Exhibit 10.1
Hittite Microwave Corporation
2 Elizabeth Drive
Chelmsford, Massachusetts 01824
March 13, 2013
Rick D. Hess
65 Village Road
Westford, MA 01886
Dear Rick,
On behalf of Hittite Microwave Corporation (“Hittite” or the “Company”), I am
delighted to offer you the position of President and Chief Executive Officer,
reporting to the Company’s Board of Directors (the “Board”), working at the
Company’s headquarters in Chelmsford, Massachusetts. You will remain a director
of the Company until the next annual meeting of stockholders of the Company, at
which time it is our expectation that you will be renominated for election as a
director. Your appointment has been approved by the Board and your compensation
package as outlined herein has been approved by the Compensation Committee of
the Board (“Compensation Committee”), in each case conditioned upon your
acceptance of the terms and conditions set forth in this letter and your
commencement of employment by Hittite. For purposes of this letter, your first
day of work at Hittite will be considered your “Employment Start Date.” Your
Employment Start Date is expected to be April 1, 2013.
1.Base Salary. Your starting annual base salary will be at the rate of $420,000
per year, less applicable taxes, deductions and withholdings, paid semi-monthly
and subject to annual review by the Compensation Committee.
2.    Incentive Compensation. You will be eligible to participate in Hittite’s
annual cash incentive compensation plan on substantially the same terms as other
executive officers, with a target incentive for 2013 of 60% of base salary
(pro-rated to reflect your time of service during 2013) (the “Target Award”).
Your individual performance objectives (MBOs) for 2013 for purposes of the plan
will be established by mutual agreement between you and the Compensation
Committee by not later than the Committee’s regularly scheduled meeting in May
2013. Target incentives do not constitute a promise of payment and your actual
bonus, if any, will depend in part on Hittite financial performance and in part
on the Compensation Committee’s discretion in assessing your individual
performance in relation to your MBOs. To qualify for the incentive bonus, you
must remain employed with the Company through the date that the incentive bonus
is paid in accordance with Hittite’s normal practice. Bonuses for executive
officers are paid not later than March 15 during the first quarter after the
year to which they relate.

 

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3.    Make Whole Bonus; One-Time Retention Equity Award.
(a)    Provided that your Employment Start Date has occurred on or before April
1, 2013, you will receive a cash bonus in the amount of $112,000, payable on the
first regular payroll date following your Employment Start Date, and further
provided that the intention of this bonus is to make you whole in the event that
you become ineligible, by reason of your acceptance of employment by Hittite, to
receive a bonus in such amount that you would otherwise have been entitled to
receive from your current employer, and that it will be paid only in such event.
(b)    You will be entitled to receive an award under Hittite’s 2005 Stock
Incentive Plan (the “2005 Plan”) with an aggregate value on the effective date
of the award equal to $1.5 million, in the form of performance-based restricted
stock units (the “Retention Award”). The Retention Award will vest on the fourth
anniversary of your Employment Start Date, provided that you are then employed
by the Company, and provided that the Company performance criteria,
substantially as set forth on Appendix A have been satisfied. The final form of
the Retention Award is subject to approval by the Compensation Committee at its
next regular meeting. The Retention Award will be delivered to you as soon as
practicable following that meeting, provided that your Employment Start Date has
occurred.
The Retention Award will be immediately forfeited in its entirety in the ease of
a termination by the Company for Misconduct or a voluntary resignation by you
without Good Reason. The Retention Award will provide for automatic use of a
portion of the vested award to cover minimum tax withholding to the extent
permitted for equity-based awards under U.S. generally accepted accounting
principles.
4.    Subsequent Long-Term Equity Grants. You will also be eligible to be
granted annual equity awards under the 2005 Plan (“Annual Grants”). The award
for 2013 will take the form of a time-vested restricted stock unit, having a
fair value at the effective date of the award equal to $1.5 million, and vesting
in equal installments on each of the first four anniversaries of the date of the
grant. This award is subject to approval by the Compensation Committee at its
next regularly scheduled meeting, with an effective date on the later of the
date of that meeting or your Employment Start Date. The amount, grant date value
and terms of any Annual Grants made during your employment with Hittite in any
year after 2013 will be determined in the discretion of the Compensation
Committee after taking into account the Company’s and your performance and other
relevant factors, and may be subject to Company performance criteria.
5.    General Terms. Subject to any specific provisions herein, all equity
awards will be on such terms and conditions as are determined by the
Compensation Committee and will be made pursuant to the 2005 Plan, or a
successor plan, as in effect from time to time.

 

