Exhibit 10.1

 

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January 28, 2015

Bob Tavares

16541 Redmond Way NE #453

Redmond, WA 98052

Dear Bob:

I am pleased to offer you a position with API Technologies Corp. (the “Company”)
as its President and Chief Executive Officer. Subject to the terms and
conditions set forth in this letter, the effective date of your employment shall
be the date that is four (4) calendar weeks from the date of your execution of
this letter or such sooner date as agreed upon by the undersigned parties to
this letter (the “Effective Date”). This letter sets forth the terms and
conditions of the Company’s offer of employment to you.

1. Position. During the term of your employment, you shall serve as the
President and Chief Executive Officer of the Company. You shall also be
appointed to serve as a member of the Board of Directors of the Company (the
“Board of Directors”) on the Effective Date. Thereafter, at each annual meeting
of the Company’s stockholders during the term of your employment, the Board of
Directors will nominate you to serve as a member of the Board of Directors. Your
service as a member of the Board of Directors will be subject to any required
stockholder approval. Upon the termination of your employment for any reason,
you will be deemed to have resigned from the Board of Directors voluntarily,
without any further action required by you, as of the end of your employment,
and you will, at the Board of Directors’ request, execute any documents
necessary to reflect such resignation. Your principal place of employment shall
be located at 4705 S. Apopka Vineland Road, Suite 210, Orlando, Florida or at
such other location as agreed upon by the undersigned parties to this letter.

2. Base Salary. You will be paid an initial annual base salary of $520,000
(“Base Salary”), which will be paid on a semi-monthly basis in accordance with
the Company’s normal payroll procedures. The Compensation Committee of the Board
of Directors (the “Committee”) shall review your Base Salary at least annually,
and you shall be entitled to such increases in Base Salary, if any, as may be
determined in the sole discretion of the Committee. Your Base Salary will be
subject to reduction only in conjunction with, and in proportion to, reductions
in the base salaries of other senior executives of the Company.

3. Incentive Compensation.

(a) Cash Incentive. You will be eligible to receive an annual cash incentive
(“Cash Incentive”) payable for the achievement of performance goals established
by the

 

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Committee with your consultation. Your target Cash Incentive will be 70% of your
Base Salary and your maximum Cash Incentive will be 100% of your Base Salary,
both based on specified levels of performance goals being achieved. The actual
earned Cash Incentive, if any, payable to you for any performance period will
depend upon the extent to which the applicable performance goals specified by
the Committee are achieved and will be decreased or increased for under- or
over-performance. Receipt of the Cash Incentive is contingent on your continued
employment with the Company through the date of payment. Payment of the Cash
Incentive for any fiscal year of the Company will be made within two and
one-half months after the end of such fiscal year. The performance period for
any Cash Incentive award shall be the Company’s fiscal year. You will be
entitled to a minimum Cash Incentive award for the Company’s fiscal year ending
November 30, 2015, of at least $100,000.

(b) Equity Incentive. You will be eligible to receive an annual equity incentive
(“Equity Incentive”) granted for the achievement of performance goals
established by the Committee with your consultation. Any such Equity Incentive
(and the terms thereof, including any accelerated vesting based upon the
performance of the Company’s common stock) shall be determined by the Committee
in its sole discretion; provided, however, that your target Equity Incentive
will be 75% of your Base Salary, based on specified levels of performance goals
being achieved. The actual earned Equity Incentive, if any, payable to you for
any performance period will depend upon the extent to which the applicable
performance goals specified by the Committee are achieved and will be decreased
or increased for under- or over-performance. Receipt of the Equity Incentive is
contingent on your continued employment with the Company through the date of
payment.

4. Signing Bonus.

(a) Cash Bonus. On the Effective Date the Company shall pay you, in cash, a
signing bonus of $360,000 (the “Signing Bonus”); provided, however, that if your
employment with the Company is terminated for Cause (as defined below) (i) prior
to the date that is ten (10) months after the Effective Date, you shall repay to
the Company, within thirty (30) days of such termination, the full amount of the
Signing Bonus; and (ii) on or following the date that is ten (10) months after
the Effective Date, but prior to the date that is twenty (20) months after the
Effective Date, you shall repay to the Company an amount equal to (A) $10,000
multiplied by (B) the remainder of (1) twenty (20) subtracted by (2) the number
of whole months after the Effective Date that have elapsed before the date of
such termination. No repayment of the Signing Bonus shall be required in the
event of a termination of your employment with the Company on or following the
date that is twenty (20) months following the Effective Date.

