**EXHIBIT 10.17**

 

**RESTATEDAGREEMENT**

 

This Agreement is entered into as of the 24th day ofMarch, 2005 by and between Ibis Technology Corporation, a Massachusettscorporation (the “Company”) and Martin J. Reid (the “Executive”).

 

WHEREAS the Executive and the Company previouslyexecuted a Retention Agreement, dated as of September 20, 1999 (the “PreviousAgreement”);

 

WHEREAS the Executive and Company wish to restate andamend the Previous Agreement in its entirety, replacing it with this Agreement;

 

WHEREAS the Executive desires to enter into thisAgreement to provide him with certain financial protection in the event thathis employment terminates for certain reasons in connection with or within aperiod of time after a change of control of the Company; and

 

WHEREAS the Board of Directors of the Company hasdetermined that it is in the best interests of the Company to enter into thisAgreement.

 

NOW, THEREFORE, for good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged, the Company andthe Executive agree as follows:

 

1.             DEFINITIONS.

 

(a)  Cause. As used herein, the term “Cause” shall be as defined in the employmentagreement by and between the Company and the Executive,dated November 12, 2003 (the “Employment Agreement”).

 

(b)  Change Of Control.  As usedherein, a “Change of Control” shall be deemed to have occurred if(i) there is a sale or transfer of all or substantially all of theassets of the Company in one or a series of transactions; (ii) any “person,”as such term is used in Section 13(d) of the Securities Exchange Act of1934, as amended (or any successor provision) (the “Exchange Act”), togetherwith all “affiliates” and “associates” (as such terms are defined in Rule 12b-2under the Exchange Act or any successor provision) of such person, shall becomethe “beneficial owner” or “beneficial owners” (as defined in Rules 13d-3 and13d-5 under the Exchange Act or any successor provision), directly orindirectly, of securities of the Company representing in the aggregate thirtypercent (30%) or more of either (1) the then outstanding shares of commonstock of the Company or (2) the combined voting power of all thenoutstanding securities of the Company having the right under ordinarycircumstances to vote in an election of the Board of Directors of the Company(hereafter referred to as an “Acquisition”); PROVIDED, that, notwithstandingthe foregoing, an Acquisition shall not be deemed to have occurred for purposesof this clause (ii) solely as the result of an acquisition of securities by theCompany which, by reducing the number of shares of common stock or other votingsecurities outstanding, increases 

 

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(x) the proportionate number of sharesof common stock beneficially owned by any person to thirty percent (30%) ormore of the common stock then outstanding or (y) the proportionate votingpower represented by the voting securities beneficially owned by any person tothirty percent (30%) or more of the combined voting power of all thenoutstanding voting securities; or (iii) there is a merger or consolidationbetween the Company and an entity other than a subsidiary of the Company inwhich the Company is not the continuing or surviving corporation and pursuantto which the holders of the Company’s voting stock immediately prior to suchmerger or consolidation would not be the holders immediately after such mergeror consolidation of at least 50% of the voting stock of the continuing orsurviving corporation.

 

©  Good Reason.  As usedherein, a “Good Reason” shall mean either a good faith determination by theExecutive following a Change of Control that he can no longer fulfill hisduties as specified in the Employment Agreement or a material change in theExecutive’s authority, functions, duties or responsibilities as President andChief Executive Officer of the Company(including, without limitation, materialchanges in the control or managerial structure of the Company) which wouldcause his position with the Company to become of less dignity, responsibility,importance or scope than his position on the date hereof or as of anysubsequent date prior to the Change of Control, a reduction in the Executive’ssalary or a material reduction in benefits from the amount of salary paid orthe value of the benefits available on the date hereof or as of any subsequentdate prior to the Change of Control, a transfer of the principal location ofthe place of performance of the Executive’s duties from the Danvers,Massachusetts area without the Executive’s consent, or the failure of the Boardof Directors of the Company to elect the Executive as President and ChiefExecutive Officer of the Company at any time such elections are made, orremoval from such office of the Company, PROVIDED that such material change isnot in connection with a termination of the Executive’s employment for Cause,and, PROVIDED, FURTHER, that any notice of termination by the Executive forGood Reason shall be given by him within ninety (90) days of when he becomesaware of such change, of such failure or removal.

 

2.             SEVERANCECOMPENSATION.  In the event that at ornear the time of, in connection with, or within a period of two (2) yearsafter, a Change of Control, the Executive’s employment with the Company isterminated either (i) by the Company other than for Cause or (ii) bythe Executive for a Good Reason, then the Company, within ten (10) days of theapplicable termination date, shall pay to the Executive, in addition to anyamounts due to Executive for services rendered prior to the termination date, alump sum amount equal to two (2) times the Executive’s highest Annual Salaryduring the preceding three year period, including the year of suchtermination.  Annual Salary shall meanExecutive’s annual base salary and bonus, excluding reimbursements and amountsattributable to stock options and other non-cash compensation.

