Exhibit 10.13
EMPLOYMENT AGREEMENT
This sets forth the Employment Agreement ("Agreement") made effective as
of August 31, 2001 between Anaren Microwave, Inc. ("Employer"), a New York
corporation with its principal place of business at 0000 Xxxxxxxxx Xxxx, Xxxx
Xxxxxxxx, Xxx Xxxx 00000, and Xxxxxxx Xxxxxxx ("Xx. Xxxxxxx" or "Employee"), an
individual currently residing at 00 Xxxxxxx Xx., Xxxxxxx, Xxx Xxxxxxxxx 00000.
RECITALS
A. Amitron, Inc. ("Amitron") is based in North Andover, Massachusetts and
is in the business of manufacturing multi-layer ceramic micro-electronic
circuits (the "Business").
B. Xx. Xxxxxxx co-founded Amitron and currently serves as its President
and Chief Operating Officer.
C. Anaren intends to purchase the outstanding stock of Amitron.
D. Anaren desires to retain Xx. Xxxxxxx in its employment to continue to
oversee and manage Amitron's business operations.
E. In entering into this Agreement, Anaren desires to ensure Xx. Xxxxxxx'x
continued employment after Anaren purchases the outstanding stock of Amitron and
to reinforce and encourage the continued dedication of Xx. Xxxxxxx to Xxxxxxx
and to Anaren.
TERMS
IN CONSIDERATION of the mutual covenants and representations contained
herein, and other good and valuable consideration, receipt of which is
acknowledged, the parties agree as follows:
1. Employment.
(a) Term. Employer shall employ Employee, and Employee shall
continue to serve, as President of Amitron and as a Vice President of Employer
for a period commencing on August 31, 2001 and ending on June 30, 2006 ("Period
of Employment"), subject to earlier termination as provided in this Agreement.
(b) Salary. During the period August 31, 2001 through November 1,
2002, Employer shall pay Employee base salary at an annual rate of $183,000
("Base Salary"). Employee's Base Salary for the period November 2, 2002 through
November 1, 2003 and for each succeeding 12 month period through June 30, 2006,
shall be determined by Xxxx Xxxxxxx, Employer's Vice President and General
Manager, subject to approval by Employer's Board of Directors, but shall not be
set below $183,000 annually. Employee's Base Salary is payable in accordance
with Amitron's regular payroll procedures for executive employees.
(c) Title/Office Location. Employee shall retain the title of
President of Amitron, Inc. and shall also be a Vice President of Employer
reporting directly to Xxxx Xxxxxxx, Employer's Vice President and General
Manager. At all times during the Period of Employment, Employee's office shall
be located at Amitron's offices which shall not be located more than forty (40)
miles from North Andover, Massachusetts or Xx. Xxxxxxx'x principal residence. In
the event Amitron's offices are relocated beyond the geographic boundaries
provided for in this paragraph, and Xx. Xxxxxxx elects not to continue his
employment, Mr.
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Xxxxxxx will be entitled to severance pay and the other fringe benefits provided
for in paragraph 1(e) below for eighteen (18) months, but in no case shall
severance pay and benefits be provided for any period beyond the time period Xx.
Xxxxxxx would have received had Amitron's offices not been relocated.
(d) Incentive Bonuses. Employee shall be eligible for annual
incentive bonuses, beginning with Employer's fiscal year 2002 pursuant to the
terms of the Management Incentive Plan which has been approved by the Board of
Directors of Employer to cover key management personnel of Employer. Employee's
target bonus shall be 30% of his Base Salary. Incentive awards shall be based on
a combination of corporate and Amitron's performance measured against
pre-established goals.
(e) Severance Pay. Upon Employee's termination at any time after the
expiration of the Period of Employment, Employee shall be entitled to be paid,
as severance compensation, six months of the Base Salary in effect at that time.
Payments required pursuant to the preceding sentence shall be paid in accordance
with Amitron's regular payroll procedures. For any period during which
Employee's Base Salary is continued as severance compensation, Employee shall be
eligible to continue to participate in Amitron's group health benefit and group
short and long term disability and term life insurance plans and Employer's
401(k) and other benefit plans as if Employee was an active, full time employee.
Employee's right to "COBRA" continuation coverage shall commence the month
following the end of the period during which Employee received severance
compensation and continued health benefits.
