EXHIBIT 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT made and entered into by and
between Littelfuse, Inc. (the "COMPANY") and Gordon Hunter (the "EXECUTIVE") as
of the 31st day of December, 2007 (the "EFFECTIVE DATE"). All terms not
otherwise defined elsewhere herein shall have the meaning set forth in Section
13 hereof.
WHEREAS, the operations of the Company and its Affiliates are a complex
matter regarding direction and leadership in a variety of arenas, including
financial, strategic planning, manufacturing, sales, human resources,
regulatory, customer relations and others;
WHEREAS, the Executive is possessed of certain experience and expertise
that qualify the Executive to provide the direction and leadership required by
the Company and its Affiliates; and
WHEREAS, the Company and the Executive have previously entered into an
Employment Agreement, dated as of May 1, 2006 (the "Original Agreement")
providing for the continued employment of the Executive as Chairman, Chief
Executive Officer and President of the Company; and
WHEREAS, the Company and the Executive now wish to amend and restate the
Original Agreement in order to comply with the requirements of Section 409A of
the Internal Revenue Code (the "Code"), and the final regulations issued to
implement said requirements ("Section 409A");
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, terms, provisions and conditions set forth in this Agreement, the
parties hereby agree that the Original Agreement is amended and restated on the
terms and conditions set forth below, which shall entirely supersede the terms
and conditions of the Original Agreement:
1. EMPLOYMENT. Subject to the terms and conditions set forth in this Agreement,
the Company hereby offers and the Executive hereby accepts continued employment.
2. TERM. The term of Executive's employment under this Agreement shall commence
on May 1, 2006 and shall end on the first date on which the term is terminated
pursuant to Section 5 hereof. The term of this Agreement is hereafter referred
to as "THE TERM OF THIS AGREEMENT" or "THE TERM HEREOF."
3. CAPACITY AND PERFORMANCE.
(a) During the term hereof, the Executive shall serve the Company as its
Chairman, Chief Executive Officer and President. In addition, and
without further compensation, the Executive shall serve as an officer
of one or more of the Company's Affiliates if so elected or appointed
from time to time. During the
term hereof, if elected or appointed, Executive shall serve as a
member of the Board of Directors of the Company (the "BOARD"). Upon
cessation of employment with the Company, Executive shall offer to
resign as a member of the Board.
(b) During the term hereof, the Executive shall be employed by the Company
on a full-time basis and shall perform the duties and responsibilities
and have the authority of Executive's position and such other duties,
responsibilities and authority on behalf of the Company and its
Affiliates, reasonably consistent with Executive's position, as may be
reasonably designated from time to time by the Board or by its
designees. Executive's duties, responsibilities and authority shall be
commensurate with the duties, responsibilities and authority of
similarly positioned executives of similar businesses of similar size
in the United States. During the term, Executive shall report to the
Board.
(c) During the term hereof, the Executive shall devote Executive's full
business time and best efforts, business judgment, skill and knowledge
exclusively to the advancement of the business and interests of the
Company and its Affiliates and to the discharge of Executive's duties
and responsibilities to them. The Executive shall not engage in any
other business activity or serve in any industry, trade, professional,
governmental or academic position during the term of this Agreement,
except as may be expressly approved in writing in advance by the
Board. The foregoing restriction, however, shall not be interpreted to
prohibit the Executive from (i) involvement in any charitable or
community activities or organizations (including, without limitation,
participation in industry trade groups) or (ii) serving on the board
of directors of up to one (1) non-competing, for-profit business
enterprise without the prior approval in writing in advance by the
Board, that does not give rise to a conflict of interest and that does
not materially interfere with Executive's ability to perform
Executive's duties and responsibilities under this Agreement.
(d) Executive acknowledges and agrees that Executive owes a fiduciary duty
of loyalty, fidelity, and allegiance to act at all times in the best
interests of the Company and its Affiliates and to do no act which
would, directly or indirectly, injure the Company and/or its
Affiliates' business, interests or reputation. It is agreed that any
direct or indirect interest in, connection with, or benefit from any
outside activities, particularly commercial activities, which interest
might in any way adversely affect the Company and/or its Affiliates,
involves a possible conflict of interest. In keeping with Executive's
fiduciary duties to the Company and its Affiliates, Executive agrees
that Executive shall not knowingly become involved in a conflict of
interest with the Company and/or its Affiliates, or upon discovery
thereof, allow such a conflict to continue. Moreover, Executive shall
not engage in any activity that is reasonably likely to involve a
possible conflict of interest without first obtaining written approval
in accordance with the Company's conflict of interest policy and
procedures.
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(e) The duties and responsibilities to be performed by the Executive shall
be performed primarily at the Company's Des Plaines, Illinois
headquarters offices, subject to reasonable travel requirements on
behalf of the Company consistent with the nature of Executive's duties
and responsibilities.
4. COMPENSATION AND BENEFITS. As compensation for all services performed by the
Executive under and during the term hereof and subject to performance of the
Executive's duties and of the obligations of the Executive to the Company and
its Affiliates, pursuant to this Agreement or otherwise:
(a) BASE SALARY. During the term hereof, the Company will pay the
Executive a base salary at the rate of Five Hundred Twenty-Five
Thousand Dollars ($525,000.00) per annum, payable in accordance with
the payroll practices of the Company for its executives and subject to
annual review and to increase, but not decrease, from time to time by
the Board in its discretion. Such base salary, as from time to time in
effect, is hereafter referred to as the "BASE SALARY."
