Exhibit 10.52
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release
(“Agreement”) is made by and between Farhad Moghadam
(“Employee”) and Applied Materials, Inc. (the
“Company”) (jointly referred to as the
“Parties” and individually referred to as a
“Party”).
RECITALS
WHEREAS, Employee is employed by the
Company as its Senior Vice President and General Manager of Thin
Films Products Business Group and Foundation Engineering;
WHEREAS, Employee signed an Employee
Agreement with the Company on May 6, 1996 (the
“Confidentiality Agreement”);
WHEREAS, Employee resigned from his
employment with the Company effective September 1, 2007 (the
“Termination Date”);
WHEREAS, the Company and Employee
have entered into Stock Option and Performance Share Agreements,
dated November 19, 2002, December 11, 2002,
November 3, 2004, December 13, 2005 and January 25,
2007, granting Employee performance shares (also called restricted
stock units) and the option to purchase shares of the
Company’s common stock subject to the terms and conditions of
the Company’s Employee Stock Incentive Plan (the “Stock
Option Plan”) and the relevant Performance Share Agreements
and Stock Option Agreements (collectively the “Stock
Agreements”); and
WHEREAS, the Parties wish to resolve
any and all disputes, claims, complaints, grievances, charges,
actions, petitions, and demands that the Employee may have against
the Company and any of the Releasees as defined below, including,
but not limited to, any and all claims arising out of, or in any
way related to Employee’s employment with, or separation
from, the Company.
NOW, THEREFORE, in consideration of
the mutual promises made herein, the Company and Employee hereby
agree as follows:
COVENANTS
1. Consideration .
a.
Continuing Employment . The Company shall continue to employ
Employee, and Employee agrees to remain employed by the Company, in
his role as Senior Vice President and General Manager of Thin Films
Products Business Group and Foundation Engineering, up to and
including the Termination Date. During Employee’s workdays
through and including the Termination Date, Employee shall perform
the duties assigned to him by the Company’s Chief Executive
Officer, which shall not be inconsistent with his role as Senior
Vice President and General Manager of Thin Films Products Business
Group and Foundation Engineering. The Company shall continue to pay
Employee his base salary in accordance with the Company’s
regular payroll
practices up to and including the Termination Date. Notwithstanding
the foregoing, the Company may terminate Employee’s
employment prior to the Termination Date for “Cause”
(as defined in Section 15 hereof). If Employee is terminated
for Cause prior to the Termination Date, he shall not be eligible
for any of the benefits or consideration set forth in this
Agreement. Employee shall continue to comply with his
Confidentiality Agreement as well as all other Company policies.
During his employment with the Company, Employee shall continue to
be eligible to participate in all benefits and incidents of
employment, including the Company’s health insurance plan,
and he shall continue to accrue vacation. In addition, Employee
shall continue to vest in stock options and performance shares on
the same terms, schedule and conditions as set forth in the Stock
Agreements. As a result of such continued vesting, from the date of
this Agreement through the Termination Date, Employee is scheduled
to vest in the number of stock options and performance shares
indicated on Exhibit A hereto.
b.
Cash . Provided that Employee does not breach this Agreement
(including Section 12), the Company agrees to pay Employee the sum
of One Million Six Hundred Thousand Dollars ($1,600,000.00), less
applicable withholding. Provided that Employee does not breach this
Agreement (including Section 12), this payment shall be
credited to Employee’s account under the 2005 Executive
Deferred Compensation Plan (the “Deferred Compensation
Plan”), pursuant to the terms of Employee’s previous
election under the Deferred Compensation Plan with respect to such
severance payment, in three installments as follows: 1) a lump sum
amount of $400,000 shall be credited on September 2, 2007; 2)
a lump sum amount of $400,000 shall be credited on March 2,
2008; and 3) the final lump sum amount of $800,000 shall be
credited on December 31, 2008.
c.
