EXHIBIT 10.106
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as
of the 8th day of November, 2005 (the “Agreement”), is
entered into by and between Thomas Loder, an individual (the
“Employee”) and APT Acquisition Corp., a Delaware
corporation (“the Corporation”).
RECITALS
WHEREAS, Advanced Power Technology,
Inc., a Delaware corporation (“APT”), the Corporation,
and Microsemi Corporation, a Delaware corporation
(“Parent”) anticipate entering into an Agreement and
Plan of Merger (the “Merger Agreement”), pursuant to
which, on the terms and subject to the conditions set forth in the
Merger Agreement, the Corporation will merge with and into APT (the
“Merger”) and the resulting entity (“Surviving
Corporation”) will become a wholly-owned subsidiary of
Parent; and
WHEREAS, as of the date hereof, the
Employee serves as the Vice President, Sales and Marketing
Switching Power; and
WHEREAS, the Corporation wishes to
employ the Employee, and the Employee wishes to be employed by the
Corporation, on the terms and conditions contained in this
Agreement effective upon the consummation of the Merger;
and
WHEREAS, the Corporation is only
willing to enter into this Agreement on the basis that the Employee
observe the restrictive covenants set out herein which have been
negotiated in good faith and which the Employee acknowledges as
being reasonable given the nature of the Employee’s expected
position with the Corporation contemplated by this
Agreement.
NOW, THEREFORE, in consideration of
the mutual covenants and agreements in this Agreement, receipt and
sufficiency of which are hereby acknowledged, it is agreed by and
between the Employee and the Corporation as follows:
1. EMPLOYMENT
1.1 Position
Subject to the terms and conditions
of Section 6.1, during the Term of Employment (as defined in
Article 2), the Corporation shall employ the Employee, and the
Employee shall be employed by the Corporation, as the Vice
President, Sales and Marketing Switching Power business of the
Corporation (the “Business”), on the terms and subject
to the conditions herein contained
1.2 Duties
During the Term of Employment (as
defined in Article 2), the Employee shall:
(i) devote the whole of the
Employee’s time, skills, experience and attention to the
business of the Corporation, and ensure that the Employee is not at
any time engaged in conduct that would interfere with the
performance by the Employee of the Employee’s duties under
this Agreement or which would constitute a conflict with the
interests of the Corporation. During the Term of Employment, the
Employee will not be employed or engaged in any other business
without the prior written permission of the Corporation;
and
(ii) well and faithfully serve the
Corporation and carry out those responsibilities as are necessary
to perform the functions associated with the Employee’s
position; and
(iii) use the Employee’s best
efforts while performing Employee’s responsibilities to
promote the success of the business of the Corporation and act at
all times in the best interests of the Corporation.
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2. TERM
Subject to the terms and conditions of
Section 6.1, this Agreement and the Employee’s
employment hereunder shall become effective at the Effective Time
of the Merger and shall continue until the earliest of the
following to occur (the “Term of
Employment”):
(a) the two (2) year
anniversary of the Effective Date of the Merger,
(b) mutual agreement between
Corporation and Employee;
(c) death of Employee;
(d) the good faith determination of
the Corporation that Employee has become so physically or mentally
disabled as to be incapable of satisfactorily performing
Employee’s duties hereunder for a period of ninety
(90) consecutive days, such determination based upon a
certificate as to such physical or mental disability issued by a
licensed physician and/or psychiatrist (as the case may be)
employed by the Corporation; or
(e) any termination pursuant to
Article 4 .
Sections 5 and 6 or this Agreement
shall survive following the Term of Employment, and Sections 1, 2,
3 and 4 of this Agreement shall be terminated and have no further
force or effect. The Corporation and the Employee understand and
agree that, if Employee’s employment shall not have been
terminated, Employee shall be an “at-will” employee of
the Corporation after the Term of Employment.
3. REMUNERATION
3.1 Compensation
During the Term of Employment, the
Corporation shall pay to the Employee as compensation for the
performance of the Employee’s duties herein a salary at the
rate of $138,000 per annum (the “Base Salary”), payable
in accordance with the Corporation’s normal payroll
procedures and subject to Section 6.14. The Employee agrees
that such salary shall be reviewed annually during the normal
course of the Corporation’s focal review process or may be
otherwise increased from time to time by the Corporation, and such
revised annual salary shall be referred to hereinafter as the
“Base Salary.”