(b) INCENTIVE COMPENSATION. For fiscal year 2006 and each fiscal year
thereafter, the Executive will be eligible to receive an annual
incentive bonus with a target bonus of fifty percent (50%) of the Base
Salary, based on performance against and payable in accordance with
the Company's management incentive plan for such fiscal year, and
subject to a maximum opportunity of 100% of Base Salary for superior
performance; provided that, either (i) the Executive must be employed
by the Company hereunder on the last day of the fiscal year and must
not have given nor received notice of termination under Section 5(c)
or (f) hereunder in order to be eligible to receive such bonus, or
(ii) the Executive must have been terminated pursuant to Section 5(a),
(b), (d) or (e) in order to be eligible to receive such bonus
pro-rated for the partial term of service for the fiscal year ending
on the date of termination. Except as otherwise provided in this
Agreement, the amount of any incentive bonus earned by the Executive
hereunder shall be determined by the Board (or such designated
committee), based on its assessment, in the exercise of its
discretion, of performance against established goals in accordance
with such annual management incentive plan.
(c) LONG TERM INCENTIVES. Executive shall be eligible to receive such
annual stock option, restricted share or other incentive grants/awards
("LONG TERM INCENTIVES") as may be determined by the Board in its
discretion.
(d) VACATIONS. During the term hereof, the Executive shall be entitled to
earn four (4) weeks of vacation per fiscal year, to be taken at such
times and intervals as shall be determined by the Executive, subject
to the reasonable business needs of the Company. Vacation shall
otherwise be governed by the policies of the Company, as in effect
from time to time.
(e) EMPLOYEE BENEFITS. During the term hereof and subject to any
contribution therefor generally required of senior level executives of
the Company, the Executive shall be entitled to participate in any and
all employee benefit plans
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from time to time in effect for employees of the Company generally,
except to the extent such plans are in a category of benefit otherwise
provided to the Executive by this Agreement. Such participation shall
be subject to the terms of the applicable plan documents and generally
applicable Company policies. The Company may alter, modify, add to or
delete its employee benefit plans at any time as it, in its sole
judgment, determines to be appropriate, without recourse by the
Executive.
(f) BUSINESS EXPENSES. The Company shall pay or reimburse the Executive
for all reasonable, customary and necessary business expenses incurred
or paid by the Executive in the performance of Executive's duties and
responsibilities hereunder during the term hereof, subject to any
maximum annual limit and other restrictions on such expenses set by
the Board and to such reasonable substantiation and documentation as
may be specified in advance by the Company from time to time.
(g) PERQUISITES. During the term hereof, the Company will provide the
Executive with the following perquisites:
i. Automobile. The Company shall provide Executive with an
automobile in accordance with the Company's automobile policy for
executives.
ii. Home Office. On behalf of the Executive, the Company will provide
and maintain a home office computer, facsimile, telephone and
required access line(s).
iii. Financial Planning. The Company shall pay or reimburse Executive
for up to Fifteen Thousand Dollars ($15,000.00) per fiscal year
for financial planning and tax counseling services.
iv. Legal Fees. The Company shall pay or reimburse Executive for the
reasonable legal fees incurred by Executive attendant to the
development of this Agreement, up to a maximum of Five Thousand
Dollars ($5,000.00).
5. TERMINATION OF EMPLOYMENT AND SEVERANCE BENEFITS. The term of this Agreement
shall end and the Executive's employment hereunder shall terminate upon the
first to occur of the following circumstances:
(a) DEATH. In the event of the Executive's death during the term hereof,
the Executive's employment hereunder shall immediately and
automatically terminate. In such event, the Company will pay or
provide to the Executive's designated beneficiary or, if no
beneficiary has been designated by the Executive, to Executive's
estate:
i. the Base Salary earned but not paid through the date of
termination.
ii. any vacation time earned but not used through the date of
termination.
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iii. any business expenses incurred by the Executive but un-reimbursed
on the date of termination, provided that such expenses and
required substantiation and documentation are submitted within
sixty (60) days of termination and that such expenses are
reimbursable under Company policy,
iv. if the date of termination occurs after the end of a fiscal year
and prior to the payment of the incentive compensation award (as
described in paragraph 4(b)) for such prior fiscal year, payment
of any earned incentive compensation award will be made at the
regularly scheduled time,
v. any vested benefits under the Company's employee benefits plans,
and
vi. any benefit continuation and/or conversion rights under the
Company's employee benefits plans,
(all of the foregoing, "ACCRUED BENEFITS"). In addition to the Accrued
Benefits, the Company shall pay to the Executive's estate the award
under Section 4(b) for the performance period in which the date of
termination occurs, based on actual performance for the entire period;
provided, however, that such award shall be subject to a pro-rata
reduction to reflect the portion of the performance period following
the date of termination, and with payment to be made at the regularly
scheduled time for payment of such amounts to executives of the
Company. Except as otherwise specifically set forth in this Agreement,
any Long Term Incentives, or as required by law, the Company shall
have no further obligation to the Executive.
(b) DISABILITY.
i. The Company may terminate the Executive's employment hereunder,
upon notice to the Executive, in the event that the Executive
becomes disabled during Executive's employment hereunder through
any illness, injury, accident or condition of either a physical
or psychological nature and, as a result, is unable to
substantially perform Executive's duties and responsibilities
hereunder, with or without reasonable accommodation, for one
hundred eighty (180) days during any period of three hundred and
sixty-five (365) consecutive calendar days. In the event of such
termination, except as otherwise specifically set forth in this
Agreement, any Long Term Incentives, or as required by law, the
Company shall have no further obligation to the Executive, other
than for payment of the Accrued Benefits. In addition to the
Accrued Benefits, the Company shall pay to the Executive or the
Executive's duly appointed guardian the award under Section 4(b)
for the performance period in which the date of termination
occurs, based on actual performance for the entire period;
provided, however, that such award shall be subject to a pro-rata
reduction to reflect the portion of the performance period
following the date of
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termination, and with payment to be made at the regularly
scheduled time for payment of such amounts to executives of the
Company.
