EXHIBIT 10.2


 


[August Technology Letterhead]


 


May 5, 2005


 


Via Hand Delivery


 


David Klenk


9680 Laforet Drive


Eden Prairie, MN 55347


 


Re:          Separation Agreement and
Release


 


Dear David:


 


As you know, your employment with August Technology Corporation (“August Technology”)
will terminate effective at the close of business on Monday, June 6,
2005.  The purpose of this Separation
Agreement and Release letter (“Agreement”) is to set forth the specific
severance pay and benefits that August Technology will provide you in
exchange for your agreement to the terms and conditions of this Agreement.  While this Agreement is being provided to you
now for your review, you may not sign this Agreement until on or after June 6,
2005.


 


By your signature below, you agree to the following terms and
conditions:


 


1.             End
of Employment.  Your employment with August Technology
will end effective at the close of business on June 6, 2005.  Your last active day of employment with August Technology
will be May 19, 2005.  You will
receive a final paycheck for services through June 6, 2005 on the normal
payroll schedule.  With your final
paycheck, you will also receive payment from August Technology for all
accrued and unused Paid Time Off (PTO) at your regular rate.  August Technology will provide
information to you regarding your COBRA election rights under separate cover.


 


2.             Severance
pay and Benefits.  Specifically in
consideration of your signing this Agreement and subject to the limitations,
obligations, and other provisions contained in this Agreement, August Technology
agrees as follows:


 


a.             To pay
you One Hundred Seven Thousand, Five Hundred and 00/100 Dollars ($107,500),
less applicable withholding, which is the equivalent of six (6) months of
your base salary, to be paid in substantially equal installments on August Technology’s
regularly scheduled paydays beginning with the first regularly scheduled payday
following the expiration of the rescission periods described in Section 5
below.  The payment described in this Section 2.a.
shall be considered timely if placed in the U.S. Mail, postage prepaid, and
postmarked on the date such payment is due. 
If the date such payment would be due falls on a weekend or holiday,


 





















 


payment shall be considered timely if it is placed in the U.S. Mail,
postage prepaid, on the next business day following such weekend or holiday.


 


b.             Provided
you timely elect COBRA, to continue to pay your COBRA premiums through December 31,
2005, for health and dental insurance coverage under August Technology’s
group health and dental insurance plans. 
August Technology will discontinue payments under this Section 2.b.
before December 31, 2005 if, and at such time as, you (1) are covered
or eligible to be covered under the health and/or dental insurance policy of a
new employer, or (2) cease to participate, for whatever reason, in August Technology’s
group insurance plans.  By your signature
below, you acknowledge and agree that August Technology may modify or
terminate its group insurance plans at any time and that you shall have the
same right to participate in August Technology’s group insurance plans
only as is provided on an equivalent basis to the company’s employees.  You further agree to promptly provide August Technology
notice if you become covered or eligible to be covered under the health and/or
dental insurance policy of a new employer. 
Notwithstanding the foregoing, the COBRA period for continuation of your
insurance coverage under August Technology’s group plans will begin on July 1,
2005.


 


c.             To pay
Lee Hecht Harrison up to $15,000 to provide you with outplacement
services.  (Additional information
regarding such outplacement services is attached to this Agreement.)  Such outplacement services will be made
available to you beginning on the date you sign this Agreement provided you do
not rescind this Agreement.


 


d.             Your
unvested stock options will accelerate and become immediately exercisable as of
June 6, 2005.


 


3.             Release
of Claims.  Specifically in
consideration of the severance pay and benefits described in Section 2, to
which you would not otherwise be entitled, by signing this Agreement you, for
yourself and anyone who has or obtains legal rights or claims through you,
agree to the following:


 


a.             You
hereby do release, agree not to sue, and forever discharge August Technology
(as defined below) of and from any and all manner of claims, demands, actions,
causes of action, administrative claims, liability, damages, claims for
punitive or liquidated damages, claims for attorney’s fees, costs and disbursements,
individual or class action claims, or demands of any kind whatsoever, you have
or might have against them or any of them, whether known or unknown, in law or
equity, contract or tort, arising out of or in connection with your employment
with August Technology, or the termination of that employment, or
otherwise, and however originating or existing, from the beginning of time
through the date of your signing this Agreement.


 


b.             This
release includes, without limiting the generality of the foregoing, any claims
you may have for wages, bonuses, commissions, penalties, compensation, deferred
compensation, vacation pay, paid time off, severance pay or benefits,
defamation, invasion of


 


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privacy, negligence, emotional distress, breach of contract, estoppel,
improper discharge (based on contract, common law, or statute, including any
federal, state or local statute or ordinance prohibiting discrimination or
retaliation in employment), violation of the United States Constitution, the
Minnesota Constitution, the Age Discrimination in Employment Act, 29 U.S.C. § 621
et  seq., the Minnesota Human Rights Act, Minn. Stat. § 363.01
et  seq., Title VII of the Civil Rights Act, 42 U.S.C. § 2000e
et  seq., the Americans with Disabilities Act, 42 U.S.C. § 12101
et  seq., the Employee Retirement Income Security Act of 1976, 29
U.S.C. § 1001 et  seq., the Family and Medical Leave Act, 29
U.S.C. § 2601 et  seq., the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. 210l, et  seq., any claim arising
under Minn. Stat. Chapters 177 and 181, Minn. Stat. § 176.82, and any
claim for retaliation, harassment or discrimination based on sex, race, color,
creed, religion, age, national origin, marital status, sexual orientation, disability,
status with regard to public assistance or any other protected class, or sexual
or other harassment.  You hereby waive
any and all relief not provided for in this Agreement.  You understand and agree that, by signing
this Agreement, you waive and release any past or present claim to employment
with August Technology.


