Exhibit 10.22

General Severance Benefits and

Change in Control Severance Benefits Agreement

 

 

This General Severance Benefits and Change in Control Severance Benefits
Agreement (this “Agreement”) is entered into as of the _10th_ day of November,
2016 (the “Effective Date”), by and between ROLLIN KOCHER (“Executive”) and
Nanometrics Incorporated (the “Company”) (together, the “Parties”).  This
Agreement is intended to provide Executive with certain compensation and
benefits in the event of certain qualifying terminations of Executive’s
employment.  Certain capitalized terms used in this Agreement are defined in
Article 6.

The Company and Executive hereby agree as follows:

article 1

Scope of and Consideration for this Agreement

1.1Upon termination of Executive’s employment for any reason, Executive shall be
entitled to the Accrued Obligations.  The Company and Executive wish to set
forth in this Agreement the compensation and benefits that Executive shall be
entitled to receive upon a Covered Termination or Change in Control
Termination.  

1.2The duties and obligations of the Company to Executive under this Agreement
in the event of a Covered Termination or Change in Control Termination shall be
in consideration for Executive’s compliance with the limitations and conditions
on benefits as described in Article 4, including the timely provision of an
effective Release, in substantially the form of Exhibit A attached hereto (the
“Release”) return of Company property and continued compliance with certain
obligations described in Article 4.  Provision of the Accrued Obligations to
Executive is not conditioned upon Executive’s compliance with the conditions on
benefits described in Article 4.

1.3This Agreement shall supersede any other policy, plan, program or
arrangement, including, without limitation, any contract between Executive and
the Company (or any subsidiary or affiliate of the Company), relating to
severance benefits payable by the Company to Executive in connection with a
termination of employment.

article 2

Covered Termination Severance Benefits (Not in connection with Change in
Control)

2.1Covered Termination Severance Benefits.  Upon a Covered Termination, and
subject to the limitations and conditions set forth in this Agreement, including
Executive’s timely provision of an effective Release and satisfaction of all
other conditions set forth in Article 4, Executive shall be eligible to receive
the benefits set forth in this Article 2 (in addition to the Accrued
Obligations).

2.2Salary Continuance.  Executive shall receive, as severance, an amount equal
to Executive’s Base Salary for six (6) months, payable in equal installments
over the six (6) month period

 

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following the Termination Date in accordance with the Company’s payroll schedule
then in effect, provided that (i) the payments shall commence on the first
regularly scheduled payroll pay date following the effective date of the
Release, (ii) the first payment shall be a “catch up” payment to include the
total amount that Executive would have received as of such date if these
payments had commenced with the first payroll pay date following the Termination
Date, and (iii) such payment schedule is subject to any delay in payment
required by Section 5.5.

2.3Health Continuation Coverage.  

(a)Provided that Executive is eligible and has made the necessary elections for
continuation coverage pursuant to COBRA under a health, dental, or vision plan
sponsored by the Company, the Company shall pay the applicable premiums
(inclusive of premiums for Executive’s dependents for such health, dental, or
vision plan coverage as in effect immediately prior to the date of the Covered
Termination) for such continued health, dental, or vision plan coverage
following the date of the Covered Termination for up to six (6) months (such
period, the “COBRA Payment Period”) but in no event after such time as Executive
and Executive’s dependents are no longer eligible for COBRA coverage.  Such
coverage shall be counted as coverage pursuant to COBRA.  If Executive and
Executive’s dependents continue coverage pursuant to COBRA following the
conclusion of the period that the Company makes premium payments hereunder,
Executive will be responsible for the entire payment of such premiums required
under COBRA for the remainder of the applicable COBRA period.  

(b)For purposes of this Section 2.4 (i) references to COBRA shall be deemed to
refer also to analogous provisions of state law, and (ii) any applicable
insurance premiums that are paid by the Company shall not include any amounts
payable by Executive under a Code Section 125 health care reimbursement plan,
which amounts, if any, are the sole responsibility of Executive.

(c)Notwithstanding the foregoing, if the Company determines, in its sole
discretion, that the Company cannot provide the COBRA premium benefits without
potentially incurring financial costs or penalties under applicable law
(including, without limitation, Section 2716 of the Public Health Service Act),
the Company shall in lieu thereof pay Executive a taxable cash amount, which
payment shall be made regardless of whether the Executive or his qualifying
family members elect or are eligible for COBRA continuation coverage (the
“Health Care Benefit Payment”).  The Health Care Benefit Payment shall be paid
in monthly or bi-weekly installments on the same schedule that the COBRA
premiums would otherwise have been paid to the insurer.  The Health Care Benefit
Payment shall be equal to the amount that the Company otherwise would have paid
for COBRA insurance premiums (which amount shall be calculated based on the
premium for the first month of coverage), and shall be paid until the expiration
of the COBRA Payment Period.

article 3

Change in Control Severance Benefits

3.1Change in Control Severance Benefits.  Upon a Change in Control Termination,
and subject to the limitations and conditions set forth in this Agreement,
including Executive’s timely provision of an effective Release and satisfaction
of all conditions set forth in Article 4, Executive shall be eligible to receive
the benefits set forth in this Article 3 (in addition to the Accrued
Obligations).

