Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This Agreement is entered into by and between August Technology Corporation
(“August Technology ” or the “Company”), a Minnesota corporation, with its
principal place of business at 4900 West 78th Street, Bloomington, Minnesota
55435, and Ardelle Johnson (“Employee”).

 

WHEREAS, Employee desires employment with August Technology or has been employed
with August Technology and wishes to continue employment under the terms and
conditions set forth in this Agreement;

 

WHEREAS, Employee acknowledges and agrees that he has and will continue to have
access to confidential, proprietary and trade secret information in the course
of his/her employment and continued employment with August Technology, the
unauthorized use or disclosure of which would cause irreparable harm to August
Technology;

 

WHEREAS, August Technology and Employee wish to set forth the terms of their
agreement in writing;

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, August
Technology and Employee agree as follows:

 

1.                                      Employment.  August Technology agrees to
employ or continue to employ Employee, effective August 18, 2003, and Employee
accepts employment or continued employment, upon the terms and conditions set
forth in this Agreement.

 

2.                                      Term of Employment.  August Technology
shall continue to employ Employee for an indefinite duration until his/her
employment is terminated in accordance with Paragraph 8 of this Agreement.

 

3.                                      Duties and Responsibilities.  Employee
shall devote his/her time, attention and best efforts to the duties and
responsibilities of his/her position, and to the business and affairs of August
Technology.  Employee’s title shall be as set forth in Exhibit A as “Employee’s
Title”, reporting to the person or office as set forth in Exhibit A as
“Manager”.  Employee shall perform all duties and responsibilities of the
position he/she holds with August Technology as those duties and
responsibilities may change from time to time.  Employee shall comply with
August Technology’s standards, policies and procedures in effect and as they may
change from time to time; provided that to the extent such policies and
procedures are inconsistent with this Agreement, the provisions of this
Agreement shall control.

 

4.                                      Compensation.  August Technology shall
pay Employee a gross annual salary as set forth in Exhibit A as “Base Salary”,
less appropriate payroll deductions.  Employee may also receive incentive
compensation in accordance with the Annual Incentive Plan, as issued and as may
change from time to time by the Company, or any other similar plan authorized by
the Board of Directors.  Employee’s compensation may be periodically increased
or adjusted as authorized by the Board of Directors in the case of the Chief
Executive Officer, or, in the case of all others, as recommended by the Chief
Executive Officer and approved by the Board of Directors.

 

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5.                                      Business Expenses.  August Technology
will, in accordance with its policies and practices as such may change from time
to time, reimburse Employee for all ordinary and necessary business expenses
after receipt of appropriate documentation of such expenses.

 

6.                                      Benefits.  Employee shall be entitled to
insurance and other benefits provided to key management employees in accordance
with applicable plan documents and commensurate with vice president and higher
positions within the Company.  Benefits provided to employees are subject to
change in the discretion of August Technology.

 

7.                                      Stock Options.  At the discretion of
August Technology, Employee may be granted stock options from time to time,
which options shall be subject to the terms and conditions of the August
Technology Corporation 1997 Stock Option Plan, as amended from time to time, or
any successor plan, and the related stock option agreements.  Further, Employee
shall be eligible to participate in the August Technology Corporation 2000
Employee Stock Purchase Plan, as amended from time to time, or any successor
plan, subject to the terms and conditions contained therein.

 

8.                                      Termination.  Employee’s employment
under this Agreement may be terminated:

 

(a)                                  At any time upon mutual written agreement
of the parties;

 

(b)                                 By either Employee or August Technology at
any time, with or without cause, upon thirty (30) days’ written notice to the
other;

 

(c)                                  By August Technology immediately upon
notice to Employee for cause which shall be defined as:

 

(i)                                     Employee’s material failure or neglect,
or refusal to perform, the duties and responsibilities of his/her position
and/or the reasonable direction of the Board of Directors or his/her superiors;

 

(ii)                                  Commission by Employee of any willful,
intentional or negligent act that has the effect of injuring the reputation,
business or performance of August Technology;

 

(iii)                               Employee’s conviction of a crime, or
commission of any act involving moral turpitude;

 

(iv)                              Any material default or nonperformance of the
terms of this Agreement, or any violation of Paragraphs 10, 11, 12, 14 and/or 15
of this Employment Agreement; or

 

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(d)                                 Employee’s employment will terminate
immediately upon his/her death.

