EMPLOYMENT AGREEMENT
EXHIBIT
10.1
This
Agreement is made and entered into as of January 15, 2009, between
ANADIGICS, INC., a Delaware corporation (the “Company”), and Xxxxx X. Xxxxx (the
“Executive”).
WHEREAS,
the Company desires to employ the Executive on the terms and subject to the
conditions set forth herein.
WHEREAS,
the Executive is willing to accept employment on such terms and
conditions.
NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
the parties hereby agree as follows:
I.
EMPLOYMENT
A. The
Company agrees to employ the Executive and the Executive agrees to be employed
by the Company for the term of employment as provided in Article II below
and upon the terms and conditions provided in this Agreement.
B. The
Executive represents and warrants to the Company that by entering into and
performing the Executive’s obligations under this Agreement, the Executive has
not breached and will not breach duties or obligations (whether fiduciary,
contractual or arising by operation of law or otherwise) owed to any third party
in connection with any prior employment or position.
II.
TERM
The
Executive’s term of employment under this Agreement shall commence on February
1, 2009 (the “Closing Date”) and shall terminate on December 31, 2010, unless
terminated earlier as provided in Article VI hereof (the “Stated Term of
Employment”).
III.
POSITION
AND RESPONSIBILITIES
A. During
the Stated Term of Employment, the Executive agrees to serve as President and
Chief Executive Officer of the Company and each subsidiary of the Company and to
serve as a member of the Company’s Board of Directors (the “Board”) and to be
responsible for the general management of the operations of the Company and its
subsidiaries, subject to the direction of the Board. The Executive
shall report directly to the Board.
B. During
the Stated Term of Employment, the Executive shall devote all of his business
time, attention and skill exclusively to the business and affairs of the Company
and its subsidiaries and as otherwise approved by the Board. Subject
to the Board’s consent, which shall not be unreasonably withheld, the Executive
may engage in civic or charitable activities and serve on the boards of
directors of other corporations. The Executive shall perform
faithfully the duties which may be assigned to him from time to time by the
Board and shall use his best efforts and skills to promote the Company’s and its
subsidiaries’ business and shall follow, at all times during the course of his
employment hereunder, prudent and ethical business practices. During
the continuance of the Executive’s employment hereunder the Executive shall
comply with all reasonable requests and directions from time to time given to
the Executive (consistent with his position as the President and Chief Executive
Officer) by the Board and with all rules and regulations from time to time
promulgated by the Company and its subsidiaries concerning its
employees.
IV.
COMPENSATION
For
services rendered by the Executive hereunder, the Executive shall be compensated
as follows:
A. Base
Salary
The
Company shall pay the Executive a fixed base salary of Four hundred fifty
thousand dollars ($450,000) per calendar year (or prorated portion hereof),
subject to increase in the sole discretion of the Board (the “Base Salary”),
payable in installments on the Company’s regular payroll dates commencing on the
Closing Date. If, in the sole discretion of the Board, the
Executive’s Base Salary is increased, such increased Base Salary shall then
constitute the “Base Salary” for purposes of this Agreement.
B. Sign-on
Bonus
As a
sign-on bonus, the Company shall grant the Executive stock options set forth in
Annex A hereto on the Closing Date.
C. Annual Bonus
Plan
In
addition to the Base Salary and Sign-on Bonus, the Executive shall be eligible
for bonuses as well as other incentive compensation as may be authorized from
time to time by the compensation committee of the Board (the “Compensation
Committee”). The bonuses shall be based upon satisfactory achievement
of the Company’s operational and strategic business plan and financial projects
(“Plan”), proposed by the Executive to the Board and agreed to by the Board,
with the targeted annual bonus being 100% of the Executive’s then annual Base
Salary for achieving Plan. The bonus shall be earned and paid out
annually with respect to achieving or exceeding Plan for such year and shall be
paid during the first two and one-half months following the end of the year for
which the bonus is earned.
D. Business Related
Expenses
The
Company shall reimburse the Executive, in accordance with Company policy, for
all actual documented out-of-pocket travel, entertainment, business and other
expenses reasonably and properly incurred by the Executive in performing his
duties and obligations under this Agreement.
E. Long Term Incentive and
Share Award Plan
The Board
intends to review Executive’s performance under this Agreement with a view to
the possible grant pursuant to the Company’s Long Term Incentive and Share Award
Plan of stock options and/or shares of restricted stock to Executive on an
annual basis to reward Executive for performance hereunder. The
Company shall grant the Executive for 2009, stock options set forth in Annex A
hereto.