ii. The Board may designate another employee or a Board member to act
in the Executive's place during any period of the Executive's
disability. Notwithstanding any such designation, the Executive
shall continue to receive the Base Salary in accordance with
Section 4(a), perquisites in accordance with Section 4(g), and
benefits in accordance with Section 4(e), to the extent permitted
by the then-current terms of the applicable employee benefit
plans, until the Executive becomes eligible for disability income
benefits under the Company's disability income plan or until the
termination of Executive's employment, whichever shall first
occur. While receiving disability income payments under the
Company's disability income plan, the Executive shall be entitled
to receive any Base Salary under Section 4(a) hereof, reduced by
the amount of any disability benefits paid for the same period of
time, and shall continue to participate in perquisites in
accordance with Section 4(g) and Company employee benefit plans
in accordance with Section 4(e) and the terms of such plans,
until the termination of Executive's employment.
iii. If any question shall arise as to whether during any period the
Executive is disabled through any illness, injury, accident or
condition of either a physical or psychological nature so as to
be unable to substantially perform Executive's duties and
responsibilities hereunder, with or without reasonable
accommodation, the Executive may, and at the request of the
Company shall, submit to a medical examination by a physician
selected by the Company to whom the Executive or Executive's duly
appointed guardian, if any, has no reasonable objection to
determine whether the Executive is so disabled and such
determination shall for the purposes of this Agreement be
conclusive of the issue. If such question shall arise and the
Executive shall fail to submit to such medical examination, the
Company's determination of the issue shall be binding on the
Executive.
(c) BY THE COMPANY FOR CAUSE. The Company may terminate the Executive's
employment hereunder for Cause at any time upon notice to the
Executive setting forth in reasonable detail the nature of such Cause.
The following, as determined by the Board in its reasonable judgment,
shall constitute "CAUSE" for termination: (i) the Executive's willful
failure to perform in accordance with the direction of the Board
(other than by reason of disability), or gross negligence in the
performance of, Executive's material duties and responsibilities to
the Company or any of its Affiliates; (ii) the Executive's breach of
any of Executive's obligations under Section 3(d), 7, 8 or 9 of this
Agreement; (iii) conviction of the Executive of, or the Executive's
plea of guilty or no contest to, a felony; (iv) conduct by the
Executive that constitutes fraud, gross negligence or gross misconduct
that results in material harm to the Company; (v) other conduct by the
Executive that is, or could reasonably be expected to be, materially
harmful to the Company or any of its Affiliates; or (vi) a material
breach of this Agreement by
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Executive not cured to the reasonable satisfaction of the Board within
thirty (30) days after written notice to Executive of such material
breach. Upon the giving of notice of termination of the Executive's
employment hereunder for Cause, the Company shall have no further
obligation to the Executive, other than for the Accrued Benefits;
provided, however, that the Executive shall be reinstated if within
ten (10) business days following termination for Cause the Executive
can demonstrate to the Board, and the Board in its sole discretion
agrees that there was no reasonable basis for termination of the
Executive for Cause.
(d) BY THE COMPANY OTHER THAN FOR CAUSE. The Company may terminate the
Executive's employment hereunder other than for Cause at any time upon
sixty (60) days' notice to the Executive. During such sixty (60) day
notice period, the Company may require that the Executive cease
performing some or all of Executive's duties and responsibilities
and/or not be present at any or all time(s) at the Company's
headquarters offices and/or other facilities. In the event of such
termination, the following provisions shall apply:
i. In addition to the Accrued Benefits, the Company shall, subject
to the remaining provisions of this Section 5(d):
A. until the conclusion of a period of twelve (12) months
following the date of termination of the Executive's
employment hereunder, (1) continue to pay the Executive the
Base Salary at the rate in effect on the date of termination
and (2) pay the Executive an amount equal to the Section
4(b) annual incentive bonus at target payable in equal
installments at the same time Base Salary hereunder is paid
(each such payment being hereinafter referred to as a
"Severance Payment");
B. if Executive elects to exercise his COBRA continuation
rights to continue his Company sponsored group health and
dental plan benefits, subject to any employee contribution
generally applicable to senior level executives actively
employed by the Company, continue to contribute to the
premium cost of the Executive's participation, and that of
Executive's eligible dependents, in the Company's group
health and dental plans, provided that the Executive and
such dependents are entitled to continue such participation
under applicable law and plan terms, but not to exceed
twelve (12) months;
C. pay to the Executive the award under Section 4(b) for the
performance period in which the date of termination occurs,
based on actual performance for the entire period; provided,
however, that such award shall be subject to a pro-rata
reduction to reflect the portion of the performance period
following the date of termination, and with payment to be
made at the regularly
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scheduled time for payment of such amounts to executives of
the Company;
D. subject to any employee contribution generally applicable to
senior level executives actively employed by the Company,
continue to contribute to the premium cost of the
Executive's participation in the Company's group life
insurance plan, provided that the Executive is entitled to
continue such participation under applicable law and plan
terms, but not to exceed twelve (12) months; and
E. pay for costs and expenses of outplacement services selected
by the Executive and reasonably acceptable to the Company,
up to a maximum cost to the Company of Twenty-Five Thousand
Dollars ($25,000.00) with payment to be made by the Company
to the outplacement vendor upon the submission to the
Company of documentation reasonably satisfactory to the
Company evidencing the incurrence of such costs and expenses
within sixty (60) days following Executive's date of
termination.
