SPEEDFAM IPEC INC
EX-10.5
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<TYPE>EX-10.5
<SEQUENCE>3
<FILENAME>p66930exv10w5.txt
<DESCRIPTION>EX-10.5
<TEXT>
<PAGE>
                                                                    Exhibit 10.5
                                 March ___, 2002

Peter J. Simone
61 Lehigh Road
Wellesley, MA 02482

            Re:   Employment Agreement

Dear Pete:

      Upon execution by you, this letter will constitute your employment
agreement ("Agreement") with Speedfam-IPEC, Inc., (the "Company").

1.    Term. This Agreement will become effective __________________, 2002 and
      will terminate on _____________, 2003, [unless mutually extended by the
      parties in writing].

2.    Positions with the Company. During the term of this Agreement, you will
      serve as Chairman of the Board of the Company. You will faithfully and
      diligently perform all duties commensurate with these positions, including
      those duties directed by the Board of Directors of the Company (the
      "Board"), as well as those set forth in the Bylaws of the Company that
      relate to such position. Upon any termination of your employment, you will
      be deemed to resign as a director and Chairman of the Board, unless the
      Board determines otherwise at such time.

3.    Compensation. You will receive the following compensation for your
      services during your term of employment:

      (a)   You will receive $125,000 per year (pro rated as appropriate). Your
            salary will be paid in equal installments in accordance with the
            Company's salary payment policies as in effect from time to time;
            and

      (b)   You will receive such other compensation as may from time to time be
            granted to you by the Board at its sole discretion, including
            options or bonuses as may be approved by the Board or the
            Compensation Committee thereof.

4.    Expenses. The Company will pay or reimburse you for all ordinary and
      necessary business expenses incurred or paid by you in furtherance of the
      Company's business, including travel to and from your home on Company
      business, all in accordance with the Company's policies and procedures of
      general application.

5.    Termination by Voluntary Resignation, Death, Disability or Cause.

      (a)   In the event that you voluntarily resign from the Company, you die
            or you become disabled (as reasonably determined by the Board), or
            in the event you are terminated for Cause, you will be entitled to
            receive that compensation due you through the date of your
            resignation, together with any COBRA (at your cost) or other
            benefits required by law.
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      (b)   "Cause" shall mean, in the reasonable judgment of the Board:

            a.    you materially breach this Agreement or any other agreement
                  with the Company;

            b.    you fail to follow any reasonable and lawful direction of the
                  Board of Directions of the Company or materially violate any
                  reasonable rule or regulation established by the Company from
                  time to time regarding conduct of its business;

            c.    you engage in any act of dishonesty with respect to the
                  Company;

            d.    you engage in criminal conduct (whether related to or not
                  related to your employment); or

            e.    you fail to perform your duties satisfactorily.

6.    Termination by the Company Without Cause. Subject to Paragraph 7 below, in
      the event that you are terminated by the Company without Cause, you will
      receive your then current salary for the unexpired term.

7.    Termination in Connection with a Change in Control. In the event of a
      Change of Control (as defined in the Company's 2001 Nonstatutory Stock
      Option Plan), you will be entitled to receive the following:

      (a)   Immediately prior to the effective date of a Change of Control, all
            stock options granted to you and not otherwise vested shall vest and
            become exercisable by you for a minimum of 90 days (or, if longer,
            the term thereof) so that you may participate in the Change of
            Control transaction to the fullest extent feasible, provided,
            however, that if the acceleration of your options would cause a
            charge to the Company's earnings, then at the Company's option it
            may offer you a consulting position during which your options would
            continue to vest;

      (b)   You will be entitled to a lump sum payment equal to your last year's
            salary; and

      (c)   [Upon any termination of your employment after a Change of Control,
            for a period of eighteen months from the date of your termination,
            the Company will pay for the COBRA benefits due you.]

8.    Covenant Not to Compete.

      (a)   For a period of one year from any termination of your employment
      hereunder, (or, if later, upon conclusion of your service as a
      consultant), you shall not, directly or indirectly, for your own benefit
      or for, with or through any other individual, firm, corporation,
      partnership or other entity, whether acting in an individual, fiduciary or
      other capacity, own, manage, operate, control, advise, invest in (except
      as a 1% or less shareholder of a public company), loan money to, or
      participate or assist in the ownership, management, operation or control
      of or be associated as a director, officer, employee, partner, consultant,
      advisor, creditor, agent, independent contractor or otherwise with, or
      acquiesce in the use of your name by, any business enterprise that is in

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      direct competition with the Company or any subsidiary within the United
      States of America or any other country that the Company conducts business
      at the time of your termination.

      (b)   In addition to the foregoing, at all times during the period of your
      employment and for one year after any termination thereof (or, if later,
      upon conclusion of your services as a consultant), you will not, directly
      or indirectly (as described above), for your benefit or for, with or
      through any business, hire, employ, solicit, or otherwise encourage or
      entice any of the Company's (or subsidiary's) employees or consultants to
      leave or terminate their employment with the Company.