F. Relocation
Expenses
As
consideration for Executive’s relocating his residence to the East Coast, the
Company agrees to reimburse Executive for:
|
1.
|
reasonable
moving expenses; and
|
|
2.
|
reasonable
rental costs of a temporary residence on the East Coast and one automobile
for 60 days.
|
To the
extent that the Company’s payments under this Section IV.F are includible
in the Executive’s taxable income, the Company shall increase such payments by
an additional amount calculated to ensure that the Executive’s net proceeds,
after paying federal, state and local income taxes on such payments and such
additional amount, are equal to the Executive’s expenses described in this
Section IV.F.
G. General
Benefits
During
the term of this Agreement, the Executive will be eligible to receive such
benefits as are generally provided to executive officers of the Company as
determined from time to time by the Board.
The
Executive will be entitled to normal sick leave during the term of this
Agreement, when the Executive is not Disabled, as that term is defined in
Section VI.A. During the Stated Term of Employment, Executive
will be entitled to all public holidays observed by the Company and vacation
days in accordance with the applicable vacation policies for executive officers
of the Company, which vacation days will be taken at a reasonable
time.
V.
RESTRICTIONS
A. Non-Interference and
Non-Solicitation
1. During
the Stated Term of Employment and for a period of two (2) years thereafter
the Executive shall not directly or indirectly:
(i) encourage
or solicit any officer or employee of the Company or any of its subsidiaries to
leave the employ of any such entity;
(ii) interfere
with or otherwise disrupt in any material respect (A) the relationships
between the Company and its subsidiaries, on the one hand, and any customer of
the Company and its subsidiaries, on the other hand, or (B) the supply to
the Company and its subsidiaries of any services by any supplier or agent who
during the period of twenty-four (24) months immediately preceding the
Executive’s termination shall have supplied product or services to the Company
or any of its subsidiaries, nor will the Executive interfere with the terms on
which such supply or agency services during such period as aforesaid have been
made or provided or cause any such supplier, agent or broker to discontinue its
relationship with the Company and its subsidiaries; or
(iii) solicit
away from the Company or any of its subsidiaries the business of any person,
firm or company who during the period of twenty-four (24) months preceding the
date of the Executive’s termination was a customer of the Company.
2. As used
in this Article V, “customer” shall include any third party with whom the
Company or any of its subsidiaries was during the said period in substantive
negotiation in respect of the sale of products by the Company or any of its
subsidiaries or to whom the Company or any of its subsidiaries had (during the
said period) made or been requested to make an offer to sell products or provide
services.
3. While the
restrictions set forth in this Article V are considered by both parties to
be reasonable in all the circumstances, it is recognized that restrictions of
the nature in question may fail for reasons unforeseen and, accordingly, it is
hereby declared and agreed that if any of such restrictions shall be adjudged to
be void as going beyond what is reasonable in all the circumstances for the
protection of the interests of the Company and its subsidiaries but would be
valid if part of the wording thereof were deleted and/or the periods (if any)
thereof reduced and/or the area dealt with thereby reduced in scope, then said
restrictions shall apply with such modifications as may be necessary to make
them valid and effective.
4. The
limitations on the Executive set forth in this Article V shall also apply
to any agent or other representative acting in his or her capacity as an agent
or representative of the Executive.
5. Nothing
contained in this Article V shall limit in any manner any additional
obligations to which the Executive may be bound pursuant to any other agreement
or any applicable law, rule or regulation.
B. Proprietary Rights;
Confidentiality
1. The
Executive agrees that the products of the Company and its subsidiaries shall
constitute the exclusive property of the Company and its
subsidiaries. The Executive hereby assigns to the Company and its
subsidiaries all of the Executive’s right, title and interest, if any,
pertaining to the products developed or improved upon by the Executive for the
businesses that are being conducted or developed by the Company or any of its
subsidiaries while employed by the Company, including any patent, trademark,
trade name, copyright or other right that may pertain thereto. As
used herein, “product” shall include prospective products under development
during the Executive’s employment with the Company.