ii. Any obligation of the Company to the Executive hereunder is
conditioned, however, (A) upon the Executive signing a waiver and
release of claims agreement in a form utilized by the Company for
senior level executives of the Company (the "EMPLOYEE RELEASE")
within twenty-one days (or such greater period as the Company may
specify) following the later of the date on which the Executive
(or, in the case of termination by the Executive for Good Reason,
the Company) receives notice of termination of employment or the
date the Executive receives a copy of the Employee Release, (B)
upon the Executive not revoking the Employee Release in a timely
manner thereafter, and (C) upon the Executive meeting Executive's
obligations under Section 6(c) hereof. The Employee Release shall
be furnished to Executive as soon as practical after the date on
which the Company or the Executive receives the notice of
termination, but in no event later than the latest date that will
insure that the revocation period referred to above will expire
not later than March 1 of the year following the year in which
the Executive's employment is terminated, and upon the effective
date of the Employee Release, all Severance Payments that would
have been paid on payroll dates since the date of termination
shall be paid to the Executive in a lump sum.
iii. In order to satisfy the requirements of Section 409A, the
following shall apply to the time of payment of the Severance
Payments:
A. Each Severance Payment shall be treated as a separate
payment for purposes of Section 409A.
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B. The aggregate amount of all Severance Payments, if any,
payable after March 15 of the year following the year that
includes the termination date(the "Short Term Deferral
Date"), but before the date that is six months after the
termination date (the "Six Month Date") (such period of time
being hereinafter referred to as the "409A Limitation
Period") shall not exceed two times the lesser of (1) the
Base Salary on the last day of the year immediately
preceding the year that includes the termination date or (2)
the limit in effect under Section 401(a)(17) of the Code
during the year that includes the termination date (the
"409A Limit"). For avoidance of doubt, if the Six Month Date
occurs before the Short Term Deferral Date, there shall be
no 409A Limitation Period and the provisions of this Section
5(d)(iii)(B) and Section 5(d)(iii)(C) shall not apply.
C. To the extent the sum of the Severance Payments payable
during the 409A Limitation Period would otherwise exceed the
409A Limit, such payments shall be reduced, in reverse order
of payment, to the extent necessary so that the sum does not
exceed the 409A Limit, and the amount by which the Severance
Payments are reduced will be paid to Executive in a lump
sum, without interest, six months after the termination
date. However, if Executive dies during such period, the
409A Limit shall not apply to payments to the Executive's
beneficiary (and the amount by which any payments to the
Executive were reduced shall be paid to the beneficiary as
soon as practical after Executive's death.).
D. All Severance Payments other than Severance Payments that
either (1) are paid before the Short Term Deferral Date, or
(2) are paid after the Short Term Deferral Date but do not
exceed in the aggregate the 409A Limit (whether or not the
provisions of Section 5(d)(iii)(B) and (C) apply), are
hereinafter referred to as "409A Severance Payments." 409A
Severance Payments are considered deferred compensation
subject to Section 409A, and such payment shall in no event
be paid at a time other than that provided in Section
5(d)(i), as modified by Section 5(d)(iii)(C), if applicable.
For this purpose, Severance Payments paid after the Short
Term Deferral Date shall not be considered 409A Severance
Payments until the cumulative total of such Severance
Payments, in chronological order of payment, exceeds the
409A Limit. The Severance Payment that causes the cumulative
total of such Severance Payments to exceed the 409A Limit
shall be considered a 409A Severance Payments to the extent
of such excess, and all subsequent Severance Payments shall
be 409A Severance Payments.
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iv. Notwithstanding the provisions of this Section 5(d), however, in
the event that, within a reasonable time (which time shall not
exceed ninety (90) days) following termination of the Executive's
employment by the Company hereunder, the Board determines in good
faith that circumstances existed which would have constituted a
basis for termination of the Executive's employment for Cause,
the Executive's employment will be deemed to have been terminated
for Cause in accordance with Section 5(c) hereof.
(e) BY THE EXECUTIVE FOR GOOD REASON. The Executive may terminate
Executive's employment hereunder for Good Reason, upon notice to the
Board setting forth in reasonable detail the nature of such Good
Reason. The following shall constitute "GOOD REASON" for termination
by the Executive: (i) a material breach of the Agreement by the
Company not cured within thirty (30) days after written notice by the
Executive to the Company, or (ii) without Executive's written consent:
(A) any change in title or any material diminution of Executive's
duties or authority, (B) assignment of duties materially inconsistent
with Executive's duties in effect on the Effective Date, (C) any
change in the reporting structure, or (D) any requirement that
Executive relocate his principal residence as in effect on the
Effective Date or office other than at the Company's headquarters
offices. In the event of termination in accordance with this Section
5(e), the Executive will be entitled to the same pay and benefits
Executive would have been entitled to receive had the Executive's
employment been terminated by the Company other than for Cause in
accordance with Section 5(d) above; provided, that the Executive
satisfies all conditions to such entitlement, including without
limitation the signing of an effective Employee Release and meeting
Executive's obligations under Section 6(c) hereof. It is agreed and
understood that Good Reason shall cease to exist for an event on the
sixtieth (60th) day following the later of its occurrence or
Executive's reasonable knowledge thereof, unless the Executive has
given the Board written notice thereof prior to such date.
(f) BY THE EXECUTIVE OTHER THAN FOR GOOD REASON. The Executive may
terminate Executive's employment hereunder at any time upon sixty (60)
days' prior written notice to the Board. In the event of termination
by the Executive pursuant to this Section 5(f), the Board may elect to
waive the period of notice, or any portion thereof, and, if the Board
so elects, the Company will pay the Executive the Base Salary for the
notice period or for any remaining portion of the period. The Company
shall have no further obligation to the Executive, other than for the
Accrued Benefits due to Executive.
