Exhibit 10.1 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”) is made and dated as of October 1, 2020,
between INTRICON CORPORATION, a Pennsylvania corporation (the “Company”), and
Scott Longval (“Executive”).

 

Background 

 

Executive served as the Executive Vice President, Chief Operating Officer and
Chief Financial Officer of the Company through September 30, 2020 and became the
President and Chief Executive Officer of the Company effective October 1, 2020.
Executive wishes to remain employed by the Company pursuant to the terms and
conditions contained in this Agreement. 

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein and
intending to be legally bound, the Company agrees to continue to employ
Executive, and Executive agrees to continue his employment with the Company,
under the following terms and conditions: 

 

SECTION 1. CAPACITY AND DUTIES 

 

1.1       Title and Responsibilities. Executive served as Executive Vice
President, Chief Operating Officer and Chief Financial Officer of the Company
through September 30, 2020 and was promoted to and serves as President and Chief
Executive Officer of the Company effective October 1, 2020 (the “Promotion
Date”). Executive also was appointed to the Board of Directors of the Company
(“Board of Directors”) effective as of the Promotion Date. Executive shall serve
as an officer and director of the Company’s subsidiaries consistent with this
Section, subject to the discretion of the Board of Directors and the boards of
directors of its subsidiaries. Executive shall perform such duties and have such
authority consistent with his position and as may from time to time be specified
by the Board of Directors. Executive also shall continue to serve as Chief
Financial Officer of the Company until a replacement for such position is
appointed by the Board of Directors. 

 

1.2       Full Business Efforts. Executive shall devote his full working time,
energy, skill and best efforts to the performance of his duties hereunder, in a
manner that complies with the Company’s rules and policies and will faithfully
and diligently further the business and interests of the Company. Executive
shall not be employed by, participate or engage in or otherwise be a part of the
management or operation of any business enterprise other than the Company and
its subsidiaries without the prior written consent of the Board of Directors,
which may be granted or withheld in the sole discretion of the Board of
Directors. 

 

SECTION 2. TERM OF EMPLOYMENT 

 

2.1       Term. The term of Executive’s employment with the Company shall
continue until terminated in accordance with Section 4 (Termination of
Employment) (the “Term”). 

 

 

 

 

SECTION 3. COMPENSATION 

 

3.1       Base Salary. Executive’s gross annual salary effective as of the
Promotion Date shall be $400,000. Executive’s annual salary shall be adjusted,
but not decreased (other than as part of an across-the-board salary reduction
that applies in the same manner to all senior executives), from time to time in
the sole discretion of the Board of Directors or the Compensation Committee of
the Board of Directors. Executive’s annual salary, as determined in accordance
with this Section, is referred to as his “Base Salary,” and shall be paid in
installments in accordance with the Company’s then current regular payroll
practices.

 

3.2       Performance Bonuses. Executive shall be entitled to a performance
bonus of up to such percentage of his Base Salary as the Compensation Committee
of the Board of Directors may determine. 

 

3.3       Employee Benefits. During the Term, Executive shall be entitled to
participate in the Company employee benefit plans and programs available to
similarly situated employees. On the date of this Agreement, Company shall issue
Executive a grant of restricted stock units under the 2015 Equity Incentive Plan
equal to $200,000 divided by the closing price of the Company’s common stock on
the date of this Agreement. Such grant will vest in equal one-third annual
installments beginning on the first anniversary of the date of grant. 

 

3.4       Vacation. During the Term, Executive shall be entitled to a paid
vacation in accordance with the Company's then current vacation policy. 

 

3.5       Expense Reimbursement. The Company shall reimburse Executive for all
reasonable business expenses incurred in connection with the performance of
Executive’s duties for the Company, in accordance with the Company’s
reimbursement policy. 

 

3.6       Annual Physical. The Company shall reimburse Executive for the cost of
an annual executive physical. 

 

SECTION 4. TERMINATION OF EMPLOYMENT 

 

4.1       Death of Executive. If Executive dies during the Term, Executive’s
employment shall terminate immediately and Company shall only be obligated to
pay to Executive’s estate amounts due and payable to Executive as of the date of
Executive’s death. If Executive’s spouse (if any) timely elects to continue
health insurance coverage as a spouse and for eligible family members under the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”) after Executive’s
death, the Company shall reimburse Executive’s spouse, on the first regularly
scheduled payroll date of each month during the Section 4.1 COBRA Period (as
defined below), an amount equal to the percentage of Executive’s health care
premium costs paid by the Company as of the date of Executive’s death. “Section
4.1 COBRA Period” means the period beginning with the first day of the calendar
month following the date of Executive death and ending 24 months thereafter. 

