CHANGE OF CONTROL AGREEMENT
This CHANGE OF CONTROL AGREEMENT is dated as of June 22, 2007
between ANAREN, INC., a New York Corporation ("Anaren"), and _______________
("Employee"). The term "Anaren" shall mean all of its subsidiaries, whether
directly or indirectly owned.
Recitals
A. Employee is currently employed by Anaren as
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B. Anaren desires to retain the services of Employee and to induce
Employee to remain with Anaren.
C. In consideration of the agreements of the parties contained in this
Agreement, and intending to be legally bound by the terms of this
Agreement, the parties agree as follows:
Terms
1. Term of Agreement.
The term of this Agreement shall be for the period from the date of this
Agreement to June 30, 2011 and shall automatically expire effective June 30,
2011, unless otherwise renewed by the parties.
2. Change of Control.
(a) Subject to the other terms, conditions and limitations of this
Agreement, if Employee's employment by Anaren ends within one year following a
"Change of Control" that occurs during the term of this Agreement, and if such
termination is due to Employee's involuntary termination of employment for
reasons other than "Cause," then Anaren shall:
(i) Pay to Employee an aggregate severance benefit determined as
follows:
(A) If Employee has completed 20 or more years of service
with Anaren, then the severance benefit shall equal
the sum of (I) 200 percent of Employee's then current
base annual salary, plus (II) an amount equal to the
sum of the previous two years' management incentive
bonus earned by Employee for the two fiscal years
that ended immediately prior to the fiscal year
during which the "Change of Control" occurs; and
(B) If Employee has completed less than 20 years of
service with Anaren, then the severance benefit shall
equal the sum of (I) 100 percent of Employee's then
current base annual salary, plus (II) an amount equal
to the management incentive bonus earned by Employee
in the fiscal year that ended immediately prior to
the fiscal year during which the "Change of Control"
occurs.
(ii) Treat as immediately exercisable all options granted by Anaren
to Employee to acquire Anaren common stock that are not exercisable or that have
not been exercised; and
(iii) Treat as immediately vested all restricted Anaren stock, or
any restricted stock received by Employee in exchange for Anaren stock, if any,
issued to Employee; and
(iv) Subject to the cancellation provisions described in paragraph
2(c) below, provide Employee with continuation of life, disability and health
insurance benefits, under the same terms and conditions that Anaren provides
such insurance to its active employees for a period of 24 months (12 months, if
Employee has completed less than 20 years of service with Anaren).
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(b) Subject to the cancellation provisions described in paragraph 2(c)
below, the severance benefit described in paragraph 2(a)(i) shall be paid in
substantially equal monthly installments over a period of 24 months (12 months,
if Employee has completed less than 20 years of service with Anaren), beginning
with Anaren's first regular payroll following Employee's termination of
employment. If Employee dies prior to receiving all of the payments due pursuant
to paragraph 2(a)(i), then any unpaid amounts shall be paid to the beneficiary
designated by Employee on the "Beneficiary Designation Form" attached to this
Agreement as Appendix A.
(c) If Employee becomes reemployed by Anaren, or another employer during
the first 12 month period in which severance payments are made, Anaren shall
have no further obligation to pay severance benefits, including insurance
benefits, after the 12 month period has expired. If Employee becomes employed
after the 12 month period, but before the expiration of the 24 month period, all
severance payments and insurance benefits will cease upon commencement of
Employee's employment. Employee acknowledges that he/she has an obligation to
promptly notify Anaren upon acceptance of employment.
(d) Upon expiration of the period described in paragraph 2(a)(iv),
Employee (and Employee's qualified beneficiaries) shall be eligible to commence
COBRA continuation benefits, in accordance with the COBRA provisions of Anaren's
group health plan.
(e) If any portion of the amounts paid to, or value received by Employee
following a "change of control" (whether paid or received pursuant to this
paragraph 2 or otherwise) constitutes an "excess parachute payment" within the
meaning of Internal Revenue Code Section 280G, then the parties shall negotiate
a restructuring of payment dates and/or methods to minimize or eliminate the
application of Section 280G; but only if and to the extent such restructuring
will not result in the premature recognition of income or the imposition of
excise taxes under Internal Revenue Code Section 409A. If an agreement to
restructure payments cannot be reached within sixty days of the date the first
payment is due under this paragraph 2, then payment shall be made without
restructuring. In that case, Employee shall be responsible for all taxes and
penalties payable by Employee as a result of Employee's receipt of an "excess
parachute payment".