(g) CHANGE OF CONTROL. The Executive shall be covered under the Company's
Change of Control Employment Agreement as in effect from time to time
during the term of this Agreement. Any amounts and/or benefits
payable, paid or provided to the Executive under such Change of
Control Employment Agreement shall be in lieu of and not in addition
to amounts and/or benefits payable or provided under this Agreement.
This Agreement is not intended to preclude
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amounts and/or benefits payable under the Change of Control Employment
Agreement should the events described therein occur.
(h) DEFINITION OF TERMINATION OF EMPLOYMENT. For all purposes of this
Agreement, the Executive's employment shall be considered to have been
terminated if, and only if, the Executive has incurred a separation
from service with the Company as defined in Section 409A. By way of
illustration, and without limiting the generality of the foregoing,
the following principals shall apply:
i. The Executive shall not be considered to have separated from
service so long as the Executive is on military leave, sick
leave, or other bona fide leave of absence if the period of such
leave does not exceed six months, or if longer, so long as the
Executive retains a right to reemployment with the Company under
an applicable statute or by contract.
ii. Regardless of whether his employment has been formally
terminated, the Executive will be considered to have separated
from service as of the date it is reasonably anticipated that no
further services will be performed by the Executive for the
Company, or that the level of bona fide services the Executive
will perform after such date will permanently decrease to no more
than 20 percent of the average level of bona fide services
performed over the immediately preceding 36-month period (or the
full period of employment if the Executive has been employed for
less than 36 months). For purposes of the preceding test, during
any paid leave of absence the Executive shall be considered to
have been performing services at the level commensurate with the
amount of compensation received, and unpaid leaves of absence
shall be disregarded.
iii. For purposes of determining whether the Executive has separated
from service, all services provided for the Company, or for any
other entity that is part of a controlled group that includes the
Company as defined in Section 414(b) or (c) of the Code, shall be
taken into account, whether provided as an employee or as a
consultant or other independent contractor; provided that the
Executive shall not be considered to have not separated from
service solely by reason of service as a non-employee director of
the Company or any other such entity.
(i) COMPLIANCE WITH SECTION 409A. The provisions of this Section 5 are
intended to comply with the requirements of Section 409A and shall be
so interpreted and administered. To the maximum extent possible, the
provisions of this Section 5 shall be construed in such a manner that
no amounts payable to the Executive are subject to the additional tax
and interest provided in Section 409(a)(1)(B) of the Code.
6. EFFECT OF TERMINATION. The provisions of this Section 6 shall apply to
termination pursuant to Section 5 or otherwise.
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(a) The Executive shall promptly give the Company notice of all facts
necessary for the Company to determine the amount and duration of its
obligations in connection with any termination pursuant to Section
5(b)-(f) hereof.
(b) Except for group health and dental plan coverage and group life
insurance coverage continued pursuant to Section 5(d) or 5(e) hereof,
benefits shall terminate pursuant to the terms of the applicable
employee benefit plans based on the date of termination of the
Executive's employment without regard to any continuation of Base
Salary or other payment to the Executive following such date of
termination. Executive shall be afforded such benefit continuation
and/or conversion rights as required by law or the Company's benefits
plans.
(c) The Executive agrees that if, on the date Executive's employment with
the Company terminates, howsoever caused, the Executive is a member of
the Board or of the board of directors of any of the Affiliates or
holds any position or office with the Company or any of the
Affiliates, the termination shall constitute Executive's offer of
resignation from all such memberships, positions and offices,
effective as of the date of termination of Executive's employment and
Executive agrees to execute confirmation of any such resignations
requested by the Company.
(d) Provisions of this Agreement shall survive any termination if so
provided herein or if necessary or desirable to accomplish the
purposes of other, surviving provisions, including without limitation
the obligations of the Executive under Sections 7, 8 and 9 hereof. The
obligation of the Company to make payments to or on behalf of the
Executive under Section 5(d) or 5(e) hereof is expressly conditioned
upon the Executive's continued full performance of obligations under
Sections 7, 8 and 9 hereof.
7. CONFIDENTIAL INFORMATION, RETURN OF DOCUMENTS AND PROPERTY, CONTINUED
COOPERATION, AND NONDISPARAGEMENT.
(a) The Executive acknowledges that the Company and its Affiliates
continually develop Confidential Information, that the Executive may
develop Confidential Information for the Company or its Affiliates and
that the Executive may learn of Confidential Information during the
course of employment. The Executive will comply with the policies and
procedures of the Company and its Affiliates for protecting
Confidential Information and shall not disclose to any Person or use,
other than as required by applicable law or for the proper performance
of Executive's duties and responsibilities to the Company and its
Affiliates, any Confidential Information obtained by the Executive
incident to Executive's employment or other association with the
Company or any of its Affiliates. The Executive understands that this
restriction shall continue to apply after Executive's employment
terminates, regardless of the reason for such termination.
(b) All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the
Company or its Affiliates and
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any copies, in whole or in part, thereof (the "DOCUMENTS"), whether or
not prepared by the Executive, and any tangible property of the
Company furnished to the Executive, including, but not limited to,
computers, personal digital assistants, credit cards, and
identification cards, shall be the sole and exclusive property of the
Company and its Affiliates. The Executive shall safeguard all
Documents and tangible property of the Company and shall surrender to
the Company at the time Executive's employment terminates, or at such
earlier time or times as the Board or its designee may specify, all
Documents and other tangible property of the Company then in the
Executive's possession or control.