(b) Initial Grants. On the Effective Date, the Committee shall grant to you,
pursuant to the Amended and Restated API Technologies Corp. 2006 Equity
Incentive Plan (the “Plan”), the following (the “Initial Grant”):

(i) Restricted Stock Unit Grant. Restricted Stock Units (as that term is defined
in the Plan) covering 227,000 shares of Common Stock (as defined in the Plan)
(the “RSU Grant”), which shall fully vest and be paid on the earliest of (A) one
year from the Effective Date, (B) the date on which the Company terminates your
employment for any reason other than for Cause, or (C) the date on which you
resign for Good Reason (as defined below); and

 

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(ii) Option Grant. Options (as that term is defined in the Plan) covering
567,500 shares of Common Stock, which shall (A) have an exercise price equal to
the Fair Market Value (as defined in the Plan) of the Common Stock on the
Effective Date, (B) have a term of ten (10) years from the Effective Date,
(C) be Incentive Stock Options (as defined in the Plan) to the maximum extent
allowed by the limit specified in Section 9.1(b) of the Plan and Non-statutory
Stock Options (as defined in the Plan) to the extent such Options exceed such
limit, and (D) fully vest and become exercisable on the earliest of (1) one year
from the Effective Date, (2) the date on which the Company terminates your
employment for any reason other than for Cause, or (3) the date on which you
resign for Good Reason.

All shares of Common Stock subject to the RSU Grant and the Options shall be
registered by the Company on Form S-8 prior to the vesting thereof. A copy of
the Company’s forms of Restricted Stock Unit Award Agreement, Incentive Stock
Option Agreement and Non-Statutory Stock Option Agreement are attached to this
letter.

5. Relocation & Moving Expenses. The Company shall reimburse you for reasonable
moving expenses incurred by you and your family with respect to their relocation
to your place of principal employment with the Company; provided, however, that
the Company shall not reimburse you for any payment obligations owing as of the
Effective Date with respect to your primary residence. In addition, for a
maximum of six (6) months commencing on the Effective Date, the Company shall
reimburse you for reasonable costs incurred by you for temporary housing in the
area of your place of principal employment with the Company.

6. Life & AD&D Insurance. The Company will provide basic life insurance and
accidental death and dismemberment insurance coverage for you that is equal to
two (2) times your Base Salary. The Company will pay 100% of the premiums to
maintain this coverage throughout your employment.

7. Medical & Dental Insurance. The Company will provide medical and dental
insurance to you and your covered dependents. The Company will pay 100% of the
premiums to maintain this coverage throughout your employment.

8. Other Employee Benefits. As a full-time employee of the Company, you will be
eligible to participate in other employee benefit plans, including vacation and
other benefits that are generally made available to other employees of the
Company, subject to the terms, conditions and eligibility requirements of such
plans and the Company’s policies; provided, however, that you will be credited
four (4) weeks of vacation time on the Effective Date and will accrue four
(4) weeks of vacation time per year, with no cap on accrual thereof. It is
understood that no perquisites, including, but not limited to, an auto
allowance, will be provided to you by the Company.

9. At-Will Employment. The Company is excited about your joining and looks
forward to a beneficial and productive relationship. Nevertheless, you should be
aware that your employment with the Company is for no specified period and
constitutes at-will employment. As

 

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a result, you are free to resign at any time, for any reason or for no reason.
Similarly, the Company is free to conclude its employment relationship with you
at any time, with or without cause, and with or without notice. We request that,
in the event of resignation, you give the Company at least two (2) weeks’
notice. Also, you should note that the Company may modify job titles, salaries
and benefits from time to time as it deems necessary; provided, however, that
the foregoing will not impair any of your rights under this letter.

