Exhibit 10.2

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Richard D. Smith

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated and effective as of
May 12, 2009, is between Allied Motion Technologies Inc., a Colorado corporation
(the “Company”), and Richard D. Smith (“Employee”).

 

RECITALS:

 

WHEREAS, the Employee has acknowledged skills and experience in the business
conducted by the Company and the Company desires to obtain the benefit of the
Employee’s knowledge, skills and experience and assure itself of the ongoing
right to Employee’s services from and after the date hereof, and is willing to
do so on the terms and conditions set forth in this Agreement; and

 

WHEREAS, Employee is willing and able to render services to the Company, from
and after the date hereof, on the terms and conditions set forth in this
Agreement; and

 

WHEREAS, the Company and Employee entered into an Employment Agreement effective
as of August 1, 2003; and

 

WHEREAS, the Company and Employee desire to amend and restate the Employment
Agreement in order to recognize that the position and responsibilities of
Employee have changed.

 

AGREEMENT:

 

NOW, THEREFORE, the Company and Employee agree as follows:

 

1.             EMPLOYMENT.

 

1.1                               TITLE AND DUTIES OF EMPLOYEE.  THE COMPANY
HEREBY EMPLOYS EMPLOYEE AS THE EXECUTIVE CHAIRMAN OF THE BOARD AND CHIEF
FINANCIAL OFFICER OF THE COMPANY AND EMPLOYEE HEREBY ACCEPTS SUCH EMPLOYMENT
WITH THE COMPANY.

 

(A)           POWERS AND DUTIES.  EMPLOYEE SHALL HAVE THE POWERS AND DUTIES
NORMALLY INCIDENT TO THE OFFICES HE HOLDS AS PROVIDED IN THE BYLAWS OF THE
COMPANY AND SUCH OTHER DUTIES AS SHALL BE DETERMINED FROM TIME TO TIME BY THE
COMPANY’S BOARD OF DIRECTORS (THE “BOARD”) CONSISTENT WITH EMPLOYEE’S
QUALIFICATIONS AND THE BEST INTEREST OF THE COMPANY.

 

(B)           CONTRACT RIGHTS.  FAILURE OF THE BOARD TO ELECT EMPLOYEE AS
EXECUTIVE CHAIRMAN OF THE BOARD, SUBJECT TO EMPLOYEE BEING A MEMBER OF THE BOARD
OF DIRECTORS, OR CHIEF FINANCIAL OFFICER, OR ACTION BY THE BOARD

 

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TO REMOVE EMPLOYEE FROM SUCH OFFICES, SHALL BE WITHOUT PREJUDICE TO THE CONTRACT
RIGHTS IN THIS AGREEMENT.

 

(C)           SERVICE ON THE BOARD.  SO LONG AS EMPLOYEE IS WILLING TO SERVE ON
THE BOARD AND HAS NOT BEEN TERMINATED FOR CAUSE, THE BOARD SHALL NOMINATE
EMPLOYEE FOR ELECTION TO THE BOARD. FAILURE TO ELECT TO, OR REMOVAL FROM, THE
BOARD OF DIRECTORS SHALL NOT CONSTITUTE RESIGNATION FROM OR TERMINATION OF
EMPLOYMENT AS CHIEF FINANCIAL OFFICER. FAILURE TO ELECT TO, OR REMOVAL FROM, THE
POSITION OF CHIEF FINANCIAL OFFICER OR TERMINATION OF THIS AGREEMENT FOR ANY
REASON SHALL NOT CONSTITUTE RESIGNATION FROM THE BOARD OF DIRECTORS OR
TERMINATION OF EMPLOYEE’S SERVICE ON THE BOARD.

 

1.2                               PERFORMANCE.  THROUGHOUT THE PERIOD OF
EMPLOYEE’S EMPLOYMENT HEREUNDER, EMPLOYEE SHALL DEVOTE EMPLOYEE’S FULL BUSINESS
TIME, ATTENTION, KNOWLEDGE AND SKILLS, FAITHFULLY, DILIGENTLY, AND TO THE BEST
OF EMPLOYEE’S ABILITY, TO THE ACTIVE PERFORMANCE OF EMPLOYEE’S DUTIES AND
RESPONSIBILITIES HEREUNDER; PROVIDED, HOWEVER, EMPLOYEE MAY SERVE AS A DIRECTOR
OF OTHER CORPORATIONS AND ENTITIES AND MAY ENGAGE IN OTHER ACTIVITIES TO THE
EXTENT THEY DO NOT INHIBIT THE PERFORMANCE OF EMPLOYEE’S DUTIES HEREUNDER, OR
CONFLICT WITH THE BUSINESS OF THE COMPANY.  EMPLOYEE SHALL DISCLOSE TO THE
COMPANY THE NAME OF ANY CORPORATION OR ENTITY ON WHICH HE SERVES AS A DIRECTOR
OR IN A SIMILAR CAPACITY AND DESCRIBE OTHER ACTIVITIES THAT ARE NOT PERSONAL IN
NATURE IN WHICH HE ENGAGES.  EMPLOYEE SHALL DO SUCH TRAVELING AS REASONABLY MAY
BE REQUIRED IN CONNECTION WITH THE PERFORMANCE OF SUCH DUTIES AND
RESPONSIBILITIES.  EMPLOYEE SHALL NOT BE REQUIRED TO RELOCATE EMPLOYEE’S
RESIDENCE AND EMPLOYEE MAY CONDUCT WORK OUT OF HIS RESIDENCE FROM TIME TO TIME
AS HE DETERMINES APPROPRIATE.