 

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4.2       Disability of Executive. If Executive becomes Disabled (as defined
below), then the Board of Directors shall have the right to terminate
Executive’s employment upon 30 days’ prior written notice to Executive at any
time during the continuation of such Disability, in which event the Company
shall not thereafter be obligated to make any further payments hereunder other
than amounts (including salary, bonuses, expense reimbursement, etc.) due and
payable to Executive as of the date of such termination. If Executive timely
elects to continue health insurance coverage for Executive and his eligible
family members under COBRA after Executive’s termination of employment, the
Company shall reimburse Executive, on the first regularly scheduled payroll date
of each month during the COBRA Period (as defined below), an amount equal to the
percentage of Executive’s health care premium costs paid by the Company as of
the date of Executive’s termination. “COBRA Period” means the period beginning
with the first day of the calendar month following the date of Executive’s
termination of employment and ending on the earlier of (i) 18 months thereafter
or (ii) the date Executive becomes eligible to receive health benefits from a
new employer. Nothing in this Agreement shall require Company to continue to pay
any compensation to Executive for any period in which he is unable to perform
his duties hereunder due to physical or mental illness in excess of the
Company’s paid sick leave policy period (other than amounts due under any
disability policy maintained by the Company). “Disability” of Executive or
Executive becoming “Disabled” means that Executive is or has been materially
unable to perform his duties for 180 consecutive days or for 180 days out of 360
consecutive days due to a physical or mental illness. Executive’s Disability
shall be determined in the reasonable judgment of the Board of Directors,
provided, however, if Executive does not agree with a determination to terminate
his employment because of Disability, the question of Executive’s Disability
shall be submitted to an impartial and reputable physician selected by a mutual
agreement of the parties or if the parties cannot agree on such physician, then
each party shall select a physician who shall make a determination, and if those
two physicians have different opinions, then the two physicians shall select a
third physician and such third physician’s determination of Disability shall be
binding on the parties. 

 

4.3       Termination for Cause. Executive’s employment shall terminate
immediately upon notice that the Board of Directors is terminating Executive for
Cause (as defined herein), in which event the Company shall not thereafter be
obligated to make any further payments hereunder other than amounts (including
salary, expense reimbursement, etc., but excluding bonuses) due and payable to
Executive as of the termination. “Cause” means the following, provided that, in
the case of circumstances described in clauses (iv) through (vi) below, the
Company shall have given written notice thereof to Executive, and Executive
shall have failed to remedy the circumstances as determined in the sole
discretion of the Board of Directors within 30 days: 

 

(i)       fraud or dishonesty in connection with Executive’s employment or
theft, misappropriation or embezzlement of the Company’s funds or other
property; 

 

(ii)       conviction of any felony, crime involving fraud or knowing
misrepresentation, or of any other crime (whether or not such felony or crime is
connected with his employment) the effect of which in the reasonable judgment of
the Board of Directors is likely to adversely affect the Company or its
affiliates; 

 

(iii)       material breach of Executive’s obligations under this Agreement; 

 

(iv)       repeated and consistent unauthorized failure of Executive to be
present at work during normal business hours; 

 

(v)       willful violation of any Company policy or any express lawful
direction or requirement established by the Board of Directors, as determined by
a majority of Board of Directors; 

 

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(vi)       insubordination, gross incompetence or misconduct in the performance
of, or gross neglect of, Executive’s duties hereunder, as determined by a
majority of Board of Directors; or 

 

(vii)       use of alcohol or other drugs which interfere with Executive’s
performance of his duties, or use of any illegal drugs or narcotics. 

