Exhibit 10.4
AMENDED AND RESTATED
SUMMARY OF TERMS
OF EMPLOYMENT
     THIS AMENDED AND RESTATED SUMMARY OF TERMS OF EMPLOYMENT (this
“Restatement”) is entered into as of this 28th day of March, 2008 (the
“Effective Date”) by and between FSI International, Inc., a Minnesota
corporation (the “Company”), and Donald S. Mitchell (the “Employee”).
RECITALS
     A. Employee is employed by the Company pursuant to a Summary of Terms of
Proposed Employment dated December 12, 1999 (the “Summary of Terms”), which the
parties entered into at the inception of Employee’s employment.
     B. Employee and the Company are parties to a Management Agreement of even
date herewith (the “Management Agreement”) and to an Employment Agreement of
even date herewith (the “Employment Agreement”).
     C. In October 2004, the American Jobs Creation Act of 2004 (the “Act”) was
enacted, Section 885 of which Act added new provisions to the Internal Revenue
Code pertaining to deferred compensation.
     D. The Treasury Department has issued final regulations regarding the
deferred compensation provisions of the Act, which permit service providers and
service recipients a transition period to modify existing deferred compensation
arrangements to bring them in compliance with the Act.
     E. The parties agree that it is in their mutual best interests to modify,
amend and clarify the terms and conditions of the Summary of Terms, as set forth
in this Restatement, with the full intention of complying with the Act so as to
avoid the excise taxes and penalties imposed under the Act.
AGREEMENT
     NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements contained in this Restatement, the Company and Employee agree as
follows:
     1. Term. Employee’s employment under this Restatement shall commence on the
Effective Date and shall continue in effect until March 28, 2009 (the “Original
Term”), unless earlier terminated in accordance with Paragraph 10 of this
Restatement. Thereafter, unless earlier terminated in accordance with
Paragraph 10 hereof, the term of Employee’s employment with the Company shall be
automatically extended for successive one-year periods (each an “Extended
Term”), unless either party gives written notice to the other party at least
90 days

 

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prior to the expiration of the Original Term or Extended Term then in effect
that such party elects not to extend the term of this Agreement. The Original
Term, together with any Extended Term, shall collectively be the “Term.”
     2. Title and Reporting. During the Term Employee will be President and
Chief Executive Officer of the Company. As of the Effective Date, Employee is
currently serving a term as a Director on the Company’s Board of Directors.
Employee’s continued service as a Director for additional terms shall be subject
to shareholder approval.
     3. Base Salary. Employee’s annual salary during the Term shall be $370,162.
Annual increases on a fiscal year basis will be in the discretion of the Board
of Directors.
     4. Management Incentive Plan. Employee will be eligible for participation
in the Company’s Management Incentive Plan during the Term at a target of 100%
and a range of up to 200% for performance in excess of established annual
milestone objectives.
     5. Severance Pay Plan. Employee shall be eligible for participation in the
Company’s Severance Pay Plan only to the extent Employee meets the eligibility
requirements for participation in the Severance Pay Plan. As of the Effective
Date, Employee does not meet the eligibility requirements for participation in
the Severance Pay Plan.
     6. Commuting and Relocation Benefits.
          a. The Company will reimburse Employee for the commuting costs of
travel for the Employee (and/or his wife) to/from California to FSI sites,
subject to the following terms and conditions:
               (i) Employee shall be eligible for reimbursement of such expenses
only to the extent such expenses are incurred in the course and scope of
employment during the Term;
               (ii) The amount of expenses eligible for reimbursement during a
calendar year shall not affect the amount of expenses eligible for reimbursement
in any other calendar year;
               (iii) Employee shall submit verification of expenses eligible for
reimbursement within 30 days from the date the expense was incurred, and the
Company shall reimburse Employee for eligible expenses within 30 days thereafter
(and in no event later than December 31 of the year following the calendar year
in which the expense was incurred); and
               (iv) The right to reimbursement of all reasonable and ordinary
commuting costs of travel may not be liquidated or exchanged for another
benefit.
          b. To the extent that the reimbursement of commuting expenses is
taxable to Employee, the Company will pay to Employee a full gross up (except to
the extent such expenditures by Employee may be deducted on Employee’s personal
income tax) so that

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amounts paid by the Company, net of Employee’s taxes, fully cover the relevant
expenses. Such tax gross up payment shall be made no later than December 31 of
the year following the calendar year in which Employee remits the related taxes.
          c. If the Employee elects to move to the Chaska, Minnesota area during
the Term, the Company will pay for all reasonable and ordinary costs of
relocating Employee and his spouse, subject to the following terms and
conditions:
               (i) Employee shall be eligible for reimbursement of such expenses
only to the extent such expenses are incurred during the Term and prior to any
notice by the Company or Employee of the termination of his employment;
               (ii) The amount of expenses eligible for reimbursement during a
calendar year shall not affect the amount of expenses eligible for reimbursement
in any other calendar year;
               (iii) Employee shall submit verification of expenses eligible for
reimbursement within 30 days from the date the expense was incurred, and the
Company shall reimburse Employee for eligible expenses within 30 days thereafter
(and in no event later than December 31 of the year following the calendar year
in which the expense was incurred); and
               (iv) The right to reimbursement of all reasonable and ordinary
costs of relocation may not be liquidated or exchanged for another benefit.
     7. Perquisite Allowance. During the Term the Company will pay Employee an
annual gross perquisite allowance of $15,000 for use as determined by Employee.
     8. Life Insurance Policy. During the Term the Company will provide Employee
with life insurance per Company plan.
     9. Health, Vacation, and Welfare Benefits. During the Term the Company will
provide Employee with health, vacation, and welfare benefits per Company plans
generally applicable to senior executives.
     10. At-will Relationship. Employee’s employment is at-will. Either the
Employee or the Company may terminate Employee’s employment at any time for any
reason, with or without notice and with or without cause.
     11. Superseded Agreement. This Restatement supersedes and replaces the
Summary of Terms in its entirety.
     12. Interpretation. This Agreement is intended to satisfy, or be exempt
from, the requirements of Section 409A(a)(2), (3), and (4) of the Code,
including current and future guidance and regulations interpreting such
provisions, and should be interpreted accordingly.

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     IN WITNESS WHEREOF, the parties hereto have executed this Restatement as of
the date stated above.

                              FSI INTERNATIONAL, INC.
 
                   
/s/ Donald S. Mitchell
      By:   /s/ Patricia M. Hollister        
 
                   
Donald S. Mitchell
          Patricia M. Hollister        
 
        Its Chief Financial Officer        
 
                   

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