 

2.             TERM OF EMPLOYMENT.  UNLESS TERMINATED AS PROVIDED IN SECTION 4
HEREOF, THE TERM OF THIS AGREEMENT SHALL EXTEND TO MAY 12, 2014 (THE “INITIAL
PERIOD”), AND THEREAFTER SHALL AUTOMATICALLY CONTINUE ON A YEAR TO YEAR BASIS
(EACH A “SUBSEQUENT PERIOD”) UNLESS THE COMPANY OR EMPLOYEE SHALL GIVE THE OTHER
PARTY NOTICE AT LEAST 60 DAYS PRIOR TO THE TERMINATION OF THE INITIAL PERIOD OR
ANY SUBSEQUENT PERIOD OF ITS OR HIS ELECTION NOT TO RENEW THE TERM OF
EMPLOYMENT, IN WHICH CASE THIS AGREEMENT SHALL TERMINATE AT THE END OF THE
PERIOD IN WHICH THE NOTICE IS GIVEN; PROVIDED, HOWEVER, THE COMPANY’S OBLIGATION
TO PAY COMPENSATION PURSUANT TO SECTION 3 OR PERFORM ANY OTHER ACTS WITH RESPECT
TO THE LAST YEAR FOR WHICH THIS AGREEMENT IS EFFECTIVE SHALL CONTINUE AND BE
ENFORCEABLE NOTWITHSTANDING THE TERMINATION OF THIS AGREEMENT.

 

3.             COMPENSATION BENEFITS.

 

3.1                               BASE SALARY.  AS COMPENSATION FOR SERVICES TO
BE RENDERED BY EMPLOYEE HEREUNDER, THE COMPANY SHALL PAY TO EMPLOYEE AN ANNUAL
SALARY OF NOT LESS THAN $285,000 PER YEAR, PAYABLE IN PERIODIC INSTALLMENTS (BUT
IN NO EVENT LESS FREQUENTLY THAN MONTHLY) IN ACCORDANCE WITH THE STANDARD
PAYROLL PRACTICES OF THE COMPANY IN EFFECT FROM TIME TO TIME.  EMPLOYEE’S SALARY
SHALL BE REVIEWED ANNUALLY FOR INCREASE (BUT NOT DECREASE) ON A MERIT BASIS. 
SUCH REVIEW SHALL BE CONDUCTED AT THE FIRST MEETING OF THE BOARD

 

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AFTER THE END OF A FISCAL YEAR BUT NOT LATER THAN FEBRUARY 28 OF EACH YEAR AND
THE EFFECTIVE DATE OF ANY SUCH INCREASE SHALL BE MARCH 1.  THE EMPLOYEE’S ANNUAL
SALARY IN EFFECT FROM YEAR TO YEAR IS HEREIN REFERRED TO AS THE “BASE SALARY”.

 

3.2                               ANNUAL BONUS.

 

(A)           PERFORMANCE CRITERIA.  THE COMPANY SHALL PAY TO EMPLOYEE AN ANNUAL
BONUS WITH RESPECT TO EACH FISCAL YEAR IN AMOUNTS DETERMINED AS PROVIDED BY THE
BOARD BASED ON ACHIEVING PERFORMANCE CRITERIA ESTABLISHED AT THE BEGINNING OF
EACH FISCAL YEAR.  SUCH PERFORMANCE CRITERIA WILL RECOGNIZE THE OVERALL
FINANCIAL PERFORMANCE OF THE COMPANY AND THE IMPROVEMENTS MADE IN FINANCIAL
RESULTS.

 

(B)           TIME OF PAYMENT.  THE FIRST PAYMENT OF THE ANNUAL BONUS TO
EMPLOYEE PURSUANT TO SECTION 3.2 (A) SHALL BE WITH RESPECT TO THE FISCAL YEAR
ENDED DECEMBER 31, 2009.  AN ANNUAL BONUS PROVIDED HEREIN SHALL BE PAID, SUBJECT
TO ACHIEVING THE PERFORMANCE CRITERIA, WITH RESPECT TO EACH FISCAL YEAR
THEREAFTER DURING THE TERM OF THIS AGREEMENT.  ALL ANNUAL BONUSES PAYABLE UNDER
SECTION 3.2 (A) SHALL BE PAID IN CASH IMMEDIATELY FOLLOWING THE FIRST BOARD
MEETING HELD AFTER THE END OF THE APPLICABLE FISCAL YEAR AT WHICH THE ANNUAL
BONUS CALCULATION IS APPROVED BY THE BOARD.  IN NO EVENT SHALL PAYMENT BE MADE
LATER THAN MARCH 15TH OF THE YEAR FOLLOWING THE YEAR IN WHICH THE ANNUAL BONUS
WAS EARNED.