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6.    Stock Ownership. You acknowledge that you will be subject to the Hittite
requirements for stock ownership by officers as in effect from time to time.
7.    Benefits. Hittite provides a competitive benefits package for its eligible
full- and part-time employees. Eligible executives may participate in Hittite’s
health insurance benefits (medical, dental and vision), life insurance, short
term and long term disability, 40l(k) Plan, and flexible spending plan
(Healthcare Reimbursement Account and/or Dependent Care Reimbursement Account).
Please refer to benefit plan documents for eligibility. Of course, Hittite may
change its benefits at any time.
You will be expected to travel in connection with your employment. Hittite will
reimburse you for reasonable business expenses incurred in connection with your
employment, upon presentation of appropriate documentation in accordance with
the Company’s expense reimbursement policies and you will be eligible to
participate in the travel policy established by the Company generally for its
senior management.
8.    Clawbacks. All bonuses and equity grants are subject to Hittite “clawback”
policies as in effect from time to time, including any established under the
Dodd-Frank Wall Street Reform and Consumer Protection Act.
9.    Indemnification and Director’s and Officer’s Insurance. In your capacity
as an officer of the Company, you will be entitled to indemnification pursuant
to the Company’s bylaws and the Indemnification Agreement currently in effect
between you and the Company.
10.    Severance.
(a)    In the event of your Involuntary Termination for any reason other than
Misconduct during the period ending two (2) years from your Employment Start
Date (the “Protected Period”) or within the 12-month period following a Change
of Control (as defined below), you will be entitled to receive, in addition to
your base salary and any other compensation earned to date hereunder and not yet
paid, a gross payment equal to the sum of (i) an amount equal to one times your
annual Base Salary and (ii) a payment in lieu of bonus equal to the greater of
(A) one times the amount of the Target Award or (B) your actual bonus for the
fiscal year prior to your Involuntary Termination) (such sum being referred to
herein as the “Severance Payment”), contingent upon your execution and delivery
to the Company within 30 days after the date of your termination of employment,
of an agreement in a form satisfactory to the Company containing a general
release of any and all potential claims against the Company and its affiliates
and agents (the “Release”), which Release has not been revoked by you within the
7-day period following its delivery to the Company. Such Severance Payment will
be made less all applicable deductions and authorized withholdings and be paid
in a lump sum within 15 days after delivery of the Release, provided that the
Release has not been timely revoked. In

 

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addition and similarly contingent upon execution and delivery of an effective
Release, for one year after your date of termination, should you elect COBRA
continuance coverage, the Company shall be responsible for paying the difference
between the cost of COBRA continuation coverage (for you and any dependent who
received health insurance coverage prior to such termination) and any premium
contribution amount applicable to you as of such termination (“Continuation
Benefits”). Continuation Benefits otherwise receivable by you will be reduced to
the extent benefits of the same type are received by or made available to you
during the applicable one-year period (and any such benefits received by or made
available to you shall be reported by you to the Company). In the event of your
Misconduct, you will repay any Severance Payment and Continuation Benefits
previously paid to you, and your right to receive any future Severance Payments
or Continuation Benefits will terminate.
(b)    In the event of your Involuntary Termination for any reason other than
Misconduct during the Protected Period, other than following a Change in
Control, the vesting of your Annual Grant for 2013 and your Retention Award will
be accelerated, without regard to satisfaction of any performance condition
specified in the latter, such that a number of shares will be issued to you
determined by multiplying the number of shares subject to Annual Grant or the
Target Award specified in the Retention Award, as the case may be, by a fraction
equal to (i) the sum of the number of days during which you were employed by the
Company, plus 365, divided by (ii) 1,460.
(c)    In the event of your Involuntary Termination for any reason other than
Misconduct within the 12-month period following a Change of Control, the vesting
of your Annual Grant for 2013 and your Retention Award will be accelerated in
full (as to the latter, as if any performance condition specified therein had
been satisfied to the maximum extent possible, but subject to any dollar
limitation provided therein).
(d)    In the event that, following your Involuntary Termination for any reason
other than Misconduct within the 12-month period following a Change of Control,
the Company shall fail to pay any amount or provide any benefit when required by
paragraph 10(a) or 10(c) above to do so, you shall be entitled to be reimbursed
by the Company for any out of pocket costs and expenses, including court costs
and reasonable attorneys’ fees, incurred by you in order to enforce the
Company’s obligations under such paragraphs.
(d)    For purposes of this Agreement, “Involuntary Termination” will mean the
termination by the Company of your employment, other than by reason of your
resignation, death or Disability. Involuntary Termination will also be deemed to
have taken place if (a) there shall occur any of (i) a change in your position
as an officer of the Company (or parent or subsidiary employing you) which
materially reduces your level of authority or responsibility, (ii) a reduction
in your level of cash compensation (including base salary and target bonus under
any performance based bonus or incentive programs) by more than 15% unless
pursuant to a

 

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reduction that is also applied to substantially all other executive officers of
the Company, (iii) a relocation of your place of employment by more than 50
miles, provided and only if such change, reduction or relocation is effected by
the Company without your consent, or (iv) a material breach by the Company of
the terms of this letter (any such event described in clauses (i) through (iv)
above being referred to herein as “Good Reason”), (b) you shall within 30 days
of the occurrence of such circumstances provide written notice to the Company
identifying the circumstances giving rise to Good Reason, (c) the Company shall
fail to cure such circumstances within 30 days after receipt of that notice (the
“Cure Period”) and (d) you shall notify the Company within 30 days following the
expiration of such Cure Period that you have resigned from your employment by
the Company due to such Good Reason. During the Cure Period, you will cooperate
as reasonably requested by the Company with efforts undertaken by the Company in
good faith to cure such circumstances.
For purposes of this letter:
The term “Misconduct” will mean (a) gross neglect of the material
responsibilities of your office; (b) commission of any act of fraud,
embezzlement or dishonesty that is in any way related to your employment with
the Company or that, in the reasonable opinion of the Board, adversely affects
the Company’s prospects or reputation or your ability to perform your
obligations or duties to the Company or any of its subsidiaries, (c)
unauthorized use or disclosure of confidential information or trade secrets of
the Company (or any Parent or Subsidiary), (d) indictment with respect to any
crime that could, in the reasonable opinion of the Board, adversely affect the
Company’s prospects or reputation or your ability to perform your obligations or
duties to the Company or any of its subsidiaries, including without limitation
any charges of securities fraud, insider trading, or money laundering, (e) any
conviction of, or plea of guilty or no contest to, a felony, during your
employment with the Company or with respect to an act occurring during your
employment with the Company, (f) any intentional wrongdoing on your part,
whether by omission or commission, which adversely affects the business or
affairs of the Company (or any parent or subsidiary) in a material manner, or
(g) any breach by you of any agreement between you and the Company, including
this agreement or the Proprietary Rights Agreement, as defined below, which, in
the case of any misconduct described in clauses (a) or (f) above that is capable
of being cured, has not been cured by you to the reasonable satisfaction of the
Board of Directors within ten (10) days after receipt by you of written notice
from the Company specifying the nature of such misconduct and referring to this
paragraph.
“Disability” shall mean your inability, for a period of 180 consecutive days or
for 180 intermittent days in any one-year period, to perform the material duties
of your office on a full-time basis as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a licensed
physician selected by the Company or its insurers and reasonably acceptable to
you or your legal representative;