 

Upon Employee’s resignation or termination under this Paragraph 8 for any
reason, August Technology shall pay Employee his/her Base Salary through the
Employee’s last date of employment, and any accrued and unused vacation or other
paid time off through the Employee’s last date of employment.  Employee’s
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents.  In the event Employee’s employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee’s continued performance of
duties during the notice period.  In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as “Severance Period”,
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period.  Employee shall not be
entitled to any further or other payments or benefits of any kind upon the
Employee’s termination or resignation under this Paragraph 8.  In the event,
Employee is entitled to Change in Control benefits as set forth in Paragraph 9,
Employee shall not be entitled to any severance or notice rights under this
Paragraph 8.

 

9.                                      Change in Control.  If, within eighteen
(18) months following a Change in Control (as defined below), Employee’s
employment is terminated (as defined below), then:

 

(a)                                  Employee shall be paid his/her last Base
Salary on a regular payroll cycle as of the effective date for the time period
as set forth in Exhibit A as “Change In Control Severance Period” from the
effective date of such termination;

 

(b)                                 For the same Change In Control Severance
Period from the effective date of such termination as set forth in Paragraph
9(b), the Company shall, if Employee elects to continue group health or other
group benefits as allowed under COBRA, make the COBRA payments for the Change In
Control Severance Period;

 

(c)                                  The right to exercise all unexpired and
non-vested stock options in favor of Employee shall immediately vest and
accelerate; and

 

(d)                                 Limitation on Change of Control Payments. 
Employee shall not be entitled to receive any Change of Control Action, as
defined below, which would constitute an “excess parachute payment” for purposes
of Code Section 280G, or any successor provision, and the regulations
thereunder.  In the event any Change of Control Action payable to Employee would
constitute an “excess parachute payment,” then the acceleration of the

 

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exercisability of such stock options and the payments to such Participant
pursuant to this Paragraph 9 shall be reduced to the largest extent or amount as
will result in no portion of such payments being subject to the excise tax
imposed by Section 4999 of the Code.  For purposes of this Paragraph 9, a
“Change of Control Action” shall mean any payment, benefit or transfer of
property in the nature of compensation paid to or for the benefit of Employee
under any arrangement which is considered contingent on a Change of Control for
purposes of Code Section 280G, including, without limitation, any and all
salary, bonus, incentive, restricted stock, stock option, compensation or
benefit plans, programs or other arrangements, and shall include benefits
payable under this Agreement.

 

(e)                                  “Change of Control.”  For purposes of this
Agreement, “Change of Control” shall mean any of the following events occurring
after the date of this Agreement:

 

(1)                                  A merger or consolidation to which the
Company is a party, an acquisition by the Company involving the issuance of the
Company’s securities as consideration for the acquired business, or any
combination of fully closed and completed mergers, consolidations or
acquisitions during any consecutive twenty-four (24) month period, if the
individuals and entities who were shareholders of the Company immediately prior
to the effective date of such merger, consolidation, or acquisition (or prior to
the effective date of the first of a combination of such transactions) have,
immediately following the effective date of such merger, consolidation or
acquisition (or following the effective date of the last of a combination of
such transactions), beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of less than fifty percent (50%) of the total
combined voting power of all classes of securities issued by the surviving
corporation for the election of directors of the surviving corporation;

 

(2)                                  The acquisition of direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of securities of the Company by any person or entity or by a group of
associated persons or entities acting in concert in one or a series of
transactions, which causes the aggregate beneficial ownership of such person,
entity or group to equal or exceed +twenty percent (20%) or more of the total
combined voting power of all classes of the Company’s then issued and
outstanding securities;

 

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(3)                                  The sale of the properties and assets of
the Company substantially as an entirety, to any person or entity which is not a
wholly-owned subsidiary of the Company;

 

(4)                                  The stockholders of the Company approve any
plan or proposal for the liquidation of the Company; or

 

(5)                                  A change in the composition of the Board of
the Company at any time during any consecutive twenty-four (24) month period
such that the “Continuity Directors” no longer constitute at least a seventy
percent (70%) majority of the Board. For purposes of this event, “Continuity
Directors” means (i) those members of the Board who were directors at the
beginning of such consecutive twenty-four (24) month period or at the date of
this Agreement if this Agreement was entered into less than twenty-four months
prior to the change in composition of the Board; and (ii) any new director whose
election to the Board of Directors or nominations for election to the Board of
Directors was approved by a vote of at least two-thirds (2/3) of the directors
identified in the immediately preceding clause (i).

 

(6)                                  The Company enters into a letter of intent,
an agreement in principle or a definitive agreement relating to an event
described in Paragraph 9(e)(1), 9(e)(2), 9(e)(3), 9(e)(4), or 9(e)(5) that
ultimately results in such a Change of Control, or a tender or exchange offer or
proxy contest is commenced that ultimately results in an event described in
Paragraph 9(e)(2) or 9(e)(5).

