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Exhibit 10.7
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is dated as of December 3,
1997, and is entered into by and between Thomas K. Lanin ("Executive") and
Bowmar Instrument Corporation, an Indiana corporation, including its divisions
Bowmar Technologies and White Microelectronics ("Bowmar").
WHEREAS, Bowmar desires to employ Executive as the President and Chief
Executive Officer and the Executive desires to be employed in that capacity; and
WHEREAS, Bowmar desires to facilitate organizational discussions
pertaining to corporate affiliations by removing personal employment security
issues from the process and providing severance benefits which will best serve
its interest in retaining key employees;
NOW THEREFORE, Executive and Bowmar hereby agree that Executive will
render services to Bowmar on the following terms and conditions:
1. Employment. Upon the terms and subject to the conditions contained
herein, during the term of this Agreement, Executive hereby agrees to provide
full-time services to Bowmar as the President and Chief Executive Officer of
Bowmar. During the term hereof, Executive agrees to devote his best efforts to
the business of Bowmar, and shall perform his duties in a diligent, trustworthy,
business-like manner, all for the purpose of advancing the business of Bowmar.
Executive shall not work for or receive compensation from any other entity for
services performed or to be performed by him during the term of this Agreement,
except with the prior written consent of Bowmar's Board of Directors.
2. Duties. Executive shall perform the duties of President and Chief
Executive Officer in accordance with the policies and practices of Bowmar, as
they may be amended from
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time to time. Those duties may be changed or modified in the discretion of
Bowmar's Board of Directors.
3. Term of Agreement. This Agreement shall be effective beginning on
October 1, 1997 and shall continue until September 30, 1998, except as provided
herein. It shall thereafter renew automatically for a one (1) year term, unless
thirty (30) or more days prior to such renewal date, either of the parties
notifies the other in writing of its intention not to renew.
4. Base Salary and Benefits. Bowmar shall pay Executive a base salary
of Two Hundred Ten Thousand Dollars ($210,000) per annum, payable in
semi-monthly installments, less applicable tax withholding and salary deductions
("Base Salary"). Executive shall be entitled to participate in the fringe
benefit programs generally available to senior executives of Bowmar, as they may
be modified from time to time.
5. Incentive Compensation. Executive shall be eligible to receive
incentive compensation in accordance with the terms of Bowmar's incentive
compensation plan, as it may be amended ("Incentive Compensation").
6. Stock Options. During the term of this Agreement, Executive shall
participate in Bowmar's Employee Stock Option Plan in accordance with the terms
and conditions of the Plan, as it may be amended.
7. Termination and Termination Benefits. The Executive's employment
hereunder shall terminate under the following circumstances:
(a) Termination by Bowmar For Cause. Bowmar may terminate the
employment of Executive for cause at any time upon written notice to Executive
specifying the cause for termination. For purposes of this Section, "for cause"
shall mean discharge resulting from a determination by Bowmar that the Executive
has: (i) been convicted of a criminal offense
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involving dishonesty, fraud, theft, embezzlement, breach of trust or moral
turpitude; (ii) performed an act or failed to act, which, if he were prosecuted
and convicted, would constitute a crime or offense involving money or property
of Bowmar; (iii) violated the provisions of Section 8 pertaining to confidential
information; or (iv) willfully refused to perform the duties reasonably assigned
to Executive and consistent with his status as President and Chief Executive
Officer of Bowmar, provided however that this Section 7(a)(iv) shall not apply
following a Change in Control as defined in Section 7(d).
In the event of Executive's termination by Bowmar under this
Section 7(a), Bowmar shall have no further obligation to Executive except for
any amounts earned by, or accrued for, Executive under any employee benefit
plans in which the Executive is then a participant, earned and unpaid salary,
accrued and unused vacation pay, and any rights of Executive under any bonus or
stock option agreement, which right has been earned by Executive at the time of
such termination pursuant to the terms of such plan or agreement. Executive
shall not be entitled to any further Base Salary, Incentive Compensation,
Severance Pay, fringe benefits, additional stock options, or any other
compensation or benefits, except as otherwise provided herein. A termination by
Bowmar under this Section 7(a) shall not prejudice any remedy to which Bowmar
may be entitled, either at law or in equity or under this Agreement.