2. For the
avoidance of doubt, all trademarks, trade names, service marks, designs, utility
models, copyrights, know-how and confidential information, applications for
registration of any of the foregoing and the right to apply for them in any part
of the world (whether any of the foregoing shall be registered or unregistered)
created or discovered or participated in by the Executive during the course of
his employment with the Company or under the instructions of the Company for the
businesses that are being conducted or developed by the Company or any of its
subsidiaries shall be the absolute property of the Company.
3. The
Executive recognizes and acknowledges that, by reason of his employment with the
Company, he may have acquired, and will acquire, information of a proprietary,
confidential, or secret nature regarding the Company and its subsidiaries and
their respective businesses and operations, including but not limited to,
information concerning trade secrets, know-how software, data processing
systems, inventions, designs, processes, formulae, notations, improvements,
financial information, business plans, prospects, referral sources, lists of
suppliers and customers and other information with respect to the affairs,
business, customers, agents or other business relationships of the Company and
its subsidiaries (the “Confidential Information”). The Executive
shall hold in a fiduciary capacity for the benefit of the Company, all
Confidential Information relating to the Company and any of its subsidiaries and
their respective businesses, which shall have been obtained by the Executive
during his employment by the Company. The Executive agrees that he
will not, during, or after, his employment with the Company, use or disclose the
Confidential Information, or any part thereof, to any person, firm, corporation,
association or other entity for any reason or purposes
whatsoever. Notwithstanding the foregoing, the provisions of this
Section V.B.3 shall not apply to Confidential Information which
(a) becomes or is generally available to the public (other than by acts of
the Executive or his representatives); (b) becomes known to the Executive
on a non-confidential basis from a source other than the Company, provided that
such source is not bound by a confidentiality agreement with or other obligation
of secrecy to the Company; or (c) the Executive is required to disclose in
a judicial, administrative or governmental proceeding (any such proceeding, a
“Legal Proceeding”). In the event the Executive is required to
disclose Confidential Information in a Legal Proceeding, the Executive shall
provide the Company with prompt notice of such request so that the
Company
may timely seek an appropriate protective order or waive compliance with this
Section V.B.3.
C. Remedies
The
Executive acknowledges that the Company will suffer irreparable injury, not
readily susceptible of valuation in monetary damages, if the Executive breaches
his obligations under this Article V. Accordingly, the Executive
agrees that the Company will be entitled, in addition to any other available
remedies, to obtain injunctive relief against any breach or prospective breach
by the Executive of his obligations under this Article V in any Federal or
state court sitting in the State of New Jersey, or, at the Company’s election,
in any other jurisdiction in which the executive maintains his principal
residence or his principal place of business. The Executive hereby
submits to the exclusive jurisdiction of all those courts, regardless of where
the Executive may be resident, for the purposes of any actions or proceedings
instituted by the Company to obtain that injunctive relief, and the Executive
agrees that process in any or all of those actions or proceedings may be served
by registered mail, addressed to the last address of the Executive known to the
Company, or in any other manner authorized by law.
VI.
TERMINATION
OF EMPLOYMENT
A. Termination Due to Death or
Disability
The
Company may terminate the Executive’s employment hereunder due to
Disability. For purposes of this Agreement, “Disability” shall occur
if the Executive is unable (other than by reason of death), in the view of the
Board, to perform the duties of his occupation hereunder for at least
180 days during any twelve month period. In the event of the
Executive’s death or a termination of the Executive’s employment by the Company
due to Disability, the Executive, his estate or his legal representative, as the
case may be, shall be entitled to:
(a) any Base
Salary earned but not yet paid as of the date of termination to be paid in
accordance with the Company’s regular payroll practice (as in effect at the time
of termination);
(b) any
annual bonus for the year prior to the year of termination awarded and earned in
accordance with the Company’s annual bonus program but not yet paid, to be paid
at the time such annual bonus would otherwise be due under Section IV.C
above;
(c) reimbursement
for all out-of-pocket expenses that are reimbursable pursuant to
Section IV.C and that are incurred, but not yet paid, prior to such death
or Disability; and
(d) any
short- or long-term disability or death benefits provided under the Company’s
plans.
