EXHIBIT 10.10
EMPLOYMENT AGREEMENT
This sets forth the Employment Agreement ("Agreement") made effective as
of February 29, 2000 between Anaren Microwave, Inc. ("Employer"), a New York
corporation with common stock publicly traded on the NASDAQ, and Xxxxxx X.
Xxxxxxx, Xx. ("Employee" or "Xx. Xxxxxxx"), an individual currently residing at
00 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000.
RECITALS
A. RF Power Components, Inc ("RF Power") is based in Bohemia, New York and
is in the business of designing and manufacturing stripline microstrip, coaxil
and surface mount resistors/terminations, attenuators, couplers and power
dividers/combiners (the "Business").
B. Xx. Xxxxxxx co-founded RF Power and currently serves as its President.
C. Anaren intends to purchase the outstanding stock of RF Power.
D. Anaren desires to retain Xx. Xxxxxxx in its employment to continue to
oversee and manage RF Power'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 RF Power
and to reinforce and encourage the continued dedication of Xx. Xxxxxxx to RF
Power 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 RF Power and as a Vice President and Officer
of Employer for a period commencing on February 29, 2000 and ending on November
1, 2003 ("Period of Employment"), subject to earlier termination as provided in
this Agreement.
(b) Salary. During the period February 29, 2000 through November 1
2000, Employer shall pay Employee base salary at an annual rate of $150,000 (as
adjusted in accordance with the following sentence "Base Salary"). Employee's
Base Salary for the period November 2, 2000 through November 1, 2001 and for
each succeeding 12 month period through November 1, 2003, shall be determined by
the Employer's President and CEO, subject to approval by Employer's Board of
Directors, but shall not be set below $150,000 annually, plus a minimum increase
of 4% each year over the prior year. Employee's Base Salary is payable in
accordance with Employer's regular payroll procedures for executive employees.
(c) Title. Employee shall retain the title of President of RF Power
Components, Inc. and shall also be a Vice President and Officer of Employer
reporting directly to Employer's President and CEO,
(d) Incentive Bonuses. Employee shall be eligible for annual
incentive bonuses, beginning with Employer's fiscal year 2001 pursuant to the
terms of the Management Incentive Plan which has been approved by the Board of
Directors of Employer to
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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 overall
corporate, functional and individual performance measured against
pre-established goals; provided, however, that the functional/individual
performance goals for fiscal 2001 shall be based on the projections provided to
Employer by Employee and attached as Exhibit A (adjusted upward for payments
made after the date hereof to Xxxx Xxxxxxxxx pursuant to the Consulting and
Non-Compete Agreement between Employee and Davidsson). (A copy of the applicable
Management Incentive Plan is attached as Exhibit B.) (For the purpose of
evaluating Employee's Management Incentive Payout related to his
functional/individual performance for fiscal 2001, RF Power will be reviewed as
a "stand alone" business. Upon termination of Employee's employment pursuant to
subparagraph 5(a), or (b), Employee shall be entitled to a pro rata portion
(based on Employee's complete months of active employment in the applicable
fiscal year) of the annual incentive bonus that is payable with respect to the
fiscal year during which the termination occurs, or in the case of a termination
upon Employee's disability pursuant to subparagraph 5(c), a pro rata portion
based on the portion of the fiscal year prior to commencement of the disability,
plus the six month period after the disability began.
(e) Severance Pay. If by November 1, 2003, Employee and Employer
cannot agree on the terms of Employee's continued employment, Employee shall be
entitled to be paid, as severance compensation, one year of the Base Salary in
effect on November 1, 2003, plus $50,000 in lieu of incentive bonuses that
Employee could have earned had he remained employed through the end of fiscal
year ending 2004. Payments required pursuant to the preceding sentence shall be
paid in accordance with Employer's regular payroll and incentive bonus payment
procedures. For any period during which Employee's Base Salary
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is continued as severance compensation, Employee shall be eligible to continue
to participate in RF's group health benefit and group term life insurance plans
as if Employee was an active, full time employee. Employee's right to "COBRA"
continuation coverage under RF's group health benefit plan 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 Employer's President and CEO and Employer's Board of
Directors, for the management of all aspects of RF Power's business and
operations, and the discharge of such other duties and responsibilities to
Employer as may from time to time be reasonably assigned to Employee by
Employer's President and CEO; provided, however, that in no event shall
Employee's duties be inconsistent with the title afforded him pursuant to
Section 1(c). Employee shall devote his full working time and reasonable best
efforts to the business and affairs of Employer, in accordance with his senior
management position with Employer, except during any period of illness or
incapacity; provided, however, that nothing herein shall preclude Employee from
devoting such reasonable and customary time as required to serve as a director
of one other corporation involving no conflict of interest with the interests of
Employer, to engage in charitable or community activities, and to engage in any
other activities as approved in each case in advance by the President and Chief
Executive Officer or the Board of Directors of Employer, provided that such
activities collectively do not unreasonably interfere with the performance of
his duties under this Agreement.