 

3.3                               LONG-TERM INCENTIVE PAYMENT PLAN.  ON OR
BEFORE THE FIRST BOARD MEETING HELD IN A CURRENT FISCAL YEAR, THE BOARD SHALL
CONSIDER WHETHER TO AWARD RESTRICTED COMMON STOCK (“RESTRICTED STOCK”) OR GRANT
OPTIONS TO PURCHASE THE COMPANY’S COMMON STOCK (“STOCK OPTIONS”) TO EMPLOYEE,
INCLUDING THE TERMS AND THE PROVISIONS OF ANY RESTRICTED STOCK OR STOCK
OPTIONS.  AWARDS OF RESTRICTED STOCK OR GRANTS OF STOCK OPTIONS PROVIDED UNDER
THIS SECTION 3.3 ARE REFERRED TO HEREIN AS “LONG-TERM INCENTIVE PAYOUT”.  IN
MAKING ITS DETERMINATION THE BOARD SHALL CONSIDER, AMONG OTHER THINGS, THE
EMPLOYEE’S RESPONSIBILITIES AND EFFORTS AND PERFORMANCE UNDER THIS AGREEMENT IN
RELATION TO THE BUSINESS PLAN AND FORECAST, THE RELATIONSHIP BETWEEN THE
BENEFITS OF RESTRICTED STOCK OR STOCK OPTIONS AND IMPROVING SHAREHOLDER VALUE,
THE DEVELOPMENT OF THE COMPANY’S PRODUCTS AND THE PERFORMANCE OF THE COMPANY’S
PRODUCTS IN THE MARKETPLACE, IMPACT OF THE COMPANY’S PRODUCTS AND PRODUCT
DEVELOPMENT ON FUTURE PROSPECTS FOR THE COMPANY, AND AN INCREASE IN THE TRADING
PRICE PER SHARE OF THE COMPANY’S COMMON STOCK.  THE BOARD SHALL ALSO CONSIDER
CUSTOMARY BUSINESS PRACTICES AND LONG-TERM INCENTIVE PAYMENT PLAN BENEFITS
GRANTED TO EMPLOYEE IN COMPARISON TO SUCH BENEFITS PROVIDED TO OTHER EXECUTIVES
IN POSITIONS SIMILAR TO THE EMPLOYEE.

 

3.4                               EXPENSES.  THE COMPANY PROMPTLY SHALL
REIMBURSE EMPLOYEE, UPON PRESENTATION OF APPROPRIATE RECEIPTS AND VOUCHERS, FOR
ANY REASONABLE

 

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BUSINESS EXPENSES INCURRED BY EMPLOYEE IN CONNECTION WITH THE PERFORMANCE OF HIS
DUTIES AND RESPONSIBILITIES HEREUNDER.

 

3.5                               VACATION.  THROUGHOUT THE PERIOD OF EMPLOYEE’S
EMPLOYMENT HEREUNDER, EMPLOYEE SHALL BE ENTITLED TO TAKE, FROM TIME TO TIME, 5
WEEKS OF VACATION ANNUALLY WITH PAY AT SUCH TIMES AS SHALL BE MUTUALLY
CONVENIENT TO EMPLOYEE AND THE COMPANY.

 

3.6                               BENEFITS AND PERQUISITES.

 

(A)           PARTICIPATION.  THE COMPANY SHALL MAKE AVAILABLE TO EMPLOYEE,
THROUGHOUT THE PERIOD OF EMPLOYMENT HEREUNDER, SUCH BENEFITS AND PERQUISITES AS
ARE GENERALLY PROVIDED BY THE COMPANY TO ITS EMPLOYEES.  WITHOUT LIMITING THE
FOREGOING, EMPLOYEE SHALL BE ELIGIBLE TO PARTICIPATE IN ANY BONUS PLAN, STOCK
OPTION PLAN, STOCK PURCHASE PLAN, PENSION PLAN AND GROUP LIFE, HEALTH AND
ACCIDENT INSURANCE PLANS AS THE COMPANY SHALL CONTINUE TO PROVIDE OR WHICH MAY
HEREAFTER BE ADOPTED BY THE COMPANY FOR THE BENEFIT OF ITS EMPLOYEES GENERALLY. 
THE COMPANY SHALL PROVIDE AND PAY THE PREMIUM ON LONG TERM DISABILITY INSURANCE
FOR EMPLOYEE.  THE COMPANY SHALL NOT MAKE ANY CHANGES IN SUCH PLANS OR
ARRANGEMENTS WHICH WOULD ADVERSELY AFFECT THE EMPLOYEE’S RIGHTS OR BENEFITS
THEREUNDER, UNLESS SUCH CHANGES OCCUR PURSUANT TO A PROGRAM APPLICABLE TO ALL
EMPLOYEES OF THE COMPANY AND DO NOT RESULT IN A PROPORTIONATELY GREATER
REDUCTION IN THE RIGHTS OF, OR BENEFITS TO, THE EMPLOYEE AS COMPARED WITH ANY
OTHER EMPLOYEE OF THE COMPANY.

