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Exhibit 13
CHANGE IN CONTROL AGREEMENT
AGREEMENT, made as of this 1st day of March, 1999, by and
between Microwave Power Devices, Inc., a Delaware corporation (the "Company")
and Xxxxx Xxxxxxxxx, a Vice President of the Company (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company believes that the establishment and
maintenance of a sound and vital management of the Company is essential to the
protection and enhancement of the interests of the Company and its stockholders;
WHEREAS, the Company also recognizes that the possibility of a
Change in Control of the Company (as defined in Section 1 hereof), with the
attendant uncertainties and risks, might result in the departure or distraction
of key employees of the Company to the detriment of the Company; and
WHEREAS, the Company has determined that it is appropriate to
take steps to induce key employees to remain with the Company, and to reinforce
and encourage their continued attention and dedication, when faced with the
possibility of a Change in Control of the Company.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto hereby agree as follows:
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1. Change in Control Definition. A Change in Control
shall mean the occurrence of any of the following: (i) any person (as defined in
Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and as used in Sections 13(d) and 14(d) thereof), excluding the
Company, any Affiliates (as hereinafter defined) of the Company, or any employee
benefit plan sponsored or maintained by the Company or its Affiliates (including
any trustee of any such plan acting in his capacity as trustee), becoming the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
securities of the Company representing more than fifty percent (50%) of the
total combined voting power of the Company's then outstanding securities; (ii)
the merger, consolidation or other business combination of the Company (a
"Transaction"), other than a Transaction involving only the Company's Affiliates
or a Transaction immediately following which the stockholders of the Company
immediately prior to the Transaction continue to have a majority of the voting
power in the resulting entity; (iii) during any period of three (3) consecutive
years beginning on or after the date hereof, the persons who were members of the
Board of Directors of the Company (the "Board") immediately before the beginning
of such period (the "Incumbent Directors") ceasing (for any reason other than
death) to constitute at least a majority of the Board or the board of directors
of any successor to the Company, provided that, any director who was not a
director as of the date hereof shall be deemed to be an Incumbent Director if
such director was elected to the board of directors by, or on the recommendation
of or with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors either actually or by prior operation of the
foregoing unless such election, recommendation or approval occurs as a result of
an actual or threatened election contest (as such terms are used in Rule l4a-11
of Regulation 14A promulgated under the Exchange Act or any
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successor provision) or other actual or threatened solicitation of proxies or
contests by or on behalf of a person other than a member of the Board; or (iv)
the approval by the stockholders of the Company of any plan of complete
liquidation of the Company or an agreement for the sale of all or substantially
all of the Company's assets, other than the sale of all or substantially all of
the assets of the Company to any of the Company's Affiliates. Only one Change in
Control may occur under this Agreement. For purposes of this Agreement, the term
"Affiliates" shall have the same meaning as set forth under the definition of
"affiliates" in Rule 405 of the Securities Act of 1933, as amended.
2. Term. This Agreement shall commence on the date
hereof and shall expire on the earlier of (i) three (3) years from the date
hereof, or (ii) the date of the death of the Executive, or (iii) the termination
of the Executive's employment with the Company (for any reason) prior to a
Change of Control.
3. Effect of a Change in Control. If a Change in Control
occurs simultaneous with or prior to the expiration of this Agreement pursuant
to Section 2 hereof and within six (6) months after a Change of Control the
Executive's employment with the Company is terminated either by the Executive
for Good Reason (as hereinafter defined) or by the Company without cause, the
Executive shall be entitled to the amounts and benefits provided under Section 4
hereof. For purposes of this Agreement, "Good Reason" shall mean the occurrence
of any of the following events without the Executive's express prior written
consent: (A) any diminution in the Executive's title or a dimunition in
Executive's duties, functions, responsibilities or authority has occurred; (B) a
reduction in the Executive's annual base salary, annual potential bonus relative
to
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the prior year's potential bonus or eligibility for or participation in benefit
plans; (C) a relocation of the Executive's principal business location to an
area outside a forty (40) mile radius of the Executive's current principal
business location or requirement to travel away from his home or office
significantly more often than was customary in the past; (D) an elimination of
all or substantially all of the Company's corporate functions at the Company's
current principal business location; or (E) a failure of any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) of
the Company to assume in writing the obligations hereunder.