 

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A “Voluntary Termination” will mean your resignation from your employment by the
Company, other than for Good Reason or by reason of your Disability; and
A “Change in Control” will be deemed to have occurred if:
(a)    any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) becomes, after the Effective Date of this Plan, a “beneficial
owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange
Act) (other than the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company’s then outstanding securities;
or
(b)    the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation or other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(c)    the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets,
The foregoing definitions will not affect the Company’s right to terminate your
employment at any time or for any reason, as set forth in paragraph 14. Upon
termination of your employment for any reason, you will be deemed to have
automatically and voluntarily resigned from the Company’s board of directors and
from any and all offices or positions with any entities related to the Company,
including affiliate, parent or subsidiary corporations. You further agree to
assist the Company with respect to such resignations by executing any and all
documents necessary to carry out such resignations.
11.    Paid Time Off. You will accrue vacation at a rate of twenty (20) days per
year, up to the maximum vacation accrual cap for others accruing at that same
rate as specified in the Hittite vacation policy. In addition, Hittite currently
provides eligible employees with designated company paid holidays each year.
12.    Proprietary Rights Agreement and No Conflict with Prior Agreements. As an
employee of Hittite, it is likely that you will become knowledgeable about
confidential and/or

 

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proprietary information related to the operations, products and services of
Hittite and its clients. Similarly, you may have confidential or proprietary
information from prior employers that should not be used or disclosed to anyone
at Hittite. Therefore, you will be required to read, complete and sign a Senior
Executive Non-Disclosure, Non-Competition and Assignment of Intellectual
Property Agreement (the “Proprietary Rights Agreement”), in the form attached as
Appendix B, and return it to Hittite on or prior to your Employment Start Date.
In addition, Hittite expects that you will comply with any existing and/or
continuing legal or contractual obligations that you may have to your former
employers. You hereby certify that Appendix C sets forth (a) any and all
confidential information and intellectual property that you claim as your own or
otherwise intend to exclude from this Agreement because it was developed by you
prior to the date of this Agreement, and (b) each contract, agreement or other
document currently in force that creates any obligation of confidentiality,
non-disclosure or non-competition or similar obligation on your part in favor of
any current or prior employer or other person. By signing this offer letter, you
represent that your employment with Hittite will not breach any such agreement
you have with any third party.
13.    Obligations. During your employment, you will devote your full business
efforts and time to Hittite. This obligation, however, will not preclude you
from engaging in appropriate civic, charitable or religious activities or, with
the consent of the Board, from serving on the boards of directors of companies
that are not competitors to Hittite, as long as the activities do not materially
interfere or conflict with your responsibilities to or your ability to perform
your duties of employment at Hittite. Any outside activities must be in
compliance with and approved if required by Hittite’s Code of Ethics or
Corporate Governance Guidelines.
14.    Employment At-Will. Please understand that this letter does not
constitute a contract of employment for any specific period of time, but will
create an employment at-will relationship that may be terminated at any time by
you or Hittite, with or without cause and with or without advance notice. The
at-will nature of the employment relationship may not be modified or amended
except by written agreement signed by Hittite’s Chairman of the Board or Lead
Director and you.
15.    Code of Ethics and Hittite Policies. Hittite is committed to creating a
positive work environment and conducting business ethically. As an employee of
Hittite, you will be expected to abide by the Company’s policies and procedures
including, but not limited to, Hittite’s Employee Handbook, Hittite’s Code of
Ethics and Hittite’s Corporate Governance Guidelines. Hittite requests that you
review, sign and bring with you on your Employment Start Date, the enclosed Code
of Ethics Acknowledgment Form.
16.    Non-Disparagement. You agree, other than with regard to employees in the
good faith performance of your duties with the Company while employed by the
Company, both during and for five (5) years after your employment with the
Company terminates for any reason, not to

 