 

(B)           OFFICE SPACE.  THE COMPANY SHALL PROVIDE OFFICE SPACE AND AT THE
COMPANY’S OFFICES SUITABLE TO EMPLOYEE’S POSITION AND WILL PROVIDE THE
EQUIPMENT, INCLUDING A COMPUTER, PRINTER AND PHONE, FOR EMPLOYEE TO MAINTAIN AN
OFFICE AT HIS HOME.

 

(C)           LIFE INSURANCE.  THE COMPANY SHALL PROVIDE WHOLE LIFE INSURANCE ON
THE LIFE OF EMPLOYEE WITH DEATH BENEFITS OF $500,000 WITH ALL PREMIUMS PAID BY
THE COMPANY.  IN ADDITION, THE COMPANY SHALL PAY AN ADDITIONAL $10,000 IN ANNUAL
PREMIUMS TOWARD AN ADDITIONAL LIFE INSURANCE POLICY ON THE LIFE OF THE
EMPLOYEE.  EMPLOYEE MAY DESIGNATE THE BENEFICIARY OR BENEFICIARIES OF SUCH
POLICIES.

 

(D)           AUTOMOBILE.  THE COMPANY SHALL PROVIDE A NEW AUTOMOBILE NO LESS
FREQUENTLY THAN EVERY 3 YEARS FOR EMPLOYEE’S SOLE USE AND THE COMPANY SHALL PAY
ALL COSTS OF OPERATING AND MAINTAINING OR REPAIRING SUCH AUTOMOBILE.  AT OR
BEFORE THE TIME OF REPLACEMENT, EMPLOYEE SHALL HAVE THE RIGHT TO PURCHASE, AT
ITS DEPRECIATED COST TO THE COMPANY, THE AUTOMOBILE PREVIOUSLY PROVIDED.

 

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(E)           BENEFIT PLANS.  THE COMPANY WILL MAKE NON-QUALIFIED CONTRIBUTIONS
FOR EMPLOYEE’S BENEFIT UNDER THE COMPANY’S IRS §401(K) PLAN ON THE SAME BASIS AS
IT MAKES CONTRIBUTIONS FOR OTHER EMPLOYEES.

 

(F)            RETIREMENT PLAN BENEFITS.  THE COMPANY WILL PROVIDE TO EMPLOYEE
RETIREMENT PLAN BENEFITS UNDER ANY PLAN ON THE SAME BASIS IT PROVIDES BENEFITS
TO OTHER EMPLOYEES.

 

4.             TERMINATION.  THIS AGREEMENT MAY BE TERMINATED BY THE COMPANY OR
EMPLOYEE AS PROVIDED IN THIS SECTION 4.  NOTWITHSTANDING ANYTHING IN THIS
AGREEMENT TO THE CONTRARY, ANY PAYMENT THAT IS SUBJECT TO CODE SECTION 409A AND
IS PAYABLE UPON TERMINATION OF THIS AGREEMENT DUE TO RETIREMENT, DISABILITY, OR
TERMINATION OF EMPLOYMENT OTHER THAN FOR CAUSE, SHALL ONLY BE MADE IF SUCH
TERMINATION OTHERWISE MEETS THE DEFINITION OF A “SEPARATION FROM SERVICE” AS
DEFINED UNDER CODE SECTION 409A.  FURTHERMORE, IF EMPLOYEE IS A “SPECIFIED
EMPLOYEE” WITHIN THE MEANING OF CODE SECTION 409A, THE PAYMENT OF ANY AMOUNT
THAT IS BOTH SUBJECT TO CODE SECTION 409A AND DUE UPON TERMINATION OF THIS
AGREEMENT SHALL NOT BE MADE UNTIL AT LEAST SIX MONTHS FOLLOWING EMPLOYEE’S
SEPARATION FROM SERVICE.  AT THAT TIME, ALL AMOUNTS, IF ANY, THAT WOULD HAVE
BEEN PAID DURING THE SIX-MONTH PERIOD SHALL BE PAID TO EMPLOYEE, AND THEREAFTER
ALL PAYMENTS SHALL BE MADE AS IF THERE HAD BEEN NO SIX-MONTH DELAY.

 

4.1                               CAUSE.

 