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3.2Salary Severance Payment.  Executive shall receive, as severance, an amount
equal to Executive’s Base Salary for twelve (12) months, payable in a single
lump sum on the first regularly scheduled payroll pay date following the
effective date of the Release, subject to any delay in payment required by
Section 5.5.  

3.3Bonus Severance Payment.  Executive shall receive an additional severance
payment in an amount equal to 100% of Executive’s target annual bonus in effect
for the fiscal year in which the Termination Date occurs (the “Bonus Severance
Payment”).  The Bonus Severance Payment shall be paid on the first regular
payroll date following the effective date of the Release, subject to any delay
in payment required by Section 5.5.

3.4Health Continuation Coverage.  

(a)Provided that Executive is eligible and has made the necessary elections for
continuation coverage pursuant to COBRA under a health, dental, or vision plan
sponsored by the Company, the Company shall pay the applicable premiums
(inclusive of premiums for Executive’s dependents for such health, dental, or
vision plan coverage as in effect immediately prior to the Termination Date) for
such continued health, dental, or vision plan coverage following the Termination
Date for up to twelve (12) months (such period, the “CIC COBRA Payment Period”)
but in no event after such time as Executive and Executive’s dependents are no
longer eligible for COBRA coverage.  Such coverage shall be counted as coverage
pursuant to COBRA.  If Executive and Executive’s dependents continue coverage
pursuant to COBRA following the conclusion of the period that the Company makes
premium payments hereunder, Executive will be responsible for the entire payment
of such premiums required under COBRA for the remainder of the applicable COBRA
period.  

(b)For purposes of this Section 3.4, (i) references to COBRA shall be deemed to
refer also to analogous provisions of state law, and (ii) any applicable
insurance premiums that are paid by the Company shall not include any amounts
payable by Executive under a Code Section 125 health care reimbursement plan,
which amounts, if any, are the sole responsibility of Executive.

(c)Notwithstanding the foregoing, if the Company determines, in its sole
discretion, that the Company cannot provide the COBRA premium benefits without
potentially incurring financial costs or penalties under applicable law
(including, without limitation, Section 2716 of the Public Health Service Act),
the Company shall in lieu thereof pay Executive a taxable cash amount, which
payment shall be made regardless of whether the Executive or his qualifying
family members elect or are eligible for COBRA continuation coverage (the “CIC
Health Care Benefit Payment”).  The CIC Health Care Benefit Payment shall be
paid in monthly or bi-weekly installments on the same schedule that the COBRA
premiums would otherwise have been paid to the insurer.  The CIC Health Care
Benefit Payment shall be equal to the amount that the Company otherwise would
have paid for COBRA insurance premiums (which amount shall be calculated based
on the premium for the first month of coverage), and shall be paid until the
expiration of the CIC COBRA Payment Period.).

3.5Equity Awards.  Executive shall receive the following benefits with respect
to the Executive’s equity awards.

(a)The vesting and exercisability of all outstanding options to purchase the
Company’s common stock, stock appreciation rights, stock units or other equity
rights with respect to the Company granted to Executive pursuant to any equity
incentive plan of the Company which would

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otherwise have vested conditioned solely upon Executive’s continued services
with the Company shall accelerate vesting in full.

(b)Any reacquisition or repurchase rights held by the Company with respect to
common stock issued or issuable pursuant to any equity award granted to
Executive pursuant to any equity incentive plan of the Company which would
otherwise have lapsed conditioned solely upon Executive’s continued services
with the Company shall lapse in full.  

(c)Any equity awards granted to Executive pursuant to any equity incentive plan
of the Company which would otherwise vest based on attainment of performance
criteria (“Performance Awards”) will either: (i) not be subject to acceleration
of vesting pursuant to this Agreement if the terms of such Performance Awards
supersede this Agreement, or (ii) if the terms of such Performance Awards do not
supersede this Agreement, such Performance Awards will accelerate vesting in
full; provided however, that if such Performance Awards have multiple vesting
levels depending on the level of performance, such Performance Awards will
accelerate vesting at the “target level.”  

(d)If Executive is unable to exercise all or a portion of any exercisable equity
awards granted to Executive pursuant to any equity incentive plan of the Company
during the applicable post Termination Date exercise period due to a
contractual, legal or regulatory restriction that prohibits the exercise of such
Company’s equity awards, the exercise period of such equity awards shall be
automatically extended for an additional ninety (90) days following the
termination of such contractual, legal or regulatory restriction; provided,
however that in no event will such exercise period be extended beyond the
maximum permitted contractual term for such equity awards and nothing herein is
intended to prohibit earlier cancellation or termination of such equity awards
in connection with a Change in Control in which such exercisable awards are not
assumed, substituted or continued.