2. Duties During The Period Of Employment.
(a) Employee shall have full responsibility, subject to the
reasonable direction of Xx. Xxxxxxx and Employer's President and CEO for the
management of all aspects
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of Amitron's Business, and the discharge of such other duties and
responsibilities to Employer as may from time to time be reasonably assigned to
Employee which duties and responsibilities shall be commensurate and appropriate
for Employee's position as President of Amitron and Vice President of Anaren.
Employee shall devote his full working time and reasonable best efforts to the
business and affairs of Amitron and Employer, in accordance with his senior
management position, except during any period of illness or incapacity;
provided, however, that nothing herein shall preclude Employee from spending
reasonable amount of time consulting with the management of Amitron-West, Inc.
d/b/a Laser Processing Technology ("LPT") consistent with Employee's past
experience and his equity ownership position in LPT, and to engage in charitable
or community activities, provided that such activities on behalf of LPT or any
charity or civic organization collectively do not unreasonably interfere with
the performance of his duties under this Agreement.
3. Fringe Benefits.
(a) Benefit Plans. During the period of employment, Employee will
continue to be eligible to participate in any Amitron or Employer sponsored
pension benefit plans (as determined and defined under Section 3(2) of the
Employee Retirement Income Security Act of 1974 as amended), Amitron's paid
group life insurance plans, medical plans, dental plans, short term and long
term disability plans, business travel insurance programs and other fringe
benefit programs maintained by Amitron for the benefit of its executive
employees. Participation in any of Amitron's benefit plans and programs shall be
based on, and subject to satisfaction of, the eligibility requirements and other
conditions of such plans and programs. Employee shall also be eligible to
receive annual stock option grants pursuant to Employer's Incentive Stock Option
Plan. It is anticipated that Amitron's current 401(k) plan will be merged
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with Anaren's 401(k) plan on or about January 1, 2002, and at that time, Xx.
Xxxxxxx will be eligible to participate in Anaren's 401(k) plan.
(b) Expenses. Upon submission to Amitron of vouchers or other
required documentation, Employee shall be reimbursed for Employee's actual
out-of-pocket travel and other expenses reasonably incurred and paid by Employee
in connection with Employee's duties.
(c) Automobile Expenses. Amitron shall pay Employee on or about
September 4, 2001, a one time lump sum payment of Twenty Thousand Dollars
($20,000) in lieu of an automobile expense allowance after the date of this
Agreement.
(d) Other Benefits. During the Period of Employment, Employee shall
be entitled to receive paid vacation of 4 weeks during each calendar year and
any holidays that may be provided to all employees of Amitron. For the balance
of calendar year 2001, Employee shall be entitled to three (3) weeks of paid
vacation.
4. Stock Options.
(a) Concurrent with execution of this Agreement, Employer shall
grant to Employee, ten thousand (10,000) stock options with an exercise price
equal to the closing price of Employer's stock at the close of business on the
date immediately proceeding the grant date pursuant to Employer's Qualified
Incentive Stock Option Plan. The aforementioned Stock Options shall vest at a
rate of twenty (20%) percent per year and shall be exercisable by Employee upon
vesting.
(b) Future grants. Employer's President and CEO shall request
annually of the Compensation Committee of the Board of Directors of Employer
that Employee be granted additional Employee stock options to purchase shares of
common stock of Employer.
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It is understood, however, that the Board of Directors maintains total
discretion as to all future option grants.
5. Termination. The Period of Employment shall be subject to termination
prior to June 30, 2006 as follows:
(a) Termination Upon Death. The Period of Employment shall terminate
upon Employee's death. In the event this Agreement is terminated as a result of
Employee's death, Employer shall continue payments of Employee's Base Salary for
a period of ninety (90) days following Employee's death to the beneficiary
designated by Employee on the "Beneficiary Designation Form" attached to this
Agreement as Appendix A. Employer shall treat as immediately fully vested and
exercisable all unexpired stock options held by Employee that are not
exercisable or that have not been exercised, so as to permit the beneficiary to
purchase the balance of Employer's common stock not yet purchased pursuant to
said options until the end of the one year period that follows Employee's date
of death.
(b) Termination Upon Disability. Employer may terminate this
Agreement upon Employee's disability. For the purpose of this Agreement,
Employee's inability to perform Employee's regular duties by reason of physical
or mental illness or injury for a period of twenty-six (26) successive weeks
("Disability Period") shall constitute "Disability." The determination of
Disability shall be made by a physician selected by Employer and a physician
selected by Employee; provided, however, that if the two physicians so selected
shall disagree, the determination of Disability shall be submitted to
Arbitration in accordance with the rules of the American Arbitration
Association, and the decision of the Arbitrator shall be binding on both
parties.