Benefits . Employee’s health insurance benefits shall
cease on September 30, 2007, subject to Employee’s right
to continue his health insurance benefits under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA). Provided that Employee does not breach this
Agreement (including Section 12), the Company agrees to
reimburse Employee for the payments Employee makes for COBRA
coverage for a period of eighteen (18) months following the
Termination Date (or, if earlier, until Employee obtains
substantially similar coverage under another employer’s group
insurance plan or ceases to be eligible for COBRA continuation
coverage), provided that Employee timely elects and pays for COBRA
coverage. COBRA reimbursements shall be made by the Company to
Employee consistent with the Company’s normal expense
reimbursement policy, and will require documentation from Employee
substantiating his payments for COBRA coverage. Except as otherwise
provided herein, Employee’s participation in all benefits and
incidents of employment, including, but not limited to, the accrual
of bonuses, vacation, paid time off, and vesting (including, but
not limited to, vesting of equity awards), shall cease as of the
Termination Date.
d.
Equity Compensation . Provided that Employee executes the
Supplemental Agreement and Release attached hereto as
Exhibit D on or within 21 days after the
Termination Date, and does not revoke the Supplemental Agreement
and Release, the Company agrees to accelerate the vesting of stock
options to purchase a total of 112,500 shares of Company common
stock granted under the relevant Stock Option Agreements and the
Company’s Stock Option Plan and to accelerate the vesting of
a total of 12,500 performance shares granted pursuant to the
Performance Share Agreement dated December 13, 2005 (the
“Accelerated Performance Shares”)
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and the
Company’s Stock Option Plan, as detailed in
Exhibit B attached hereto. Notwithstanding such
accelerated vesting, the Accelerated Performance Shares will be
paid out to Employee in accordance with the original vesting
schedule contained in the Performance Share Agreement dated
December 13, 2005. Effective as of the “Effective
Date” (as defined in Section 25 hereof),
Employee’s stock options listed on Exhibit C
hereto shall remain exercisable until the earlier of (1) the
one-year anniversary of the Termination Date, or (2) the
applicable scheduled expiration dates of such stock options as set
forth in the relevant Stock Option Agreement. In all other
respects, such options, all of Employees other vested options and
the issuance of any shares shall continue to be governed by the
terms and conditions of the Company’s Stock Agreements.
Except as provided herein, all stock options, performance shares
and any shares issuable under such awards shall continue to be
subject to the terms and conditions of the Company’s Stock
Agreements. The accelerated vesting provided in this Section 1(d)
constitutes an amendment to the Stock Option Agreements and the
Performance Share Agreement listed on Exhibit B and the
option exercisability extension provided in this Section 1(d)
constitutes an amendment to the Stock Option Agreements listed on
Exhibit C . To the extent not explicitly amended
hereby, the Stock Agreements remain in full force and effect.
2. Payment of Salary .
Employee acknowledges and represents that the Company has paid or
provided all salary, wages, bonuses, accrued vacation/paid time
off, housing allowances, relocation costs, interest, severance,
outplacement costs, fees, reimbursable expenses, commissions,
stock, stock options, vesting, and any and all other benefits and
compensation due to Employee.