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knowingly disparage the Company or its officers, directors, employees or agents
in any manner likely to be harmful to it or them or its or their business,
business reputation or personal reputation. This paragraph will not be deemed to
be violated by statements that are truthful, materially complete and made in
good faith in required response to legal process or governmental inquiry. You
agree that any breach of this non-disparagement provision by you will be deemed
Misconduct and a material breach of this offer letter.
17.    Entire Agreement. This offer letter and the referenced documents and
agreements constitute the entire agreement between you and Hittite with respect
to the subject matter hereof and supersede any and all prior or contemporaneous
oral or written representations, understandings, agreements or communications
between you and Hittite concerning those subject matters.
18.    Eligibility to Work in the United States. In order for Hittite to comply
with United States law, we ask that on your Employment Start Date you bring to
Hittite appropriate documentation to verify your authorization to work in the
United States. Hittite may not employ anyone who cannot provide documentation
showing that they are legally authorized to work in the United States.
19.    Limitation on Payments. Notwithstanding any other provisions of this
letter agreement, in the event that any payment or benefit received or to be
received by you in connection with a Change in Control, whether pursuant to the
terms of this letter agreement or any other plan, arrangement or agreement (all
such payments and benefits, being hereinafter referred to as the “Total
Payments”) would be subject (in whole or part), to the excise tax imposed under
Section 4999 of the Code (the “Excise Tax”), then, after taking into account any
reduction in the Total Payments provided by reason of Section 28OG of the
Internal Revenue Code (the “Code”) in such other plan, arrangement or agreement,
the severance payments hereunder shall be reduced to the extent necessary so
that no portion of the Total Payments is subject to the Excise Tax. The Total
Payments shall be reduced by the Company in its reasonable discretion in the
following order: (A) reduction of any cash payment, excluding any cash payment
with respect to the acceleration of equity awards, that is otherwise payable to
you that is exempt from Section 409A of the Code, (B) reduction of any other
payments or benefits otherwise payable to you on a pro-rata basis or such other
manner that complies with Section 409A of the Code and (C) reduction of any
payment with respect to the acceleration of equity awards that is otherwise
payable to you that is exempt from Section 409A of the Code.
20.    IRC 409A. The benefits payable pursuant to this letter agreement are
intended to comply with the short-term deferral rule under Treasury Regulation
Section 1.409A-l(b)(4) and be exempt from Section 409A of the Code, and will be
construed and interpreted in accordance with such intent, provided that, if any
severance provided at any time hereunder involves non-qualified deferred
compensation within the meaning of Section 409A of the Code, it is intended

 

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to comply with the applicable rules with regard thereto and will be interpreted
accordingly. A termination of employment will not be deemed to have occurred for
purposes of any provision of this letter agreement providing for the payment of
any amounts or benefits upon or following a termination of employment that are
considered “nonqualified deferred compensation” under Section 409A of the Code
unless such termination is also a “separation from service” within the meaning
of Section 409A of the Code and, for purposes of any such provision of this
letter agreement, references to a “termination,” “termination of employment” or
like terms will mean “separation from service.” If you are deemed on the date of
termination to be a “specified employee” within the meaning of that term under
Section 409A(a)(2)(B) of the Code, then with regard to any payment that is
considered non-qualified deferred compensation under Section 409A of the Code
payable on account of a “separation from service,” such payment or benefit will
be made or provided at the date which is the earlier of (A) the date that is
immediately following the expiration of the six (6)-month period measured from
the date of such “separation from service” of you, and (B) the date of your
death (the “Delay Period”). Upon the expiration of the Delay Period, all
payments and benefits delayed pursuant to this paragraph (whether they would
have otherwise been payable in a single sum or in installments in the absence of
such delay) will be paid or reimbursed to you in a lump sum, and any remaining
payments and benefits due under this letter agreement will be paid or provided
in accordance with the normal payment dates specified for them herein. With
regard to any provision herein that provides for reimbursement of costs and
expenses or in-kind benefits, except as permitted by Section 409A of the Code,
(i) the right to reimbursement or in-kind benefits will not be subject to
liquidation or exchange for another benefit, (ii) the amount of expenses
eligible for reimbursement, or in-kind benefits, provided during any taxable
year will not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, provided that the foregoing
clause (ii) will not be violated without regard to expenses reimbursed under any
arrangement covered by Section 105(b) of the Code solely because such expenses
are subject to a limit related to the period the arrangement is in effect and
(iii) such payments will be made on or before the last day of your taxable year
following the taxable year in which the expense occurred. For purposes of
Section 409A of the Code, your right to receive any installment payments
pursuant to this letter agreement will be treated as a right to receive a series
of separate and distinct payments. In no event may you, directly or indirectly,
designate the calendar year of any payment to be made under the letter agreement
that is considered non-qualified deferred compensation. In the event the time
period for considering any release and it becoming effective as a condition of
receiving severance will overlap two calendar years, no amount of such severance
will be paid in the earlier calendar year.
21.    Background Check; Prior Conditions. You represent that all information
provided to Hittite or its agents with regard to your background is true and
correct. You acknowledge that

 

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any breach of this representation would constitute Misconduct and a material
violation of this letter agreement.
The effectiveness of this agreement and commencement of your employment by the
Company shall be conditional upon your delivering to the Company written
confirmation, executed by an authorized representative of any prior employer
named in Appendix C and otherwise satisfactory to the Company, that your
employment by the Company will not constitute a breach of any agreement between
you and such prior employer. This Agreement may be terminated in its entirety by
the Company without further liability, effective immediately upon written notice
to you, if, due to no fault of the Company (including by reason of the failure
of the preceding condition to be satisfied), your Employment Start Date shall
not have occurred by April 30,2013.
We look forward to your joining Hittite. Please indicate your acceptance of this
offer by signing where indicated below and returning an executed copy of this
offer to me at your earliest convenience.
Sincerely,
/s/ Franklin Weigold    
Franklin Weigold
Lead Director
I accept this offer of employment with Hittite Microwave Corporation and agree
to the terms and conditions stated in this letter.
/s/ Rick D. Hess        March 13, 2013    
Rick D. Hess         Date
April 1, 2013    
Planned Employment Start Date
Enclosures
cc: HR file