The Employee will also be eligible
to participate in the Corporation’s Incentive Compensation
Plan which provides for certain cash incentive compensation upon
the achievement of certain individual, unit and Parent-wide
performance goals. The Employee’s individual incentive target
under the Incentive Compensation Plan shall be equal to thirty-five
percent (35%) of the Base Salary.
The Employee will also be eligible
to participate in the Parent’s other incentive compensation
plans for which employees of the Corporation or its subsidiaries of
similar seniority participate.
3.2 Retention Bonus
Payment
In connection with your commencement
of employment with the Corporation, you will be eligible to receive
a retention bonus payment of $50,000 (the “Retention Bonus)
The Retention Bonus will be payable twenty (24) months after
the Effective Time of the Merger, subject to the conditions below.
You will be entitled to the Retention Bonus payment only if you are
employed by the Corporation on the date specified above for the
payment; provided, however, if your employment is terminated by the
Corporation other than for Cause (as defined below) or if your
termination qualifies as a Resignation for Good Reason (as defined
below) you will be entitled to receive the Retention Bonus at the
end of the Corporation’s standard pay period that includes
the date of such termination.
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3.3 New Hire Option Grant
Contingent upon your execution and
delivery of a Lock-up Agreement (as defined in the Merger
Agreement), within five (5) business days after the Effective
Time of the Merger, the Compensation Committee of the Board of
Directors will grant you an option to purchase 20,000 shares of
common stock of the Parent (the “Parent Common Stock”)
under the Parent 1987 Stock Plan. The option exercise price will be
the closing price of the Parent Common Stock on the Nasdaq National
Market on the option grant date. You will be provided with the
standard Parent form of stock option agreement at the time of grant
of such option (the “Parent Option”). The Parent Option
will vest only during your continuous full-time employment over a
four-year period starting from the grant date, at the rate of 25%
of the option at the end of your first year of employment, and 25%
at the end of each successive year until the completion of the
four-year period. You will be eligible for future Parent Options in
the sole discretion of the Corporation.
3.4 APT Options
On or before the Effective Date of
the Merger, your outstanding APT stock options will accelerate
under the existing provisions of the APT stock option plan. These
options will be assumed by Parent and adjusted to reflect the terms
of the Merger Agreement. Accordingly, following the Merger, your
APT Options will have become options to acquire Parent Common
Stock. You will receive a Stock Option Assumption Agreement (to be
entered into by you) informing you of the specific adjustments to
the number of shares, the exercise price and the number of shares
subject to each vesting installment that have been made to your APT
Options to reflect the exchange ratio in effect for the
Merger.
3.5 Benefits
The Employee shall be entitled to
participate in all of the benefit plans for employees of the
Corporation in effect from time to time, in accordance with the
terms of the formal plan documents, including medical, dental,
group life and disability plans, as of and with effect from the
Effective Date. Employee’s years of service with APT prior to
the Effective Time shall be counted as years of service with the
Corporation for purposes of eligibility and vesting (other than
vesting with respect to any equity-based compensation). The
Corporation reserves the right to unilaterally revise the terms of
the benefit plans of general application to all employees or to
eliminate any such benefit plan altogether.
3.6 Vacation
The Employee will be entitled to
four (4) weeks paid vacation per year in accordance with the
Corporation’s generally established policies. The Employee
shall endeavor to schedule such vacation to be taken so as to not
unreasonably interfere with the demands of the business of the
Corporation.
3.7 Expenses
The Corporation shall reimburse the
Employee for all out-of-pocket expenses and other disbursements
actually and properly incurred by the Employee in connection with
the Employee’s duties hereunder or otherwise properly
incurred by the Employee for and on behalf of the Corporation, upon
presentation of reasonably acceptable evidence of the Employee
having incurred such expenses and disbursements.
4 TERMINATION OF EMPLOYMENT
4.1 Termination by Corporation for
Cause
The employment of the Employee
hereunder may be terminated for Cause at any time by notice in
writing from the Corporation to the Employee, in which event the
Employee shall not be entitled to a notice period or compensation
in lieu of notice. In such case, the Employee shall not be entitled
to any compensation or benefits hereunder except for payment of all
amounts due and owing to the date of termination, including accrued
but unpaid Base Salary, vacation, and unreimbursed
expenses.