 

(f)                                    Termination.  For purposes of this
Paragraph 9, “Termination” shall mean any of the following events occurring
within eighteen (18) months after a Change of Control:

 

(1)                                  The termination of Employee’s employment by
the Company for any reason, with or without cause, except for termination
resulting from conduct by Employee constituting (a) a felony involving moral
turpitude under either federal law or the law of the State of Minnesota, or (b)
Employee’s willful failure to fulfill his/her employment duties with the
Company; provided, however, that for purposes of this clause (c), an act or
failure to act by Employee shall not be “willful” unless it is done, or omitted
to be done, in bad faith and without any reasonable belief that Employee’s
action or omission were in the best interests of the Company; or

 

(2)                                  The termination of employment with the
Company by Employee for Good Reason.  Such termination shall be accomplished by,
and

 

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effective upon, Employee giving written notice to Company of his/her decision to
terminate.  “Good Reason” shall mean a good faith determination by Employee, in
Employee’s sole and absolute judgment, that any one or more of the following
events has occurred, at any time during the term of this Agreement or after a
Change of Control; provided, however, that such event shall not constitute “Good
Reason” if Employee has expressly consented to such event in writing or if
Employee fails to provide written notice of his/her decision to terminate within
sixty (60) days of the occurrence of such event:

 

(a)                                  A material change in Employee’s reporting
responsibilities, titles or offices, or any removal of Employee from or any
failure to re-elect Employee to any of such positions, which has the effect of
materially diminishing Employee’s responsibility or authority;

 

(b)                                 A reduction by the Company in Employee’s
base salary (as increased from time to time);

 

(c)                                  A requirement imposed by the Company on
Employee that results in Employee being based at a location that is outside of a
twenty-five (25) mile radius of Employee’s prior job location;

 

(d)                                 Without the adoption of a replacement plan,
program or arrangement that provides benefits to Employee that are equal to or
greater than those benefits that are discontinued or adversely affected:

 

i.                                          A failure by the Company to continue
in effect, within its maximum stated term, any pension, bonus, incentive, stock
ownership, stock purchase, stock option, life insurance, health, accident,
disability, or any other employee compensation or benefit plan, program or
arrangement, in which Employee is or has been participating;

 

ii.                                       The taking of any action by the
Company that would adversely affect Employee’s participation or materially
reduce Employee’s benefits under any of such plans, programs or arrangements; or

 

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(e)                                  Any action by the Company that would
materially adversely affect the physical conditions in or under which Employee
performs his/her employment duties; or

 

(f)                                    Any material breach by the Company of
this Employment Agreement between Employee and the Company.

 

Termination for “Good Reason” shall not include Employee’s death or a
termination for any reason other than the events specified in clauses (a)
through (f) above.

 

10.                               Confidential Information.  During the term of
this Agreement and at all times thereafter, Employee shall not directly or
indirectly use or disclose any trade secret, proprietary or confidential
information of August Technology or any subsidiary for the benefit of any person
or entity other than August Technology or any subsidiary without prior written
approval of August Technology’s Board of Directors.  For purposes of this
Agreement, in addition to all materials and information protected by applicable
statute or law, the parties acknowledge that confidential information shall
include any information, whether in print, on computer disc or tape or
otherwise, which is not public information and which relates to August
Technology or any subsidiary, or August Technology’s or any subsidiary’s
existing or reasonably foreseeable business, including but not limited to
information relating to research, development, technology, manufacturing
processes, purchasing and sales, information relating to sales and other
financial strategies, plans and/or goals, information relating to proprietary
rights and data, ideas, know-how, and/or trade secrets, information regarding
the identity and/or needs of clients or customers, client or customer lists and
other client or customer information, information regarding active and inactive
accounts of August Technology or any subsidiary, and information relating to
August Technology’s or any subsidiary’s methods of operation.

 

11.                               Noncompetition Obligations.  As a condition to
and in consideration of his/her employment and continued employment, and in
exchange for the severance and Change of Control provisions as set forth in
Paragraphs 8 and 9 of this Employment Agreement, and the mutual covenants
herein, Employee agrees that, during his/her employment and for a period of one
(1) year following his/her voluntary or involuntary resignation or termination
for any reason, the Employee will not, on behalf of himself/herself or any other
person or entity:

 

(a)                                  Directly or indirectly solicit, on
Employee’s own behalf, or on behalf of another, any of August Technology’s or
any subsidiary’s customers or potential customers with whom Employee or
Employee’s supervisees had contact, either directly or indirectly, within the
twelve months immediately preceding Employee’s resignation or termination of
employment, for the purpose of providing, selling, or attempting to sell any
products or services competing with those provided or sold by August Technology
or any subsidiary, or clearly contemplated thereby due to research, development,

 

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engineering, applications, licensing, or other like projects in process, at the
time of resignation or termination; or

 

(b)                                 hire or attempt to hire, or influence or
solicit, or attempt to influence or solicit, either directly or indirectly, any
employee of August Technology or any subsidiary to leave or terminate his/her or
her employment, or to work for any other person or entity.