4. Payments upon a Change in Control. If pursuant to
Section 3 above, the Executive is entitled to amounts and benefits under this
Section 4, the Company shall pay or provide, as the case may be, the following
items:
(a) immediately following his termination of employment
with the Company, the Company shall continue to pay to the Executive for a
period of one year the Executive's then current annual salary plus the
Executive's then current annual targeted bonus pursuant to the terms of that
certain Executive Incentive Bonus Plan of the Company attached hereto as Exhibit
A (as such plan may be modified from time to time). Such payments shall be made
to Executive by the Company in equal weekly installments.
(b) within five (5) business days (or at such earlier
time as required by applicable law) following his termination of employment with
the Company, the Company shall pay to the Executive in a lump sum: (i) any
earned but unpaid base salary, (ii) any earned but
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unpaid bonus, (iii) accrued but unused vacation time as of the date of
termination, and (iv) incurred but unreimbursed business expenses for the period
prior to termination.
(c) for a period of twelve (12) months commencing on the
date of the Change of Control, subject to the Executive's continued copayment of
premiums which shall not exceed the level of copayments prior to such Change of
Control, the Company shall continue to pay the premiums to provide health
benefits and coverage for the Executive and his dependents under the Company's
health plans in effect prior to such Change of Control which cover senior
executives. The Company's obligation to pay premiums hereunder shall cease upon
the Executive's employment with any employer (other than due to self-employment)
following a Change of Control. Upon the expiration of such twelve (12) month
period, the Company shall offer COBRA continuation health coverage to the
Executive and his dependents in accordance with applicable law.
5. No Duty to Mitigate/Set-off; Severance. If pursuant
to Section 4 hereof the Executive is entitled to payments, the Executive will
not be required to seek other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant to this Agreement.
Further, the amounts and benefits provided for in this Agreement shall not be
reduced by any compensation earned by the Executive or benefits provided to the
Executive as the result of employment by another employer or otherwise.
Notwithstanding anything herein to the contrary, if pursuant to Section 4 hereof
the Executive is entitled to payment, all of such payments shall be in lieu of
any other severance payments to which Executive may be entitled pursuant to any
severance plan of the Company or otherwise.
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6. Successors: Binding Agreement. In addition to any
obligations imposed by law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree in writing to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive's estate. This Agreement is personal to the Executive and neither this
Agreement or any rights hereunder may be assigned by the Executive.
7. Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. This
Agreement constitutes the entire Agreement between the parties hereto pertaining
to the subject matter hereof. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof
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have been made by either party which are not expressly set forth in this
Agreement. All references to any law shall be deemed also to refer to any
successor provisions to such laws. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument. If any provisions of this
Agreement shall be declared to be invalid or unenforceable, in whole or in part,
such invalidity or unenforceability shall not affect the remaining provisions
hereof which shall remain in full force and effect.
8. Notices. All notices under this Agreement shall be
given in writing and shall be either delivered personally or sent by certified
or registered mail, return receipt requested, addressed to the other party at
the appropriate address first set forth above, or to such other address as such
party shall designate by written notice as aforesaid. Notices shall be deemed
given when received or two (2) days after mailing, whichever is earlier.
9. Non-Exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive, equity or other plan or program provided by the
Company and for which the Executive may qualify and the payments hereunder shall
be in addition to, not in lieu of, any payments under any such plan or program
of the Company. Amounts that are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company, at or
subsequent to the date of termination shall be payable in accordance with such
plan or program, except as otherwise specifically provided herein.
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10. Not an Agreement of Employment. This is not an
agreement assuring employment and, subject to any other agreement between the
Executive and the Company, the Company reserves the right to terminate the
Executive's employment at any time with or without cause.
11. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York, without
reference to rules relating to conflicts of law.
IN WITNESS WHEREOF, this Agreement has been executed as of the
day and year first above written.
MICROWAVE POWER DEVICES, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
Title: EVP, COO/CFO
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
Executive
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