10. Severance.

(a) Our at-will relationship notwithstanding, if the Company terminates your
employment with the Company for any reason other than for Cause or you resign
for Good Reason (as defined below), in each case in anticipation of or within
twenty-four (24) months after a Change in Control (as defined below) (an
“Involuntary Termination”), and you sign and deliver to the Company within
fifty-two (52) days after such Involuntary Termination (or termination
contemplated by Section 10(c)), and do not revoke within any applicable seven-
(7-) day revocation period (or other revocation period set forth by the Company
ending prior to the sixtieth (60th) day after such Involuntary Termination (or
termination contemplated by Section 10(c)) (such time period being the “Release
Deadline Period”), a general release of claims in the Company’s favor in a form
and substance reasonably acceptable to the Company (a “Release”), then you shall
be entitled to receive as severance pay continuation of your Base Salary,
payable in accordance with the Company’s standard payroll policies as in effect
on the date of such Involuntary Termination (and in no event less frequently
than monthly), including compliance with applicable withholding, for a period of
twelve (12) months (such period is hereinafter referred to as the “Severance
Period”). Payment of this severance pay shall begin on the first regularly
scheduled pay day occurring after your Release becomes effective (i.e., after
your Release has been signed and the applicable revocation period has elapsed
without revocation) (the “Payment Commencement Date”), but in any event no later
than March 15 of the calendar year following the calendar year in which your
Involuntarily Termination occurs; provided, however, that the first such payment
shall include any installments of severance pay that you would have received
prior to such Payment Commencement Date had your Release been effective on the
date of your Involuntary Termination. However, if the Release Deadline Period
spans two (2) calendar years, then the Payment Commencement Date will in any
event be in the second (2nd) calendar year. In addition, any outstanding equity
grants or awards held by you immediately prior to the effectiveness of such
Involuntary Termination will immediately vest and settle in full and such equity
grants shall be exercisable for one (1) year following such Involuntary
Termination.

(b) In the event of an Involuntary Termination, subject to the same conditions
applicable to the receipt of any severance payments otherwise payable during any
Severance Period as set forth in Section 10(a), the Company will pay you the
amount, if any, that would have been paid to you under Section 3 and/or the
Company’s then active bonus plan had you remained employed by the Company for
the full bonus plan performance period, based on the actual performance of you
and/or the Company, as applicable, against the performance metrics applicable
thereto, provided, however, that any such amount otherwise earned shall be
prorated based on the ratio of the number of days you were actually employed by
the Company during the performance period to the total number of days comprising
the performance period as a whole. Such prorated bonus, if any, will be paid at
its regularly scheduled time.

 

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(c) If the Company terminates your employment with the Company for any reason
other than for Cause or your employment terminates as a result of your
resignation for Good Reason, in either case other than in anticipation of or
within twenty-four (24) months after a Change in Control, and you sign, deliver
to the Company and do not revoke a Release within the Release Deadline Period,
then you shall be entitled to receive as severance pay continuation of your Base
Salary, payable in accordance with the Company’s standard payroll policies as in
effect on the date of such termination (and in no event less frequently than
monthly), including compliance with applicable withholding, for a period of
twelve (12) months, which shall be the Severance Period for all purposes under
this letter. Payment of this severance pay shall begin on the Payment
Commencement Date but in any event no later than March 15 of the calendar year
following the calendar year in which your employment terminates; provided,
however, that the first such payment shall include any installments of severance
pay that you would have received prior to such Payment Commencement Date had
your Release been effective on the date of such termination. However, if the
Release Deadline Period spans two (2) calendar years, then the Payment
Commencement Date will in any event be in the second (2nd) calendar year.

(d) You hereby agree that the severance benefits provided for in this Section 10
are the only severance benefits to which you may be entitled in the event of the
termination of your employment with the Company, and that such benefits will be
reduced dollar for dollar by any severance-related amount the Company is
required to pay you by law, corporate policy or other source that would
otherwise duplicate any portion of the severance benefits provided herein.

(e) The following terms shall have the following meanings for purposes of this
letter:

(i) “Affiliate” shall mean any person or entity that controls, is controlled by
or is under common control with the Company, by reason of equity security
ownership, contract or otherwise, as of the date of this letter, or any entity
controlled by any such person or entity, by reason of equity security ownership,
contract or otherwise, whether such control exists as of the date of this letter
or is established at any point in the future.