B. Resignation by Executive Not
For Good Reason or Termination by the Company for Cause
(a) The
Executive may resign not for Good Reason (as defined below), or the Company may
terminate the Executive’s employment hereunder for Cause (as defined below) as
provided in this Section VI.B. If the Executive resigns not for
Good Reason or the Company terminates the Executive’s employment hereunder for
Cause, the Executive shall be entitled to (i) reimbursement for all
out-of-pocket expenses that are reimbursable pursuant to Section IV.D and
that are incurred, but not yet paid, prior to such termination of employment;
and (ii) any Base Salary earned but not yet paid as of the date of
termination to be paid in accordance with the Company’s regular payroll practice
(as in effect at the time of termination). All stock options held by
Executive that have not yet vested as of the date of resignation or termination
shall be canceled. The Executive may exercise his vested stocks
options within ninety (90) days of the date of resignation or
termination.
(b) If the
Executive is to be terminated for Cause as provided in this Section VI.B,
the Executive shall be given thirty (30) days written notice of such
termination. Such written notice shall specify the particular act or
acts, or failure to act, which is or are the basis for the termination of the
Executive’s employment for Cause. The Executive shall be given the
opportunity during such third-day period to correct such act or failure to act
if such act or failure is reasonably capable of cure. Upon failure of
the Executive, within such third-day period, to correct such act or failure to
act, the Executive’s employment by the Company shall automatically be terminated
under this Section VI.B for Cause. If such act or failure to act
is not reasonably capable of cure, the Executive’s employment by the Company
shall automatically be terminated under this Section VI.B for Cause when notice
is given by the Company.
C. Termination Without Cause or
Termination for Good Reason
The
Company may terminate the Executive’s employment hereunder without Cause (as
defined below) and the Executive may terminate his employment hereunder for Good
Reason (as defined below). If the Company terminates the Executive’s
employment hereunder without Cause, other than due to death or Disability, or if
the Executive terminates his employment for Good Reason, the Executive shall be
entitled subject to the Executive’s executing (and not revoking within any
statutory revocation period) the Company’s Separation and Release Agreement in
the form submitted by the Company’s Human Resources Department within fifty (50)
days after such submission, to:
(a) an amount
equal to 200% of the sum of (A) his then annual Base Salary plus
(B) his annual bonus, if any, earned during the immediately preceding
calendar year, such payments to be made, subject to Section VII.J below, sixty
(60) days after the date of termination of employment under this
Section VI.C;
(b) any Base
Salary earned but not yet paid as of the date of termination to be paid in
accordance with the Company’s regular payroll practice (as in effect at the time
of termination);
(c) any
annual bonus for the year prior to the year of termination awarded and earned in
accordance with the Company’s annual bonus proposed but not yet paid, to be paid
at the time such annual bonus would otherwise be due under Section IV.C
above;
(d) reimbursement
for all out-of-pocket expenses that are reimbursable pursuant to
Section IV.D and that are incurred, but not yet paid, prior to such
termination of employment;
(e) continuation
of the Executive’s and his dependent’s health benefits, if any, at the level in
effect on the date of termination through the earlier to occur of
(i) twelve (12) months from such termination of employment or (ii) the
date Executive commences employment with another entity; and
(f) immediate
vesting of Executive’s stock options; Executive may exercise such options within
three hundred sixty (360) days of the date of termination of
employment.
If the
Executive intends to terminate his employment for Good Reason, the Executive
shall give written notice to the Company which notice shall specify the
particular act or acts, or failure to act, which is or are the purported basis
for the termination of his employment for Good Reason and such notice shall be
given not later than ninety (90) days after the occurrence of such act or
failure to act. The Company shall be given the opportunity for a
period of forty-five (45) days after its receipt of such notice to correct such
act or acts or failure to act. Upon failure of the Company, within
such forty-five (45) day period, to correct such act or failure to act, the
Executive’s employment by the Company shall automatically be terminated under
this Section VI.C for Good Reason.
For
purposes of this Agreement, “Cause” means
(i) Unauthorized
use or disclosure of the confidential information or trade secrets of the
Company in violation of Article V;
(ii) Conviction
of, or a plea of “guilty” or “no contest” to, a felony under the laws of the
United States or any state thereof;
(iii) Embezzlement
or misappropriation of the assets of the Company;
(iv) Misconduct
or gross negligence in the performance of duties assigned to the Executive under
this Agreement; or
(v) Willful
failure to carry out the good faith, lawful direction of the Board which
continues for a period of ten (10) days after notice of the specific failure and
requested action.