 


c.             You
affirm that you have not caused or permitted, and to the full extent permitted
by law will not cause or permit to be filed, any charge, complaint, or action
of any nature or type against August Technology, including but not limited
to any action or proceeding raising claims arising in tort or contract, or any
claims arising under federal, state, or local laws, including discrimination
laws.  If you file, or have filed on your
behalf, a charge, complaint, or action, you agree that the payments and
benefits described above in Section 2 are in complete satisfaction of any
and all claims in connection with such charge, complaint, or action and you
waive, and agree not to take, any award of money or other damages from such
charge, complaint, or action.


 


d.             You are not, by signing this Agreement,
releasing or waiving (1) any vested benefits or claims for benefits under August Technology’s
employee benefit plans, (2) any rights or claims that may arise after the
Agreement is signed, (3) the post-employment benefits and payments
specifically promised to you under this Agreement or your Employment Agreement,
as amended by the Amendment to Employment Agreement, (4) the right to
institute legal action for the purpose of enforcing the provisions of this
Agreement, or (5) the right to apply for state unemployment compensation
benefits.


 


e.             August Technology,
as used in this Section 3, shall mean August Technology Corporation
and its parent, subsidiaries, divisions, affiliated entities, insurers, and its
and their present and former officers, directors, shareholders, trustees,
employees, agents, attorneys, representatives and consultants, and the
successors and assigns of each, whether in their individual or official
capacities, and the current and former trustees or administrators of any
pension or other benefit plan applicable to the employees or former employees
of August Technology Corporation, in their official and individual
capacities.


 


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3.5.          August Technology’s
Release of Claims.  Specifically in
consideration of your covenants as described in this Agreement, to which August Technology
would not otherwise be entitled, by signing this Agreement, August Technology
agrees to release, agrees not to sue, and forever discharges you of and from
any and all manner of claims, demands, actions, causes of action,
administrative claims, liability, damages, claims for punitive or liquidated
damages, claims for attorney’s fees, costs and disbursements, individual or
class action claims, or demands of any kind whatsoever, it has or might have
against you, whether known or unknown,
in law or equity, contract or tort, arising within the scope of your employment
with August Technology, from the beginning of time through the date of
your signing this Agreement.


 


3.6           Cooperation.  You
agree that you will cooperate with August Technology with respect to any
claims, actions or proceedings brought or threatened that related to your
employment or any transactions, decisions or actions in which you were involved
while an employee of August Technology.  You agree to make yourself
reasonably available upon reasonable notice and at mutually agreeable times to
discuss such matters and to appear without subpoena for deposition or testimony
at the request of August Technology.  August Technology will
compensate you for any reasonable expenses incurred in connection with your
cooperation, including attorneys fees and travel expenses.


 


4.             Notice
of Right to Consult Attorney and Forty-Five (45) Day Consideration Period.  By signing this Agreement, you acknowledge
and agree that August Technology has informed you by this Agreement that (1) you
have the right to consult with an attorney of your choice prior to signing this
Agreement, and (2) you are entitled to forty-five (45) days from the
receipt of this Agreement to consider whether the terms are acceptable to
you.  August Technology encourages
you to use the full 45-day period to consider this Agreement but you have the
right, if you choose, to sign this Agreement prior to the expiration of the
forty-five (45) day period.


 


5.             Notification
of Rights under the Minnesota Human Rights Act (Minn. Stat. Chapter 363) and
the Federal Age Discrimination in Employment Act (29 U.S.C. § 621 et seq.).  You are hereby notified of your right to
rescind the release of claims contained in Section 3 with regard to claims
arising under the Minnesota Human Rights Act, Minnesota Statutes Chapter 363, within
fifteen (15) calendar days of your signing this Agreement, and with regard to
your rights arising under the federal Age Discrimination in Employment Act, 29
U.S.C. § 621 et  seq., within seven (7) calendar days of
your signing this Agreement.  The two
rescission periods shall run concurrently. 
In order to be effective, the rescission must (a) be in
writing; (b) delivered to Susan Peattie, Director, Human Resources, August Technology
Corporation, 4900 West 78th Street, Bloomington, MN 55435 by hand or mail
within the required period; and (c) if delivered by mail, the rescission
must be postmarked within the required period, properly addressed to Susan
Peattie, as set forth above, and sent by certified mail, return receipt
requested.  This Agreement will be
effective upon the expiration of the 15-day period without rescission.  You understand that if you rescind any part
of this Agreement in accordance with this Section 5, you will not receive
the severance pay and


 


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other benefits described in Section 2 and you will be obligated to
return any such benefits and payments under Section 2 if already received.