(b) Termination by Bowmar Without Cause. Executive's
employment under this Agreement may be terminated without cause at any time by
majority vote of Bowmar's Board of Directors upon written notice to Executive
and, upon such termination, Executive shall be entitled to the following
benefits:
(i) Severance Payment. Bowmar will pay Executive a single,
lump-sum payment equal to Executive's total Base Salary and Incentive
Compensation paid for the
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calendar year immediately preceding the termination, less all applicable taxes
and other withholding ("Severance Payment").
(ii) Benefit Continuation. Bowmar will continue benefit
contributions (medical, dental, disability and life) on behalf of Executive for
twelve (12) months or until Executive becomes otherwise eligible for such
benefits, whichever occurs first. In the event that Bowmar is unable to continue
such contributions or secure replacement coverage, then it shall pay to
Executive the premium cost for such coverage. Executive shall not participate in
any other Bowmar benefit plans except for any amounts earned by, or accrued for,
Executive under any employee benefit plans in which the Executive is then a
participant, earned and unpaid salary and accrued and unused vacation pay and
any rights of Executive under any bonus or stock option agreement, which right
has been earned by Executive at the time of such termination pursuant to the
terms of such plan or agreement.
(iii) Outplacement Assistance. Bowmar will provide
executive-level outplacement services to Executive at the outplacement provider
of his choice for a period not to exceed twelve (12) months.
(iv) Attorneys' Fees. Bowmar will reimburse Executive for
all attorneys' fees incurred in connection with enforcing the terms of this
Agreement following termination of employment.
(c) Termination by Executive Without Cause. Executive may
terminate this Agreement at any time upon thirty (30) days' prior written notice
to Bowmar. In the event of such termination, Bowmar shall have no further
obligations to Executive under this Agreement except for any amounts earned by,
or accrued for, Executive under any employee benefit plans in which the
Executive is then a participant, earned and unpaid salary and accrued and unused
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vacation pay and any rights of Executive under any bonus or stock option
agreement, which right has been earned by Executive at the time of such
termination pursuant to the terms of such plan or agreement. Executive shall not
after termination be entitled to Base Salary, Incentive Compensation, Severance
Pay, fringe benefits, additional stock options, or any other compensation or
benefits. Bowmar may, in its sole discretion, accept Executive's resignation and
terminate his employment prior to the expiration of the thirty (30) day notice
period and pay Executive's compensation for the notice period (or remaining term
thereof).
(d) Termination of Executive Following a Change in Control. In the
event of a Change in Control, this Agreement shall be automatically renewed for
a period of twelve (12) months following the effective date of the Change in
Control. For purposes of this Agreement, a "Change in Control" shall mean: any
sale of all or substantially all of the assets of Bowmar; or merger or
consolidation involving Bowmar, unless the stockholders of Bowmar receive in the
transaction, with respect to their stock in Bowmar, stock or other securities
representing a majority in voting interest of the acquiring entity's equity
securities; or any sale of a majority voting interest of the outstanding stock
of Bowmar by the holders thereof in a single transaction or series of related
transactions. For a period of twelve (12) months following the effective date of
a Change in Control, the Executive may terminate the Agreement by written notice
to Bowmar's Board of Directors (or its successor) subsequent to the occurrence
of any of the following events:
(i) Notice of termination of a material change in the nature
or scope of Executive's responsibilities, title, authority, reporting
relationship, powers, functions or duties from the responsibilities, title,
authority, reporting relationship, powers, functions or duties exercised by the
Executive immediately prior to the Change in Control; or
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(ii) A decrease in the total annual compensation or benefits
payable to Executive other than as a result of a decrease in incentive-based
compensation payable to the Executive and to all other executive officers of
Bowmar on the basis of Bowmar's financial performance;
(iii) A requirement imposed by Bowmar that Executive relocate
to an office that is more than fifty (50) miles distant from the office at which
he is employed or the home at which he resides immediately prior to the Change
in Control or an increase in Executive's business travel; or
(iv) Failure of Bowmar's successor to assume its obligations
hereunder following a Change in Control.
In the event the Executive terminates this Agreement under the terms of
this Section 7(d), he shall be paid in a lump sum an amount equal to one and
one-half (1-1/2 ) times the Severance Payment set forth in Section 7(b)(i),
which shall not exceed the total sum of Three Hundred Seventy-Five Thousand
Dollars ($375,000.00), as well as the additional benefits set forth in Section
7(b), less all applicable taxes and other withholding. In the event of such
termination, Bowmar shall have no further obligations to Executive under this
Agreement except for any amounts earned by, or accrued for, Executive under any
employee benefit plans in which the Executive is then a participant, earned and
unpaid salary and accrued and unused vacation pay and any rights of Executive
under any bonus or stock option agreement, which right has been earned by
Executive at the time of such termination pursuant to the terms of such plan or
agreement.