For
purposes of this Agreement, “Good Reason” means and shall be deemed to exist if,
without the prior express written consent of the Executive and subject to the
notice and cure right
set forth
above, (a) the Executive is assigned any duties or responsibilities
inconsistent in any material respect with the scope of the duties or
responsibilities associated with the Executive’s titles or positions, as set
forth and described in Article III of this Agreement; (b) the
Executive suffers a material reduction in the duties, responsibilities or
authority associated with his titles and positions, as set forth and described
in Article III of this Agreement, (c) the Executive is not appointed
to, or is removed from the offices with the Company provided for in
Article III of this Agreement; or (d) the Executive’s Annual Base
Salary is materially reduced in violation of Article IV
hereof. Notwithstanding anything written herein to the contrary, it
shall be considered a material reduction in duties, responsibilities and
authority associated with Executive’s title if the Company ceases being a
publicly traded company as a result of the Company having undergone a change of
control and becoming a subsidiary of another company (whether a publicly traded
company or privately held company) and Executive remains CEO of the subsidiary
only.
D. Other
1. Upon any
termination of the Executive’s employment pursuant to this Article VI, the
Executive (or, if applicable, his estate) shall immediately deliver to the
Company all documents, correspondence, memoranda, notes records, reports, plans,
designs, studies and any other papers or items made or received by the Executive
in connection with his employment with Company (whether or not constituting
Confidential Information) (including copies of the foregoing), and all computer
equipment, disks and software, keys, credit cards, books and other property of
or relating to the Company or any of its subsidiaries (including without
limitation all documents prepared by the Executive or which may have come into
his possession in the course of the Executive’s employment hereunder including
copies thereof) then in the Executive’s (or if applicable his estate’s)
possession.
2. After any
termination of the Executive’s employment hereunder, the Executive shall not at
any time thereafter represent himself as being in any way connected with or
interested in the business of or employed by the Company or any of its
subsidiaries, or use for trade or other purposes the name of the Company or if
its subsidiaries or any name capable of confusion therewith.
3. Upon the
termination of the Executive’s employment for whatever reason the Executive
shall immediately be deemed to have resigned from all directorships, if any, and
offices the Executive holds in the Company or any of its subsidiaries and any
directorships held at the request of or on behalf of the Company or any of its
subsidiaries.
VII.
MISCELLANEOUS
PROVISIONS
A. Entire
Agreement
This
Agreement contains all the understandings between the parties hereto and
supersedes all prior discussions and agreements between the Company, on the one
hand, and the Executive, on the other hand, with respect to the subject matter
hereof.
B. Modification;
Waiver
This
Agreement may not be modified, amended or supplemented except in writing and
signed by the party against whom any modification, amendment or supplement is
sought. No term or condition of this Agreement may be, or will be
deemed to have been, waived except in writing by the party charged with the
waiver. A waiver shall operate only as to the specific term or
condition waived and will not constitute a waiver for the future or act on
anything other than that which is specifically waived.
C. Severability
If any
one or more of the provisions contained in this Agreement will be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability will not affect any other provision hereof.
D. Legal and Accounting Advice
and Assistance
The
Executive and the Company acknowledge that this is a legally binding contract
and acknowledge and agree that they have had the opportunity to consult with
legal counsel of their choice and in connection with the drafting, negotiation
and execution of this Agreement. the Company agrees to reimburse the
Executive for the reasonable fees of his legal counsel incurred in reviewing
this Agreement, and for the reasonable fees incurred by Executive in connection
with obtaining accounting and tax advice, including income tax preparation, not
to exceed $10,000.
E. Rights and Remedies
Cumulative
No right
or remedy herein conferred upon the Company is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
implementation of any other appropriate right or remedy.
F. Assignment
This
Agreement shall inure to the benefit of, and be enforceable by, the Company and
its successors and assigns. This Agreement is personal to the
Executive and may not be assigned by him.
G. Governing
Law
The
validity and effects of this Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New Jersey without giving
effect to its principles of conflicts of laws.
H. Survivorship
The
respective rights and obligations of the parties hereunder that specifically
provide for such survival shall survive any termination of this Agreement and
the Executive’s Stated Term of Employment hereunder for any reason to the extent
necessary to the intended provision of such rights and the intended performance
of such obligations.
I. Notice
Any
notice or other communications required or permitted to be given pursuant to
this agreement shall be in writing and shall be sent by registered or certified
mail, return receipt requested, postage prepaid, by hand delivery (including
courier services), or by telex or telecopier, as follows:
If to the
Company:
ANADIGICS,
INC.