(c) During the term hereof and for a reasonable period thereafter (but not
less than twelve (12) months following termination of Executive's
employment), the Executive agrees to cooperate with the Company with
respect to all matters arising during or related to Executive's
employment, including without limitation cooperation in connection
with any litigation or governmental investigation or regulatory or
other proceeding which may have arisen or which may arise following
the execution of this Agreement. As part of the cooperation agreed to
herein, the Executive shall provide complete and truthful information
to the Company and its attorneys with respect to any matter arising
during or related to Executive's employment. Further, the Executive
shall be available to meet with Company personnel and the Company's
attorneys and shall provide to the Company and its attorneys any and
all documentary or other physical evidence pertinent to any such
matter; and, at the Company's request upon reasonable notice, the
Executive shall travel to such places as the Company may specify (for
which the Company will reimburse Executive for reasonable travel and
lodging expenses) and provide such complete and truthful information
and evidence to parties whom the Company may specify. Further, upon
the oral request of the Company or its attorneys, the Executive shall
testify, truthfully and accurately, to any such matter in any civil
case to which the Company is a party or in connection with any
investigation or regulatory or other proceeding relating to the
Company or its activities. To the extent legally permissible, the
Executive shall promptly notify the Board, within two business days,
of Executive's receipt from any third party or governmental entity of
a request for testimony and/or documents, whether by legal process or
otherwise, relating to any matter arising during or relating to
Executive's employment. Except as otherwise expressly provided herein,
the Executive shall not charge the Company for Executive's compliance
with obligations under this Section 7(c), but shall be reimbursed for
all reasonable and documented out of pocket expenses incurred at the
request of the Company. The Executive's compliance with this Section
7(c) shall be reasonably requested by the Company, so, where
practicable, to minimize interference with the Executive's then
current employment. In the event the Executive can demonstrate loss of
base salary from the Executive's full-time employer during any period
of time the Executive is complying with this Section 7(c), the Company
will compensate the Executive for Executive's reasonable time at an
amount to be then agreed upon between the Company and the Executive.
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(d) During the term hereof and thereafter, the Executive agrees that the
Executive shall not take any actions or make any statements to the
public, current, former or future Company employees, prospective
future employers, the media, or any other third party whatsoever that
disparages or reflects negatively upon the Company and its Affiliates,
and its and their directors, officers, or employees. The Company
agrees following the end of the term the Company shall instruct its
senior officers and members of the Board not to take any actions or
make any statements to the public, media, or any other third party
whatsoever that disparages or reflects negatively upon the Executive.
Notwithstanding the foregoing provisions of this Section 7(d), nothing
herein shall prevent the Company and its Affiliates, and its and their
directors, officers and employees or the Executive from responding
truthfully to any information requests or questions posed in any
formal or informal legal, regulatory, administrative or other
proceedings involving any court, tribunal or governmental body or
agency or as otherwise required by law.
8. ASSIGNMENT OF RIGHTS TO INTELLECTUAL PROPERTY.
(a) The Executive shall promptly and fully disclose all Intellectual
Property to the Company. The Executive hereby assigns and agrees to
assign to the Company (or as otherwise directed by the Company) the
Executive's full right, title and interest in and to all Intellectual
Property. The Executive agrees to execute any and all applications for
domestic and foreign patents, copyrights or other proprietary rights
and to do such other acts (including without limitation the execution
and delivery of instruments of further assurance or confirmation)
requested by the Company to assign the Intellectual Property to the
Company and to permit the Company to enforce any patents. copyrights
or other proprietary rights to the Intellectual Property. The
Executive will not charge the Company for time spent in complying with
these obligations, but shall be reimbursed for all reasonable and
documented out of pocket expenses incurred at the request of the
Company. All copyrightable works that the Executive creates shall be
considered "work made for hire".
(b) As used in this Agreement, "INTELLECTUAL PROPERTY" means any
invention, formula, process, discovery, development, design,
innovation or improvement (whether or not patentable or registrable
under copyright statutes) made, conceived, or first actually reduced
to practice by the Executive solely or jointly with others, during
Executive's employment by the Company, provided, however, notice is
hereby provided that, in accordance with Illinois law (765 Ill. Comp.
Stat. 1060/2), the term "Intellectual Property" shall not apply to any
invention that the Executive develops entirely on Executive's own time
and without using the equipment, supplies, facilities or trade secret
information of the Company, unless (i) such invention relates to the
business of the Company or to the actual or demonstrably anticipated
research or development of the Company or (ii) the invention results
from any work performed by the Executive for the Company.
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9. RESTRICTED ACTIVITIES. The Executive agrees that some restrictions on
Executive's activities during and after Executive's employment are necessary to
protect the goodwill, Confidential Information and other legitimate interests of
the Company and its Affiliates:
(a) While the Executive is employed by the Company and for the period of
twelve (12) months immediately following Executive's employment by the
Company (in the aggregate, with the period of Executive's employment,
the "NON-COMPETITION PERIOD"), the Executive shall, not, directly or
indirectly, whether as owner, partner, investor, consultant, agent,
executive or managerial employee, co-venturer or otherwise, compete
with the Company or any of its Affiliates within the United States,
Europe or Asia or undertake any planning for any business competitive
with the Company or any of its Affiliates. Specifically, but without
limiting the foregoing, the Executive agrees not to engage in any
manner in any activity that is directly or indirectly competitive with
the business of the Company or any of its Affiliates as conducted or
under consideration at any time during the Executive's employment.
Restricted activity includes without limitation. providing services,
directly or indirectly, with or without compensation, whether as an
executive or managerial employee, independent contractor, officer,
director or otherwise, to any Person who does, or has plans to become.
a competitor of the business of the Company or any of its Affiliates.
For the purposes of this Section 9, the business of the Company and
its Affiliates shall include all Products and the Executive's
undertaking shall encompass all items. products and services that may
be used in substitution for Products. The foregoing restrictions shall
not preclude the Executive from retaining or making passive investment
interests of less than two percent (2%) in corporations whose stock is
registered under the Securities Exchange Act of 1934, as amended.