(e) Non-Renewal Severance Payment. In the event that Bowmar gives
notice of its intention not to renew this Agreement in accordance with Section
3, it shall, upon the
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termination of Executive's employment, pay Executive in a single lump sum an
amount equal to the Severance Payment set forth in Section 7(b)(i), provide
outplacement assistance set forth in Section 7(b)(iii), and will continue
benefit contributions (medical, dental, disability and life) on behalf of
Executive for twelve (12) months or until Executive becomes otherwise eligible
for such benefits, whichever occurs first. In the event that Bowmar is unable to
continue such contributions or secure replacement coverage, then it shall pay
the Executive the premium cost for such coverage. Bowmar shall have no further
obligations to Executive except for any amounts earned by, or accrued for,
Executive under any employee benefit plans in which the Executive is then a
participant, earned and unpaid salary and accrued and unused vacation pay and
any rights of Executive under any bonus or stock option agreement, which right
has been earned by Executive at the time of such termination pursuant to the
terms of such plan or agreement.
(f) Illness, Incapacity, or Death. In the event of illness or
incapacity of Executive, Bowmar shall continue Executive's Base Salary for a
period of ninety (90) days or such time as the Executive is eligible for
consideration for long-term disability benefits, whichever occurs last. If
Executive is unable to perform the essential elements of his job due to illness
or incapacity for a period greater than ninety (90) days, Bowmar may elect, in
its sole determination, to terminate this Agreement with no further obligation
to Executive, except for any amounts earned by, or accrued for, Executive under
any employee benefit plans in which the Executive is then a participant, earned
and unpaid salary and accrued and unused vacation pay and any rights of
Executive under any bonus or stock option agreement, which right has been earned
by Executive at the time of such termination pursuant to the terms of such plan
or agreement. If Executive should die during the term of this Agreement,
Executive's heir shall be
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paid by Bowmar a total amount equal to ninety (90) days' Base Salary, be
entitled to whatever rights the heir may have under Executive's stock option
plan, and be granted applicable COBRA rights; Bowmar's remaining obligations
hereunder shall terminate as of the end of the month in which Executive's death
occurs.
8. Confidential Information. In view of the fact that Executive's work
for Bowmar will bring him into close contact with many confidential affairs and
plans of Bowmar not readily available to the public, Executive agrees to keep
secret and retain in the strictest confidence all confidential matters of
Bowmar, including, without limitation, trade "know-how," secrets, customer and
prospect lists, pricing policies, prices, costs, operational and development
methods, and other business affairs of Bowmar (but excluding all information in
the public domain) learned by him heretofore or hereafter, and not to disclose
them to anyone outside of Bowmar, either during or after his employment with
Bowmar, except in the course of performing his duties hereunder or with Bowmar's
express written consent. Executive further agrees to deliver promptly to Bowmar,
on termination of his employment, or at any time Bowmar may so request, all
memoranda, notes, records, reports, manuals, drawings, blueprints, computer
records and other documents (and all copies thereof) relating to Bowmar's
business and all property associated therewith, which he may then possess or
have under his control. Executive acknowledges and understands that his
obligations with respect to confidential information shall survive the
termination of this Agreement.
9. Violation of Covenants. If Executive violates any of his covenants
under Section 8, Executive agrees and acknowledges that such violation or
threatened violation will cause irreparable injury to Bowmar and that Bowmar
will be entitled to injunctive relief without the necessity of proving actual
damages.
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10. Automobile Allowance. Bowmar shall pay an automobile allowance to
Executive in the amount of $850.00 per month, as it may be changed from time to
time, during the term of this Agreement.
11. Vacation. Bowmar will provide Executive with annual paid vacation
consistent with the policies of Bowmar applicable to senior executive staff, as
they may be changed from time-to-time.
12. Company Expenses. During the term of this Agreement, Bowmar will
reimburse Executive for reasonable authorized business expenses incurred on
behalf of Bowmar in accordance with Bowmar policies, as they may be amended.