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(f) Payments made and benefits provided pursuant to this paragraph 2 shall
be subject to withholding for income, employment and other similar taxes Anaren
may be required to withhold.
(g) As a condition to Anaren's obligation to provide the payments and
benefits pursuant to this paragraph 2, Employee must first execute a General
Release, that releases and discharges Anaren from all claims of any type arising
out of Employee's employment or the termination of employment.
(h) For purposes of this Agreement, a "Change of Control," shall be deemed
to have occurred if:
(i) any "person," including a "group" as determined in accordance
with the Section 13(d)(3) of the Securities Exchange Act of 1934 ("Exchange
Act"), is or becomes the beneficial owner, directly or indirectly, of securities
of Anaren, Inc. representing 30% or more of the combined voting power of Anaren,
Inc.'s then outstanding securities;
(ii) as a result of, or in connection with, any tender offer or
exchange offer, merger or other business combination (a "Transaction"), the
persons who were directors of Anaren, Inc. before the Transaction shall cease to
constitute a majority of the Board of Directors of Anaren, Inc. or any
successor;
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(iii) Anaren, Inc. is merged or consolidated with another
corporation and as a result of the merger or consolidation less than 70% of the
outstanding voting securities of the surviving or resulting corporation shall
then be owned in the aggregate by the former stockholders of Anaren, Inc.;
(iv) a tender offer or exchange offer is made and consummated for
the ownership of securities of Anaren, Inc. representing 30% or more of the
combined voting power of Anaren, Inc.'s then outstanding voting securities; or
(v) Anaren, Inc. transfers substantially all of its assets to
another corporation which is not controlled by Anaren, Inc.
3. Termination For "Cause".
(a) Notwithstanding any contrary provision contained in paragraph 2,
Anaren may terminate Employee's employment and this Agreement for "Cause"
(defined below) at any time, effective upon receipt by Employee of written
notice of termination. Upon termination of employment for "Cause," Employee
shall be entitled only to the salary due Employee from Anaren to the date of
receipt by Employee of written notice of termination.
(b) Termination for "Cause" for purposes of this Agreement shall include,
but not be limited to, any of the following:
(i) any act of fraud or the commission of a felony; or
(ii) intentional disclosure of confidential or proprietary Anaren
information to the detriment of Anaren; or
(iii) unreasonable neglect or refusal to perform the material duties
of his or her position, unless such neglect or refusal is cured within a
reasonable period of time (of at least 30 days) following written notice to
Employee of such neglect or refusal.
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4. Covenants.
(a) Confidentiality. Employee shall not, without the prior written consent
of Anaren, disclose or use in any way, either during employment by Anaren or
thereafter, except as required in the course of employment by Anaren, any
confidential business or technical information or trade secrets acquired in the
course of Employee's employment by Anaren. Employee acknowledges and agrees that
it would be difficult to fully compensate Anaren for damages resulting from the
breach or threatened breach of the foregoing provision and, accordingly, that
Anaren shall be entitled to temporary preliminary injunctions and permanent
injunctions to enforce this provision. Anaren's right to obtain injunctive
relief shall not, however, diminish Anaren's right to claim and recover damages.
Employee commits to use his or her best efforts to prevent the publication or
disclosure of any trade secret or any confidential information concerning the
business or finances of Anaren or Anaren's subsidiaries, 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 Anaren.
(b) No Competition. Employee's employment is subject to the condition that
during the term of his or her employment and for a period of 24 months (12
months, if Employee has completed less than 20 years of service with Anaren)
from the date of the termination of employment (the "Date of Termination")
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 which principal
business directly competes with Anaren on the date of termination. 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.
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(c) Termination of Payments. Upon the breach by Employee of any covenant
under this paragraph 4, Anaren may offset and/or recover from Employee
immediately any and all of the severance compensation paid to Employee under
paragraph 2 hereof in addition to any and all other remedies available to Anaren
under law or in equity.
5. Miscellaneous.
(a) Notices. Any and all notices with respect to this Agreement shall be
sufficient if furnished personally in writing or sent by certified mail, return
receipt requested, to the last known address or other address designated by the
parties to this Agreement.