 

3.             CONTINUATIONOF BENEFITS.  In the event that at thetime of, in connection with, or within a period of (2) two years after a Changein Control, the Executive’s employment with the Company is terminated either(i) by the Company other than for Cause or (ii) by the Executivefor a Good Reason, then the Company shall arrange to provide the Executive withlife, disability, group dental and health insurance benefits substantiallysimilar to those the Executive was receiving, immediately prior to thetermination, until the earlier of (a) two (2) years following his

 

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termination date, or(b) the date upon which he becomes eligible for such coverage offered by asubsequent employer.  Executive’stermination date shall be the date of any qualifying event under theConsolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and the COBRAcoverage that may be available to Executive, if any, shall be offset by anyperiod of coverage provided hereunder.

 

3A.          SPECIFIEDEMPLOYEE.  Notwithstanding the provisionsof Sections 2 and 3, if the Executive is a “specified employee” within themeaning of Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, asamended (the “Code”), then payment of the amount described in Section 2(a)shall be made on the date which is six (6) months after the applicabletermination date or, if earlier, the date of death of the Executive, and thebenefit described in Section 3 shall commence on the date which is six (6)months after the applicable termination date and, subject to the otherprovisions of Section 3, continue until thirty (30) months after the applicabletermination date.

 

4.             NODUPLICATION OF COMPENSATION OR BENEFITS. The Executive’s severance compensation and benefits set forth inSections 2 and 3 above shall replace, and be provided in lieu of, anyseverance compensation and benefits that may be provided to Executive under anyother agreement, including but not limited to those provided under Section 3(b)of the Employment Agreement; PROVIDED, that this prohibition againstduplication shall not be construed to otherwise limit Executive’s rights as topayments or benefits provided under any pension plan (as defined in Section3(2) of the Employee Retirement Income Security Act of 1974, as amended),deferred compensation, stock, stock option or similar plan sponsored by theCompany; and FURTHER PROVIDED, that notwithstanding the foregoing, all otherrights and obligations set forth in the Employment Agreement shall continue asprovided for therein.

 

5.             ENFORCEABILITY;REDUCTION.

 

(a)  If anyprovision of this Agreement shall be deemed invalid or unenforceable aswritten, this Agreement shall be construed, to the greatest extentpossible, or modified, to the extent allowable by law, in a manner which shallrender it valid and enforceable and any limitation on the scope or duration ofany provision necessary to make it valid and enforceable shall be deemed to bea part thereof.  No invalidity orunenforceability of any provision contained herein shall affect any otherportion of this Agreement.

 

(b) Notwithstanding anything provided herein, if the Executive is a “disqualifiedindividual” (as defined in Section 280G of the Code, and the severancecompensation and continuation of benefits provided for in Sections 2 and 3hereof (collectively “Severance Compensation”) together with any other paymentswhich the Executive has the right to receive from the Company (or itsaffiliates and subsidiaries), would constitute a “parachute payment” (asdefined in Section 280G(b)(2) of the Code), the Severance Compensation shall bereduced.  The reduction shall be in anamount so that the present value of the total amount received by the Executivefrom the Company (or its affiliates and subsidiaries) will be one dollar($1.00) less than three (3) times the Executive’s Base Amount (as defined inSection 280G of the Code) so

 

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that no portion ofthe amounts received by the Executive shall be subject to the excise taximposed by Section 4999 of the Code (excise tax).

 

The determination as to whether any reduction inSeverance Compensation is necessary and the amount of any such reduction shallbe made by the Company’s independent public accountants (the “AccountingFirm”) which shall provide detailed supportingcalculations both to the Company and to the Executive within fifteen (15)business days of the Executive’s termination date.  Any such determination by the Accounting Firmshall be conclusive and binding upon the Executive and the Company.  The Executive shall determine which part ofthe Severance Compensation shall be eliminated or reduced consistent with therequirements of this Section 5 and shall notify the Company promptly inwriting; PROVIDED, that if the Executive does not make such determinationwithin ten (10) business days of the receipt of the calculations made by theAccounting Firm, the Company shall determine which part of the SeveranceCompensation shall be eliminated or reduced consistent with the requirements ofthis Section 5 and shall notify the Executive promptly in writing of suchelection.

 

If through error or otherwise the Executive shouldreceive payments under this Agreement, together with other payments theExecutive has the right to receive from the Company (or its affiliates andsubsidiaries), in excess of one dollar ($1.00) less than three times his BaseAmount, the Executive shall immediately repay the excess to the Company uponnotification that an overpayment has been made.

 

6.             MITIGATION.  The Executive shall not be required tomitigate the amount of any payment provided for in this Agreement by seekingother employment or otherwise, nor shall the amount of anypayment provided for herein be reduced by any compensation earned by theExecutive as the result of employment by another employer or by retirementbenefits after the termination date or otherwise.

 

7.             NOTICES.  All notices, requests, consents and othercommunications hereunder shall be in writing, shall be addressed to thereceiving party’s address set forth below or to such otheraddress as a party may designate by notice hereunder, and shall be either(i) delivered by hand, (ii) made by telex, telecopy or facsimiletransmission, (iii) sent by overnight courier, or (iv) sent byregistered or certified mail, return receipt requested, postage prepaid.