 

4.4       Termination without Cause. 

 

(a)              If Executive’s employment is terminated by the Company for any
reason other than Cause or Executive’s death or Disability: 

 

(i)       the Company shall pay Executive amounts (including salary, bonuses,
expense reimbursement, etc.) due and payable to Executive as of the termination
of his employment and shall pay Executive an amount equal to Executive's then
current Base Salary for a period of two years after Executive’s termination of
employment under this Section (“Severance Period”) payable in installments in
accordance with the Company’s then current regular payroll practices and dates,
commencing as soon as administratively practicable after the Release described
in Section 4.9 (Release) becomes irrevocable as provided in Section 4.9,
provided that if the 60-day period described in Section 4.9 begins in one
taxable year and ends in a second taxable year, such payments shall not commence
until the second taxable year; 

 

(ii)       in the sole discretion of the Board of Directors, the Company may
elect to pay Executive a prorated amount of the bonus that Executive would have
been entitled to, if he had remained employed, under Section 3.2, (Performance
Bonuses), for the year in which he was terminated (which, if determined to be
paid by the Board, shall be payable as and when the bonus is paid to other
similarly situated officers); 

 

(iii)       if Executive timely elects to continue health insurance coverage for
Executive and his eligible family members under COBRA after Executive’s
termination of employment under this Section, the Company shall reimburse
Executive, on the first regularly scheduled payroll date of each month during
the COBRA Period (as defined in Section 4.2), an amount equal to the percentage
of Executive’s health care premium costs paid by the Company as of the date of
Executive’s termination of employment. 

 

(iv)       Executive shall be entitled to have transferred to him any Company
paid disability policy on the Executive, if the policy so permits, and Executive
shall then assume sole responsibility for payment of premiums on such disability
policy; and 

 

(v)       Executive shall be entitled to have transferred to him any Company
paid life insurance policies on the Executive, if the policies so permit, upon
payment by the Executive to the Company of any cash surrender value of such
policies, and Executive shall assume sole responsibility for payment of premiums
on such life insurance policies. 

 

(b)              Except for the provisions of this Section and Section 4.8,
Equity Awards, the Company shall have no further obligation to Executive
hereunder if Executive’s employment is terminated under this Section. 

 

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4.5       Voluntary Termination. Executive may terminate his employment
hereunder upon 60 days prior written notice to the Company. If Executive
voluntarily terminates his employment under this Section 4.5, the Company shall
not be obligated to make any further payments to Executive under this Agreement
other than amounts (including salary, expense reimbursement, etc., but excluding
bonuses) due and payable to Executive as of his employment termination date.
Additionally, the following provisions shall apply in the event of a voluntary
termination by Executive: 

 

(a)       Executive shall be entitled to have transferred to him any Company
paid disability policy on the Executive, if the policy so permits, and Executive
shall then assume sole responsibility for payment of premiums on such disability
policy. 

 

(b)       Executive shall be entitled to have transferred to him any Company
paid life insurance policies on the Executive, if the policies so permit, upon
payment by the Executive to the Company of any cash surrender value of such
policies, and Executive shall assume sole responsibility for payment of premiums
on such life insurance policies. 

 

4.6       Termination following a Change of Control

 

(a)        If a Change of Control (as hereinafter defined) of the Company occurs
during the Term, and if Executive’s employment by the Company is Involuntarily
Terminated (as hereinafter defined) within one year after such Change of
Control:

 

(i)       the Company shall pay or cause to be paid to Executive, two year’s
Base Salary at the rate being earned by Executive immediately prior to the
Change of Control or immediately prior to the Involuntary Termination, whichever
is greater (the “Change of Control Payment”), together with all accrued and
unpaid bonus and Base Salary due and payable to Executive; provided, however,
that the Company need not make the Change of Control Payment if the Change of
Control is an Asset Sale (as defined below) and the purchaser in such Asset Sale
or an affiliate of such purchaser offers to employ Executive commencing at the
time of closing of the Asset Sale in a position which does not represent a
material diminution in the authority, duties, or responsibilities of Executive
at not less than the same rate of compensation (including Base Salary and good
faith bonus potential) and a comparable level of benefits as Executive was
receiving immediately prior to the Asset Sale and agrees to employ Executive for
at least a one year period after the consummation of the Asset Sale.

 

(ii)       in the sole discretion of the Board of Directors, the Company may
elect to pay Executive a prorated amount of the bonus that Executive would have
been entitled to receive, if he had remained employed, under Section 3.2,
Performance Bonuses, for the year in which he was terminated (which, if
determined to be paid, shall be payable as and when the bonus is paid to other
similarly situated officers);

 

(iii)       if Executive timely elects to continue health insurance coverage for
Executive and his eligible family members under COBRA after Executive’s
Involuntary Termination, the Company shall reimburse Executive, on the first
regularly scheduled payroll date of each month during the COBRA Period (as
defined in Section 4.2), an amount equal to the percentage of Executive’s health
care premium costs paid by the Company as of the date of Executive’s
termination. 

