Exhibit 10.3
SEVERANCE PAY AGREEMENT
This Agreement is made as of the 19th day of May,
2008, between CyberOptics Corporation, a Minnesota corporation (the
“Company”) and Jeffrey A. Bertelsen
(“Executive”).
WITNESSETH THAT:
WHEREAS, it is the purpose of this Agreement to
specify the financial arrangements that the Company will provide to
the Executive upon Executive’s separation from employment
with the Company or with a subsidiary of the Company or one of its
subsidiaries under the circumstances described herein;
and
WHEREAS, this Agreement is adopted in the belief
that it is in the best interests of the Company and its
stockholders to provide stable conditions of employment for
Executive, thereby minimizing personnel turnover and enhancing the
Company’s and its subsidiaries’ ability to recruit
highly qualified people.
NOW, THEREFORE, to assure the Company that it will
have the continued dedication of Executive notwithstanding the
possibility, threat or occurrence of a bid to take over control of
the Company, and to induce Executive to remain in the employ of the
Company, and for other good and valuable consideration, the Company
and Executive agree as follows:
1.
Term of Agreement .
This Agreement shall be for a two-year term commencing on the date
hereof. This Agreement shall be automatically renewed for
additional one-year terms thereafter unless either Executive or the
Company provides written notice at least sixty (60) days prior to
its scheduled termination of their intent not to renew the same;
provided that this Agreement shall continue for at least two years
after a Change in Control that occurs during the term of this
Agreement.
2.
Termination of Employment .
(i) If a
Change in Control (as defined in Section 3(i) hereof) occurs during
the term of this Agreement and the Company shall terminate
Executive’s employment without Cause or the Executive shall
terminate his employment with the Company for Good Reason, the
terminated Executive shall be entitled to receive the cash payment
provided in Section 4 hereof.
(ii) From and
after the date of a Change in Control, the Company shall have the
right to terminate Executive from employment at any time during the
term of this Agreement for Cause, by written notice to the
Executive, specifying the particulars of the conduct of Executive
forming the basis for such termination, and Executive shall not be
entitled to any payment pursuant to Section 4 for termination for
Cause.
(iii) From
and after the date of a Change in Control during the term of this
Agreement, Executive shall not be removed from employment with the
Company except as provided in Section 2(i) or (ii) hereof or as a
result of Executive’s Disability (as defined in Section 3(iv)
hereof) or his death. Executive’s rights upon termination of
employment prior to a Change in Control or after the expiration of
the term of this Agreement shall be governed by the standard
employment termination policy applicable to Executive in effect at
the time of termination.
Any notice given by Executive pursuant to this
Section 2 shall be effective five (5) business days after the date
it is given by Executive.
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(i)
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A “Change in Control” shall
mean:
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(a)
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a change in control of a nature that would be
required to be reported in response to Item 6(e) of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), whether or not the Company is
then subject to such reporting requirement;
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(b)
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the public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) by the Company or
any “person” (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) that such person has become the
“beneficial owner” (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of
securities of the Company representing 40% or more of the combined
voting power of the Company’s then outstanding
securities;
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(c)
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the Continuing Directors cease to constitute a
majority of the Company’s Board of Directors;
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(d)
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the shareholders of the Company approve (x) any
consolidation or merger of the Company in which the Company is not
the continuing or surviving corporation or pursuant to which shares
of Company stock would be converted into cash, securities or other
property, other than a merger of the Company in which shareholders
immediately prior to the merger have the same proportionate
ownership of stock of the surviving corporation immediately after
the merger; (y) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company; or (z) any plan of
liquidation or dissolution of the Company; or
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(e)
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the majority of the Continuing Directors determine
in their sole and absolute discretion that there has been a change
in control of the Company.
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‘Continuing Director” shall mean any
person who is a member of the Board of Directors of the Company,
while such person is a member of the Board of Directors, who is not
an Acquiring Person (as defined below) or an Affiliate or Associate
(as defined below) of an Acquiring Person, or a representative of
an Acquiring Person or of any such Affiliate or Associate, and who
(x) was a member of the Board of Directors on the effective date of
this Agreement or (y) subsequently becomes a member of the Board of
Directors, if such person’s initial nomination for election
or initial election to the Board of Directors is recommended or
approved by a majority of the Continuing Directors. For purposes of
this subparagraph, “Acquiring Person” shall mean any
“person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) who beneficially owns (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, securities
of the Company representing 40% or more of the combined voting
power of the Company’s then outstanding securities, but shall
not include the Company, any subsidiary of the Company or any
employee benefit plan of the Company or of any subsidiary of the
Company or any entity holding shares of Common Stock organized,
appointed or established for, or pursuant to the terms of, any such
plan; and “Affiliate” and “Associate” shall
have the respective meanings ascribed to such terms in Rule 12b-2
promulgated under the Exchange Act.
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(ii)
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“Good Reason” shall mean the occurrence
of any of the following events:
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(a)
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the assignment to Executive of employment
responsibilities which are not of comparable responsibility and
status as the employment responsibilities held by Executive
immediately prior to a Change in Control;
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(b)
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a reduction by the Company in Executive’s
compensation (including a change in the form of the bonus
compensation plan that makes less likely the achievement of a
targeted bonus) as in effect immediately prior to a Change in
Control;
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(c)
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the Company’s requiring Executive to be based
anywhere other than wit
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