 

If to the Company:

 
|   | Ibis Technology Corporation |
|--------|-----------------------------|
|   |                        |
|   | 32 Cherry Hill Drive        |
|   |                        |
|   | Danvers, MA 01923           |
|   |                        |
|   | Attn: Board of Directors    |

 

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If to the Executive:

 
|   | Martin J. Reid |
|--------|----------------|

 

All notices, requests, consents and othercommunications hereunder shall be deemed to have been given either (i) ifby hand, at the time of the delivery thereof to the receivingparty at the address of such party set forth above, (ii) if made by telex,telecopy or facsimile transmission, at the time that receipt thereof has beenacknowledged by electronic confirmation or otherwise, (iii) if sent byovernight courier, on the next business day following the day such notice isdelivered to the courier service, or (iv) if sent by registered orcertified mail, on the 5th business day following the day such mailing is made.

 

8.             ENTIREAGREEMENT.  The Previous Agreement ishereby restated and amended in its entirety with this Agreement.  This Agreement embodies the entire agreementand understanding between the parties hereto with respect to the subject matterhereof and supersedes all prior oral or written agreements andunderstandings relating to the subject matter hereof.  No statement, representation, warranty,covenant or agreement of any kind not expressly set forth in this Agreementshall affect, or be used to interpret, change or restrict, the express termsand provisions of this Agreement.

 

9.             MODIFICATIONSAND AMENDMENTS.  The terms and provisionsof this Agreement may be modified or amended only by written agreement executedby all parties hereto.

 

10.           WAIVERSAND CONSENTS.  The terms and provisionsof this Agreement may be waived, or consent for the departure therefromgranted, only by written document executed by the partyentitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed tobe or shall constitute a waiver or consent with respect to any other terms orprovisions of this Agreement, whether or not similar.  Each such waiver or consent shall beeffective only in the specific instance and for the purpose for which it wasgiven, and shall not constitute a continuing waiver or consent.

 

11.           ASSIGNMENT.  The rights and obligations under thisAgreement may not be assigned by either party hereto without the prior writtenconsent of the other party.

 

12.           BENEFIT.  All statements, representations, warranties,covenants and agreements in this Agreement shall be binding on the partieshereto and shall inure to the benefit of the respective successorsand permitted assigns of each party hereto. Nothing in this Agreement shall be construed to create any rights orobligations except among the parties hereto, and no person or entity shall beregarded as a third-party beneficiary of this Agreement.

 

13.           GOVERNINGLAW.  This Agreement and the rights andobligations of the parties hereunder shall be construed in accordance with andgoverned by the law of the Commonwealth of Massachusetts, without givingeffect to the conflict of law principles thereof.

 

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14.           JURISDICTIONAND SERVICE OF PROCESS.  Any legal actionor proceeding with respect to this Agreement may be brought in the courts ofthe Commonwealth of Massachusetts or of the United States of America forthe District of Massachusetts.  Byexecution and delivery of this Agreement, each of the parties hereto acceptsfor itself and in respect of its property, generally and unconditionally, thejurisdiction of the aforesaid courts. Each of the parties hereto irrevocably consents to the service ofprocess of any of the aforementioned courts in any such action or proceeding bythe mailing of copies thereof by certified mail, postage prepaid, to the partyat its address set forth in Section 7 hereof.

 

15.           NOWAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by a party hereto in exercising any right, power orremedy under this Agreement, and no course of dealing betweenthe parties hereto, shall operate as a waiver of any such right, power orremedy of the party.  No single orpartial exercise of any right, power or remedy under this Agreement by a partyhereto, nor any abandonment or discontinuance of steps to enforce any suchright, power or remedy, shall preclude such party from any other or furtherexercise thereof or the exercise of any other right, power or remedyhereunder.  The election of any remedy bya party hereto shall not constitute a waiver of the right of such party topursue other available remedies.  Nonotice to or demand on a party not expressly required under this Agreementshall entitle the party receiving such notice or demand to any other or furthernotice or demand in similar or other circumstances or constitute a waiver ofthe rights of the party giving such notice or demand to any other or furtheraction in any circumstances without such notice or demand.

 

16.           COUNTERPARTS.  This Agreement may be executed in one or morecounterparts, and by different parties hereto on separate counterparts, each ofwhich shall be deemed an original, but all of which together shallconstitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties have executed thisAgreement as of the day and year first above written.

 
|   | COMPANY:                     |
|--------|------------------------------|
|   |                         |
|   |                         |
|   | IBIS TECHNOLOGY  CORPORATION |
|   |                         |
|   |                         |
|   | By:                          |
|   |                         |
|   |                         |
|   |                         |
|   |                         |
|   | Authorized Officer           |
|   |                         |
|   |                         |
|   | EXECUTIVE:                   |
|   |                         |
|   |                         |
|   |                         |
|   |                         |
|   | MARTIN J. REID               |

 

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