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For purposes of this Agreement,
“Cause” shall mean:
(1) fraud, misappropriation,
embezzlement, or other act of material misconduct against the
Corporation, Parent or any of its respective directors, officers,
agents or affiliates;
(2) substantial and willful failure
to perform specific and lawful directives of the Parent or
Corporation, including but not limited to policies of general
application;
(3) willful and knowing violation of
any material laws, rules or regulations of any governmental or
regulatory body;
(4) willful and knowing failure to
cooperate with any investigation or inquiry, formal or informal, by
the Parent, the Corporation or any governmental or regulatory body;
or
(5) conviction of, or plea of guilty
or nolo contendere to, any felony whatsoever or any misdemeanor
that involves moral turpitude.
4.2 Termination by Corporation without Cause
or by Employee for Good Reason
The employment of the Employee may
be terminated by the Corporation without Cause. Contingent upon the
Employee’s signing and delivering to the Corporation and not
revoking a full release of all claims, known or unknown, against
the Corporation, the Parent, and their respective affiliates,
directors, officers and agents, the Corporation will make payment
to the Employee of the following: (i) a one-time lump sum
combined salary and bonus payment in an amount equal to the product
of $14,518.17 multiplied by the number of months between the date
of termination and the second anniversary of the Effective Date of
the Merger, prorated for any partial months, payable to Employee at
the end of the Corporation’s standard pay period that
includes the date of the termination, (ii) any accrued but
unpaid Base Salary for services rendered to the date of
termination, (iii) any accrued but unpaid expenses required to
be reimbursed under this Agreement, and (iv) any vacation
accrued to the date of termination. Additionally, in the event of
the Employee’s termination by the Corporation without Cause
or by the Employee for Good Reason, provided such termination
occurs during the Term of Employment, and contingent upon the
Employee’s signing and delivering to the Corporation and not
revoking a full release of all claims, known or unknown, against
the Corporation, the Parent, and their respective affiliates,
directors, officers and agents, the options subject to the then
outstanding Equity Awards shall vest as to that number of shares of
common stock that would have become vested assuming Employee
continued to perform services under this Agreement for an
additional twelve (12) months. Employee shall have until the
earlier of: (i) three (3) months following such
termination, or (ii) the expiration date of each such Equity
Award, to exercise the portion of each of the Employee’s
Equity Awards which are vested as of the date of such termination.
In addition, until the earlier of (a) the twelve
(12) month anniversary of Employee’s termination by the
Corporation without Cause or by the Employee for Good Reason or
(b) the date the Employee secures similar benefits through new
employment, the Corporation shall continue benefits for the
Employee and, as applicable, the Employee’s family under the
Corporation’s benefit plans in which the Employee
participated pursuant to Section 3.5. Except as stated in this
Section 4.2, Employee shall not be entitled to any other
compensation or benefits.
For purposes of this Agreement,
“Good Reason” shall mean any of the following to the
extent they are undertaken without the Employee’s
consent:
(1) the assignment to the Employee
of any duties or level of responsibilities that results in any
diminution or adverse change of the Employee’s position,
title, authority, circumstances of employment or scope of
responsibilities where such conduct has not been cured after
forty-five (45) days written notice from the
Employee;
(2) a reduction by the Corporation
in the Employee’s Base Salary unless such reduction is part
of a Corporation wide reduction in compensation to save costs or a
reduction by the Corporation in the Employee’s individual
incentive target percentage under the Incentive Compensation Plan
unless such reduction is consistent with other similarly situated
employees at the Corporation;
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(3) the taking of any action by the
Corporation that would adversely affect the Employee’s
participation in, or reduce the Employee’s benefits under,
the Corporation’s benefit plans as described in
Section 3.5 (excluding equity-based compensation), except to
the extent the benefits of all other employees of the Corporation
are similarly reduced, where such conduct has not been cured after
forty-five (45) days written notice from the Employee;
or
(4) the Corporation’s
relocation of the Employee’s place of employment beyond a
fifty-mile radius from either the location of the Employee’s
place of employment as of the Effective Date.
4.3 Termination by Employee Not for Good
Reason
In the event the Employee terminates
employment with the Corporation for any reason other than Good
Reason, the Corporation shall within ten (10) business days of
such termination pay to the Employee all amounts due and owing to
the Employee as of the date of such termination, including accrued
but unpaid Base Salary, vacation, and unreimbursed expenses and the
Employee shall not be entitled