 

article 4

Limitations and Conditions on Benefits

4.1Rights Conditioned on Compliance.  Executive’s rights to receive all
severance benefits described in Article 2 and Article 3 (other than the Accrued
Obligations) shall be conditioned upon and subject to Executive’s compliance
with all the limitations and conditions on benefits as described in this Article
4.  Executive acknowledges and agrees that Executive’s obligations under this
Article 4 are an essential part of the consideration Executive is providing
hereunder in exchange for which and in reliance upon which the Company has
agreed to provide the payments and benefits under this Agreement.  Accordingly,
Executive agrees that Executive will forfeit, effective as of the date of any
breach or failure to comply with any of Executive’s continuing obligations under
this Article 4, any right, entitlement, claim or interest in or to any then
unpaid portion of the severance payments or benefits provided in Article 2 or
Article 3.

4.2Resignation of all Company Positions on Termination Date.  No later than the
Termination Date, and prior to the provision or payment of any benefits under
this Agreement on account of such Covered Termination or Change in Control
Termination, as applicable, Executive must resign from all positions that
Executive holds with the Company unless otherwise requested by the Company.

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4.3Release Prior to Payment of Benefits.  Prior to the provision or payment of
any benefits under this Agreement on account of a Covered Termination or Change
in Control Termination, as applicable, Executive must execute a general waiver
and release of all known and unknown claims in substantially the form attached
hereto as Exhibit A (or in such other form as may later be specified by the
Company) (the “Release”), and such release must become effective in accordance
with its terms, but in no event later than sixty (60) days following the
Termination Date (the “Release Deadline”).  No amount shall be paid under this
Agreement prior to the effective date of the Release.  The Company may modify
the Release in its discretion to comply with changes in applicable law at any
time prior to Executive’s execution of such Release.  Such Release shall
specifically relate to all of Executive’s rights and claims in existence at the
time of such execution and shall confirm Executive’s obligations under
Executive’s written confidentiality or proprietary information agreement (or any
successor agreement thereto) and any similar obligations under applicable
law.  It is understood that, as specified in the applicable Release, Executive
has a certain number of calendar days to consider whether to execute such
Release.  If Executive does not execute such Release within the applicable
period, Executive shall have no further rights, title or interests in or to any
severance benefits or payments pursuant to, this Agreement.  It is further
understood that if Executive is aged 40 years old or older at the time of a
Change in Control Termination or a Covered Termination, as applicable, Executive
may revoke the applicable Release in writing within seven (7) calendar days
after its execution by Executive.  If Executive revokes such Release within such
subsequent seven (7) day period, no benefits shall be provided or payable under
this Agreement pursuant to such Covered Termination or Change in Control
Termination, as applicable.

4.4Return of Company Property.  Not later than the Termination Date (unless
otherwise agreed by the Company in writing), Executive shall return to the
Company all documents (and all copies thereof) and other property and
information belonging to the Company that Executive has in his or her possession
or control.  The documents and property to be returned include, but are not
limited to, all files, correspondence, email, memoranda, notes, notebooks,
records, plans, forecasts, reports, studies, analyses, compilations of data,
proposals, agreements, financial information, research and development
information, marketing information, operational and personnel information,
databases, computer-recorded information, tangible property and equipment
(including, but not limited to, computers, facsimile machines, mobile
telephones, and servers), credit cards, entry cards, identification badges and
keys; and any materials of any kind which contain or embody any proprietary or
confidential information of the Company (and all reproductions thereof in whole
or in part).  Executive agrees to make a diligent search to locate any such
documents, property and information.  If Executive has used any personally owned
computer, server, or e-mail system to receive, store, review, prepare or
transmit any Company confidential or proprietary data, materials or information,
then within ten (10) business days after the Termination Date (or within such
other timing as provided in writing by the Company), Executive shall provide the
Company with a computer-useable copy of all such information and then
permanently delete and expunge such confidential or proprietary information from
those systems without retention of any reproductions.  Executive agrees to
provide the Company access to Executive’s personally owned computer, server or
e-mail systems as requested to verify that the necessary copying and/or deletion
is done.  

4.5Cooperation and Continued Compliance with Proprietary Information
Obligations.

(a)From and after the Termination Date, Executive shall cooperate fully with the
Company in connection with its actual or contemplated defense, prosecution, or
investigation of any existing or future litigation, arbitrations, mediations,
claims, demands, audits, government or regulatory inquiries, or other matters
arising from events, acts, or failures to act that occurred during the time
period

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in which Executive was employed by the Company (including any period of
employment with an entity acquired by the Company).  Such cooperation includes,
without limitation, being available upon reasonable notice, without subpoena, to
provide accurate and complete advice, assistance and information to the Company,
including offering and explaining evidence, providing truthful and accurate
sworn statements, and participating in discovery and trial preparation and
testimony.  Executive also agrees to promptly send the Company copies of all
correspondence (for example, but not limited to, subpoenas) received by
Executive in connection with any such legal proceedings, unless Executive is
expressly prohibited by law from so doing.  The Company will reimburse Executive
for reasonable out-of-pocket expenses incurred in connection with any such
cooperation (excluding foregone wages, salary, or other compensation) within
thirty (30) days of Executive’s timely presentation of appropriate documentation
thereof, in accordance with the Company’s standard reimbursement policies and
procedures, and will make reasonable efforts to accommodate Executive’s
scheduling needs.  