(b) Entire Agreement; Release From Prior Agreements. This Agreement
represents the entire agreement between the parties regarding the subject matter
of the Agreement and specifically supersedes any and all oral or written
agreements previously entered into by the parties, and each party releases the
other party of all obligations and liabilities with respect to any prior
employment agreements between the parties.
(c) Governing Law. This Agreement, having been made and duly executed
within the State of New York, shall be construed and governed in accordance with
and pursuant to New York law.
(d) Waiver. In the event that any breach of this Agreement by Employee or
Anaren is waived by act or failure to act, such waiver shall not constitute a
waiver of any subsequent breach by either party.
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(e) Severability and Construction. If any provision of this Agreement
shall be held invalid or unenforceable, such invalidity or unenforceability
shall affect only that particular provision and shall not affect or render
invalid or unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not a part of the Agreement. This Agreement shall be interpreted and
applied in all circumstances in a manner that is consistent with the intent of
the parties that amounts payable pursuant to this Agreement shall not be subject
to the premature income recognition or adverse tax provisions of Internal
Revenue Code Section 409A. Accordingly, the parties intend to maximize the
application of the exceptions to deferred compensation treatment stated in
Treasury Regulation sections 1.409A-1(b)(9)(iii) and (v) that generally exempt
from the treatment of deferred compensation payments and benefits that are
provided under a separation pay plan to the extent limited payments are made,
and/or limited benefits are provided, for a limited period of time following
Employee's separation from service. However, to the extent payments and/or
benefits provided pursuant to this Agreement result in the deferral of
compensation under Internal Revenue Code Section 409A, such payments and/or
benefits shall not be provided earlier than six months following Employee's
separation from service, if Employee is a "specified employee" within the
meaning of Internal Revenue Code Section 409A.
(f) Binding Effect. This Agreement may not be assigned by Employee or
Anaren, except that this Agreement shall be binding upon and shall inure to the
benefit of any successor of Anaren through merger, corporate reorganization,
Change of Control or otherwise. Anaren shall use its reasonable best efforts to
ensure that any successor to Anaren provides the successor's written
acknowledgement of the successor's obligations under this Agreement. Such a
written acknowledgement, however, shall not be a condition to the successor's
assumption of the obligations imposed on the successor by this Agreement.
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(g) Arbitration and Fees. Any dispute between the parties relating to the
terms of this Agreement, or any interpretation, construction or enforcement
hereof, shall first be submitted to non-binding arbitration in Syracuse, New
York in accordance with the rules and regulations of the American Arbitration
Association then in effect. Each party shall be responsible for its own costs
and expenses in pursuing non-binding arbitration, and any arbitration fees or
costs shall be shared equally between the parties. However, if Employee is a
party in an arbitration to collect payments due pursuant to this Agreement and
prevails in collecting payments due in the arbitration or settlement of the
arbitration, Anaren shall reimburse Employee for reasonable attorneys' fees
incurred by Employee in connection with such arbitration; provided that (i) the
foregoing right to reimbursement shall be limited to eligible expenses incurred
within the first 60 months that follow Employee's termination of employment,
(ii) reimbursement of eligible expenses shall be made by the last day of
Employee's taxable year following the taxable year in which the expenses were
incurred, and (iii) the right to reimbursement is not subject to liquidation or
exchange for any other benefit.
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IN WITNESS WHEREOF, the parties have signed this Agreement after full
opportunity to read and discuss the provisions of the Agreement, and both
parties voluntarily assent to this Agreement with full understanding of its
provisions.
EMPLOYEE
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ANAREN, INC.
By:_______________________________
Xxxxxxxx X. Xxxx
President & CEO
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APPENDIX A
BENEFICIARY DESIGNATION FORM
Pursuant to the Change of Control Agreement between Anaren, Inc. and
_______________, dated as of June 22, 2007 ("Agreement"), I,
_________________, hereby designate ___________________________, my
____________, as the beneficiary of amounts payable upon my death in
accordance with paragraph 2(b) of the Agreement. My beneficiary's current
address is
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My contingent beneficiary is ___________________________, my
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My contingent beneficiary's address is
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Dated: _____________ ___________________________
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Witness