(b) The Executive agrees that, during Executive's employment with the
Company, Executive will not undertake any outside activity, whether or
not competitive with the business of the Company or its Affiliates,
that could reasonably give rise to a conflict of interest or otherwise
interfere with Executive's duties and obligations to the Company or
any of its Affiliates. Further, the Executive agrees that, during
Executive's employment and thereafter, Executive will comply with the
policies of the Company and directives of the Board with respect to
conflicts of interest, code of conduct, publicity and disparagement of
the Company, its business and its management, as in effect from time
to time.
(c) The Executive acknowledges the interest of the Company and its
Affiliates in maintaining a stable work force and agrees that, during
the Non-Competition Period, Executive will not (i) hire or attempt to
hire any employee of the Company or any of its Affiliates, assist in
such hiring by any Person or encourage any such employee to terminate
his or her relationship with the Company or any of its Affiliates or
(ii) solicit or encourage any independent contractor providing
services to the Company or any of its Affiliates to terminate or
diminish those services or its relationship with the Company or any of
its Affiliates.
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(d) Further, freely and knowingly acknowledging and agreeing that the
Company and its Affiliates have a near permanent relationship with
their customers, the Executive agrees that, during the Non-Competition
Period, Executive will not directly or indirectly solicit or encourage
any customer of the Company or any of its Affiliates to terminate or
diminish its relationship with them, or to conduct with any Person any
business or activity which such customer conducts or could conduct
with the Company or any of its Affiliates.
10. NOTIFICATION REQUIREMENT. Until sixty (60) days after the conclusion of the
Non-Competition Period, the Executive shall give notice to the Company of each
new business activity Executive plans to undertake, at least twenty-one (21)
days prior to beginning any such activity. Such notice shall state the name and
address of the Person for whom such activity is undertaken and the nature of the
Executive's business relationship(s) and position(s) with such Person. The
Executive shall provide the Company with such other pertinent information
concerning such business activity as the Company may reasonably request in order
to determine the Executive's continued compliance with Executive's obligations
under Sections 7, 8 and 9 hereof.
11. ENFORCEMENT OF COVENANTS. The Executive acknowledges that Executive has
carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon Executive pursuant to Sections 7, 8 and 9
hereof. The Executive agrees that those restraints are necessary for the
reasonable and proper protection of the Company and its Affiliates and that each
and every one of the restraints is reasonable in respect to subject matter,
length of time and geographic area. The Executive further acknowledges that,
were Executive to breach any of the covenants contained in Sections 7, 8 or 9
hereof, the damage to the Company and its Affiliates would be irreparable. The
Executive therefore agrees that the Company and its Affiliates, in addition to
any other remedies available to them, shall be entitled to preliminary and
permanent injunctive relief against any breach or threatened breach by the
Executive of any of said covenants, without having to post bond. The parties
further agree that, in the event that any provision of Section 7, 8 or 9 hereof
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a geographic
area or too great a range of activities, such provision shall be deemed to be
modified to permit its enforcement to the maximum extent permitted by law.
12. CONFLICTING AGREEMENTS. The Executive hereby represents and warrants that
the execution of this Agreement and the performance of Executive's obligations
hereunder will not breach or be in conflict with any other agreement to which
the Executive is a party or is bound and that the Executive is not now subject
to any covenants against competition or similar covenants or any court order or
other legal obligation that would affect the performance of Executive's
obligations hereunder. The Executive will not disclose to or use on behalf of
the Company any proprietary information of a third party without such party's
consent.
13. DEFINITIONS. Words or phrases which are initially capitalized or are within
quotation marks shall have the meanings provided in this Section and as provided
elsewhere herein. For purposes of this Agreement, the following definitions
apply:
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(a) "AFFILIATES" means all persons and entities directly or indirectly
controlling, controlled by or under common control with the Company,
where control may be by either management authority. contract or
equity interest.
(b) "CONFIDENTIAL INFORMATION" means any and all information of the
Company and its Affiliates that is not generally known by others with
whom they compete or do business, or with whom any of them plans to
compete or do business and any and all information, which, if
disclosed by the Company or its Affiliates would assist in competition
against them. Confidential Information includes without limitation
such information relating to (i) the development, research, testing,
manufacturing, marketing and financial activities of the Company and
its Affiliates, (ii) the Products, (iii) the costs, sources of supply,
financial performance and strategic plans of the Company and its
Affiliates, (iv) the identity and special needs of the customers of
the Company and its Affiliates and (v) the people and organizations
with whom the Company and its Affiliates have business relationships
and those relationships. Confidential Information also includes any
information that the Company or any of its Affiliates have received,
or may receive hereafter, belonging to customers or others with any
understanding, express or implied, that the information would not be
disclosed. Confidential Information does not include any information
that (i) at the time of disclosure or thereafter is generally
available to and known by the public (other than as a result of its
disclosure directly or indirectly by the Executive) or (ii) was
available to the Executive on a non-confidential basis from a source
other than the Company or its advisors, provided that such source is
not and was not bound by a confidentiality agreement regarding such
material, the Company, its affiliates or its business. In addition, in
the event that the Executive become legally compelled (by deposition,
subpoena, civil investigative demand or similar process) to disclose
any of the Confidential Information, such Confidential Information, to
the extent the Executive and the Company cannot, after using all
commercially reasonable efforts, obtain a protective order or other
appropriate remedy, shall not be deemed to be Confidential Information
solely to the extent and for the limited purpose the Executive is
advised by counsel that the Executive is legally required to disclose
such Confidential Information and the Executive shall use Executive's
best efforts to obtain assurance that confidential treatment will be
accorded such Confidential Information.
