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Exhibit
10.6
A MENDED A
ND R ESTATED E
XECUTIVE E MPLOYMENT A
GREEMENT
This Amended Executive Employment
Agreement (the “Agreement”), dated
March 11, 2006, is between CREDENCE SYSTEMS CORPORATION
(the “Company”) and JOHN C. BATTY
(“Executive”) and amended and restated June 5,
2007.
I. POSITION AND
RESPONSIBILITIES
A. Position. Executive
is employed by the Company to render services to the Company in the
position of Senior Vice President, Chief Financial Officer and
Secretary, reporting to the Company’s Chief Executive
Officer. 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 Company. Executive shall
abide by the rules, regulations, and practices as adopted or
modified from time to time in the Company’s sole
discretion.
B. Other Activities.
Except upon the prior written consent of the Company, Executive
will not, during the term of this Agreement, (i) accept any
other employment, or (ii) 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.
C. No Conflict.
Executive represents and warrants that his execution of this
Agreement, his employment with the Company, and the performance of
his proposed duties under this Agreement shall not violate any
obligations he 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.
II. COMPENSATION AND
BENEFITS
A. Base Salary. In
consideration of the services to be rendered under this Agreement,
the Company shall pay Executive an annual base salary of Two
Hundred and Eighty-five Thousand Dollars ($285,000) (“Base
Salary”). The Base Salary shall be paid in accordance with
the Company’s regularly established payroll practice.
Executive’s Base Salary will be reviewed from time to time in
accordance with the established procedures of the Company for
adjusting salaries for similarly situated employees and may be
adjusted in the sole discretion of the Company.
B. Bonus. Executive
shall be eligible for an annual target incentive bonus equal to
Sixty Percent (60%) of his then-current Base Salary
(“Target Bonus”), based on Executive’s
achievement of performance objectives determined by the
Company.
C. Benefits. Executive
shall be eligible to participate in the benefits made generally
available by the Company to similarly-situated executives, 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.
D. 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.
III. AT-WILL EMPLOYMENT; TERMINATION
BY COMPANY
A. At-Will Termination by
Company. Executive’s employment with the Company shall be
“at-will” at all times. The Company may terminate
Executive’s employment with the Company at any time, without
any advance notice, for any reason or no reason at all,
notwithstanding anything to the contrary contained in or arising
from any statements, policies or practices of the Company relating
to the employment, discipline or termination of its employees. Upon
and after such termination, all obligations of the Company under
this Agreement shall cease, except as otherwise provided
herein.
B. Separation
Benefits. Except in situations where the employment of
Executive is terminated For Cause, By Death or By Disability (as
defined in Section IV below), in the event that the Company
terminates Executive’s employment at any time, Executive will
be eligible to receive the following benefits (collectively,
“Separation Benefits):
1. an amount equal to
(1) One Hundred Percent (100%) of Executive’s
then-current Base Salary plus (2) One Hundred Percent
(100%) of Executive’s annual Target Bonus, payable in
equal monthly installments over the twelve (12) month period
following the date of such termination (“Salary Continuation
Period”);
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2. continued vesting
of Executive’s stock options until the earlier of
(a) the end of the Salary Continuation Period or (b) the
date Executive begins other employment, and a period of twelve
(12) months thereafter to exercise such vested
options;
3. if Executive elects
to continue his medical coverage under the Consolidated Omnibus
Reconciliation Act (“COBRA”), the Company shall pay the
premiums for Executive’s COBRA coverage until the earlier of
(a) the end of the Salary Continuation Period or (b) the
date Executive becomes covered under another employer’s
health plan; and
4. continued payment
of the premiums required to maintain Executive’s coverage
under his Company-provided life insurance policy during the Salary
Continuation Period.
Notwithstanding the foregoing, if
Executive begins other employment during the Salary Continuation
Period, all vesting of Executive’s stock options shall cease
and Executive shall receive an accelerated lump-sum payment of the
remaining payments for the Salary Continuation Period, in lieu of
salary continuation. Executive shall not be eligible to participate
in the Company’s deferred compensation, 401K, or employee
stock purchase plans during the Salary Continuation
Period.
Executive’s eligibility for the
foregoing Separation Benefits is conditioned on (a) Executive
remaining available during the Salary Continuation Period to
consult with the Company regarding matters for which he previously
had responsibility as a Company executive; (b) Executive
having first signed a release agreement in the form attached as
Exhibit A, and (c) Executive’s agreement not to
compete with the Company, or its successors or assigns, during the
Salary Continuation Period. If Executive engages in any business
activity competitive with the Company or its successors or assigns
during the Salary Continuation Period, all Separation Benefits
immediately shall cease.
This Agreement is intended to comply
with Section 409A of the Internal Revenue Code (the
“Code”) (as amplified by any Internal Revenue Service
or U.S. Treasury Department guidance), and shall be construed and
interpreted in accordance with such intent. Executive acknowledges
that the Company, in the exercise of its sole discretion and
without the consent of Executive, (i) may amend or modify this
Agreement in any manner in order to meet the requirements of
Section 409A of the Code as amplified by any Internal Revenue
Service or U.S. Treasury Department guidance and (ii) shall
have the authority to delay the payment of any amounts or the
provision of any benefits under this Agreement to the extent it
deems necessary or appropriate to comply with
Section 409A(a)(2)(B)(i) of the Code (relating to payments
made to certain “specified employees” of certain
publicly-traded companies) as amplified by any Internal Revenue
Service or U.S. Treasury Department guidance as the Company deems
appropriate or advisable. In such event, any amounts or benefits
under this Agreement to which Executive would otherwise be entitled
during the six (6) month period following Executive’s
termination of employment will be paid on the first business day
following the expiration of such six (6) month period. Any
provision of this Agreement that would cause the payment of any
benefit to fail to satisfy Section 409A of the Code shall have
no force and effect until amended to comply with Code
Section 409A (which amendment may be retroactive to the extent
permitted by the Code or any regulations or rulings
thereunder).
IV. OTHER TERMINATIONS BY
COMPANY
A. Termination for
Cause. For purposes of this Agreement, “For Cause”
shall mean: (i) Executive commits a crime involving
dishonesty, breach of trust, or physical harm to any person;
(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 twenty days after
written notice to Executive from the Company; (iv) Executive
willfully refuses to implement or follow a lawful policy or
directive of
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the Company, which breach is not cured
within twenty days after written notice to Executive from the
Company; or (v) Executive engages in misfeasance or
malfeasance demonstrated by a pattern of failure to perform job
duties diligently and professionally. The Company may terminate
Executive’s employment For Cause at any time, without any
advance notice. The Company shall pay to Executive all compensation
to which Executive is entitled up through the date of termination,
subject to any other rights or remedies of the Company under law;
and thereafter all obligations of the Company under this Agreement
shall cease.
B. By Death.
Executive’s employment shall terminate automatically upon
Executive’s death. The Company shall pay to
ExecutiveR
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