(ii) “Cause” shall mean (A) a material act of dishonesty committed by you in
connection with your responsibilities as an employee of the Company; (B) your
conviction of, or plea of nolo contendere to, (1) a misdemeanor involving an act
of moral turpitude or (2) a felony; (C) any gross or willful misconduct
(including action or failures to act) by you that causes material harm to the
business or reputation of the Company; (D) loss of any security or other
clearance required to be maintained due to the Company’s contracting with
government agencies; or (E) your (1) material failure to discharge your
employment duties or (2) material breach of this letter or the Confidentiality
Agreement (as defined below), in each case of clauses (1) and (2) after you have
received a written demand for performance from the Board of Directors (or notice
of non-performance, where applicable) specifying the breach of employment
duties, and your failure to cure such breach (where such breach is curable)
within thirty (30) days of the date of such notice from the Board of Directors.

 

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(iii) “Change in Control” shall mean the occurrence of any of the following with
respect to the Company following the Effective Date:

(A) Any “person”, as the term is used in Section 3 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) (other than a Company employee
benefit plan), is or becomes the “beneficial owner” as defined in Rule 16a-1
under the Exchange Act, directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the Company’s outstanding securities
ordinarily having the right to vote in the election of directors;

(B) Individuals who constitute the Board of Directors (the “Incumbent Board”) on
the Effective Date, cease for any reason to constitute at least a majority
thereof; provided, however, that (1) any individual becoming a director
subsequent to the Effective Date whose election proxies shall have been
solicited by the Board of Directors or who shall have been recommended for
election by the Board of Directors or (2) any individual elected or appointed by
the Board of Directors to fill vacancies on the Board of Directors caused by
death or resignation (but not by removal) or to fill newly created directorships
shall be for purposes of this Section 10(e)(iii)(B) considered as though he or
she were a member of the Incumbent Board;

(C) The consummation of a plan of reorganization, merger, or consolidation, in
which the stockholders of the Company own less than 50% of the outstanding
voting securities of the surviving entity; or

(D) A sale of all or substantially all of the Company’s assets, a liquidation or
dissolution of the Company or a similar transaction.

(f) “Good Reason” shall mean your resignation within thirty (30) days following
the expiration of any Company cure period (discussed below) following the
occurrence of one or more of the following, without your consent: (i) the
assignment to you of any duties, or the reduction of your duties, either of
which results in a material diminution of your authority, duties, or
responsibilities with the Company in effect immediately prior to such
assignment, or the removal of you from such position and responsibilities;
(ii) a material change in the geographic location at which you must perform
services (in other words, the relocation of you to a facility that is more than
fifty (50) miles from your current work location); (iii) the failure of the
Company to obtain assumption of this letter by any successor or assign; (iv) any
material breach by the Company of any provision of this letter; (v) a material
reduction in the amount of your then current Base Salary or other compensation,
other than any reduction that is also applicable in a substantially similar
manner and proportion to the other senior executives of the Company and/or
(vi) the failure of the Company to nominate you to the Board of Directors in
accordance with Section 1. You agree you will not resign for Good Reason without
first providing the Company with written notice of the acts or omissions
constituting the grounds for “Good Reason” within thirty (30) days of the
initial existence of the grounds for “Good Reason” and a reasonable cure period
of not less than thirty (30) days following the date of such notice.

(g) To the extent that any payment or distribution to or for your benefit
pursuant to the terms of this letter or any other plan, arrangement or agreement
with the Company, any of its affiliated companies, any person whose actions
result in a change of ownership or effective control covered by
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
“Code”), or any person affiliated with the Company or such person,

 

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whether paid or payable or distributed or distributable pursuant to the terms of
this letter or otherwise (the “Payments”) would be subject to the excise tax
(the “Excise Tax”) imposed by Section 4999 of the Code, then the Company shall
reduce the Payments to the amount that is (after taking into account federal,
state, local and social security taxes at the maximum marginal rates, including
any excise taxes imposed by Section 4999 of the Code) one dollar less than the
amount of the Payments that would subject you to the Excise Tax (the “Safe
Harbor Cap”) if, and only if, such reduction would result in you receiving a
higher net after-tax amount. Unless you shall have given prior written notice
specifying a different order to the Company to effectuate the Safe Harbor Cap,
the Payments to be reduced hereunder will be determined in a manner which has
the least economic cost to you and, to the extent the economic cost is
equivalent, will be reduced in the inverse order of when the Payments would have
been made to you until the reduction specified herein is achieved. Your right to
specify the order of reduction of the Payments shall apply only to the extent
that it does not directly or indirectly alter the time or method of payment of
any amount that is deferred compensation subject to (and not exempt from)
Section 409A of the Code.