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(i) During the Disability Period, Employee shall be entitled
to 100% of Employee's Base Salary, reduced by any other
benefits to which Employee may be entitled for the
disability period on account of such disability,
including, but not limited to, benefits provided under
Massachusetts Compensation law.
(ii) Upon termination pursuant to this Disability provision,
Employer shall treat as immediately fully vested and
exercisable all unexpired stock options held by Employee
that are not exercisable or that have not been
exercised, so as to permit the Employee to purchase the
balance of Employer common stock not yet purchased
pursuant to said options until the end of the one year
period following Employee's termination due to
Disability.
(c) Termination for Cause. Employer may terminate Employee's
employment immediately for "Cause" by written notice to Employee. For purpose of
this Agreement, termination shall be for "Cause" if the termination results from
any of the following events:
(i) material and willful breach by Employee of this
Agreement which is not cured by Employee within 10 days
after receipt of written notice of such breach
specifying the nature of such breach in detail;
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(ii) misappropriating any funds or property of Amitron or
Employer, or attempting to obtain any personal benefit
from any transaction to which Amitron or to Employee's
knowledge, Employer is a party or from any transaction
with any third party in which Employee has an interest
which is adverse to the interest of Amitron or to
Employee's knowledge, Employer, unless in either case,
Employee shall have first obtained the written consent
of the Employer's Vice President and General Manager
(but excluding any bona fide, arm's length transaction
between LPT and Amitron pursuant to any contractual
arrangements between Amitron and LPT existing as of the
date of this Agreement);
(iii) conviction of felony; or
(iv) documented repeated failure to follow the reasonable,
written instructions of Employer's Vice President and
General Manager after prior written warning.
Notwithstanding any other term or provision of this Agreement to the
contrary, if Employee's employment is terminated for "Cause", Employee shall
forfeit all rights to receive future payments and benefits otherwise provided
pursuant to this Agreement; provided, however, that Base Salary will be paid to
Employee through the date of termination.
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(d) Termination by Employer for Reasons Other Than Cause. In the
event Employer terminates Employee for reasons "Other Than Cause", Employee
shall be entitled to:
(i) the greater of (A) severance pay determined in
accordance with the provisions of Section 1(e) of this
Agreement, or (B) Employee's regular Base Salary for the
balance of the Period of Employment had the Period of
Employment not been terminated;
(ii) continued participation in Amitron's group health
benefit and group short and long term disability
insurance plans and Employer's 401(k) and other benefit
plans, as if Employee was an active, full time employee
for the severance pay period described above, with
"COBRA" continuation coverage to commence the month
following the end of the period during which Employee
receives severance compensation and continued health
benefits.
(iii) exercise all unexpired stock options held by Employee
that are not exercisable or that have not been
exercised, so as to permit the Employee to purchase the
balance of Employer common stock not yet purchased
pursuant to said options until the end of the one year
period following Employee's termination; and
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(iv) receipt of the payments and benefits provided in
paragraphs (i) and (ii) above is expressly conditioned
on Employee executing a complete general release in
favor of Employer, Amitron, and their officers and
directors, in their individual and representative
capacities, (collectively "the Releasees") which will
provide a total bar against all claims against the
respective Releasees related to Employee's employment
and the termination of that employment.
6. Withholding. Employer shall deduct and withhold from compensation and
benefits provided under this Agreement all legally required taxes and any
benefit contributions required by law.