(b) Employer will not require Employee to relocate from Long Island,
New York to work for Employer during the term of this Agreement.
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3. Fringe Benefits.
(a) Benefit Plans. During the period of employment, Employee will
continue to be eligible to participate in any RF Power sponsored pension benefit
plans (as determined and defined under Section 3(2) of the Employee Retirement
Income Security Act of 1974 as amended), RF Power'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 RF Power for the benefit of its executive employees at the time this
Agreement is executed. Participation in any of RF Power'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 stock options and restricted stock grants pursuant
to Employer's Incentive Stock Option Plan and Restricted Stock Guidelines, as
well as any other similar stock based plans made available to senior managers of
Employer.
(b) Expenses. Upon submission to Employer 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) Other Benefits. During the Period of Employment, Employee shall
be entitled to receive the
following additional benefits:
(i) paid vacation of 4 weeks during each calendar year and
any holidays that may be provided to all employees of RF
Power.
(ii) Employee will continue to have full use of the
automobile currently owned by RF Power and provided to
him, until
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such time as the automobile is paid in full and, at that
time, Employer will transfer the automobile to Employee
at a price to be determined by Employee and Employer's
President and CEO, but such price shall not exceed the
wholesale book value as determined by the "Automobile
Red Book" published for the month during which the final
car loan payment is made by RF Power. In the interim,
the Employer will be responsible for the car loan
payments and reasonable repairs related to Employee's
car.
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 on the date of grant subject to
Employer's Qualified Incentive Stock Option Plan.
(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.
5. Termination. The Period of Employment shall be subject to termination
prior to November 1, 2003 as follows:
(a) Expiration of the Term. This Agreement shall terminate
automatically at the expiration of the Period of Employment, unless the parties
enter into a successor agreement that extends the Period of Employment.
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(b) 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 B. Employee's beneficiary shall be free to retain or
dispose of any restricted stock granted to Employee in accordance with the terms
of the applicable granting agreement(s). For purpose of this Section 5,
"restricted stock" shall include shares of Employer Common Stock issued to
Employee pursuant to the Stock Purchase Agreement between the undersigned
parties and Xxx Xxxxxxx dated February 29, 2000, as well as restricted stock
that may be granted to Employee in his capacity as an employee. Additionally,
Employer shall treat as immediately 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 common stock not yet
purchased pursuant to said options until the end of the one year period that
follows Employee's date of death.
(c) 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
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rules of the American Arbitration Association, and the decision of the
Arbitrator shall be binding on both parties.
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 New York's Workers' Compensation law.
Upon termination pursuant to this Disability provision, Employee shall be
free to dispose or retain in accordance with the terms of the applicable
granting agreement(s), any restricted stock previously granted to Employee.
Additionally, Employer shall treat as immediately 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.
(d) 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 breach by Employee of this Agreement; provided
if the breach was inadvertent, Employee shall have 10
days after notice of such breach is received from
Employer's President and CEO to cure such breach;
(ii) misappropriating any funds or property of RF or
Employer, or attempting to obtain any personal benefit
from any
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transaction to which RF 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 RF or to Employee's
knowledge, Employer, unless in either case, Employee
shall have first obtained the written consent of the
Employer's President and CEO;
(iii) unreasonable neglect or refusal to perform the duties
assigned to Employee;
(iv) conviction of felony or
(v) documented failure to follow the reasonable, written
instructions of Employer's President and CEO.
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.
(e) Termination by Employee for Good Reason. Employee's employment
with Employer may be terminated by Employee for Good Reason. For purposes of
this Agreement "Good Reason" shall mean:
(i) the assignment to Employee of any duties inconsistent
with Employee's position (including any change in his
status, offices, and titles) authority, duties or
responsibilities as contemplated by Sections 1(c) and 2
of this Agreement.