 

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(iv)       Executive shall be entitled to have transferred to him any Company
paid disability policy on the Executive, if the policy so permits, and Executive
shall then assume sole responsibility for payment of premiums on such disability
policy.

 

(v)       Executive shall be entitled to have transferred to him any Company
paid life insurance policies on the Executive, if the policies so permit, upon
payment by the Executive to the Company of any cash surrender value of such
policies, and Executive shall assume sole responsibility for payment of premiums
on such life insurance policies. 

 

(b)      The Company agrees to use its commercially reasonable efforts to
provide that any agreement concerning an Asset Sale shall include a provision
obligating the purchaser to fulfill any of the Company’s obligations to
Executive under this Agreement if the Company fails to fulfill said obligations.

 

(c)       Except as otherwise provided in this Section, any Change of Control
Payment or other sums to be paid to Executive under this Section shall be paid
in a lump sum as soon as administratively practicable after the Release
described in Section 4.9 (Release) becomes irrevocable as provided in Section
4.9, provided that if the 60-day period described in Section 4.9 begins in one
taxable year and ends in a second taxable year, such payment shall not commence
until the second taxable year.

 

(d)      Notwithstanding any other provision hereof, the obligations of the
Company hereunder shall arise, if at all, only in connection with the first
Change of Control to occur after the date hereof; any second Change of Control
which may occur following the first Change of Control shall neither diminish nor
trigger again the obligations set forth herein to the extent that such
obligations may be applicable.

 

(e)      The following terms used herein have the meanings set forth below:

 

(i)       “Asset Sale” means the sale of the assets of the Company (including
the stock or assets of subsidiaries of the Company) to which are attributable
90% or more of the consolidated sales volume of the Company.

 

(ii)       “Change of Control” of the Company means an “Asset Sale” or a “Change
in Majority Stock Ownership.”

 

(iii)       “Change in Majority Stock Ownership” means the acquisition by any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”), including any affiliate or associate
as defined in Rule 12b-2 under the Exchange Act of such person, or any group of
persons acting in concert, other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or
any corporation or other entity owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportion as their
ownership of capital stock of the Company, of “beneficial ownership” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or more of
the combined voting power of the Company’s then outstanding securities.

 

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(iv)       “Involuntary Termination” (or “Involuntarily Terminated”) means (a)
any termination of employment of the Executive by Executive following (i) a
material diminution in the Executive's base compensation; (ii) a material
diminution in the Executive's authority, duties, or responsibilities; (iii) a
material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report, including a requirement
that Executive report to a corporate officer or employee instead of reporting
directly to the Board of Directors; (iv) a material diminution in the budget
over which the Executive retains authority; (v) a material change in the
principal geographic location at which the Executive must perform the services,
unless such change reduces the length of the Executive’s commute (measured
either in time or miles); or (vi) any other action or inaction that constitutes
a material breach by the Company of this Agreement; or (b) any termination of
the employment of Executive by the Company other than for Cause, death or
Disability; provided, however, that none of the events or conditions described
in clause (a) of this paragraph will constitute grounds for Involuntary
Termination unless Executive: (i) shall have first provided written notice to
the Company of the existence of the condition proposed to be relied upon within
90 days of the initial existence of the condition, (ii) shall have given the
Company a period of 30 days during which it may remedy the condition, (iii) the
Company shall have failed to do so during such period and (iv) and Executive’s
resigns his employment effective not later than 30 days following the expiration
of such remedy period. Anything in the Agreement to the contrary
notwithstanding, Executive's employment with the Company shall not be deemed
terminated if he is transferred from one subsidiary of the Company to another
subsidiary of the Company.

 

(f)       Upon the occurrence of a Change of Control, the Company or its
assignee waives, and will not assert, any right to set off the amount of any
claims, liabilities, damages or losses the Company or its assignee may have
against any amounts payable by it to Executive hereunder, and any amounts
payable to Executive in respect of any period prior to the termination of this
Agreement shall be paid when due.