      (c)   You and the Company consider the restrictions contained in
      Paragraphs 8(a) and 8(b) above to be reasonable for the purpose of
      preserving the Company's proprietary rights and interests. If a court
      makes a final judicial determination that any such restrictions are
      unreasonable or otherwise unenforceable against you, you and the Company
      hereby authorize such court to amend this Agreement so as to produce the
      broadest, legally enforceable agreement, and for this purpose the
      restrictions on time period, geographical area and scope of activities set
      forth in Paragraphs 8(a) and 8(b) above are divisible; if the court
      refuses to do so, you and the Company hereto agree to modify the
      provisions held to be unenforceable to preserve each party's anticipated
      benefits thereunder to the maximum extent legal.

      (d)   You acknowledge and agree that the Company's remedies at law for
      breach or threatened breach of any of the provisions of this Paragraph 8
      would be inadequate. Therefore, you agree that in the event of a breach or
      threatened breach by you of the provisions in this Paragraph 8, the
      Company shall be entitled to, in addition to its remedies at law and
      without posting any bond, equitable relief in the form of specific
      performance, a temporary restraining order, a temporary or permanent
      injunction, or any other equitable remedy that may then be available.

9.    Personal Rights and Obligations. This Agreement and all rights and
      obligations hereunder are personal and shall not be assignable by either
      you or the Company except as provided in this subparagraph, and any
      purported assignment in violation thereof shall be null and void. Any
      person, firm or corporation succeeding to the business of the Company by
      merger, consolidation, purchase of assets or otherwise, shall assume by
      contract or operation of law the obligations of the Company hereunder and
      in such a case you shall continue to honor this Agreement with such
      business substituted for the Company as the employer.

10.   Notices. Any notice, election or communication to be given under this
      Agreement shall be in writing and delivered in person or deposited,
      certified or registered, in the United States mail, postage prepaid,
      addressed as follows:

      If to the Company:      Speedfam-IPEC, Inc.
                              305 North 54th Street
                              Chandler, AZ 85226-2416
                              Attn:  Chief Executive Officer

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      If to you:     Peter J. Simone
                     61 Lehigh Road
                     Wellesley, MA 02482






      or to such other addresses as the Company or you may from time to time
      designate by notice hereunder. Notices will be effective upon delivery in
      person or upon receipt of any facsimile or e-mail, or at midnight on the
      fourth business day after the date of mailing, if mailed.

11.   Entire Agreement. Except for any [confidentiality agreement] or option
      grants to which you are subject, this Agreement constitutes and embodies
      the full and complete understanding and agreement of the Company and you
      with respect to your employment by the Company and supersedes all prior
      understandings or agreements whether oral or in writing. This Agreement
      may be amended only by a writing signed by you and the Company. This
      Agreement may be executed in any number of counterparts, each of which
      will be considered a duplicate original.

12.   Binding Nature of Agreement. This Agreement shall be binding upon and
      inure to the benefit of the Company and its successors and assigns and
      shall be binding upon you, your heirs and legal representatives.

13.   Arbitration. Any controversy relating to this Agreement or relating to the
      breach hereof shall be settled by arbitration conducted in Phoenix,
      Arizona in accordance with the Commercial Arbitration Rules of the
      American Arbitration Association then in effect. The award rendered by the
      arbitrator(s) shall be final and judgment upon the award rendered by the
      arbitrator(s) may be entered upon it in any court having jurisdiction
      thereof. The arbitrator(s) shall possess the powers to issue mandatory
      orders and restraining orders in connection with such arbitration. The
      expenses of the arbitration shall be borne by the losing party unless
      otherwise allocated by the arbitrator(s). This agreement to arbitrate
      shall be specifically enforceable under the prevailing arbitration law.
      During the continuance of any arbitration proceedings, the parties shall
      continue to perform their respective obligations under this Agreement.
      Nothing in this Agreement shall preclude the Company or any affiliate or
      successor from seeking equitable relief, including injunction or specific
      performance, in any court having jurisdiction, in connection with the
      non-compete provisions herein and any obligations of confidentiality.

14.   Governing Law. This Agreement shall be governed by and interpreted in
      accordance with the laws of the State of Arizona.

15.   Withholding and Release. You acknowledge and agree that payments made to
      you hereunder may be subject to withholding. You further acknowledge and
      agree that payment of any of the benefits to be provided to you under this
      Agreement following any termination of your employment is subject to your
      compliance with any reasonable and lawful policies or procedures of the
      Company relating to employee severances, including the execution and
      delivery by you of a release reasonably satisfactory to the Company of any
      and all claims that you may have against the Company or related persons,
      except for

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      (i) the continuing obligations provided herein, and (ii) for any
      continuing obligations of indemnification due you as an officer or
      director (or a former officer or director).

                                    Very truly yours,



                                    --------------------------
                                    Richard J. Faubert
                                    Chief Executive Officer

ACCEPTED:

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Peter J. Simone

Date:

------------------------

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