of interest with
the Company. Notwithstanding the foregoing, Executive is currently
engaged in several business activities as disclosed to the Company
prior to the Effective Time and such engagement shall not
constitute a violation of this Section. Executive shall comply with
the Company’s Corporate Governance Policies.
c. No Conflict.
Executive represents and warrants
that Executive’s execution of this Agreement,
Executive’s employment with the Company, and the performance
of Executive’s proposed duties under this Agreement shall not
violate any obligations Executive may have to any other employer,
person or entity, including any obligations with respect to
proprietary or confidential information of any other person or
entity.
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2. COMPENSATION AND BENEFITS
a. Base Salary.
The Company shall pay Executive a
salary of Eight Thousand Three Hundred Thirty Four Dollars ($8,334)
per month for the initial term of six (6) months (the
“Base Salary”), which amounts shall be paid to
Executive in accordance with the Company’s customary payroll
practices. Thereafter, the Company shall pay Executive an amount
mutually agreed by the Executive and the Board. In the event
Execuitve shall cease to be employed by the Company but shall
remain a member of the Board, Executive shall be entitled to the
compensation provided to non-employee members of the
Board.
b. Benefits.
Executive shall be eligible to
participate in any benefits plans made generally available by the
Company to employees providing equivalent hours of service, in
accordance with the benefit plans established by the Company, and
as may be amended from time to time in the Company’s sole
discretion.
c. Expenses.
The Company shall reimburse
Executive for reasonable business expenses incurred in the
performance of Executive’s duties hereunder in accordance
with the Company’s expense reimbursement
guidelines.
d. Stock Options.
The Company shall recommend to the
Company’s Board an initial grant of an option to purchase One
Hundred Thousand (100,000) shares of the Company’s
Common Stock (the “Initial Grant”), which option shall
be granted and priced two (2) business days after the release
of the Company’s earnings for the fourth quarter of FY2005.
Thereafter, at the Company’s Annual Stockholders Meeting
during each year that the Executive serves as Chairman of the
Board, the Executive shall be granted an option to purchase
additional shares of the Company’s Common Stock (or other
equity grant in conformity with those grants made to non-employee
members of the Board) equal to One Hundred Sixty-two and One Half
Percent (162.5%) of the number of shares of the
Company’s Common Stock (or other equity grant in conformity
with those grants made to non-employee members of the Board )
granted to non-employee members of the Board (the “Annual
Grant”). The Initial Grant shall vest while the Executive
remains a member of the Board, over a four (4) year period in
accordance with the Company’s standard practices. The Annual
Grant shall vest while the Executive remains a member of the Board,
in accordance with the vesting terms of the annual grants made to
non-employee members of the Board. Upon the Executive’s
termination of service as a member of the Board, Executive shall
have twelve (12) months from the date of such termination to
exercise the vested portion of his Initial Grant and each Annual
Grant.
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e. Staff Support.
The Company shall make available to
Executive a suitable office at the Company’s Milpitas,
California facility and shall employ an Executive Assistant
designated by Executive on a part-time basis in Milpitas,
California to provide support to Executive in the fulfillment of
his duties and responsibilities under this Agreement.
3. TERMINATION
a. Termination.
Executive may terminate
Executive’s employment with the Company at any time, for any
reason or no reason at all, upon thirty (30) days’
advance written notice. The Board may terminate Executive’s
employment with the Company at any time, for any reason or no
reason at all, upon thirty (30) days’ advance written
notice. The Company may terminate Executive’s employment for
Cause at any time, without any advance notice. In the event the
Board terminates Executive’s employment with the Company for
any reason other than “for Cause,” or if the Executive
terminates his employment “for Good Reason,” any
portion of the Initial Grant and each Annual Grant contemplated in
Section 2.d. of this Agreement that is unvested shall
immediately become vested and fully exercisable by Executive. For
purposes of this Agreement, “for Cause” shall mean:
(i) Executive’s conviction of, or plea of nolo contendre
to, a felony that the Board reasonably believes has had or will
have a material detrimental effect on the Company’s
reputation or business; (ii) Executive willfully engages in
conduct that is in bad faith and materially injurious to the
Company, including but not limited to, misappropriation of trade
secrets, fraud or embezzlement; (iii) Executive commits a
material breach of this Agreement, which breach is not cured within
thirty (30) days after written notice to Executive from the
Company; (iv) Executive’s willful and continued failure
to perform the duties and responsibilities of his position after
there has been delivered to Executive a written demand for
performance from the Board which describes the basis for the
Board’s belief that Executive has not substantially performed
his duties and provides Executive with thirty (30) days to
take corrective action; or (v) A breach of any fiduciary duty
owed to the Company by the Executive that has a material
detrimental effect on the Company’s reputation or business.
For purposes of this Ag