13. Assistance with Litigation. Executive shall make himself available,
upon the request of Bowmar or its counsel, to testify or otherwise assist in
litigation, arbitration or other disputes involving Bowmar during and following
the termination of this Agreement, so long as Executive receives reimbursement
for his reasonable out-of-pocket expenses. Executive will also make himself
available to the attorneys representing Bowmar for such purposes as they
reasonably deem necessary, including but not limited to, the review of
documents, discussion of the cases and preparation for trial. This Agreement is
not intended to and shall not be construed so as to in any way limit or affect
the testimony which Executive gives in any such litigation; it is understood and
agreed Executive will at all times testify fully, truthfully and accurately,
whether in deposition, trial or otherwise.
14. Arbitration. Any dispute, controversy, or claim arising out of or
relating to this Agreement or breach thereof, or arising out of or relating in
any way to the employment of Executive or the termination thereof, shall be
submitted to arbitration in Phoenix, Arizona, in accordance with the National
Rules for the Resolution of Employment Disputes of the American
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Arbitration Association. Judgment upon the award rendered by the arbitrator may
be entered in any court in the State of Arizona, or in any other court of
competent jurisdiction. In reaching his or her decision, the arbitrator shall
have no authority to ignore, change, modify, add to or delete from any provision
of this Agreement, but is instead limited to interpreting this Agreement. The
fees and expenses of the arbitrator shall initially be shared equally by the
parties and the prevailing party shall be entitled to recover its fees and
expenses incurred in connection with the arbitration.
15. Governing Law. This Agreement has been entered into and shall be
interpreted in accordance with the laws of the State of Arizona.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties respecting the employment of Executive and there are no
representations, warranties or commitments other than those set forth herein.
This Agreement may be amended or modified only by an instrument in writing
executed by both of the parties hereto. This is an integrated agreement.
17. Effect of Agreement. This Agreement shall be binding upon the
parties and their respective heirs, executors, administrators, successors and
assigns. Executive shall not assign any rights or duties under this Agreement
without the written consent of the Bowmar Board of Directors. In the event of a
merger, sale, transfer, consolidation or reorganization involving Bowmar, this
Agreement shall continue in force and become an obligation of Bowmar or
successor entity.
18. Severability. If any provision of this Agreement as applied to
either party or to any circumstances shall be adjudged by a court or arbitration
to be void, voidable or unenforceable, the same shall in no way affect any other
provision of this Agreement. In case
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this Agreement, or any one or more of the provisions hereof, shall be held to be
invalid, illegal or unenforceable within any governmental jurisdiction or
subdivision thereof, this Agreement or any such provision thereof shall not as a
consequence thereof be deemed to be invalid, illegal or unenforceable in any
other governmental jurisdiction or subdivision thereof.
19. Waiver. The waiver by either party of any term or condition of this
Agreement or any breach thereof shall not constitute a waiver of any other term
or condition or breach of this Agreement, nor shall it constitute a waiver of
the same term or condition in the future.
20. Notices. Any notice or communication required or permitted to be
given to the parties hereto shall be delivered personally or be sent by United
States registered or certified mail, postage prepaid and return receipt
requested, and addressed or delivered as follows, or such other address as the
party addressed may be substituted by prior written notice pursuant to this
section:
(a) If to Executive: Thomas K. Lanin
Bowmar Instrument Corporation
5080 North 40th Street, Ste. 475
Phoenix, Arizona 85018
(or such other address as may appear
in the records of Bowmar)
(b) If to Bowmar: Chairman, Board of Directors
Bowmar Instrument Corporation
5080 North 40th Street, Ste. 475
Phoenix, Arizona 85018
with a copy to: Joseph T. Clees, Esq.
Bryan Cave
2800 North Central Ave., Ste. 2100
Phoenix, Arizona 85004-1098
21. Representations by Executive. Executive represents and warrants
that he is not a party to or bound by any agreement or covenant that would
prohibit, restrict or inhibit in any way
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the full performance of his duties for Bowmar under this Agreement. Executive
further acknowledges that he has been given the opportunity to consult with
legal counsel regarding this Agreement.
22. Captions. Captions of this Agreement are inserted for convenience
and do not constitute a part hereof.
23. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective
as of the day and year first written above.
BOWMAR INSTRUMENT CORPORATION
By: /S/ Edward A. White
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Title: Chairman
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THOMAS K. LANIN
/S/ Thomas K. Lanin
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