(c) "PERSON" means an individual, a corporation, a limited liability
company, an association; a partnership, an estate, a trust and any
other entity or organization, other than the Company or any of its
Affiliates.
(d) "PRODUCTS" mean all products actively planned. researched. developed,
tested, manufactured, sold, licensed, leased or otherwise distributed
or put into use by the Company or any of its Affiliates, together with
all services provided or planned by the Company or any of its
Affiliates, during the Executive's employment.
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14. WITHHOLDING. All payments made by the Company under this Agreement shall be
reduced by any tax or other amounts required to be withheld by the Company under
applicable law.
15. ASSIGNMENT. Neither the Company nor the Executive may make any assignment of
this Agreement or any interest herein, by operation of law or otherwise, without
the prior written consent of the other; provided, however, that the Company may
assign its rights and obligations under this Agreement without the consent of
the Executive in the event that the Executive is transferred to a position with
any of the Affiliates (provided such assignment shall not relieve the Company
from its duties and obligations hereunder) or in the event that the Company
shall hereafter effect a reorganization, consolidate with, or merge into, any
Person or transfer all or substantially all of its properties or assets to any
Person. This Agreement shall inure to the benefit of and be binding upon the
Company and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.
16. SEVERABILITY. If any portion or provision of this Agreement shall to any
extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
17. WAIVER. No waiver of any provision hereof shall be effective unless made in
writing and assigned by the waiving party. The failure of either party to
require the performance of any term or obligation of this Agreement, or the
waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
18. NOTICES. Any and all notices, requests. demands and other communications
provided for by this Agreement shall be in writing and shall be effective when
delivered in person, consigned to a reputable national overnight courier or
deposited in the United States mail, postage prepaid, registered or certified,
and addressed to the Executive at Executive's last known home address on the
books of the Company or, in the case of the Company, at its principal place of
business, attention of the Vice President Human Resources, or to such other
address as either party may specify by notice to the other actually received.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment, except as otherwise provided in Section 5(f) with
respect to Change of Control Employment Agreements, and provided that this
Agreement shall not supersede the Agreement for Deferred Compensation, dated
December 20, 2005, between the Executive and the Company, pursuant to which the
Company agreed to compensate the Executive for the increase in the exercise
price of certain of the Executive's stock options.
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20. AMENDMENT. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by an expressly authorized representative
of the Company.
21. HEADINGS. The headings and captions in this Agreement are for convenience
only and in no way define or describe the scope or content of any provision of
this Agreement.
22. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be an original and all of which together shall constitute
one and the same instrument.
23. GOVERNING LAW. This is an Illinois contract and shall be construed and
enforced under and be governed in all respects by the laws of the State of
Illinois, without regard to the conflict of laws principles thereof.
24. SURVIVORSHIP. The provisions of this Agreement necessary to carry out the
intention of the parties as expressed herein shall survive the termination or
expiration of this Agreement.
25. CONSTRUCTION. The parties acknowledge that this Agreement is the result of
arm's-length negotiations between sophisticated parties each afforded
representation by legal counsel. Each and every provision of this Agreement
shall be construed as though both parties participated equally in the drafting
of the same, and any rule of construction that a document shall be construed
against the drafting party shall not be applicable to this Agreement.
26. SET OFF; NO MITIGATION. The Company's obligation to pay Executive the
amounts provided and to make the arrangements provided hereunder shall be
subject to set-off, counterclaim or recoupment of monies owed by Executive to
the Company or its Affiliates. Executive shall not be required to mitigate the
amount of any payment provided for pursuant to this Agreement by seeking other
employment.
27. INDEMNIFICATION; INSURANCE. The Company agrees that it shall indemnify
Executive for any and all liabilities of Executive that arise by reason of the
fact that Executive is or was a director, officer or employee of the Company and
its Affiliates to the fullest extent permitted by the laws of the State of
Illinois, and that it will provide director and officer liability insurance
coverage on the same basis as provided to the other directors and officers of
the Company during the term of this Agreement and for a period of ten (10) years
thereafter. This provision shall survive any expiration or termination of this
Agreement.
28. DISPUTE RESOLUTION. Subject to the rights of the Company pursuant to Section
11 above, any controversy, claim or dispute arising out of or relating to this
Agreement, the breach thereof, or the Executive's employment by the Company
shall be settled by arbitration with one arbitrator. The arbitrator shall be
currently licensed to practice law in a state within the United States. The
arbitration will be administered by the American Arbitration Association in
accordance with its National Rules for Resolution of Employment Disputes. The
arbitration proceeding shall be confidential, and judgment on the award rendered
by the arbitrator may be entered in any court having jurisdiction. Any such
arbitration shall take place in the Chicago, Illinois area, or in any other
mutually agreeable location. In the event any judicial action is necessary to
enforce the arbitration provisions of this Agreement, sole jurisdiction shall be
in the federal and state courts, as applicable, located in Illinois. Any request
for interim injunctive
19
relief or other provisional remedies or opposition thereto shall not be deemed
to be a waiver or the right or obligation to arbitrate hereunder. To the extent
a party prevails in any dispute arising out of this Agreement or any of its
terms and provisions, all reasonable costs, fees and expenses relating to such
dispute, including the parties' reasonable legal fees, shall be borne by the
party not prevailing in the resolution of such dispute, but only to the extent
that the arbitrator or court, as the case may be, deems reasonable and
appropriate given the merits of the claims and defenses asserted.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by
the Company, by its duly authorized representative, and by the Executive,
effective as of the date first above written.
EXECUTIVE: LITTELFUSE, INC.
/s/ Gordon Hunter By: /s/ Ryan K. Stafford
- ------------------------------------- ------------------------------------
Gordon Hunter Name: Ryan K. Stafford
Title: Vice President, Human Resources
and General Counsel
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