 

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Appendix A to offer letter
Retention Award Vesting Conditions
The Retention Award will vest on the fourth anniversary of the date of grant of
the award (the “Vesting Date”), provided that you are employed by the Company on
that date, and subject to satisfaction of the Minimum TSR Condition described
below, with the number of shares that vest, if any, being determined as follows:
At the conclusion of the four-year period ending on the Vesting Date (the
“Measurement Period”), the total shareholder return (as defined below) (“TSR”)
of the Company’s common stock over the Measurement Period will be calculated in
a manner specified in the award agreement and ranked by percentile in relation
to the TSRs of a representative group of public semiconductor companies,
including the Company, selected by the Compensation Committee (the “Comparison
Group”), calculated in the same manner over the Measurement Period.
•
If the Company’s TSR is below the 25th percentile of the Comparison Group, no
shares will vest;

•
If the Company’s TSR is at the 50th percentile of the Comparison Group, the
number of shares as to which the award will vest wilt be equal to [insert number
of shares having an aggregate value on the date of grant equal to$1.5 million]
(the “Target Award”)

•
if the Company’s TSR is positive and is at or above the 75th percentile of the
Comparison Group, a number of shares equal to 200% of the Target Award will vest
(or, if less, that number of shares as have an aggregate market value on the
Vesting Date, determined by reference to the closing price of the Company’s
Common Stock on the Vesting Date, as reported by Nasdaq, equal to $4.5 million);
provided, that if the Company’s TSR is zero or negative, no shares in excess of
the Target Award will be issued;

•
If the Company’s TSR is positive and is between the 25th percentile and the 50th
percentile, the number of shares that will vest will be determined by linear
interpolation, consistent with the following illustration;

 

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Company TSR
at the stated percentile
Percentage of
Target Award Issued
At or below 25th
0%
30th
20%
35th
40%
40th
60%
45th
80%
50th
100%

•
If the Company’s TSR is positive and is above the 50lh percentile, the number of
shares that vest will be determined by linear interpolation, consistent with the
following illustration, and subject to the limitations above:

Company TSR
at the stated percentile
Percentage of
Target Award Issued
50th
100%
55th
120%
60th
140%
65th
160%
70th
180%
75th or above
200%

 

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Appendix B to offer letter
FORM OF SENIOR EXECUTIVE
NON DISCLOSURE, NON-COMPETITION AND
ASSIGNMENT OF INTELLECTUAL PROPERTY AGREEMENT
In consideration of my employment in the capacity of President and Chief
Executive Officer of Hittite Microwave Corporation, a Delaware corporation (the
“Company”), and in recognition of the fact that, due to such role, I will or may
have access to Confidential Information (as defined herein), I agree with the
Company as follows:
1.    Prior Obligations. I hereby represent, warrant and agree (i) that I have
the full right to enter into this Agreement and to perform the services that I
have been engaged to provide for or on behalf of the Company (the “Services”),
without any restriction, whatsoever, except as otherwise disclosed on Exhibit A;
(ii) that in the course of performing the Services, I will not violate the terms
or conditions of any agreement between me and any third party or infringe or
wrongfully appropriate any patents, copyrights, trade secrets or other
intellectual property rights of any person or entity anywhere in the world;
(iii) that I have not and will not disclose or use during the Relationship (as
defined below) any confidential information that I acquired or will acquire as a
result of any current or previous employment or consulting arrangement, or under
a previous obligation of confidentiality, with any third party; and (iv) that I
have disclosed to the Company in writing any and all continuing obligations to
current and previous employers and others that require me not to disclose any
information to the Company. For purposes of this Agreement, “Relationship” means
my role as an employee, director, officer, consultant, advisor or independent
contractor, whether or not for compensation, of the Company.
2.    Confidential Information. During the Relationship and thereafter, I will
not, directly or indirectly, use any Confidential Information (as hereinafter
defined) other than pursuant to the Relationship or disclose to anyone outside
of the Company any such Confidential Information whether by private
communication, public address, publication or otherwise or to anyone within the
Company who has not been authorized to receive such information, except as
directed in writing by an authorized representative of the Company. The term
“Confidential Information” as used throughout this Agreement means all trade
secrets, proprietary information, know-how, data, designs, specifications,
processes, customer lists, client lists and other technical or business
information (and any tangible evidence, record or representation thereof),
disclosed to or made known to me at any time, whether prepared, conceived or
developed by me or by an officer, director, consultant or employee of the
Company, or received by the Company from an outside source, which is in the
possession of the Company (whether or not the property of the Company), which in
any way relates to the present or future business of

 