(b)From and after the Termination Date, Executive shall continue to abide by all
of the terms and provisions of Executive’s written confidentiality or
proprietary information agreement (and any other comparable agreement signed by
Executive), in accordance with its terms.   

4.6Continued Compliance with Nondisparagement, Noncompetion and Nonsolicitation
Requirements.  

(a)During the period of Executive’s employment with the Company and during the
Continuation Period, Executive will not knowingly and materially disparage,
criticize, or otherwise make any derogatory statements regarding the Company or
any officer, director or agent of the Company nor will the Company knowingly and
materially disparage, criticize, or otherwise make any derogatory statements
regarding Executive.  Notwithstanding the foregoing, nothing contained in this
Agreement will be deemed to restrict Executive, the Company or any of the
Company’s current or former officers and/or directors from providing information
to any governmental or regulatory agency (or in any way limit the content of any
such information) to the extent they are requested or required to provide such
information pursuant to applicable law or regulation.

(b)Executive acknowledges that the nature of the Company’s business is such that
if Executive were to become employed by, or substantially involved in, the
business of a competitor of the Company during the Continuation Period, it would
be very difficult for Executive not to rely on or use the Company’s trade
secrets and confidential information.  Thus, to avoid the inevitable disclosure
of the Company’s trade secrets and confidential information, Executive agrees
and acknowledges that Executive’s right to receive any then unpaid portion of
the severance payments or benefits provided in Article 2 or Article 3 shall be
conditioned upon Executive not directly or indirectly engaging in (whether as an
employee, consultant, agent, proprietor, principal, partner, stockholder,
corporate officer, director or otherwise), nor having any ownership interested
in or participating in the financing, operation, management or control of, any
person, firm, corporation or business that competes with Company or is a
customer of the Company; provided, however, that nothing contained in this
Section 4.6(b) shall be construed to prohibit Executive from purchasing and
owning (directly or indirectly) up to two percent (2%) of the capital stock or
other securities of any competitor corporation or other or other entity whose
stock or securities are traded on any national or regional securities exchange
or the national over-the-counter market and such ownership shall be excluded
from the prohibition set forth in this Section 4.6(b).  

(c)During the Continuation Period Executive shall not either directly or
indirectly solicit, induce, attempt to hire, recruit, encourage, take away, hire
any employee of the Company or cause

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any employee of the Company to leave his or her employment either for Executive
or for any other entity or person.

4.7Survival.  The provisions of this Article 4 shall survive the termination of
this Agreement.

 

article 5

Tax Treatment, Reductions and Offsets

5.1Parachute Payments.  

(a)If any payment or benefit (including payments and benefits pursuant to this
Agreement) Executive would receive in connection with a Change in Control from
the Company or otherwise (“Payment”) would (i) constitute a “parachute payment”
within the meaning of Section 280G of the Code, and (ii) but for this sentence,
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then such Payment will be equal to the Reduced Amount. The “Reduced
Amount” will be either (x) the largest portion of the Payment that would result
in no portion of the Payment being subject to the Excise Tax, or (y) the largest
portion, up to and including the total, of the Payment, whichever amount set
forth in clause (x) or (y), after taking into account all applicable federal,
state, provincial, foreign, and local employment taxes, income taxes, and the
Excise Tax (all computed at the highest applicable marginal rate), results in
such Participant's receipt, on an after-tax basis, of the greater economic
benefit notwithstanding that all or some portion of the Payment may be subject
to the Excise Tax.  If a reduction in a Payment is required pursuant to the
preceding sentence and the Reduced Amount is determined pursuant to clause (x)
of the preceding sentence, the reduction shall occur in the manner (the
"Reduction Method") that results in the greatest economic benefit for
Participant.  If more than one method of reduction will result in the same
economic benefit, the items so reduced will be reduced pro rata (the "Pro Rata
Reduction Method").  

(b)Notwithstanding any provision of this Section 5.1 to the contrary, if the
Reduction Method or the Pro Rata Reduction Method would result in any portion of
the Payment being subject to taxes pursuant to Section 409A of the Code that
would not otherwise be subject to taxes pursuant to Section 409A of the Code,
then the Reduction Method and/or the Pro Rata Reduction Method, as the case may
be, shall be modified so as to avoid the imposition of taxes pursuant to Section
409A of the Code as follows:  (i) as a first priority, the modification shall
preserve to the greatest extent possible, the greatest economic benefit for the
Executive as determined on an after-tax basis; (ii) as a second priority,
Payments that are contingent on future events (e.g., being terminated without
Cause), shall be eliminated before Payments that are not contingent on future
events; and (iii) as a third priority, Payments that are "deferred compensation"
within the meaning of Section 409A of the Code shall be reduced before Payments
that are not "deferred compensation" within the meaning of Section 409A of the
Code.

(c)The professional firm engaged by the Company for general tax purposes as of
the day prior to the effective date of the Change in Control shall make all
determinations required to be made under this Section 5.1.  If the professional
firm so engaged by the Company is serving as an accountant or auditor for the
individual, entity or group effecting the Change in Control, the Company shall
appoint a nationally recognized independent registered public accounting firm to
make the determinations required hereunder.  The Company shall bear all expenses
with respect to the determinations by such professional

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firm required to be made hereunder.  Any good faith determinations of the
professional firm made hereunder shall be final, binding and conclusive upon the
Company and Executive.