 

(g)      Nothing in this Section shall diminish the Company’s right to terminate
the employment of the Executive prior to a Change of Control or impose any
obligation to make any payment to the Executive in connection with any such
termination otherwise than as provided in the other Sections of this Agreement.

 

(h)      Nothing in this Section shall prejudice Executive’s or his
beneficiary’s right to receive any death, disability, pension, 401(k), qualified
benefit, or other benefits under any contract or plan otherwise due to Executive
upon or following termination.

 

4.7       Withholding; Other Tax Matters. Any payment required under this
Agreement shall be subject to all applicable requirements of law with regard to
withholding, filing, making of reports and the like.

 

4.8       Equity Awards. If during the Term: (a) Executive’s employment is
terminated by the Company for any reason other than for Cause or (b) Executive
terminates his employment under circumstances that would constitute an
Involuntary Termination, then (i) any stock options granted to Executive by the
Company which are outstanding and have not been exercised by Executive prior to
Executive’s termination (X) if unvested, shall accelerate, vest and be
exercisable on the later of the first anniversary of the date of grant of such
options and the date of termination of employment, and (Y) may be exercised by
Executive or his legal representative, estate, personal representative or
beneficiary who acquired the right to exercise such options by bequest or
inheritance, as the case may be, for a period equal to the unexpired term of the
stock option, notwithstanding Executive’s termination, and (ii) any unvested
restricted stock units granted to Executive by the Company shall automatically
vest and become free of all restrictions and conditions, less applicable
withholdings, on the later of the first anniversary of the date of grant of such
restricted stock units and the date of termination of employment,
notwithstanding Executive’s termination; provided, however, that with respect to
any acceleration of stock options or vesting of restricted stock units as a
result of the termination of Executive's employment under clause (a) or (b), it
shall be a condition precedent to such acceleration that Executive shall have
complied with Section 4.9 (Release). For the avoidance of doubt, the treatment
of Executive’s equity awards in the event of a Change of Control shall be
governed by the terms of the 2015 Equity Incentive Plan as it may be amended (or
any applicable successor plan). 

 

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4.9       Release. In the event of the termination of Executive’s employment for
any reason, the Company shall not be obligated to make any payments or provide
continuing benefits under this Agreement (other than payments and benefits
earned by Executive and payable prior to the date of termination) unless
Executive executes and delivers within 60 days after presentation by the
Company, and does not revoke within 15 days after delivery by Executive, an
agreement (“Release”) in a form acceptable to the Company, that: (i) releases
all claims by Executive against the Company and any of its subsidiaries and
affiliates, through date of execution; and (ii) requires Executive to indemnify
the Company if he breaches the Release. 

 

SECTION 5. RESTRICTIVE COVENANTS. 

 

5.1       Confidentiality. Executive acknowledges that the Company, which term
includes subsidiaries and affiliates for purposes of this Section 5 (Restrictive
Covenants), is in a highly competitive business and he has been and will
continue to be substantially involved with the Company’s operations and
management and has been and will continue to have access to trade secrets,
proprietary information and other confidential information relating to the
Company and its customers, which provides the Company with a competitive
advantage and which the Company has a legitimate business interest in
protecting. Executive therefore acknowledges a duty of confidentiality owed to
the Company and shall not, at any time during or after his employment by the
Company, retain in writing, use, divulge, furnish, or make accessible to any
person or entity, without the express authorization of the Board of Directors,
any trade secret, proprietary or confidential information or knowledge of the
Company obtained or acquired by him while so employed. All computer software,
address books, rolodexes, business cards, telephone lists, customer and prospect
lists and preferences, pricing and sales information, contract forms, financial
and budgeting information, business strategies, marketing information, methods,
catalogs, books, records, files and know-how acquired while an employee of the
Company are acknowledged to be the property of the Company and shall not be
duplicated, removed from the Company’s possession or premises or used other than
in the pursuit of the Company’s business. Upon termination of Executive’s
employment for any reason (or, if earlier, upon request of the Company),
Executive shall deliver to the Company all Company property, including all
electronic and paper documents, and copies and summaries thereof, which are in
Executives possession, custody or control. 