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the Company, which is maintained in confidence by the Company, or which might
permit the Company or its clients or customers to obtain a competitive advantage
over competitors who do not have access to such trade secrets, proprietary
information, or other data or information. Without limiting the generality of
the foregoing, Confidential Information includes:
(a)    any idea, improvement, invention, innovation, development, technical
data, design, formula, device, pattern, concept, art, method, process, machine,
manufacturing method, composition of matter, computer program, software,
firmware, source code, object code, algorithm, subroutine, object module,
schematic, model, diagram, flow chart, chip masking specification, user manual,
training or service manual, product specification, plan for a new or revised
product, sample, compilation of information, or work in process, and any and all
revisions and improvements relating to any Of the foregoing (in each case
whether or not reduced to tangible form); and
(b)    the name or other information of any employee, consultant, supplier,
customer or client, or prospective customer or client, any sales plan, marketing
material, plan or survey, business plan or opportunity, product or development
plan or specification, business proposal, financial record, or business record
or other record or information relating to the present or proposed business of
the Company or any customer or client.
Notwithstanding the foregoing, the term Confidential Information does not apply
to information which the Company has voluntarily disclosed to the public without
restriction, or which has otherwise lawfully entered the public domain.
In the event that I am requested or required (whether by applicable laws, the
requirements of any stock exchange, an order of a court of competent
jurisdiction, a valid administrative, congressional or other order, a subpoena,
a civil investigative demand or similar legal process) to disclose Confidential
Information, I agree to notify the Company promptly of the request or
requirement so that the Company may seek an appropriate protective order or
waive compliance with the provisions of this Section 2. In the event that no
such protective order or other remedy is obtained and that the Company does not
waive compliance with this Section 2. I agree to furnish only that portion of
the Confidential Information which I am reasonably advised by counsel is legally
required and will exercise my best efforts to obtain reliable assurance that
confidential treatment will be accorded the Confidential Information to the
extent possible,
I agree to cooperate with the Company and use my best efforts to prevent the
unauthorized disclosure of all Confidential Information. I will notify the
Company as soon as possible in the event of any unauthorized disclosure of
Confidential Information under this Agreement and to cooperate fully with the
Company in remedying or mitigating the impact and extent of such disclosure.

 

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I understand that the Company from time to time has in its possession
information which is claimed by customers, clients and others to be proprietary
and which the Company has agreed to keep confidential. I agree that all such
information will be Confidential Information for purposes of this Agreement.
3.    Ownership and Assignment of Intellectual Property. I agree that all
originals and all copies of all manuscripts, drawings, prints, manuals,
diagrams, letters, notes, notebooks, reports, models, records, files, memoranda,
plans, sketches and all other documents and materials containing, representing,
evidencing, recording, or constituting any Confidential Information (as defined
in Section 2 above), however and whenever produced (whether by myself or others)
during the course of and in connection with the Relationship, will be the sole
property of the Company. I agree that all Confidential Information and all other
discoveries, inventions, ideas, specifications, designs, concepts, research and
other information, processes, products, methods and improvements, or parts
thereof conceived, developed, or otherwise made by me, alone or jointly with
others and in any way relating to the Company’s business, including but not
limited to its present or proposed products, programs or services or to tasks
assigned to me during the Relationship, whether or not made during my normal
working hours, whether or not patentable or subject to copyright protection,
whether or not reduced to tangible form or reduced to practice, during the
Relationship, whether or not developed, reduced to practice or made on the
Company’s premises, and whether or not disclosed by me to the Company
(hereinafter referred to as “Company Intellectual Property”), together with all
products or services which embody or emulate such Company Intellectual Property,
will be the sole property of the Company and to the fullest extent permitted by
law will be deemed “works made for hire”.
I agree to, and hereby do, assign to the Company all my right, title and
interest throughout the world in and to all Company Intellectual Property and to
anything tangible which evidences, incorporates, constitutes, represents or
records any such Company Intellectual Property. I hereby assign and, to the
extent any such assignment cannot be made at present, I hereby agree to assign
to the Company all copyrights, patents and other proprietary rights I may have
in any such Company Intellectual Property, together with the right to file for
and/or own wholly without restriction United States and foreign patents,
trademarks, and copyrights. I agree to waive, and hereby waive, all moral rights
or proprietary rights in or to any Company Intellectual Property and, to the
extent that such rights may not be waived, agree not to assert such rights
against the Company or its licensees, successors or assigns.
I also agree to, and hereby do, assign to the Company ail my right, title and
interest throughout the world in and to all discoveries, inventions, ideas,
specifications, designs, concepts, research and other information, processes,
products, methods and improvements, or parts thereof conceived, developed, or
otherwise made by me prior to the date hereof relating to the Company’s proposed
business (“Existing IP”) and to anything tangible which evidences,

 