11. Retirement. You shall be eligible to participate in the Company’s 401(k)
deferred compensation arrangement, subject to the terms thereof as in effect
from time to time.

12. Section 409A. The parties intend that this letter and the payments and
benefits provided hereunder be exempt from the requirements of Section 409A of
the Code, to the maximum extent possible, whether pursuant to the short-term
deferral exception described in Treas. Reg. Section 1.409A-1(b)(4), the
involuntary separation pay plan exception described in Treas. Reg.
Section 1.409A-1(b)(9)(iii), or otherwise. To the extent Code Section 409A is
applicable to this letter, the parties intend that this letter and any payments
and benefits thereunder comply with the deferral, payout and other limitations
and restrictions imposed under Code Section 409A. Notwithstanding anything
herein to the contrary, this letter shall be interpreted, operated and
administered in a manner consistent with such intentions; provided, however,
that in no event shall the Company or its agents, parents, subsidiaries,
Affiliates or successors be liable for any additional tax, interest or penalty
that may be imposed on you pursuant to Code Section 409A or for any damages
incurred by you as a result of this letter (or the payments or benefits
hereunder) failing to comply with, or be exempt from, Code Section 409A. Without
limiting the generality of the foregoing, and notwithstanding any other
provision of this letter to the contrary:

(a) To the extent Code Section 409A is applicable to this letter, a termination
of employment shall not be deemed to have occurred for purposes of any provision
of this letter providing for the payment of amounts or benefits upon or
following a termination of employment unless such termination is also a
“separation from service,” as defined in Treas. Reg. Section 1.409A-1(h), after
giving effect to the presumptions contained therein (and without regard to the
optional alternative definitions available therein), and, for purposes of any
such provision of this letter, references to “terminate,” “termination,”
“termination of employment” and like terms shall mean separation from service;

(b) If at the time your employment hereunder terminates, you are a “specified
employee,” as defined in Treas. Reg. Section 1.409A-1(i) and determined using
the identification methodology selected by the Company from time to time, or if
none, the default methodology,

 

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then, to the extent necessary to avoid subjecting you to an additional tax or
interest under Code Section 409A, any and all amounts payable under this letter
on account of such termination of employment that would (but for this provision)
be payable within six (6) months following the date of termination, shall
instead be paid in a lump sum on the first day of the seventh (7th) month
following the date on which your employment terminates or, if earlier, upon your
death, except (i) to the extent of amounts that do not constitute a deferral of
compensation within the meaning of Treas. Reg. Section 1.409A-1(b) (including
without limitation by reason of the safe harbor set forth in Treas. Reg.
Section 1.409A-1(b)(9)(iii), as determined by the Company in its reasonable good
faith discretion), (ii) benefits which qualify as excepted welfare benefits
pursuant to Treas. Reg. Section 1.409A-1(a)(5), and (iii) other amounts or
benefits that are not subject to the requirements of Code Section 409A; and

(c) Each payment made under this letter shall be treated as a separate payment
and the right to a series of installment payments under this letter shall be
treated as a right to a series of separate payments.

13. Disclosure Requirement. You have disclosed to the Company any and all
agreements relating to your prior employment that may affect your eligibility to
be employed by the Company or limit the manner in which you may be employed. The
Company understands that such agreements will not prevent you from accepting
your position and/or performing the duties of your position, and you represent
that such is the case.