 

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5.2       Inventions and Improvements. Executive shall promptly communicate to
the Company all ideas, discoveries, inventions and business opportunities which
are or may be useful to the Company or its business. Executive acknowledges that
all such ideas, discoveries, inventions, and improvements which heretofore have
been or are hereafter made, conceived, or reduced to practice by him at any time
during his employment with the Company and every item of knowledge relating to
the Company’s business interests (including business opportunities) heretofore
or hereafter gained by him at any time during his employment with the Company
are the property of the Company, and Executive hereby irrevocably assigns all
such ideas, discoveries, inventions, improvements, and knowledge to the Company
for its sole use and benefit, without additional compensation. The provisions of
this Section 5.2 shall apply whether such ideas, discoveries, inventions,
improvements or knowledge were or are conceived, made or gained by him alone or
with others, whether during or after usual working hours, whether on or off the
job, whether applicable to matters directly or indirectly related to the
Company’s business interests (including potential business interests), and
whether or not within the specific realm of his duties. It shall be conclusively
presumed that ideas, discoveries, inventions, and improvements relating to the
Company’s business interests or potential business interests conceived by
Executive during the six-month period following termination of his employment
are, for the purposes of this Agreement, conceived prior to termination of his
employment hereunder. Executive shall, upon request of the Company, but at no
expense to Executive, at any time during or after his employment with the
Company, sign all instruments and documents reasonably requested by the Company
and otherwise cooperate with the Company to protect its right to such ideas,
discoveries, inventions, improvements, and knowledge, including applying for,
obtaining, and enforcing patents and copyrights thereon in such countries as the
Company shall determine. 

 

5.3       Non-competition and Non-solicitation. During the term of Executive’s
employment and for (a) one year after termination of employment, or (b) two
years after termination of employment if Executive is entitled to severance
under Section 4.4 (Termination without Cause) or a Change of Control Payment
under Section 4.6 (Termination following a Change of Control), Executive shall
not directly or indirectly: (i) engage in any geographic market served by the
Company or any of its subsidiaries in any activity which competes in whole or in
part with the products, services or activities of the Company at the time of
such termination; (ii) be or become a stockholder, partner, owner, officer,
director or employee or agent of, or a consultant to or give financial or other
assistance to, any person or entity engaged in any such activities; (iii) seek
in competition with the business of the Company to procure orders from or do
business with any customer or business relationship of the Company; (iv)
solicit, or contact with a view to, the engagement or employment by any person
or entity of any person who is an employee or contractor of the Company; (v)
seek to contract with or engage (in such a way as to adversely affect or
interfere with the business of the Company) any person or entity which has been
contracted with or engaged to manufacture, assemble, supply or deliver products,
goods, materials or services to the Company; or (vi) engage in or participate in
any effort or act to induce any of the customers, vendors, manufacturers,
business contacts, consultants, or employees of the Company to take any action
which might be disadvantageous to the Company; provided, however, that nothing
herein shall prohibit Executive and his affiliates from owning, as passive
investors, in the aggregate not more than 5% of the outstanding publicly traded
stock of any corporation so engaged. The duration of Executive’s covenants set
forth in this Section shall be extended by a period of time equal to the number
of days, if any, during which Executive is in violation of the provisions
hereof. To permit the Company to monitor compliance with this Section, Executive
must advise the Company of any new job, including the title and description of
responsibilities and geographic scope, within fourteen (14) days of receipt of
acceptance of the offer. 

 

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5.4       Injunctive and Other Relief. 

 

(a)       Executive acknowledges and agrees that the covenants contained herein
are reasonable to protect the Company’s legitimate business interest, and fair
in light of the Executive’s promotion, raise and equity award, which constitute
adequate consideration. Executive also acknowledges that the Company would be
irreparably harmed by a breach of these covenants and that damages alone would
not be an adequate remedy and accordingly expressly agrees that, in addition to
any other remedies which the Company may have, the Company shall be entitled to
injunctive or other equitable relief in any court of competent jurisdiction for
any breach or threatened breach of any such covenants by Executive. Nothing
contained herein shall prevent or delay the Company from seeking, in any court
of competent jurisdiction, specific performance or other equitable remedies in
the event of any breach or intended breach by Executive of any of his
obligations hereunder. 

 

(b)       Executive understands that in addition to equitable relief available
to the Company, the Company shall be entitled to monetary damages for any period
breach until the termination of such breach, in an amount deemed reasonable to
cover all actual and consequential losses, plus all monies received by Executive
as a result of said breach and all costs and attorneys’ fees incurred by the
Company in enforcing this Agreement. If Executive should use or reveal to any
other person or entity any confidential information, such use or revelation is a
continuing violation for as long as the confidential information is made
available by Executive. 