000 Xx.
Xxxxxx Xxxx
Xxxxxx,
XX 00000
Telecopy: 000-000-0000
Attention: Board
of Directors
with
copies to:
Xxxxxxx X
Xxxxxx, Esq.
Xxxxxx
Xxxxxx & Xxxxxxx llp
00 Xxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Telecopy: 212-269-5420
If to the
Executive:
At the
Executive’s most recent address shown on the Company’s corporate records or at
any other address which the Executive may specify in a notice delivered to the
Company in the manner set forth herein.
Any
notice or communication shall be deemed given or made (i) when delivered by
hand (or courier service), (ii) when mailed, five business days after being
deposited in the mail, postage prepaid, sent by certified mail, return receipt
requested, (iii) when telexed, answer-back received and (iv) when
telecopied, receipt acknowledged.
J. Section
409A
(a) It
is intended that this Agreement will comply with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and any regulations and guidelines
prom-
ulgated
thereunder (collectively, “Section 409A”), to the extent the Agreement is
subject thereto, and the Agreement shall be interpreted on a basis consistent
with such intent. If an amendment of the Agreement is necessary in
order for it to comply with Section 409A, the parties hereto will negotiate in
good faith to amend the Agreement in a manner that preserves the original intent
of the parties to the extent reasonably possible. No action or
failure to act pursuant to this Section VII.J shall subject the Company to
any claim, liability, or expense, and the Company shall not have any obligation
to indemnify or otherwise protect the Executive from the obligation to pay any
taxes, interest or penalties pursuant to Section 409A.
(b) Notwithstanding
any provision to the contrary in this Agreement, if the Executive is deemed on
the date of his or her “separation from service” (within the meaning of Treas.
Reg. Section 1.409A-1(h)) with the Company to be a “specified employee”
(within the meaning of Treas. Reg. Section 1.409A-1(i)), then with regard
to any payment or benefit that is considered deferred compensation under Section
409A payable on account of a “separation from service” that is required to be
delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into account
any applicable exceptions to such requirement), such payment or benefit shall be
made or provided on the date that is the earlier of (i) the expiration of the
six (6)-month period measured from the date of the Executive’s “separation from
service,” or (ii) the date of the Executive’s death (the “Delay
Period”). Upon the expiration of the Delay Period, all payments and
benefits delayed pursuant to this Section VII.J (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Executive in a lump sum and any
remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them
herein. Notwithstanding any provision of this Agreement to the
contrary, for purposes of any provision of this Agreement providing for the
payment of any amounts or benefits that are considered deferred compensation
under Section 409A upon or following a termination of employment, references to
the Executive’s “termination of employment” (and corollary terms) with the
Company shall be construed to refer to the Executive’s “separation from service”
(within the meaning of Treas. Reg. Section 1.409A-1(h)) with the
Company.
(c) With
respect to any reimbursement or in-kind benefit arrangements of the Company and
its subsidiaries that constitute deferred compensation for purposes of
Section 409A, except as otherwise permitted by Section 409A, the following
conditions shall be applicable: (i) the amount eligible for reimbursement,
or in-kind benefits provided, under any such arrangement in one calendar year
may not affect the amount eligible for reimbursement, or in-kind benefits to be
provided, under such arrangement in any other calendar year (except that the
health and dental plans may impose a limit on the amount that may be reimbursed
or paid), (ii) any reimbursement must be made on or before the last day of
the calendar year following the calendar year in which the expense was incurred,
and (iii) the right to reimbursement or in-kind benefits is not subject to
liquidation or exchange for another benefit. Whenever a payment under
this Agreement specifies a payment period with reference to a number of days
(e.g., “payment
shall be made within thirty (30) days after termination of employment”), the
actual date of payment within the specified period shall be within the sole
discretion of the Company. Whenever payments under this Agreement are
to be made in installments, each such installment shall be deemed to be a
separate payment for purposes of Section 409A. Anything in this
Agreement to
the
contrary notwithstanding, any tax gross-up payment (within the meaning of Treas.
Reg. Section 1.409A-3(i)(1)(v)) provided for in this Agreement shall be made to
the Executive no later than the end of the Executive’s taxable year next
following the Executive’s taxable year in which he remits the related
taxes.