(A)           DEFINITION.  THIS AGREEMENT MAY BE TERMINATED AT ANY TIME AT THE
OPTION OF THE COMPANY FOR CAUSE (AS SUCH TERM IS HEREINAFTER DEFINED), EFFECTIVE
AS PROVIDED IN SECTION 4.9.  AS USED HEREIN, THE TERM “CAUSE” SHALL MEAN AND BE
LIMITED TO: (I) CONVICTION OF, THE INDICTMENT FOR (OR ITS PROCEDURAL
EQUIVALENT), OR THE ENTERING OF A GUILTY PLEA OR PLEA OF NO CONTEST WITH RESPECT
TO, A FELONY; (II) THE WILLFUL VIOLATION OF THE TERMS OF THIS AGREEMENT;
(III) GROSS NEGLIGENCE BY EMPLOYEE IN CONNECTION WITH THE PERFORMANCE OF
EMPLOYEE’S DUTIES, RESPONSIBILITIES, AGREEMENTS AND COVENANTS HEREOF, WHICH
VIOLATION OR NEGLIGENCE SHALL CONTINUE UNCORRECTED FOR A PERIOD OF 45 DAYS AFTER
RECEIPT BY EMPLOYEE OF A WRITTEN NOTICE FROM THE COMPANY; (IV) THE APPROPRIATION
(OR ATTEMPTED APPROPRIATION) OF A MATERIAL BUSINESS OPPORTUNITY OF THE COMPANY,
INCLUDING ATTEMPTING TO SECURE OR SECURING ANY PERSONAL PROFIT IN CONNECTION
WITH ANY TRANSACTION ENTERED INTO ON BEHALF OF THE COMPANY; (V) THE
MISAPPROPRIATION (OR ATTEMPTED MISAPPROPRIATION) OF ANY OF THE COMPANY’S FUNDS
OR PROPERTY; OR (VI) THE EXCESSIVE USE (FOLLOWING AT LEAST ONE WRITTEN WARNING)
OF ALCOHOL OR ANY ILLEGAL USE OF DRUGS OR NARCOTICS.  FOR PURPOSES OF THIS
SECTION, NO ACT OR FAILURE TO ACT ON THE EMPLOYEE’S PART SHALL BE CONSIDERED
“WILLFUL” UNLESS DONE, OR OMITTED TO BE DONE, BY HIM NOT IN GOOD FAITH AND
WITHOUT REASONABLE BELIEF THAT HIS ACTION OR OMISSION WAS IN THE BEST INTEREST
OF THE COMPANY.  NOTWITHSTANDING THE FOREGOING, EMPLOYEE SHALL NOT BE DEEMED TO
HAVE BEEN TERMINATED FOR CAUSE WITHOUT WRITTEN NOTICE PURSUANT TO SECTION 13 AND
PROVIDING EMPLOYEE AN OPPORTUNITY TO BE HEARD BEFORE THE BOARD WITH THE
PROVISIONS RELIED UPON FOR TERMINATION PROVIDED IN REASONABLE DETAIL.

 

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(B)           SALARY; BENEFITS; BONUSES.  UPON TERMINATION FOR CAUSE, THE
COMPANY SHALL (I) CONTINUE THE BASE SALARY THROUGH THE DATE OF TERMINATION,
(II) PAY ALL FRINGE BENEFITS THROUGH THE END OF THE CALENDAR MONTH IN WHICH
TERMINATION OCCURS, AND (III) PAY ANY ANNUAL BONUSES PURSUANT TO SECTION 3.2
TREATING THE EFFECTIVE DATE OF TERMINATION AS BEING THE LAST DAY OF THE FISCAL
YEAR IN WHICH TERMINATION UNDER THIS SECTION 4 OCCURS.

 

4.2                               RETIREMENT.  TERMINATION OF EMPLOYMENT BASED
ON “RETIREMENT” SHALL MEAN TERMINATION IN ACCORDANCE WITH ANY RETIREMENT
ARRANGEMENT ESTABLISHED WITH EMPLOYEE’S CONSENT, INCLUDING SETTLEMENT FOR THE
ANNUAL BONUS PURSUANT TO SECTION 3.2.

 

4.3                               DEATH OF EMPLOYEE.  THIS AGREEMENT SHALL
TERMINATE UPON THE DEATH OF EMPLOYEE; PROVIDED, HOWEVER, THE COMPANY SHALL
(I) CONTINUE EMPLOYEE’S BASE SALARY THROUGH THE MONTH IN WHICH DEATH OCCURS AND
FOR THE FOLLOWING THREE MONTHS AND (II) SHALL MAKE PAYMENTS AS PROVIDED IN
SECTION 4.5 IN PLACE OF (X) ANNUAL BONUS PAYMENTS PROVIDED IN SECTION 3.2 AND
(Y) THE LONG-TERM INCENTIVE PAYOUT PURSUANT TO SECTION 3.3.

 

4.4                               DISABILITY OF EMPLOYEE.

 

(A)           TERMINATION; DEFINITION.  IN THE EVENT EMPLOYEE BECOMES MENTALLY
OR PHYSICALLY DISABLED DURING THE TERM OF EMPLOYMENT HEREUNDER, THIS AGREEMENT
SHALL TERMINATE AS OF THE DATE SUCH DISABILITY IS ESTABLISHED.  AS USED IN THIS
SECTION, THE TERM “DISABLED” OR “DISABILITY” MEANS SUFFERING FROM ANY MENTAL OR
PHYSICAL CONDITION, OTHER THAN USE OF ALCOHOL OR ILLEGAL USE OF DRUGS OR
NARCOTICS, WHICH RENDERS EMPLOYEE UNABLE TO PERFORM SUBSTANTIALLY ALL OF
EMPLOYEE’S DUTIES AND SERVICES UNDER THIS AGREEMENT IN A SATISFACTORY MANNER FOR
120 CONSECUTIVE DAYS, OR 180 DAYS DURING ANY 12-MONTH PERIOD.  IF, BY REASON OF
DISABILITY, EMPLOYEE IS ABSENT FROM THE FULL-TIME PERFORMANCE OF HIS DUTIES WITH
THE COMPANY FOR THE PERIODS ABOVE PROVIDED, NOTICE OF TERMINATION MAY BE GIVEN
AND IF EMPLOYEE HAS NOT RETURNED TO THE FULL-TIME PERFORMANCE OF HIS DUTIES
WITHIN 30 DAYS THEREAFTER, EMPLOYEE’S DISABILITY SHALL BE DEEMED “ESTABLISHED”
AT THE END OF SUCH 30-DAY PERIOD.