(d)If Executive receives a Payment for which the Reduced Amount was determined
pursuant to clause (x) of Section 5.1(a) and the Internal Revenue Service
determines thereafter that some portion of the Payment (after reduction pursuant
to clause (x) of Section 5.1(a)) is subject to the Excise Tax, Executive shall
promptly return to the Company a sufficient amount of the Payment so that no
portion of the remaining Payment is subject to the Excise Tax.  For the
avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y)
of Section 5.1(a), Executive shall have no obligation to return any portion of
the Payment pursuant to the preceding sentence.

5.2Certain Reductions and Offsets. To the extent that any federal, state or
local laws, including, without limitation, the federal Worker Adjustment and
Retraining Notification Act (the “WARN Act”) or any other so-called “plant
closing” laws (including but not limited to California Labor Code Section 1400
et seq.), require the Company to give advance notice or make a payment of any
kind to Executive because of Executive’s involuntary termination due to a
layoff, reduction in force, plant or facility closing, sale of business, change
in control, or any other similar event or reason, the benefits payable under
this Agreement shall be correspondingly reduced.  The benefits provided under
this Agreement are intended to satisfy any and all statutory obligations that
may arise out of Executive’s involuntary termination of employment for the
foregoing reasons, and the parties shall construe and enforce the terms of this
Agreement accordingly.

5.3Mitigation.  Executive shall not be required to mitigate damages or the
amount of any payment provided under this Agreement by seeking other employment
or otherwise, nor shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by Executive as a result of
employment by another employer or by any retirement benefits received by
Executive after the date of a Covered Termination or Change in Control
Termination.

5.4Indebtedness of Executive. If Executive is indebted to the Company on the
effective date of a Covered Termination or Change in Control Termination, the
Company reserves the right to offset any severance payments and benefits under
this Agreement by the amount of such indebtedness; provided, however, that any
such offset does not violate or result in the imposition of tax under Section
409A of the Code.

5.5Section 409A.  

(a)Notwithstanding anything to the contrary herein, the following provisions
apply to the extent severance and other benefits provided herein are subject to
Section 409A of the Code and the regulations and other guidance thereunder and
any state law of similar effect (collectively “Section 409A”).  Severance
benefits shall not commence until Executive has a “separation from service” for
purposes of Section 409A.  Each installment of  severance benefits is a separate
“payment” for purposes of Treas. Reg. Section 1.409A-2(b)(2)(i), and the
severance benefits are intended to satisfy the exemptions from application of
Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4),
1.409A-1(b)(5) and 1.409A-1(b)(9).  However, if such exemptions are not
available and Executive is, upon separation from service, a “specified employee”
for purposes of Section 409A, then, solely to the extent necessary to avoid
adverse personal tax consequences under Section 409A, the timing of the
severance benefits payments shall be delayed until the earlier of (i) six (6)
months and one day after Executive’s separation from service, or (ii)
Executive’s death.

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(b)If the severance benefits are not covered by one or more exemptions from the
application of Section 409A and the Release could become effective in the
calendar year following the calendar year in which Executive separates from
service, the separation agreement will not be deemed effective any earlier than
the Release Deadline.  None of the severance benefits will be paid or otherwise
delivered prior to the effective date of the Release.  

(c)All expenses or other reimbursements as provided herein shall be payable in
accordance with the Company’s policies in effect from time to time, provided
that such reimbursements (i) shall be made on or prior to the last day of the
taxable year following the taxable year in which such expenses were incurred by
Executive; (ii) no such reimbursement or expenses eligible for reimbursement in
any taxable year shall in any way affect the expenses eligible for reimbursement
in any other taxable year; and (iii) the right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchanged for another benefit.

(d)The severance and other benefits provided herein are intended to qualify for
an exemption from application of Section 409A or comply with its requirements to
the extent necessary to avoid adverse personal tax consequences under Section
409A, and any ambiguities herein shall be interpreted accordingly.  

5.6Tax Withholding.  All payments made and benefits provided under this
Agreement shall be subject to applicable withholding for federal, state and
local income and employment taxes.  

article 6

Definitions

Unless otherwise provided, for purposes of this Agreement, the following
definitions shall apply:

6.1“Accrued Obligations” means (i) any portion of Executive’s annual base salary
or incentive compensation earned through Executive’s termination date not
theretofore paid, (ii) any unreimbursed business expenses which are eligible for
reimbursement in accordance with the Company’s policies, (iii) any accrued but
unused vacation pay or paid time off owed to Executive, and (iv) any amount
arising from Executive’s participation in, or benefits under, any employee
benefit plans, programs or arrangements, which amounts shall be payable in
accordance with the terms and conditions of such employee benefit plans,
programs or arrangements.  Accrued Obligations also includes any rights to
indemnification Executive many have under the Company’s Certificate of
Incorporation, Bylaws, or separate indemnification agreement, as applicable, and
as each may be amended from time to time.