 

12.                               Work Product and Inventions.  August
Technology shall be entitled to all of the benefits, profits, results and work
product arising from or incident to all work, services, advice and activities of
Employee, including without limitation all rights in inventions (as set forth
below), trademark or trade name creations, and copyrightable materials. 
Employee shall not, during the term of his/her employment by August Technology,
be interested, directly or indirectly, in any manner, including, but not limited
to, as partner, officer, advisor, or in any other capacity in any other business
similar to, or in competition with, August Technology’s or any subsidiary’s
business.

 

Employee agrees to communicate promptly and fully to August Technology all
inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as provided in this
Paragraph 12, Employee will and hereby does assign to August Technology and/or
its nominees all of the Employee’s right, title and interest in such inventions,
discoveries, improvements or designs and all of his/her right, title and
interest in any patents, patent applications or copyrights based thereon without
obligation on the part of August Technology or any subsidiary to make any
further compensation, royalty or payment to Employee.  Employee further agrees
to assist August Technology and/or its nominee (without charge but at no expense
to Employee) at any time and in every proper way to obtain and maintain for its
and/or their own benefit, patents for all such inventions, discoveries and
improvements and copyrights for all such designs.

 

This Agreement does not obligate Employee to assign to August Technology any
invention, discovery, improvement or design for which no equipment, supplies,
facility or trade secret information of August Technology or any subsidiary was
used and which was developed entirely on Employee’s own time, and (1) which does
not relate (a) directly to the business of August Technology or any subsidiary,
or (b) to August Technology’s or any subsidiary’s actual or demonstrably
anticipated research or development, or (2) which does not result from any work
performed by Employee for August Technology or any subsidiary.

 

13.                               Exempt Inventions.  Identified under Exempt
Inventions in Exhibit A by descriptive title are all of the Inventions, if any,
in which Employee possesses any right, title or interest prior to Employee’s
employment with August Technology or execution of this Employment Agreement
which are not subject to the terms hereof.

 

14.                               Copyrights.  Employee acknowledges that any
documents, drawings, computer software or other work of authorship prepared by
Employee within the scope of his/her employment is a “work made for hire” under
U.S. copyright laws and that, accordingly, August Technology

 

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exclusively owns all copyright rights in such works of authorship.  For purposes
of this paragraph, “scope of employment” means that the work of authorship (a)
relates to any subject matter pertaining to his/her employment, (b) relates to
or is directly or indirectly connected with the existing or reasonably
foreseeable business, products, projects or confidential information of August
Technology or any subsidiary, or (c) involves the use of any time, material or
facility of August Technology or any subsidiary.

 

15.                               Return of Property.  Employee shall,
immediately upon his/her involuntary or voluntary resignation or termination
from employment for any reason, deliver to August Technology all documents and
other items, whether on computer disc or tape or otherwise, including all copies
thereof, belonging to August Technology or any subsidiary or in any way related
to the business of August Technology or any subsidiary or the services Employee
performed for August Technology or any subsidiary, including but not limited to
any documents or items containing trade secret, proprietary, or confidential
information, documents in any way relating to any inventions or copyrights,
client or customer information, information relating to August Technology’s or
any subsidiary’s processes or procedures and any other materials or documents of
any sort relating to August Technology or any subsidiary.  Employee shall not
retain any copies or summaries of any kind of documents and materials covered by
this Paragraph 15.

 

16.                               Remedy upon Violation.  Employee and August
Technology agree that a breach or threatened breach of Paragraphs 10, 11, 12, 14
or 15 would cause irreparable harm to August Technology and/or its subsidiaries,
and that monetary damages alone would not be an adequate remedy.  Employee
agrees that August Technology and any subsidiary shall be entitled, in addition
to any other remedy it may have at law or in equity, to an injunction, without
the posting of a bond if allowed by applicable law or with the posting of a
minimal bond if required, enjoining or restraining Employee from any violation
or violations or threatened violation or violations of Paragraphs 10, 11, 12, 14
and 15, and/or for specific performance of duties and obligations under such
paragraphs, and Employee hereby consents to the issuance of such injunction.  If
any rights or restrictions contained in Paragraphs 10, 11, 12, 14 and 15 shall
be deemed to be unenforceable by reason of the extent, duration or geographic
scope, or other provision thereof, the parties contemplate that the Court shall
reduce such extent, duration or geographic scope or other provision and enforce
Paragraphs 10, 11, 12, 14 and 15 in their reduced form for all purposes in the
manner contemplated by such Paragraphs.