3. Release of Claims.
Employee agrees that the consideration set forth in this Agreement
represents settlement in full of all outstanding obligations owed
to Employee by the Company and its current and former: officers,
directors, employees, agents, investors, attorneys, shareholders,
administrators, affiliates, divisions, and subsidiaries, and
predecessor and successor corporations and assigns (collectively,
the “Releasees”). Employee, on his own behalf and on
behalf of his respective heirs, family members, executors, agents,
and assigns, hereby and forever releases the Releasees from, and
agrees not to sue concerning, or in any manner to institute,
prosecute or pursue, any claim, complaint, charge, duty,
obligation, or cause of action relating to any matters of any kind,
whether presently known or unknown, suspected or unsuspected, that
Employee may possess against any of the Releasees arising from any
omissions, acts, facts, or damages that have occurred up until and
including the Effective Date of this Agreement, including, without
limitation:
a. any
and all claims relating to or arising from Employee’s
employment relationship with the Company and the termination of
that relationship;
b. any
and all claims relating to, or arising from, Employee’s right
to purchase, or actual purchase of shares of stock of the Company,
including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under
applicable state corporate law, and securities fraud under any
state or federal law;
c. any
and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; harassment;
retaliation; breach of contract, both express and implied; breach
of covenant of good faith and fair dealing, both express and
implied; promissory
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estoppel; negligent or intentional infliction of emotional
distress; fraud; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective
economic advantage; unfair business practices; defamation; libel;
slander; negligence; personal injury; assault; battery; invasion of
privacy; false imprisonment; conversion; and disability
benefits;
d. any
and all claims for violation of any federal, state, or municipal
statute, including, but not limited to, Title VII of the Civil
Rights Act of 1964; the Civil Rights Act of 1991; the
Rehabilitation Act of 1973; the Americans with Disabilities Act of
1990; the Equal Pay Act; the Fair Labor Standards Act, except as
prohibited by law; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit
Protection Act; the Employee Retirement Income Security Act of
1974; the Worker Adjustment and Retraining Notification Act; the
Family and Medical Leave Act, except as prohibited by law; the
Sarbanes-Oxley Act of 2002; the California Family Rights Act; the
California Labor Code, except as prohibited by law; the California
Workers’ Compensation Act, except as prohibited by law; and
the California Fair Employment and Housing Act;
e. any
and all claims for violation of the federal or any state
constitution;
f. any
and all claims arising out of any other laws and regulations
relating to employment or employment discrimination;
g. any
claim for any loss, cost, damage, or expense arising out of any
dispute over the non-withholding or other tax treatment of any of
the proceeds received by Employee as a result of this Agreement;
and
h. any
and all claims for attorneys’ fees and costs.
Employee
agrees that the release set forth in this section shall be and
remain in effect in all respects as a complete general release as
to the matters released. This release does not extend to any
obligations incurred under this Agreement. This release does not
release claims that cannot be released as a matter of law,
including, but not limited to: (1) Employee’s right to
file a charge with, or participate in a charge by, the Equal
Employment Opportunity Commission or comparable state agency
against the Company (with the understanding that any such filing or
participation does not give Employee the right to recover any
monetary damages against the Company; Employee’s release of
claims herein bars Employee from recovering such monetary relief
from the Company); (2) claims under Division 3, Article 2
of the California Labor Code (which includes California Labor Code
section 2802 regarding indemnity for necessary expenditures or
losses by employee); and (3) claims prohibited from release as
set forth in California Labor Code section 206.5 (specifically
“any claim or right on account of wages due, or to become
due, or made as an advance on wages to be earned, unless payment of
such wages has been made”).
4. Acknowledgment of Waiver
of Claims under ADEA . Employee acknowledges that he is waiving
and releasing any rights he may have under the Age Discrimination
in Employment Act of 1967 (“ADEA”), and that this
waiver and release is knowing and voluntary. Employee agrees that
this waiver and release does not apply to any rights or claims that
may arise under the
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ADEA
after the Effective Date of this Agreement. Employee acknowledges
that the consideration given for this waiver and release is in
addition to anything of value to which Employee was already
entitled. Employee further acknowledges that he has been advised by
this writing that: (a) he should consult with an attorney
prior to executing this Agreement; (b) he has
twenty-one (21) days within which to consider this Agreement;
(c) he has seven (7) days following his execution of this
Agreement to revoke this Agreement; (d) this Agreement shall
not be effective until after the revocation period has expired; and
(e) nothing in this Agreement prevents or precludes Employee
from challenging or seeking a determination in good faith of the
validity of this waiver under the ADEA, nor does it impose any
condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law. In the event Employee signs
this Agreement and returns it to the Company in less than the
21-day period identified above, Employee hereby acknowledges that
he has freely and voluntarily chosen to waive the time period
allotted for considering this Agreement. Employee acknowledges and
understands that revocation must be accomplished by a written
notification to Michael R. Splinter, President and Chief Executive
Officer, that is received prior to the Effective Date.
5. California Civil Code
Section 1542 . Employee acknowledges that he has been
advised to consult with legal counsel and is familiar with the
provisions of California Civil Code Section 1542, a statute that
otherwise prohibits the release of unknown claims, which provides
as follows:
A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Employee, being aware of said code
section, agrees to expressly waive any rights he may have
thereunder, as well as under any other statute or common law
principles of similar effect.