6.2“Base Salary” means 1/12th of Executive’s annual base salary (excluding
incentive pay, premium pay, commissions, overtime, bonuses, and other forms of
variable compensation) as in effect on the date of a Change in Control
Termination or a Covered Termination, as applicable, but determined without
giving effect to any reduction in Base Salary that would give rise to the
Executive’s right to resign for Good Reason.

6.3“Board” means the Board of Directors of the Company.

6.4“Cause” means (i) Executive’s willful gross misconduct; (ii) Executive’s
unjustifiable neglect of his duties (as determined in the good faith judgment of
the Board); (iii) Executive’s acting in any

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manner that has a direct, substantial and adverse effect on the Company or its
reputation; (iv) Executive’s repeated material failure or repeated refusal to
comply with reasonable written policies, standards and regulations established
by the Company from time to time which failure, if curable, is not cured to the
reasonable satisfaction of the Board during the thirty (30) day period following
written notice of such failure from the Company; (v) any tortuous act, unlawful
act or malfeasance which causes or reasonably could cause (for example, if it
became publicly known) material harm to the Company’s standing, condition or
reputation; (vi) any material breach by Executive of the provisions of any
confidential information agreement with the Company or other material improper
disclosure of the Company’s confidential or proprietary information; (vii)
Executive’s theft, dishonesty, or falsification of any Company records; (viii)
Executive’s being found liable in any Securities and Exchange Commission or
other civil or criminal securities law action or entering any cease and desist
order with respect to such action (regardless of whether or not Executive admits
or denies liability); or (ix) Executive (A) obstructing or impeding; (B)
endeavoring to influence, obstruct or impede, or (C) failing to materially
cooperate with, any investigation authorized by the Board or any governmental or
self-regulatory entity (an “Investigation”).  However, Executive’s failure to
waive attorney-client privilege relating to communications with Executive’s own
attorney in connection with an Investigation will not constitute “Cause.”

6.5“Change in Control” means the occurrence of any of the following: (i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by, or 50% or
more of the fair value of, the Company’s then outstanding voting power
represented by, or 50% or more of the fair value of, the Company’s then
outstanding voting securities; (ii) any action or event occurring within a
two-year period, as a result of which less than a majority of the directors are
Incumbent Directors.  “Incumbent Directors” will mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of a majority of
the Incumbent Directors at the time of such election or nomination (but will not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company); (iii) the consummation of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted in to voting securities of the surviving or resulting entity,
including any parent holding company) at least fifty percent (50%) of the total
voting power represented by the voting securities of the Company or such
surviving or resulting entity outstanding immediately after such merger or
consolidation; or (iv) the consummation of the sale, lease or other disposition
by the Company of all or substantially all the Company’s assets.  In addition,
to the extent required for compliance with Section 409A of the Code, in no event
will a Change in Control be deemed to have occurred if such transaction is not
also a “change in the ownership or effective control of” the Company or a
“change in the ownership of a substantial portion of the assets of” the Company,
as determined under Treasury Regulations Section 1.409A-3(i)(5).

6.6“Change in Control Termination” means an “Involuntary Termination Without
Cause” or “Resignation for Good Reason,” either of which occurs on or within
twelve (12) months following, the effective date of a Change in Control,
provided that any such termination is a “separation from service” within the
meaning of Treasury Regulation Section 1.409A-1(h). For the sake of clarity, a
termination of employment due to Executive’s death or disability will not
constitute a Change in Control Termination for purposes of this Agreement.

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6.7“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.

6.8“Code” means the Internal Revenue Code of 1986, as amended.

6.9“Company” means Nanometrics Incorporated or, following a Change in Control,
the surviving entity resulting from such transaction, or any subsequent
surviving entity resulting from any subsequent Change in Control.

6.10“Continuation Period” means the 6 month period following the Termination
Date in the event of a Covered Termination and the 12 month period following the
Termination Date in the event of a Change in Control Termination, as applicable.

6.11“Covered Termination” means an “Involuntary Termination Without Cause” or
“Resignation for Good Reason” either of which occurs other than on or within
twelve (12) months following, the effective date of a Change in Control,
provided that any such termination is a “separation from service” within the
meaning of Treasury Regulation Section 1.409A-1(h).  For the sake of clarity, a
termination of employment due to Executive’s death or disability will not
constitute a Covered Termination for purposes of this Agreement.

6.12“Involuntary Termination Without Cause” means Executive’s dismissal or
discharge by the Company for reasons other than Cause and other than as a result
of death or disability.  

6.13“Resignation for Good Reason” means Executive’s resignation from all
positions Executive holds with the Company at such time, which resignation
occurs within ninety (90) days following any of the following events taken
without Executive’s written consent, provided that Executive has given the
Company written notice of such event within thirty (30) days after the first
occurrence of such event and the Company has not cured such event, to the extent
curable, within thirty (30) days thereafter:

(a)A material decrease in Executive’s base compensation (which includes
Executive’s base salary and target bonus);

(b)A material diminution in Executive’s authority, duties or responsibilities
(including any change in Executive’s position such that Executive is no longer
employed in substantially the same position and with substantially the same
level of authority, responsibilities or duties at the ultimate parent
corporation in an affiliated group of companies);

(c)A relocation of Executive’s assigned office location to a facility which is
more than fifty (50) miles from its current location and which materially
increases Executive’s one-way driving distance from Executive’s principal
personal residence to such office location at which Executive is required to
perform services (except for required business travel to the extent consistent
with Executive’s prior business travel obligations); or

(d)The material breach by the Company of this Agreement, the Prior Agreement or
any other then current agreement under which Executive performs services for the
Company.