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(ii) any failure by Employer to comply with any of the
provisions of Sections 1(b), 1(d), 3, 4,(b) or 8 of this
Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which
is remedied by Employer promptly after receipt of notice
thereof given by Employee; or
(iii) the failure by Employer to comply with the provisions of
Section 2(b).
(f) Termination by Employee for Good Reason or by Employer for
Reasons Other Than Cause. In the event Employee terminates his employment for
Good Reason or 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 (i.e., Base Salary plus $50,000 payable
beginning with Employer's first payroll period that
begins following Employee's date of termination, or (B)
Employee's regular Base Salary for the balance of the
Period of Employment had the Period of Employment not
been terminated plus $22,500 for each 12 months
remaining and pro rated for any period less than 12
months, in the Period of Employment;
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(ii) dispose or retain in accordance with the applicable
granting agreement(s) any restricted stock granted to
Employee and 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
(iii) Employer-paid professional outplacement services through
a company of Employee's choice for a period of 12 months
following termination, not to exceed $14,000.
(iv) receipt of the payments and benefits provided in
paragraphs (i) and (iii) above and the acceleration of
the vesting provided for in paragraph (ii) above, is
expressly conditioned on Employee executing a complete
general release in favor of Employer, RF, 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.
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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
acquired in the course of Employee's employment 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 best
efforts to prevent the publication or disclosure of any trade secret or any
confidential information concerning the business or finances of Employer or
Employer's 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 confidential information which (i) becomes generally
available to the public other than as a result of a disclosure thereof by
Employee or (ii) was or becomes available to the Employee from a source other
than Employer which source, if a third party, is under no legal or contractual
restraint on his or its disclosure thereof to Employee. If Employee is requested
or required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or
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similar process) to disclose any of the confidential 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
confidential 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 C).
(c) No Competition.
(i) During the period of February 29 through November 1,
2003, Employee shall not, directly or indirectly, own,
manage, operate, control or 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 ("a
Competitive Operation") which principal business
competes with the Business or the business of Employer.
(ii) In addition, if Employee is terminated for "Cause" as
defined in Section 5(d) during the period of February 29
through November 1, 2003, Employee shall not, for a
period of twenty four (24) months after November 1,
2003,
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participate in a Competitive Operation as defined in (i)
above.
(iii) Further, if Employee's termination results from
Expiration of the Term as provided in Section 5(a),
Employee shall not, for a period of twenty four (24)
months after November 1, 2003, participate in a
Competitive Operation as defined in (i) above. Ownership
by Employee of not more than 5% of the voting stock of
any publicly held corporation shall not constitute a
violation of this paragraph. Employee agrees that the
amount of consideration paid by Employer to purchase the
outstanding stock of RF Power was, in part, determined
based on the condition that Employee would remain
employed by Employer, and operate RF Power, for a
minimum of three (3) years, and that the scope and
breath of the above covenant not to compete is fair and
reasonable and shall therefore be enforceable.
(c) Termination of Payments. Upon the breach by Employee of any
covenant under this paragraph 7, Employer may offset against any damages,
including but not limited to attorneys' fees, it sustains by reason of such
breach and/or recover from Employee immediately any and all severance benefits
paid to Employee under paragraph 1(e) hereof in addition to any and all other
remedies available to Employer under law or in equity.
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8. In the event that any officer other than the President and CEO of
Employer, is given a "change of control" arrangement or agreement, then this
Agreement will be amended contemporaneously therewith to provide Employee with a
"change of control" arrangement on terms no less favorable than that given to
other officers of Employer.
9. 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, with a copy to Winston & Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxx XxXxxxxxxxx, Esq. 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.
10. 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.
11. 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.
12. 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 Employer.
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13. 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 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.
14. 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.
15. 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
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.
16. 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.
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17. 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.
(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 1(d), and 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.
18. Counterparts. This Agreement may be executed in counterparts, which
together shall constitute one in the same instrument.
Dated: February 29, 2000 ANAREN MICROWAVE, INC.
By: /s/ Xxxxxxxx X. Xxxx
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Xxxxxxxx X. Xxxx
President and CEO
Dated: February 29, 2000 /s/ Xxxxxx X. Xxxxxxx, Xx
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Xxxxxx X. Xxxxxxx, Xx.
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