 

17.                               Other Agreements.  By Employee’s signature to
this Agreement, Employee warrants that he/she is not subject to any employment,
noncompetition, confidentiality, inventions or other obligations or agreements
which would prevent or restrict the Employee in any way from accepting
employment with August Technology and fully performing his/her duties and
responsibilities as described in this Agreement.  Employee, by his/her signature
to this Agreement, further warrants that he/she has not taken and will not take
any trade secret, proprietary or confidential information of any former
employer, and will not use or disclose any such information to anyone in the
performance of duties and responsibilities under this Agreement.

 

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18.                               Successors and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of August
Technology.

 

19.                               Notices.  All notices and other communications
to be given under this Agreement shall be in writing and shall be deemed to be
given when delivered personally, or when mailed by registered or certified mail,
addressed to the party to whom such notice is intended to be given, at the last
known address for that party or at such other address as the party may specify
by written notice.

(a)                                  In the case of August Technology, the
notice shall be provided to:

 

General Counsel

August Technology Corporation

4900 West 78th Street

Bloomington, MN 55435

 

(b)                                 In the case of Employee, the notice shall be
provided to:

 

Ardelle Johnson

19725 Waterford Pl

Shorewood, MN 55331

 

Either party may, by written notice hereunder, designate a change of address. 
Any notice, if mailed properly addressed, postage prepaid, registered or
certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received, whichever is
sooner.

 

20.                               Survival of Provisions.  Employee acknowledges
and agrees that the restrictions and obligations set forth in Paragraphs 10, 11,
12, 13, 14, 15 and 16 of this Agreement are reasonable, shall survive his/her
resignation from or the termination of his/her employment, and shall apply to
him/her whether his/her resignation or termination from employment is voluntary
or involuntary and regardless of the reason for such resignation or termination.

 

21.                               Nonwaivers.  No failure on the part of either
party to exercise, and no delay in exercising, any right or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right or remedy hereunder preclude any other or further exercise thereof or
the exercise of any right or remedy granted hereby or by any related document or
by law.

 

22.                               Governing Law.  This Agreement shall be
construed and interpreted according to the laws of the State of Minnesota,
without reference to its conflict of laws provisions.

 

23.                               Paragraph Headings.  Paragraph headings are
included in this Agreement for convenience of reference only, and are not
intended to be full or accurate descriptions of the contents hereof.

 

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24.                               Counterparts.  This Agreement may be executed
in two (2) or more counterparts, each of which shall be deemed an original, but
all of which shall constitute one (1) and the same instrument.

 

25.                               Entire Agreement.  This Agreement states the
entire Agreement of the parties on the subjects set forth herein, and merges and
supersedes all prior agreements and understandings between the parties.  No
modification, termination, or attempted waiver of any provision of this
Agreement will be valid unless it is made in writing and signed by the party
against whom the same is sought to be enforced, and is specifically identified
as a modification, termination, release, waiver or discharge of this Agreement. 
If any term, clause or provision of this Agreement shall for any reason be
adjudged invalid, unenforceable or void, the same shall not impair or invalidate
any of the other provisions contained herein, all of which shall be performed in
accordance with their respective terms.

 

 

AUGUST TECHNOLOGY CORPORATION

 

 

 

 

DATED:  SEPTEMBER 17, 2003

By

/s/ DAVID L. KLENK

 

 

 

Its

President

 

 

 

 

 

Dated:  September 9, 2003

By

/s/ ARDELLE JOHNSON

 

 

 

Employee

 

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EXHIBIT A

 

 

Employee’s Name

 

=

Ardelle Johnson

 

 

 

 

Employee’s Title

 

=

VP, Strategic Marketing

 

 

 

 

Manager

 

=

Jeff O’Dell, & CEO

 

 

 

 

Base Salary

 

=

$145,000

 

 

 

 

Severance Period

 

=

twelve (12) months

 

 

 

 

Change In Control Severance Period

 

=

eighteen (18) months

 

 

 

 

Exempted Inventions

 

=

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Initials of approval:

 

AUGUST TECHNOLOGY CORP.

 

DLK

 

 

 

 

 

 

 

EMPLOYEE

 

AJ

 

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