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incorporates, constitutes, represents or records any such Existing IP. I hereby
assign and, to the extent any such assignment cannot be made at present, I
hereby agree to assign to the Company all copyrights, patents and other
proprietary rights I may have in any such Existing IP, together with the right
to file for and/or own wholly without restriction United States and foreign
patents, trademarks, and copyrights. I agree to waive, and hereby waive, all
moral rights or proprietary rights in or to any Existing IP and, to the extent
that such rights may not be waived, agree not to assert such rights against the
Company or its licensees, successors or assigns.
I hereby certify that Exhibit A sets forth any and all confidential information
and intellectual property that I claim as my own or otherwise intend to exclude
from this Agreement because it was developed by me prior to the date of this
Agreement (“Prior Inventions”). I understand that after execution of this
Agreement I will have no right to exclude Confidential Information or Company
Intellectual Property from this Agreement.
I hereby represent and warrant to the Company that all work product delivered to
the Company by me will not, without the Company’s written consent, incorporate
any Prior Invention. If I do incorporate a Prior Invention into work product
delivered to the Company, I hereby grant to the Company a nonexclusive,
royalty-free, paid-up, irrevocable, worldwide license (with the full right to
sublicense) to make, have made, modify, use, sell, offer for sale and import
such Prior Invention.
I hereby represent and warrant to the Company that all work product delivered to
the Company by me will be original and will not without disclosure to the
Company incorporate any “open source” computer code or be in any way subject to
any open source license, including, by way of example, the GNU General Public
License or Lesser General Public License, the Apache Software License, the
Mozilla Public License or any other license that requires disclosure of source
code or otherwise would limit the Company’s proprietary rights in such computer
code.
4.    Obligation to Keep Records. I will make and maintain adequate and current
written records of all Company Intellectual Property, including notebooks and
invention disclosures, which records will be available to and remain the
property of the Company at all times. I will disclose all Company Intellectual
Property promptly, fully and in writing to the Company immediately upon
production or development of the same and at any time upon request.
5.    Obligation to Cooperate. I will, at any time during the Relationship, or
after it terminates, upon request of the Company, execute all documents and
perform all lawful acts which the Company considers necessary or advisable to
secure its rights hereunder and to carry out the intent of this Agreement.
Without limiting the generality of the foregoing, I will assist the Company in
any reasonable manner to obtain for its own benefit patents or copyrights in any
and all countries with respect to all Company Intellectual Property and Existing
IP assigned

 

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pursuant to Section 3, and I will execute, when requested, patent and other
applications and assignments thereof to the Company, or persons designated by
it, and any other lawful documents deemed necessary by the Company to carry out
the purposes of this Agreement, and I will further assist the Company in every
way to enforce any patents and copyrights obtained, including, without
limitation, testifying in any suit or proceeding involving any of said patents
or copyrights or executing any documents deemed necessary by the Company, all
without further consideration than provided for herein. It is understood that
reasonable out-of-pocket expenses of my assistance incurred at the request of
the Company under this Section 5 will be reimbursed by the Company. If the
Company is unable to obtain my signature on any document which I may be required
to sign pursuant to this Agreement, whether because of my physical or mental
incapacity or for any other reason whatsoever, I hereby irrevocably designate
and appoint each of the President and the Secretary of the Company (whether now
or hereafter in office) as my agent and attorney-in-fact to execute any such
document on my behalf, and to take any and all actions as the Company may deem
necessary or desirable in order to protect its rights and interests in any
Company Intellectual Property.
6.    Non-Competition. I understand and acknowledge that Company’s market for
its existing and/or proposed products and services is worldwide. I also
understand and acknowledge that the competitors for the Company’s existing and
proposed products and services are located or may be located worldwide and that
geographic boundaries do not define the scope of competition in this field.
Further, I understand and acknowledge that, during the course of my Relationship
with the Company, I will be given access to and will help develop Confidential
Information, which if such Confidential Information were released to the general
public or to a competitor, would place the Company at a disadvantage with its
competitors. Therefore, in order to protect the Company’s Confidential
Information and good will, during the Relationship and for a period of one year
after the termination of the Relationship for any reason (the “Restricted
Period”), I will not, on my own behalf, or as owner, manager, stockholder,
consultant, director, officer, or employee of any business entity other than the
Company (except as a holder of not more than one (1%) percent of the stock of a
publicly held company):
(a)    participate, directly or indirectly, in any capacity, in any business
activity that is, or is intended to be, in competition with the business of the
Company, as then conducted or actively contemplated by the Company;
(b)    directly or indirectly hire, attempt to hire, or induce or solicit to be
hired, as an employee or consultant or in any other capacity, any employee or
consultant of the Company (or any person who may have been employed or engaged
as a consultant by the Company during the term of the Relationship), or assist
in such hiring by any other person or business entity or encourage any such
employee or consultant to terminate his or her employment or consultancy
relationship with the Company; or

 

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(c)    directly or indirectly solicit, call upon, induce, divert or take away
any current or former customer or client of the Company, or any person or entity
reasonably understood to be a prospective customer or client of the Company.
I acknowledge that if I violate any of the provisions of this Section 6, the
running of the Restricted Period will be extended by the time during which I
engage in such violation(s).
7.    Return of Property. Upon termination of the Relationship, or at any other
time upon request of the Company, I will promptly return or destroy any and all
customer or prospective customer, or client or prospective client, lists,
information or related materials, computer programs, software, electronic data,
specifications, drawings, blueprints, data storage devices, reproductions,
sketches, notes, notebooks, memoranda, reports, records, proposals, business
plans, or copies of them, other documents or materials, tools, equipment, or
other property belonging to the Company or its customers which I may then
possess or have under my control. I further agree that upon termination of the
Relationship I will not take with me any documents or data in any form or of any
description containing or pertaining to Confidential Information or Company
Intellectual Property.
8.    Other Obligations. I acknowledge that the Company from time to time may
have agreements with other persons, including the government of the United
States or other countries and agencies thereof, which impose obligations or
restrictions on the Company regarding inventions made during the course of work
thereunder or regarding the confidential nature of such work. I agree to be
bound by all such obligations and restrictions and to take all action necessary
to discharge the obligations of the Company thereunder.
9.    Miscellaneous
(a)    This Agreement contains the entire and only agreement between me and the
Company with respect to the subject matter hereof, superseding any previous oral
or written communications, representations, understandings, or agreements with
the Company or any officer or representative hereof. In the event of any
inconsistency between this Agreement and any other contract between me and the
Company, the provisions of this Agreement will prevail.
(b)    My obligations under this Agreement will continue in accordance with its
express terms regardless of any changes in my title, position, duties, salary,
compensation or benefits or other terms and conditions of my Relationship with
the Company. My obligations under this Agreement will survive the termination of
the Relationship regardless of the manner of or reasons for such termination,
and regardless of whether such termination constitutes a breach of any other
agreement I may have with the Company. My obligations under this Agreement will
be binding upon my heirs, assigns, executors, administrators and
representatives, and the provisions of this Agreement will inure to the benefit
of and be binding on the successors and

