EMPLOYMENT AGREEMENT

 

                             EMPLOYMENT AGREEMENT

 

 

       This Employment Agreement ("Agreement") is entered into on May 31,

2002, by and between Fred Sturm, an individual ("Executive"), and California

Amplifier, Inc., a Delaware corporation (the "Company").

 

                                  RECITALS:

       A.   It is the desire of the Company to assure itself of the

continued services of the Executive by engaging the Executive to perform

such services under the terms hereof.

 

       B.   The Executive desires to commit himself to serve the Company on

the terms herein provided.

 

       NOW, THEREFORE, in consideration of the foregoing and of the

respective covenants and agreements set forth below the parties hereto agree

as follows:

 

       1.   Employment by the Company and Term.

 

              (a)   Full Time and Best Efforts.   Subject to the terms set

forth herein, the Company agrees to employ Executive as President and Chief

Executive Officer of the Company, and in such other executive capacities as

may be requested from time to time by the Board of Directors of the Company

or a duly authorized committee thereof, and Executive hereby accepts such

employment.   Executive shall render such other services for the Company and

corporations controlled by, under common control with or controlling,

directly or indirectly, the Company, and to successor entities and assignees

of the Company ("Company's Affiliates") as the Company may from time to time

reasonably request and as shall be consistent with the duties Executive is

to perform for the Company and with Executive's experience.   During the term

of his employment with the Company, Executive will devote his full time and

use his best efforts to advance the business and welfare of the Company, and

will not engage in any other employment or business activities for any

direct or indirect remuneration that would be directly harmful or

detrimental to, or that may compete with, the business and affairs of the

Company, or that would interfere with his duties hereunder.  

 

              (b)   Duties.   Executive shall serve in an executive capacity

and shall perform such duties as are customarily associated with his

position, consistent with the Bylaws of the Company and as reasonably

required by the Company's Board of Directors (the "Board") or by the

Company's Chief Executive Officer.

 

              (c)   Company Policies.   The employment relationship between the

parties shall be governed by the general employment policies and practices

of the Company, including but not limited to those relating to protection of

confidential information and assignment of inventions, except that when the

terms of this Agreement differ from or are in conflict with the Company's

general employment policies or practices, this Agreement shall control.

 

              (d)   Term.   The initial term of employment of Executive under

this Agreement shall begin as of date hereof for an initial term ending on

May 30, 2004 (such period, the "Initial Term"), subject to the provisions

for termination set forth herein and renewal as provided in Section 1(e)

below.

 

              (e)   Renewal.   Unless either party shall have given the other

notice that this Agreement shall not be renewed at least thirty (30) days

prior to the end of the Initial Term, the term of this Agreement shall be

automatically extended for a period of one (1) year, such procedure to be

followed in each such successive year.   Each extended term shall continue to

be subject to the provisions for termination set forth herein.   Failure by

the company to renew the agreement shall constitute termination without

cause or disability and the Executive shall be eligible for severance in

accordance with section 6 (d) and (f) or if applicable 6 (e) and 6 (f).

 

        2.   Compensation and Benefits.

 

              (a)   Salary.   Executive shall receive for services to be

rendered hereunder a salary at the rate of Twenty Seven Thousand Eighty-

Three Dollars ($27,083) per month payable at least as frequently as monthly

and subject to payroll deductions as may be necessary or customary in

respect of the Company's salaried employees (the "Base Salary").   The Base

Salary will be reviewed by and shall be subject to adjustment at the sole

discretion of the Board of Directors of the Company each year during the

term of this Agreement.

 

              (b)   Participation in Benefit Plans.   During the term hereof,

Executive shall be entitled to participate in any group insurance,

hospitalization, medical, dental, health, accident, disability or similar

plan or program of the Company now existing or established hereafter to the

extent that he is eligible under the general provisions thereof.   The

Company may, in its sole discretion and from time to time, amend, eliminate

or establish additional benefit programs, as it deems appropriate.  

Executive shall also participate in all standard fringe benefits offered by

the Company to any of its Executive Officers.

 

              (c)   Vacation.   Executive shall be entitled to a period of

annual vacation time in accordance with the company's vacation policy, to

accrue pro rata during the course of each such twelve-month period.   The

days selected for Executive's vacation must be mutually and reasonably

agreeable to Company and Executive.  

 

       3.   Bonuses.  

 

       The Executive shall be eligible to participate in the Company's

employee bonus program in accordance with the terms of such program (as it

may exist from time to time) and in the discretion of the committee

administering such program.  

 

       4.   Stock Awards.  

 

       The Executive shall be eligible to participate in the Company's

employee stock award plans and shall be eligible for award of stock options

or other stock incentive awards in accordance with the terms of the

Company's stock award plans and in the discretion of the Committee of the

Board administering such plans.

 

       5.   Reasonable Business Expenses and Support.

 

       Executive shall be reimbursed for documented and reasonable business

expenses in connection with the performance of his duties hereunder.  

Executive shall be furnished reasonable office space, assistance and

facilities.

      

       6.   Termination of Employment.  

 

       The date, on which Executive's employment by the Company ceases,

under any of the following circumstances, shall be defined herein as the

"Termination Date."

 

              (a)   Termination Upon Death.   If Executive dies prior to the

expiration of the term of this Agreement, the Company shall (i) continue

coverage of Executive's dependents (if any) under all benefit plans or

programs of the type listed above in paragraph 2(b) herein for a period of

six (6) months, and (ii) pay to Executive's estate the accrued portion of

any salary and vacation earned as of the Termination Date, less standard

withholdings for tax and social security purposes.

 

              (b)   Termination Upon Disability.   The Company may terminate

Executive's employment in the event Executive suffers a disability that

renders Executive unable to perform the essential functions of his position,

even with reasonable accommodation, as determined by competent medical

authority.   After the Termination Date, which in this event shall be the

date upon which notice of termination is given, no further compensation will

be payable under this Agreement except that Executive shall be paid the

accrued portion of any salary and vacation earned as of the Termination Date,

less standard withholdings for tax and social security purposes.  

 

              (c)   Termination for Cause.

 

                      (i)   Termination; Payment of Accrued Salary and

Vacation.   The Board may terminate Executive's employment with the Company

at any time for Cause, immediately upon notice to Executive of the

circumstances leading to such termination for Cause.   In the event that

Executive's employment is terminated for Cause, Executive shall receive

payment for all accrued salary and vacation earned through the Termination

Date, which in this event shall be the date upon which notice of termination

is given.   The Company shall have no further obligation to pay severance of

any kind whether under this Agreement or otherwise nor to make any payment

in lieu of giving notice of such termination.

 

                       (ii)   Definition of Cause.   "Cause" means the

occurrence or existence of any of the following with respect to Executive,

as determined by a majority of the directors of the Board:  

(a) unsatisfactory performance of Executive's duties or responsibilities,

provided that the Company has given Executive written notice specifying the

unsatisfactory performance of his duties and responsibilities and afforded

the Executive reasonable opportunity for cure, all as determined by a

majority of the directors of the