6.14“Termination Date” means the effective date of the Change in Control
Termination or Covered Termination, as applicable.

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article 7

General Provisions

7.1Employment Status.  This Agreement does not constitute a contract of
employment or impose upon Executive any obligation to remain as an employee, or
impose on the Company any obligation (i) to retain Executive as an employee,
(ii) to change the status of Executive as an at-will employee or (iii) to change
the Company’s policies regarding termination of employment.

7.2Notices.  Any notices provided hereunder must be in writing, and such notices
or any other written communication shall be deemed effective upon the earlier of
personal delivery (including personal delivery by facsimile) or the third day
after mailing by first class mail, to the Company at its primary office location
and to Executive at Executive’s address as listed in the Company’s payroll
records.  Any payments made by the Company to Executive under the terms of this
Agreement shall be delivered to Executive either in person or at the address as
listed in the Company’s payroll records.  Either Party can change his or its
address for receipt of notice by providing writing notice to the other Party of
such change.

7.3Severability.  Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.

7.4Waiver.  If either party should waive any breach of any provisions of this
Agreement, such Party shall not thereby be deemed to have waived any preceding
or succeeding breach of the same or any other provision of this Agreement.

7.5Complete Agreement.  This Agreement, including Exhibit A hereto constitutes
the entire agreement between Executive and the Company and is the complete,
final, and exclusive embodiment of their agreement with regard to this subject
matter, wholly superseding all written and oral agreements with respect to
payments and benefits to Executive in the event of employment termination,
including but not limited to the Prior Agreement.  It is entered into without
reliance on any promise or representation other than those expressly contained
herein.

7.6Amendment or Termination of Agreement; Continuation of Agreement.  This
Agreement may be changed or terminated only upon the mutual written consent of
the Company and Executive.  The written consent of the Company to a change or
termination of this Agreement must be signed by an executive officer of the
Company (other than Executive) after such change or termination has been
approved by the Board. Unless so terminated, this Agreement shall continue in
effect for as long as Executive continues to be employed by the Company or by
any surviving entity following any Change in Control.  In other words, if,
following a Change in Control, Executive continues to be employed by the
surviving entity without a Change in Control Termination and the surviving
entity then undergoes a Change in Control, following which Executive is
terminated by the subsequent surviving entity in a Change in Control
Termination, then Executive shall receive the benefits described in Article 3
hereof.

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7.7Counterparts.  This Agreement may be executed in separate counterparts, any
one of which need not contain signatures of more than one party, but all of
which taken together will constitute one and the same Agreement.

7.8Headings.  The headings of the Articles and Sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.

7.9Successors and Assigns.  This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, and the Company, and any surviving
entity resulting from a Change in Control and upon any other person who is a
successor by merger, acquisition, consolidation or otherwise to the business
formerly carried on by the Company, and their respective successors, assigns,
heirs, executors and administrators, without regard to whether or not such
person actively assumes any rights or duties hereunder; provided, however, that
Executive may not assign any duties hereunder and may not assign any rights
hereunder without the written consent of the Company.

7.10Choice of Law.  All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the law of the State of
California, without regard to such state’s conflict of laws rules.

7.11Dispute Resolution.  To ensure the rapid and economical resolution of
disputes that may arise in connection with Executive’s employment and services
for the Company, Executive and the Company agree that any and all disputes,
claims, or causes of action, in law or equity, including but not limited to
statutory claims, arising from or relating to the enforcement, breach,
performance, or interpretation of this Agreement, Executive’s employment with
and services for the Company, or the termination of Executive’s employment with
and services for the Company, will be resolved pursuant to the Federal
Arbitration Act, 9 U.S.C. §§1-16, and to the fullest extent permitted by law, by
final, binding and confidential arbitration conducted in San Jose, California
(or such other location as mutually agreed by the parties) by JAMS, Inc.
(“JAMS”) or its successors by a single arbitrator.  Both Executive and the
Company acknowledge that by agreeing to this arbitration procedure, they each
waive the right to resolve any such dispute through a trial by jury or judge or
administrative proceeding.  Any such arbitration proceeding will be governed by
JAMS’ then applicable rules and procedures for employment disputes, which can be
found at http://www.jamsadr.com/rules-clauses/ and which will be provided to
Executive upon request.  In any such proceeding, the arbitrator shall (a) have
the authority to compel adequate discovery for the resolution of the dispute and
to award such relief as would otherwise be permitted by law; and (b) issue a
written arbitration decision including the arbitrator’s essential findings and
conclusions and a statement of the award.  Executive and the Company each shall
be entitled to all rights and remedies that either would be entitled to pursue
in a court of law.  Nothing in this Agreement is intended to prevent either the
Company or Executive from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any such arbitration pursuant to
applicable law.  The Company shall pay all filing fees in excess of those that
would be required if the dispute were decided in a court of law, and shall pay
the arbitrator’s fees and any other fees or costs unique to arbitration.  Any
awards or orders in such arbitrations may be entered and enforced as judgments
in the federal and state courts of any competent jurisdiction.