 

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assigns of the Company. I expressly consent to be bound by the provisions of
this Agreement for the benefit of the Company or any parent, subsidiary or
affiliate to whose employ I may be transferred without the necessity that this
Agreement be re-signed at the time of such transfer. I agree to provide a copy
of this Agreement to any prospective employer, partner or co-venturer prior to
entering into an employment, partnership or other business relationship with
such person or entity.
(c)    If any provision of this Agreement is determined to be unenforceable by
any court of competent jurisdiction by reason of its extending for too great a
period of time or over too large a geographic area or over too great a range of
activities, such provision will be interpreted to extend only over the maximum
period of time, geographic area or range of activities as to which it may be
enforceable. If, after application of the immediately preceding sentence, any
provision of this Agreement shall be determined to be invalid, illegal or
otherwise unenforceable by any court of competent jurisdiction, the validity,
legality and enforceability of the other provisions of this Agreement shall not
be affected thereby. Except as otherwise provided in this paragraph, any
invalid, illegal or unenforceable provision of this Agreement shall be
severable, and after any such severance, all other provisions hereof shall
remain in full force and effect.
(d)    I acknowledge and agree that violation of this Agreement by me would
cause irreparable harm to the Company not adequately compensable by money
damages alone, and I therefore agree that, in addition to all other remedies
available to the Company at law, in equity or otherwise, the Company shall be
entitled to injunctive relief to prevent an actual or threatened violation of
this Agreement and to enforce the provisions hereof, without showing or proving
any actual damage to the Company or posting any bond in connection therewith.
(e)    No failure by the Company to insist upon strict compliance with any of
the terms, covenants, or conditions hereof, and no delay or omission by the
Company in exercising any right under this Agreement, will operate as a waiver
of such terms, covenants, conditions or rights. A waiver or consent given by the
Company on any one occasion is effective only in that instance and will not be
construed as a bar to or waiver of any right on any other occasion.
(f)    This Agreement may not be changed, modified, released, discharged,
abandoned, or otherwise amended, in whole or in part, except by an instrument in
writing signed by me and the Company.
(g)    This Agreement will be deemed to be made and entered into in The
Commonwealth of Massachusetts, and be governed by, and construed and enforced in
accordance with, the laws of The Commonwealth of Massachusetts, without regard
to its principles of conflicts of laws. I hereby agree to consent to personal
jurisdiction of the state and federal courts situated within Suffolk County,
Massachusetts for purposes of enforcing this

 

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Agreement, and waive any objection that I might have to personal jurisdiction or
venue in those courts. This Agreement is executed under seal.
[Signature page follows]

 

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BY PLACING MY SIGNATURE HEREUNDER, I ACKNOWLEDGE THAT I HAVE CAREFULLY READ ALL
THE PROVISIONS OF THIS NON-DISCLOSURE, NON-COMPETITION AND ASSIGNMENT OF
INTELLECTUAL PROPERTY AGREEMENT, THAT I AM SATISFIED THAT I UNDERSTAND IT
COMPLETELY, AND THAT I AGREE TO ALL OF ITS TERMS.
Date:
        
Rick D. Hess

Address:    65 Village View Road
Westford, MA 01886
Accepted and Agreed:
HITTITE MICROWAVE CORPORATION
Date:
        
By:
Title:

EXHIBIT A
to Senior Executive
Non-Disclosure, Non-Competition and
Assignment of Intellectual Property Agreement
Excluded Confidential Information and Intellectual Property; Certain Agreements
(a) Identify any and all confidential information and intellectual property that
you claim as your own or otherwise intend to exclude from this Agreement because
it was developed by you prior to the date of this Agreement:
None
(b) Identify each contract, agreement or other document currently in force that
creates any obligation of confidentiality, non-disclosure or non-competition or
similar obligation on y our part in favor of any current or prior employer or
other person:
Employee Nondisclosure and Developments Agreement with American Superconductor
Corporation

Appendix D to Offer Letter
Excluded Confidential Information and Intellectual Property; Certain Agreements
(a) Identify any and all confidential information and intellectual property that
yon claim as your own or otherwise Intend to exclude from this Agreement because
it was developed by you prior to the date of this Agreement;
None
(b) Identify each contract, agreement or other document currently in force that
creates any obligation of confidentiality, non-disclosure or non-competition or
similar obligation on your part in favor of any current or prior employer or
other person:
Employee Nondisclosure and Developments Agreement with American Superconductor
Corporation

Signature Page to NDA