 

(B)           SALARY, BENEFITS.  DURING ANY PERIOD THAT EMPLOYEE FAILS TO
PERFORM HIS FULL DUTIES WITH THE COMPANY BECAUSE HE IS DISABLED, EMPLOYEE SHALL
CONTINUE TO RECEIVE BASE SALARY UNTIL THIS AGREEMENT IS TERMINATED PURSUANT TO
SECTION 4.8 AT THE RATE IN EFFECT AT THE COMMENCEMENT OF ANY SUCH PERIOD
ADJUSTED FOR ANY COMPENSATION PAYABLE TO HIM UNDER ANY COMPANY PAID DISABILITY
PLAN DURING SUCH PERIOD.  IN THE EVENT OF TERMINATION FOR DISABILITY THE COMPANY
SHALL CONTINUE (I) EMPLOYEE’S BASE SALARY ADJUSTED FOR ANY COMPENSATION PAYABLE
TO HIM UNDER ANY COMPANY PAID DISABILITY PLAN DURING SUCH PERIOD AND (II) THE
SAME COVERAGE UNDER MEDICAL, DENTAL, LONG-TERM DISABILITY AND LIFE

 

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INSURANCE FOR THE GREATER OF (X) THE REMAINING TERM OF THIS AGREEMENT OR
(Y) UNTIL LONG TERM DISABILITY INSURANCE COVERAGE BECOMES EFFECTIVE.

 

(C)           BONUSES.  IN THE EVENT OF TERMINATION UPON ESTABLISHED DISABILITY
THE COMPANY SHALL MAKE PAYMENTS AS PROVIDED IN SECTION 4.5 IN PLACE OF (I) THE
ANNUAL BONUS PAYMENT PROVIDED IN SECTION 3.2 AND (II) THE LONG-TERM INCENTIVE
PAYOUT PURSUANT TO SECTION 3.3.

 

4.5                               DEATH AND DISABILITY OF EMPLOYEE.  IN THE
EVENT OF TERMINATION UPON DEATH THE COMPANY SHALL MAKE PAYMENTS TO EMPLOYEE’S
PERSONAL REPRESENTATIVE, AND IN THE EVENT OF TERMINATION FOR DISABILITY THE
COMPANY SHALL MAKE PAYMENTS TO EMPLOYEE, AS HEREINAFTER PROVIDED.  SUCH PAYMENTS
SHALL BE MADE IMMEDIATELY FOLLOWING THE FIRST MEETING OF THE BOARD HELD AFTER
THE END OF THE FISCAL YEAR IN WHICH DEATH OR DISABILITY OCCURRED, BUT IN NO
EVENT LATER THAN FEBRUARY 28 OF THE YEAR FOLLOWING THE YEAR OF SUCH DEATH OR
DISABILITY.

 

(A)           ANNUAL BONUS.  WITH RESPECT TO THE ANNUAL BONUS PAYMENT PROVIDED
IN SECTION 3.2(A) THE COMPANY SHALL MAKE A SEPARATE DETERMINATION OF THE ANNUAL
BONUS BASED ON THE FACTORS PROVIDED IN SECTION 3.2(A) FOR THE FISCAL YEAR IN
WHICH DEATH OR DISABILITY OCCURS

 

(B)           LONG TERM INCENTIVE PLAN.  WITH RESPECT TO THE LONG-TERM INCENTIVE
PAYOUT PROVIDED IN SECTION 3.3 THE COMPANY SHALL MAKE A SEPARATE DETERMINATION
OF THE LONG-TERM INCENTIVE PAYOUT BASED ON THE FACTORS PROVIDED IN SECTION 3.3
FOR THE FISCAL YEAR IN WHICH DEATH OR DISABILITY OCCURS.

 

4.6                               OTHER THAN FOR CAUSE.  IF EMPLOYEE’S
EMPLOYMENT SHALL BE TERMINATED BY THE COMPANY OTHER THAN FOR CAUSE, RETIREMENT,
DEATH OR DISABILITY, PRIOR TO A CHANGE IN CONTROL OF THE COMPANY OR POTENTIAL
CHANGE IN CONTROL OF THE COMPANY AS DEFINED IN THE SEVERANCE AGREEMENT REFERRED
TO IN SECTION 4.7, THEN EMPLOYEE SHALL BE ENTITLED TO THE PAYMENTS PROVIDED
BELOW:

 

(A)           BASE SALARY.  ON THE EFFECTIVE DATE OF TERMINATION THE COMPANY
SHALL PAY EMPLOYEE HIS FULL BASE SALARY THROUGH THE END OF THE MONTH IN WHICH
TERMINATION OCCURS AT THE RATE IN EFFECT AT THE TIME NOTICE OF TERMINATION IS
GIVEN, AND FOR ONE FULL YEAR THEREAFTER WITH PAYMENTS BEING MADE OVER THE
FOLLOWING 12 MONTHS AND NO LESS FREQUENTLY THAN ONCE PER MONTH.