14. Rules of Workplace Conduct. As a Company employee, you will be expected to
abide by the Company’s rules and standards. Specifically, you will be required
to sign an acknowledgment that you have read and that you understand the
Company’s rules of conduct. Moreover, you agree that, during the term of your
employment with the Company, you will not engage in any other employment,
occupation, consulting or other business activity directly related to the
business in which the Company is now involved or becomes involved during the
term of your employment, nor will you engage in any other activities that
conflict with your obligations to the Company. Similarly, you agree not to bring
any third party confidential information to the Company, including that of your
former employer, and that in performing your duties for the Company you will not
in any way utilize any such information.

15. Execution of Confidentiality Agreement. As a condition of your employment,
you are also required to sign and comply with a Confidentiality and Intellectual
Property Agreement (the “Confidentiality Agreement”), which is incorporated by
reference herein and which requires, among other provisions, the assignment of
patent rights to any invention made during your employment at the Company, and
non-disclosure of Company proprietary information. Please note that we must
receive your signed Confidentiality Agreement before your first day of
employment.

16. Clawback. Any bonuses, incentive or equity based compensation awards granted
to you hereunder will be subject to any executive compensation recovery policy
adopted by the Company pursuant to the requirements of the Dodd-Frank Wall
Street Reform and Consumer Protection Act or the NASDAQ Listing Rules to the
extent such requirements become applicable to the Company.

 

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17. Miscellaneous.

(a) Governing Law. This letter shall be governed by and construed in accordance
with the laws of the State of Florida, without regard to conflicts of laws
principles thereof that would direct the application of the laws of another
jurisdiction.

(b) Entire Agreement/Amendments. This letter, along with the Confidentiality
Agreement and any agreements relating to the Initial Grant, set forth the terms
of your employment with the Company and supersede any prior or contemporaneous
representations or agreements including, but not limited to, any representations
made during your recruitment, interviews or pre-employment negotiations, whether
written or oral. This letter, including, but not limited to, its at-will
employment provision, may not be modified or amended except by a written
agreement signed by the Chairman of the Board of Directors and you.

(c) Assignment. This letter, and all of your rights and duties hereunder, shall
not be assignable or delegable by you. Any purported assignment or delegation by
you in violation of the foregoing shall be null and void ab initio and of no
force and effect. This letter may be assigned by the Company to a person or
entity which is an Affiliate or a successor in interest to substantially all of
the business operations of the Company. Upon such assignment, the rights and
obligations of the Company hereunder shall become the rights and obligations of
such Affiliate or successor person.

(d) Successors and Assigns. This letter shall inure to the benefit of and be
binding upon the parties and their personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, legatees and
permitted assigns.

(e) No Waiver. The failure of a party to insist upon strict adherence to any
term of this letter on any occasion shall not be considered a waiver of such
party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this letter.

(f) Severability. In the event that any one or more of the provisions of this
letter shall be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions of this letter
shall not be affected thereby.

(g) Withholding. The Company may withhold from any amounts payable under this
letter such federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.

(h) Counterparts. This letter may be signed in counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.

(i) Legal Fees. The Company shall reimburse you for the legal fees incurred by
you in connection with the negotiation and execution of this letter, up to a
maximum of $10,000.

 

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(j) Submission to Jurisdiction. THE PARTIES HEREBY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN ORANGE COUNTY, FLORIDA
IN CONNECTION WITH ALL DISPUTED MATTERS BASED UPON, RELATED TO OR ARISING OUT OF
THIS LETTER OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

(k) Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, EACH OF THE PARTIES HERETO WAIVES AND COVENANTS THAT IT WILL
NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF
THIS LETTER OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE.

This offer of employment will terminate if it is not accepted, signed and
returned within seven (7) days of the date of this letter. To accept the
Company’s offer, please sign and date this letter in the space provided below. A
duplicate original is enclosed for your records.

We look forward to your favorable reply and to working with you at API
Technologies Corp.

 

Sincerely,

/s/ Brian Kahn

Brian Kahn Chairman of the Board of Directors

 

Agreed to and accepted: By:

/s/ Robert Tavares

Name: Bob Tavares Date: 29/Jan/2015

Enclosures

Duplicate Original Letter

Form of Restricted Stock Unit Award Agreement

Form of Incentive Stock Option Agreement

Form of Non-Statutory Stock Option Agreement

Confidentiality and Intellectual Property Agreement

 

4705 S. Apopka Vineland Road, Suite 210, Orlando, Florida 32819