6. No Pending or Future
Lawsuits . Employee represents that he has no lawsuits, claims,
or actions pending in his name, or on behalf of any other person or
entity, against the Company or any of the other Releasees. Employee
also represents that he does not intend to bring any claims on his
own behalf or on behalf of any other person or entity against the
Company or any of the other Releasees.
7. Trade Secrets and
Confidential Information/Company Property . Employee reaffirms
and agrees to observe and abide by the terms of the Confidentiality
Agreement, specifically including the provisions therein regarding
nondisclosure of the Company’s trade secrets and confidential
and proprietary information. Employee’s signature below
constitutes his certification that he has returned to the Company
all documents and other items provided to Employee by the Company,
developed or obtained by Employee in connection with his employment
with the Company, or otherwise belonging to the Company. Employee
hereby grants consent to notification by the Company to any new
employer about Employee’s obligations under this Section.
Employee
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represents that he has not to date misused or disclosed
Confidential Information to any unauthorized party.
8. No Cooperation .
Employee agrees that he will not knowingly encourage, counsel, or
assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims,
charges, or complaints by any third party against any of the
Releasees, unless under a subpoena or other court order to do so.
Employee agrees both to immediately notify the Company upon receipt
of any such subpoena or court order, and to furnish, within three
(3) business days of its receipt, a copy of such subpoena or
other court order. If approached by anyone for counsel or
assistance in the presentation or prosecution of any disputes,
differences, grievances, claims, charges, or complaints against any
of the Releasees, Employee shall state no more than that he cannot
provide counsel or assistance.
9. Non-Disparagement .
Employee agrees to refrain from any disparagement, defamation,
libel, or slander of any of the Releasees, and agrees to refrain
from any tortious interference with the contracts and relationships
of any of the Releasees. Employee shall direct any inquiries by
potential future employers to the Company’s Vice President of
Human Resources, who shall use his/her best efforts to respond by
providing only the Employee’s last position and dates of
employment. The Company agrees to refrain from any disparagement,
defamation, libel, or slander of Employee. Employee understands
that the Company’s obligations under this paragraph extend
only to the Company’s current executive officers and members
of its Board of Directors and only for so long as each officer or
director is an employee or director of the Company. The Parties
further agree that each Party shall have the opportunity to review
and approve any press release or other publicly distributed written
communication (other than the Company’s filings pursuant to
the Securities Exchange Act of 1934, as amended) regarding
Employee’s departure from the Company prior to publication or
release of such communication.
10. Breach . Employee
acknowledges and agrees that any material breach of this Agreement
(including any breach of Section 12) or the Confidentiality
Agreement shall entitle the Company immediately to recover and
cease providing the consideration provided to Employee under
Section 1 of this Agreement, unless such breach constitutes a
legal action by Employee challenging or seeking a determination in
good faith of the validity of the waiver herein under the ADEA or
as otherwise provided by law. Except as provided by law, Employee
shall also be responsible to the Company for all damages incurred
by the Company, including reasonable attorneys’ fees and
costs, in: (a) enforcing Employee’s obligations under
this Agreement or the Confidentiality Agreement, including in any
action to recover the consideration, if and only if Company
prevails in any such action, and (b) defending against a claim
or suit brought or pursued by Employee in violation of the terms of
Sections 3-5 of this Agreement.
11. No Admission of
Liability . Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all
actual or potential disputed claims by Employee. No action taken by
the Company hereto, either previously or in connection with this
Agreement, shall be deemed or construed to be (a) an admission
of the truth or falsity of any actual or potential claims or
(b) an acknowledgment or admission by the Company of any fault
or liability whatsoever to Employee or to any third party.
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12. Non-Competition .
During the period commencing on the Termination Date and ending on
December 31, 2008 (the “Non-Competition Period”),
Employee shall not (other than in connection with his employment
services to the Company through the Termination Date), without the
prior express written permission of the Company’s Chief
Executive Offic
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