 


6.             Return
of Property.  By signing this
Agreement, you acknowledge and agree that all documents and materials relating
to the business of, or the services provided by, August Technology are the
sole property of August Technology. 
By signing this Agreement you further agree and represent that you have
returned to August Technology all of its property, including but not
limited to, all customer records and other documents and materials, whether on
computer disc, hard drive or other form, and all copies thereof, within your
possession or control, which in any manner relate to the business of, or the
duties and services you performed on behalf of August Technology.


 


7.             [intentionally
omitted]


 


8.             Confidentiality.  You promise and agree not to disparage August Technology
or disclose or discuss, directly or indirectly, in any manner whatsoever, any
information regarding either (1) the contents and terms of this Agreement,
or (2) the substance and/or nature of any dispute between August Technology
and any employee or former employee, including yourself.  You agree that the only people with whom you
may discuss this confidential information are your legal and financial advisors
and your spouse, if applicable, provided they agree to keep the information
confidential, or as otherwise required by law.


 


9.             Remedies.  If you breach any term of this Agreement, August Technology
shall be entitled to its available legal and equitable remedies, including but
not limited to suspending and recovering any and all payments and benefits made
or to be made under this Agreement.  If August Technology
seeks and/or obtains relief from an alleged breach of this Agreement, all of
the provisions of this Agreement shall remain in full force and effect.


 


10.           Non-Admission.  It is expressly understood that this
Agreement does not constitute, nor shall it be construed as, an admission by August Technology
or you of any liability or unlawful conduct whatsoever.  August Technology and you specifically
deny any liability or unlawful conduct.


 


11.           Successors
and Assigns.  This Agreement is
personal to you and may not be assigned by you without the written agreement of
August Technology.  The rights and
obligations of this Agreement shall inure to the successors and assigns of August Technology.


 


11.5         Effect of
Death.  In the event you die before all
payments under this Agreement have been made, the remaining payments shall be
made to your spouse, Julie Ann Klenk, or if she is no longer living, then to
your estate.


 


12.           Enforceability.  If a court finds any term of this Agreement
to be invalid, unenforceable, or void, the parties agree that the court shall
modify such term to make it enforceable


 


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to the maximum extent possible. 
If the term cannot be modified, the parties agree that the term shall be
severed and all other terms of this Agreement shall remain in effect.


 


13.           Law
Governing.  This Agreement shall be
governed and construed in accordance with the laws of the State of Minnesota.


 


14.           Full
Agreement.  This Agreement contains
the full agreement between you and August Technology and may not be
modified, altered, or changed in any way except by written agreement signed by
both parties.  The parties agree that
this Agreement supersedes and terminates any and all other written and oral
agreements and understandings between the parties, except for paragraphs 8, 10-16,
and those paragraphs necessary for the enforcement of paragraphs 10-16, of your
Employment Agreement signed by the parties on March 6, 2002, as amended by
the Amendment to Employment Agreement, which shall remain in full force and
effect.


 


15.           Acknowledgment
of Reading and Understanding.  By
signing this Agreement, you acknowledge that you have read this Agreement,
including the release of claims contained in Section 3, and understand
that the release of claims is a full and final release of
all claims you may have against August Technology and the
other entities and individuals covered by the release.  By signing, you also acknowledge and agree
that you have entered into this Agreement knowingly and voluntarily.


 


The offer contained in this Agreement will remain in
effect until 5:00 p.m. on June 20, 2005, at which time it will expire
if not accepted.  After you have reviewed
this Agreement and obtained whatever advice and counsel you consider
appropriate regarding it, please evidence your agreement to the provisions set
forth in this Agreement by dating and signing both copies of the
Agreement.  Please then return one copy
of this Agreement in the envelope provided by no later than 5:00 p.m. on June 20,
2005.  You should keep the other copy for
your records.


 


	
  Sincerely,

  
	
   

  
	
  August Technology Corporation

  
	
   

  
	
  /s/ Susan Peattie

  	
   

  
	
   

  
	
  Susan Peattie

  
	
  Director, Human Resources

  
	
   

  
	
  Enclosure

  



 


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ACKNOWLEDGMENT AND SIGNATURE


 


By signing below, I, David Klenk, acknowledge and
agree to the following:


 


•      I have had adequate time to
consider whether to sign this Separation Agreement and Release.


•      I have read this Separation
Agreement and Release carefully.


•      I understand and agree to
all of the terms of the Separation Agreement and Release.


•      I am knowingly and
voluntarily releasing my claims against August Technology.


•      I have not, in signing this
Agreement, relied upon any statements or explanations made by August Technology
except as for those specifically set forth in this Separation Agreement and
Release.


•      I intend this Separation
Agreement and Release to be legally binding.


•      I am signing this Separation
Agreement and Release on or after my last day of employment with August Technology.


 


 


Accepted this 6th day of June, 2005.


 


 


	
  /s/ David Klenk

  	
   

  
	
  David Klenk

  



 


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