 

(B)           BENEFITS.  THE COMPANY SHALL CONTINUE PROVIDING MEDICAL, DENTAL,
LONG-TERM DISABILITY AND LIFE INSURANCE EQUAL TO THE COVERAGES EXISTING AT THE
TIME NOTICE OF TERMINATION IS GIVEN FOR ONE FULL YEAR.

 

(C)           ANNUAL AND LONG TERM BONUS.  ON THE EFFECTIVE DATE OF TERMINATION
THE COMPANY SHALL MAKE PAYMENTS TO AND ISSUE TO EMPLOYEE WITH RESPECT TO, AND IN
PLACE OF (I) THE ANNUAL BONUS PAYMENT PROVIDED IN

 

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SECTION 3.2 AN AMOUNT IN CASH EQUAL TO 0.9 MULTIPLIED BY BASE SALARY FOR THE
YEAR IN WHICH EMPLOYMENT IS TERMINATED AND (II) THE LONG TERM INCENTIVE PAYOUT
PROVIDED IN SECTION 3.3 FOR THE FISCAL YEAR IN WHICH EMPLOYMENT IS TERMINATED
UNDER THIS SECTION.

 

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4.7                               CHANGE IN CONTROL.

 

(A)           SEVERANCE AGREEMENT CONTINUED.  THE LETTER AGREEMENT DATED
JULY 24, 2003 AS SUBSEQUENTLY AMENDED, (SEVERANCE AGREEMENT) BETWEEN THE COMPANY
AND EMPLOYEE PROVIDING CERTAIN BENEFITS TO EMPLOYEE UPON A CHANGE IN CONTROL OF
THE COMPANY IS CONTINUED AND UPON A CHANGE IN CONTROL OF THE COMPANY THE
SEVERANCE AGREEMENT SHALL APPLY AND HAVE PRIORITY OVER THIS AGREEMENT SO THAT IN
THE EVENT OF ANY CONFLICT BETWEEN THIS AGREEMENT AND THE SEVERANCE AGREEMENT THE
SEVERANCE AGREEMENT SHALL APPLY.  ANY PAYMENTS MADE OR BENEFITS PROVIDED
PURSUANT TO THE SEVERANCE AGREEMENT ARE NOT TO BE DUPLICATED BY ANY REQUIREMENTS
OF THIS AGREEMENT.

 

(B)           DEFINITION.  AS USED IN THIS AGREEMENT THE TERM “CHANGE IN CONTROL
OF THE COMPANY” SHALL HAVE THE MEANING EXPRESSED IN THE SEVERANCE AGREEMENT.

 

4.8                               NOTICE OF TERMINATION.  ANY PURPORTED
TERMINATION OF EMPLOYMENT BY THE COMPANY OR BY EMPLOYEE, OTHER THAN FOR DEATH,
MAY BE COMMUNICATED ORALLY OR IN WRITING.  IF COMMUNICATED ORALLY, SUCH
COMMUNICATION SHALL BE FOLLOWED WITHIN 10 DAYS BY A WRITTEN COMMUNICATION WHICH,
AND IF COMMUNICATED BY WRITTEN COMMUNICATION THE COMMUNICATION, SHALL INDICATE
THE SPECIFIC TERMINATION PROVISIONS IN THIS AGREEMENT RELIED UPON, SHALL SET
FORTH IN REASONABLE DETAIL THE FACTS AND CIRCUMSTANCES CLAIMED TO PROVIDE A
BASIS FOR TERMINATION OF EMPLOYMENT UNDER THE PROVISIONS SO INDICATED AND SHALL
STATE AN EFFECTIVE DATE OF TERMINATION.

 

4.9                               DATE OF TERMINATION, ETC.  “DATE OF
TERMINATION” SHALL MEAN: (I) IF EMPLOYMENT IS TERMINATED FOR DISABILITY, THE
DATE AS PROVIDED IN SECTION 4.4(A), AND (II) IF EMPLOYMENT IS TERMINATED FOR
CAUSE PURSUANT TO SECTION 4.1 OR FOR ANY OTHER REASON (OTHER THAN DISABILITY),
THE DATE SPECIFIED IN THE NOTICE OF TERMINATION (WHICH, IN THE CASE OF A
TERMINATION PURSUANT TO SECTION 4.1 SHALL BE THE END OF A CALENDAR MONTH BUT NOT
LESS THAN 15 DAYS).  AMOUNTS PAID UNDER THIS SECTION ARE IN ADDITION TO ALL
OTHER AMOUNTS DUE UNDER THIS AGREEMENT AND SHALL NOT BE OFFSET AGAINST OR REDUCE
ANY OTHER AMOUNTS DUE UNDER THIS AGREEMENT.