 

(c)       If any provision of this Section is found to be invalid or
unenforceable by reason of its duration or scope, such term shall be reduced to
a duration or scope to the extent necessary to render it valid and enforceable.
In such event, Executive shall negotiate in good faith to provide the Company
with lawful and enforceable protection that is most nearly equivalent to that
found to be invalid or unenforceable. 

 

(d)       The existence of any claim or cause of action that Executive or any
other person or entity may have against the Company shall not constitute a
defense or bar to the enforcement of this Section 5 (Restrictive Covenants). 

 

(e)       Nothing in this Agreement prohibits Executive reporting possible
violations of federal law or regulation to any governmental agency or entity,
including but not limited to the Department of Justice, the Securities and
Exchange Commission, Congress, the Occupational Safety and Health
Administration, and any agency Inspector General, or making other disclosures
that are protected under the whistleblower provisions of federal and state law
or regulation, including the Defend Trade Secrets Act, which gives Executive
immunity from federal and state civil and criminal liability for disclosures of
trade secrets. Under the Defend Trade Secrets Act, Executive has the right to
(i) disclose in confidence trade secrets to federal, state, and local government
officials, or to an attorney, for the sole purpose of reporting or investigating
a suspected violation of law, and (ii) disclose trade secrets in a document
filed in a lawsuit or other proceeding, but only if the filing is made under
seal and protected from public disclosure. Executive does not need prior
authorization from the Company to make any such reports or disclosures and are
not required to notify the Company that he has made such reports or
disclosures. 

 

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SECTION 6. MISCELLANEOUS 

 

6.1       Duty to Cooperate. At the request of the Company, Executive shall
during and after his employment with the Company provide reasonable assistance
to the Company in connection with any litigation, audit, investigation or other
proceeding or matter involving the Company or any of its affiliates which
Executive has any relevant knowledge or information. The Company will pay
Executive reasonable compensation as mutually agreed for any such services
performed after the Term. The Company agrees that during the Term that at all
times it shall carry appropriate amounts of officers and directors liability
insurance naming the Executive as an insured party. 

 

6.2       Arbitration. All claims and disputes relating to this Agreement or
concerning Executive’s employment or termination, other than claims by the
Company of a breach of Section 5 (Restrictive Covenants), shall be conclusively
resolved by arbitration in Minneapolis, Minnesota, under the then existing rules
of the American Arbitration Association. Judgment upon any award rendered may be
entered by either party in any court of competent jurisdiction. The cost of such
arbitration shall be borne equally by the parties or as otherwise directed by
the arbitrators. 

 

6.3      Section 409A.  

 

(a)       Notwithstanding anything to the contrary in this Agreement, no portion
of the benefits or payments to be made under Section 4, Termination of
Employment, will be payable until Executive has a “separation from service” from
the Company within the meaning of Section 409A of the Internal Revenue Code of
1986 and its governing regulations and guidance (“Section 409A”). In addition,
to the extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2)
(or any successor provision) is necessary to avoid the application of an
additional tax under Section 409A to payments due to Executive upon or following
his “separation from service”, then notwithstanding any other provision of this
Agreement (or any otherwise applicable plan, policy, agreement or arrangement),
any such payments that are otherwise due within six months following Executive’s
“separation from service” (taking into account the preceding sentence of this
paragraph) will be deferred without interest and paid to Executive in a lump sum
immediately following the earlier to occur (i) the expiration of such six month
period or (ii) the death of Executive. For purposes of the application of
Section 409A, each payment in a series of payments will be deemed a separate
payment. 

 

(b)       Notwithstanding anything herein to the contrary or otherwise, except
to the extent any expense, reimbursement or in-kind benefit provided to
Executive does not constitute a “deferral of compensation” within the meaning of
Section 409A, (i) the amount of expenses eligible for reimbursement or in-kind
benefits provided to Executive during any calendar year will not affect the
amount of expenses eligible for reimbursement or in-kind benefits provided to
Executive in any other calendar year, (ii) the reimbursements for expenses for
which Executive is entitled to be reimbursed shall be made on or before the last
day of the calendar year following the calendar year in which the applicable
expense is incurred and (iii) the right to payment or reimbursement or in-kind
benefits hereunder may not be liquidated or exchanged for any other benefit. 