7.12Construction of Agreement.  In the event of a conflict between the text of
the Agreement and any summary, description or other information regarding the
Agreement, the text of the Agreement shall control.

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In Witness Whereof, the parties have executed this Agreement on the Effective
Date written above.

 

Nanometrics IncorporatedRollin Kocher

By: /S/ Timothy Stultz/S/ Rollin Kocher

 

Name: Timothy Stultz

 

Title:  President/CEO

 

 

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Exhibit A

 

Release of Claims

 

In consideration of the payments and other benefits set forth in the General
Severance Benefits and Change in Control Severance Benefits Agreement dated
September 14th, 2016 to which this form is attached, I, Rollin Kocher, hereby
furnish Nanometrics Incorporated (the “Company”) with the following release and
waiver (“Release and Waiver”).

In exchange for the consideration provided to me by the Employment Agreement
that I am not otherwise entitled to receive, I hereby generally and completely
release the Company and its current and former directors, officers, employees,
stockholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, affiliates, and assigns (collectively, the
“Released Parties”) from any and all claims, liabilities and obligations, both
known and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring prior to or on the date that I sign this Release
and Waiver (collectively, the “Released Claims”).  The Released Claims include,
but are not limited to:  (a) all claims arising out of or in any way related to
my employment with the Company, or the termination of that employment; (b) all
claims related to my compensation or benefits from the Company including salary,
bonuses, commissions, vacation pay, expense reimbursements, severance pay,
fringe benefits, stock, stock options, or any other ownership interests in the
Company; (c) all claims for breach of contract, wrongful termination, and breach
of the implied covenant of good faith and fair dealing; (d) all tort claims,
including claims for fraud, defamation, emotional distress, and discharge in
violation of public policy; and (e) all federal, state, and local statutory
claims, including claims for discrimination, harassment, retaliation,
misclassification, attorneys’ fees, or other claims arising under the federal
Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities
Act of 1990 (as amended), the federal Age Discrimination in Employment Act of
1967 (as amended) (the “ADEA”), the California Labor Code, and the California
Fair Employment and Housing Act (as amended).  Notwithstanding the foregoing,
the following are not included in the Released Claims (the “Excluded Claims”):
(a) any rights or claims for indemnification I may have pursuant to any written
indemnification agreement with the Company to which I am a party, the charter,
bylaws, or operating agreements of the Company, or under applicable law; (b) any
rights or claims to unemployment compensation, funds accrued in my 401k account,
or any vested equity incentives; (c) any rights that are not waivable as a
matter of law; or (d) any claims arising from the breach of this Release and
Waiver.  I hereby represent and warrant that, other than the Excluded Claims, I
am not aware of any claims I have or might have against any of the Released
Parties that are not included in the Released Claims.

I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads 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.”  I hereby
expressly waive and relinquish all rights and benefits under that Section and
any law of any jurisdiction of similar effect with respect to any claims I may
have against the Company.

I acknowledge that, among other rights, I am waiving and releasing any rights I
may have under ADEA, that this Release and Waiver is knowing and voluntary, and
that the consideration given for this

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Release and Waiver is in addition to anything of value to which I was already
entitled as an executive of the Company.  If I am 40 years of age or older upon
execution of this Release and Waiver, I further acknowledge that I have been
advised, as required by the Older Workers Benefit Protection Act, that:  (a) the
release and waiver granted herein does not relate to claims under the ADEA which
may arise after this Release and Waiver is executed; (b) I should consult with
an attorney prior to executing this Release and Waiver; and (c) I have
twenty-one (21) days from the date of termination of my employment with the
Company in which to consider this Release and Waiver (although I may choose
voluntarily to execute this Release and Waiver earlier); (d) I have seven (7)
days following the execution of this Release and Waiver to revoke my consent to
this Release and Waiver; and (e) this Release and Waiver shall not be effective
until the seven (7) day revocation period has expired without my having
previously revoked this Release and Waiver.

I acknowledge my continuing obligations under my Proprietary Information and
Inventions Agreement.  Pursuant to the Proprietary Information and Inventions
Agreement I understand that among other things, I must not use or disclose any
confidential or proprietary information of the Company and I must immediately
return all Company property and documents (including all embodiments of
proprietary information) and all copies thereof in my possession or control.  I
understand and agree that my right to the severance pay I am receiving in
exchange for my agreement to the terms of this Release and Waiver is contingent
upon my continued compliance with my Proprietary Information and Inventions
Agreement.

This Release and Waiver constitutes the complete, final and exclusive embodiment
of the entire agreement between the Company and me with regard to the subject
matter hereof.  I am not relying on any promise or representation by the Company
that is not expressly stated herein.  This Release and Waiver may only be
modified by a writing signed by both me and a duly authorized officer of the
Company.

 

ROLLIN KOCHER

 

/S/ Rollin Kocher

 

Date:  12/21/2016

 

 

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