K. Excise Tax
Gross-Up
(i) In the
event it is determined that any payment or distribution of any type to or for
the benefit of the Executive made by the Company, by any of its affiliates, by
any person who acquires ownership or effective control of the Company or
ownership of a substantial portion of the Company’s assets (within the meaning
of section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations thereunder) or by any affiliate of such person,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (the “Total Payments”), would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties
with respect to such excise tax (such excise tax, together with any such
interest or penalties, are collectively referred to as the “Excise Tax”), then
the Executive shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount that shall fund the payment by the Executive of any
Excise Tax on the Total Payments as well as all income taxes imposed on the
Gross-Up Payment, any Excise Tax imposed on the Gross-Up Payment and any
interest or penalties imposed with respect to taxes on the Gross-Up Payment or
any Excise Tax. Notwithstanding the foregoing provisions of this
Section VII.K.(i), if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the portion of the Total Payments that would be
treated as “parachute payments” under Section 280G of the Code does not exceed
by more than $250,000 the greatest amount (the “Safe Harbor Amount”) that could
be paid to the Executive such that the receipt of Total Payments would not give
rise to any Excise Tax, then no Gross-up Payment shall be made to the Executive
and the amount payable under clause (a) of Section VI.C of this Agreement shall
be reduced so that the Total Payments, in the aggregate, are reduced to the Safe
Harbor Amount. For purposes of reducing the payments to the Safe
Harbor Amount, only amounts payable under this Agreement (and no other payments)
shall be reduced. If the reduction of the amounts payable under this Agreement
would not result in a reduction of the Total Payments to the Safe Harbor Amount,
no amounts payable under this Agreement shall be reduced pursuant to this
Section VII.K.(i)
(ii) All
mathematical determinations and all determinations of whether any of the total
Payments are “parachute payments” (within the meaning of section 280G of
the Code) that are required to be made under this Section VII.K, including
all determinations of whether a Gross-Up Payment is required, of the amount of
such Gross-Up Payment and of amounts relevant to the last sentence of this
Section VII.K, shall be made by the independent accounting firm of Ernst
& Young LLP (the “Accounting Firm”), which shall provide its determination
(the “Determination”), together with detailed supporting calculations regarding
the amount of any Gross-Up Payment and any other relevant matters, both to the
Company and to the Executive within seven business days of the Executive’s
termination date, if applicable, or such earlier time as is requested by the
Company or by the Executive (if the Executive reasonably believes that any of
the Total Payments may be subject to the Excise Tax). If the
Accounting
Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written statement that such Accounting firm has concluded that
no Excise Tax is payable (including the reasons therefor) and that the Executive
has substantial authority not to report any Excise Tax on the Executive’s
federal income tax return. If a Gross-Up Payment is determined to be
payable, it shall be paid to the Executive within five business days after the
Determination is delivered to the Company or the Executive. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive, absent manifest error.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and the Executive has hereunto set his hand as of the
day and year first above written.
|
ANADIGICS,
INC.
|
|
By: /s/ Xxxxxx X.
Xxxxxxx
|
|
Name: Xxxxxx
X. Xxxxxxx
Title: Executive
Vice President and
Chief Financial
Officer
|
|
EXECUTIVE
|
|
By: /s/ Xxxxx X.
Xxxxx
|
|
Name: Xxxxx
X. Xxxxx
|
Annex
A
Options
Section IV.B Sign-On
Bonus
On the
Closing Date Executive shall be granted non-qualified options for the purchase
of seven hundred thousand (700,000) shares of Common Stock of the Company at an
exercise price equal to the last reported sales price of the Company’s Common
Stock on the NASDAQ National Market on the business day immediately prior to the Closing Date. The Options shall have a term of
10 years (subject to earlier termination as set forth therein) and shall become
vested and exercisable pursuant to the following schedule: two
hundred fifty thousand (250,000) shares on the second anniversary of the Closing
Date and four hundred fifty thousand (450,000) shares on the third anniversary
of the Closing Date.
Section
IV.X. Xxxxx of Options under Long Term Incentive and Share Award Plan
for 2009
On the
Closing Date Executive shall be granted pursuant to the Company’s Long Term
Incentive and Share Award Plan for the year 2009 non-qualified options for the
purchase of five hundred thousand (500,000) shares of Common Stock of the
Company at an exercise price equal to the last reported sales price of the
Company’s Common Stock on the NASDAQ National Market on the business day
immediately prior to the Closing Date. The options shall have a term
of ten years (subject to earlier termination as set forth therein) and shall
become vested and exercisable on the first anniversary of the Closing
Date.