 

(c)       Anything to the contrary herein notwithstanding, all benefits or
payments provided by the Company to Executive that would be deemed to constitute
“nonqualified deferred compensation” within the meaning of Section 409A are
intended to comply with, and shall be interpreted as complying with, Section
409A and all benefits or payments provided by the Company to Executive that are
intended to be exempt from Section 409A shall be interpreted in a manner
consistent with such intent. 

 

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6.4         Notices. All notices hereunder shall be in writing and shall be
sufficiently given if hand-delivered, sent by documented overnight delivery
service or registered or certified mail, postage prepaid, return receipt
requested or by telegram or email, receipt acknowledged, addressed as set forth
below or to such other person and/or at such other address as may be furnished
in writing by any party hereto to the other. Any such notice shall be deemed to
have been given as of the date received, in the case of personal delivery, or on
the date shown on the receipt or confirmation therefor, in all other cases. Any
and all service of process and any other notice in any action, suit or
proceeding-shall be effective against any party if given as provided in this
Agreement; provided that nothing herein shall be deemed to affect the right of
any party to serve process in any other manner permitted by law. 

 

(a)            If to the Company: 

 

IntriCon Corporation

Arden Hills Office

1260 Red Fox Road 

Arden Hills, MN 55112 

Attention: Sara Hill 

Chief Human Resources Officer 

Email: shill@intricon.com

 

(b)           If to Executive: 

 

Scott Longval

________________________

 

________________________ 

Email: slongval@intricon.com 

 

6.5          Entire Agreement; Modification; Advice of Counsel. 

 

(a)       This Agreement constitutes the entire agreement between the parties
hereto with respect to the matters contemplated herein and therein and
supersedes all prior agreements and understandings with respect thereto. Without
limiting the generality of the foregoing, this Agreement supersedes the
Employment Agreement dated as of October 5, 2007, between Executive and the
Company. No amendment, modification, or waiver of this Agreement shall be
effective unless in writing signed by both parties. Neither the failure nor any
delay on the part of any party to exercise any right or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right or remedy preclude any other or further exercise of the same or of any
other right or remedy with respect to such occurrence or with respect to any
other occurrence.

 

(b)       Executive acknowledges that he has been afforded an opportunity to
consult with his counsel with respect to this Agreement. The Company agrees to
reimburse Executive for the cost of consulting with counsel in an amount not to
exceed $5,000. In view of the fact that each of the parties hereto have been
represented by their own counsel and this Agreement has been fully negotiated by
all parties, the legal principle that ambiguities in a document are construed
against the draftsperson of that document shall not apply to this Agreement. 

 

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6.6       Governing Law. This Agreement is made pursuant to, and shall be
construed and enforced in accordance with, the laws of the State of Minnesota
and the federal laws of the United States of America, to the extent applicable,
without giving effect to otherwise applicable principles of conflicts of law. 

 

6.7       Headings; Counterparts. The headings of paragraphs in this Agreement
are for convenience only and shall not affect its interpretation. This Agreement
may be executed in counterparts (including by electronic or facsimile
signature), each of which shall be deemed to be an-original and all of which,
when taken together, shall be deemed to constitute the same Agreement. 

 

6.9       Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive and his heirs and
administrators and the Company and its successors and assigns (including,
without limitation, by purchase of assets or stock, or by merger, or otherwise).
Executive may not assign Executive’s rights or delegate Executive’s obligations
hereunder without the prior written consent of the Company. The Company’s rights
and obligations under this Agreement may be assigned by the Company to the
purchaser or its affiliate in connection with an Asset Sale if the Executive
becomes an employee of the purchaser or an affiliate immediately after the Asset
Sale, in which case the assignee shall expressly assume and agree to perform the
obligations set forth in this Agreement in the same manner and to the same
extent as if it were the Company and the Company shall by virtue thereof and
without further act be released from its obligations hereunder. 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written intending to be legal bound.

 

  INTRICON CORPORATION         By  /s/Sara Hill   Name: Sara Hill   Title: Vice
President and Chief Human Resources Officer         EXECUTIVE   /s/Scott Longval
  Scott Longval

 

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