7. Covenants.
(a) Confidentiality. Employee shall not, without the prior written
consent of Employer, disclose or use in any way, either during his employment by
Employer or thereafter, except as required in the course of his employment by
Employer, any confidential business or technical information or trade secrets
(collectively "proprietary information") acquired in the course of Employee's
employment by Amitron or by Employer. Employee acknowledges and agrees that it
would be difficult to fully compensate Employer for damages resulting from the
breach or threatened breach of the foregoing provision and, accordingly, that
Employer shall be entitled to temporary preliminary injunctions and permanent
injunctions to enforce this provision. Employer's right to obtain injunctive
relief shall not, however, diminish Employer's right to claim and recover
damages. Employee commits to use his reasonable efforts commensurate with his
position to prevent the publication or disclosure of any trade secret or
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any proprietary information concerning the business or finances of Employer or
Employer's subsidiaries or affiliates, or any of its or their dealings,
transactions or affairs which may come to Employee's knowledge in the pursuance
of its duties on behalf of Employer, provided, however, that the foregoing
covenants in this Section 7(a) shall not apply to any proprietary information
which (i) becomes generally available to the public or the industries of Amitron
and Employer other than as a result of a disclosure thereof by Employee in
violation of this Agreement; (ii) was or becomes available to the Employee from
a source other than Employer or Amitron, which source, if a third party, is
under no legal or contractual restraint on his or its disclosure thereof to
Employee; or (iii) which Employee is obligated to disclose in accordance with
any applicable law or pursuant to any lawful subpoena. If Employee is requested
or required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any proprietary information, it is agreed that Employee will provide Employer
with prompt notice of such request(s) so that Employer may seek an appropriate
protective order and if unsuccessful in obtaining a protective order by the time
employee is compelled to disclose any proprietary information, the Employer
shall be deemed to waive Employee's compliance with the provisions of this
Section 7(a).
(b) Upon execution of this Agreement, Employee will properly execute
a copy of Employer's Confidential and Proprietary Information Agreement
(attached as Exhibit B).
(c) No Competition.
(i) During the Period of Employment and for the time period
specified in Section 7(c)(ii) below, Employee shall not,
directly or indirectly, own, manage, operate, control or
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participate in the ownership, management, operation or
control of or be connected as an officer, employee,
partner, director, individual proprietor, lender,
consultant or otherwise, or have any financial interest
in, or aid or assist anyone else in the conduct of any
entity or business which is engaged in (A) any business
which is competitive with the business of Amitron as it
is now conducted or which may hereafter be conducted by
Amitron during the Period of Employment or (B) in any
business now conducted by Employer or hereafter
conducted by Employer during the Period of Employment,
provided that Employee has been materially involved in
such business conducted by the Employer or has had
access to confidential information with respect to such
business of the Employer ("a Competitive Operation").
(ii) The foregoing obligations of Employee under Section
7(c)(i) shall cease and terminate, and be of no further
force and effect on the later of (A) August 31, 2006,
(B) the last day on which Employee receives severance
pay in accordance with the provisions of this Agreement
or (C) the expiration of two (2) years after the date of
the termination of Employee's employment unless the
reason is
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without cause, in which case one (1) year after the date
of termination.
(iii) It is expressly understood that Employee currently is an
equity owner of LPT and Employee from time to time
consults with LPT's management on various operational
and business related issues. It is additionally
understood that LPT is engaged in the laser services
industry, providing laser drilling and ceramic machining
services, including, but not limited to, CO(2) laser
processing (cutting and drilling), high temperature
annealing, automated inspection, laser coating to
protect material surfaces and optical alignment (all of
the foregoing being hereafter referred to as the
"Excluded Business"). It is further understood that the
"Excluded Business" does not include the manufacture or
selling of thick film ceramic circuits or components.
Notwithstanding anything to the contrary contained
herein, none of the provisions set forth in this Section
7(c) shall in any manner be deemed to preclude, prohibit
or restrict in any manner Employee (a) during and after
Employee's employment with Employer, from owning any
equity interest in, or acting as a director of the
Excluded Business and (b) after the termination of
Employee's employment, engaging in any services of any
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nature on behalf of the Excluded Business or engaging in
any other business which may be in the future conducted
by LPT provided that such future business do not
constitute a Competitive Operation.
(iv) Ownership by Employee of not more than 2% of the voting
stock of any publicly held corporation shall not
constitute a violation of this paragraph.
(v) Employee agrees that the foregoing obligations of
Employee under this Section 7(c) are entered into by
Employee in conjunction with Employer's purchase of the
outstanding stock of Amitron, and that the scope and
breath of the above covenant not to compete is fair and
reasonable and shall therefore be enforceable.
(d) Termination of Payments. Upon the breach by Employee of any
covenant under this paragraph 7, Employer may offset any damages, including but
not limited to attorneys' fees awarded by the final non-appealable decree or
order of an arbitrator pursuant to paragraph 14 below by reason of such breach
against any and all severance benefits payable to Employee under paragraph 1(e)
hereof in addition to any and all other remedies available to Employer under law
or in equity.
8. Notices. Any notice which may be given hereunder shall be sufficient if
in writing and mailed by certified mail, return receipt requested, to Employee
at his residence, and to Employer at X.X. Xxx 000, 0000 Xxxxxxxxx Xxxx, X.
Xxxxxxxx, Xxx Xxxx 00000 or at such other addresses as either Employee or
Employer may, by similar notice, designate.
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9. Rules, Regulations and Policies. Employee shall abide by and comply
with all of the material rules, regulations, and policies of Employer, which are
not inconsistent with this Agreement, including without limitation Employer's
policy of strict adherence to, and compliance with, any and all requirements of
the Securities and Exchange Commission and the NASDAQ.
10. No Prior Restrictions. Employee affirms and represents that Employee
is under no obligation to any former employer or other third party which is in
any way inconsistent with, or which imposes any restriction upon, the employment
of Employee by Employer, or Employee's undertakings under this Agreement.
11. Return of Employer's Property. After Employee has received notice of
termination or at the end of the term of this Agreement whichever first occurs,
Employee shall immediately return to Employer all documents and other property
in his possession belonging to Amitron.
12. Construction and Severability. The invalidity of any one or more
provisions of this Agreement or any part thereof, all of which are inserted
conditionally upon their being valid in law, shall not affect the validity of
any other provisions to this Agreement; and in the event that one or more
provisions or any part thereof contained herein shall be invalid, as determined
by a court of competent jurisdiction, this instrument shall be construed as if
such invalid provisions had not been inserted, and further provided that with
respect to the duration of the "no competition" covenants in Section 7, if a
court of competent jurisdiction deems any period provided in Section 7 as
"excessive", the parties intend that the applicable provision will remain valid
and enforceable for whatever period the court deems appropriate.
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13. Governing Law. This Agreement was executed and delivered in New York
and shall be construed and governed in accordance with the laws of the State of
New York, without regard to its conflicts of law principles.
14. Disputes. The exclusive forum to resolve any dispute involving the
interpretation or application of this Agreement shall be to binding arbitration
pursuant to the rules and procedures of the American Arbitration Association to
be held in Syracuse New York except that the "non-prevailing" party shall be
liable to pay the costs and reasonable attorney's fees of the prevailing party.
To the extent that the parties can not agree as to who the "non prevailing"
party is, the Arbitrator shall retain jurisdiction exclusively to decide that
issue. The Arbitrator shall have no jurisdiction or authority to add to, detract
from or alter in any way the provisions of this Agreement. The award rendered by
the Arbitrator shall be final, and judgment may be entered upon it in accordance
with applicable law in any New York court having jurisdiction.
15. Assignability and Successors. This Agreement may not be assigned by
Employee or Employer, except that this Agreement shall be binding upon, and
shall inure to the benefit of the successor of Employer through merger,
acquisition of all or substantially all the assets of Employer, or corporate
reorganization.
16. Miscellaneous.
(a) This Agreement constitutes the entire understanding and
agreement between the parties with respect to Employee's employment with
Employer and shall supersede all prior understandings and agreements.
(b) This Agreement cannot be amended, modified or supplemented in
any respect, except by a subsequent written agreement entered into by the
parties.
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(c) The services to be performed by Employee are special and unique;
it is agreed that any breach of this Agreement by Employee shall entitle
Employer (or any successor or permitted assigns of Employer), in addition to any
other legal remedies available to it, to apply to any court of competent
jurisdiction to enjoin such breach.
(d) The provisions of paragraph 7 and any other provisions of this
Agreement that by their terms survive the termination of this Agreement or
Period of Employment shall survive the termination of this Agreement.
17. Counterparts. This Agreement may be executed in counterparts, which
together shall constitute one in the same instrument.
Dated: ANAREN MICROWAVE, INC.
By:
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Xxxxxxxx X. Xxxx
President and CEO
Dated:
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Xxxxxxx Xxxxxxx
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APPENDIX A
BENEFICIARY DESIGNATION FORM
Pursuant to the Employment Agreement between ANAREN MICROWAVE, INC. and
XXXXXXX XXXXXXX dated as of ________ ____, 2001 ("Agreement"), I, Xxxxxxx
Xxxxxxx hereby designate ___________________________, my spouse, as the
beneficiary of amounts payable upon my death in accordance with paragraph 5 of
the Agreement. My beneficiary's current address is the same as mine.
Dated:
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Xxxxxxx Xxxxxxx
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Witness
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