 

4.10                        TERMINATION BY EMPLOYEE.  EMPLOYEE MAY TERMINATE
THIS AGREEMENT BY RESIGNING AS BOTH EXECUTIVE CHAIRMAN OF THE BOARD AND CHIEF
FINANCIAL OFFICER UPON AT LEAST 30 DAYS PRIOR WRITTEN NOTICE OF THE EFFECTIVE
DATE OF TERMINATION.  IN SUCH EVENT THE COMPANY SHALL CONTINUE EMPLOYEE’S BASE
SALARY AND ALL FRINGE BENEFITS TO THE EFFECTIVE DATE OF TERMINATION. 
TERMINATION OF THIS AGREEMENT UNDER THIS SECTION DOES NOT AFFECT THE COMPANY’S
OBLIGATION TO MAKE ALL PAYMENTS TO EMPLOYEE WHICH WERE FIXED AND DETERMINED
PRIOR TO THE EFFECTIVE DATE OF TERMINATION.

 

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5.             CONFIDENTIAL INFORMATION.

 

5.1                               DEFINITION.  CONFIDENTIAL INFORMATION MEANS:

 

(A)           ANY AND ALL (I) TRADE SECRETS CONCERNING THE BUSINESS AND AFFAIRS
OF THE COMPANY, PRODUCT SPECIFICATIONS, DATA, KNOW-HOW, FORMULA, COMPOSITIONS,
PROCESSES, DESIGNS, SKETCHES, PHOTOGRAPHS, GRAPHS, DRAWINGS, SAMPLES, INVENTIONS
AND IDEAS, PAST, CURRENT, AND PLANNED RESEARCH AND DEVELOPMENT, CURRENT AND
PLANNED MANUFACTURING OR DISTRIBUTION METHODS AND PROCESSES, CUSTOMER LISTS,
CURRENT AND ANTICIPATED CUSTOMER REQUIREMENTS, PRICE LISTS, MARKET STUDIES,
BUSINESS PLANS, COMPUTER SOFTWARE AND PROGRAMS (INCLUDING OBJECT CODE AND SOURCE
CODE), COMPUTER SOFTWARE AND DATABASE TECHNOLOGIES, SYSTEMS, STRUCTURES,
ARCHITECTURES (AND RELATED FORMULA), IMPROVEMENTS, DEVICES, DISCOVERIES,
CONCEPTS, IDEAS, METHODS AND INFORMATION, AND ANY OTHER INFORMATION, HOWEVER
DOCUMENTED, THAT IS A TRADE SECRET WITHIN THE MEANING OF COLORADO REVISED
STATUTES § 7-74-101 ET SEQ.; AND

 

(B)           INFORMATION CONCERNING THE BUSINESS AND AFFAIRS OF THE COMPANY
(WHICH INCLUDES HISTORICAL FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS AND
BUDGETS, HISTORICAL AND PROJECTED SALES, CAPITAL SPENDING BUDGETS AND PLANS, THE
NAMES AND BACKGROUNDS OF KEY PERSONNEL, PERSONNEL TRAINING AND TECHNIQUES AND
MATERIALS), HOWEVER DOCUMENTED; AND

 

(C)           NOTES, ANALYSES, COMPILATIONS, STUDIES, SUMMARIES AND OTHER
MATERIAL PREPARED BY OR FOR THE COMPANY CONTAINING OR BASED, IN WHOLE OR IN
PART, ON ANY INFORMATION INCLUDED IN THE FOREGOING.

 

5.2                               DISCLOSURE AND USE.  EMPLOYEE SHALL NOT
DISCLOSE, EITHER DURING OR SUBSEQUENT TO EMPLOYEE’S EMPLOYMENT WITH THE COMPANY,
ANY CONFIDENTIAL INFORMATION OR PROPRIETARY DATA OF THE COMPANY, WHETHER OR NOT
DEVELOPED BY EMPLOYEE, EXCEPT (I) AS MAY BE REQUIRED FOR EMPLOYEE TO PERFORM
EMPLOYEE’S EMPLOYMENT DUTIES WITH THE COMPANY; (II) TO THE EXTENT SUCH
INFORMATION HAS BEEN DISCLOSED TO EMPLOYEE BY A THIRD PARTY WHO IS NOT SUBJECT
TO RESTRICTION ON THE DISSEMINATION OF SUCH INFORMATION; (III) AS SUCH
INFORMATION BECOMES GENERALLY AVAILABLE TO THE PUBLIC OTHER THAN AS A RESULT OF
A DISCLOSURE BY EMPLOYEE; (IV) INFORMATION WHICH MUST BE DISCLOSED AS A RESULT
OF A SUBPOENA OR OTHER LEGAL PROCESS, OR (V) IF EMPLOYEE SHALL FIRST SECURE THE
COMPANY’S PRIOR WRITTEN AUTHORIZATION.  THIS COVENANT SHALL SURVIVE THE
TERMINATION OF THE EMPLOYEE’S EMPLOYMENT WITH THE COMPANY, AND SHALL REMAIN IN
EFFECT AND BE ENFORCEABLE AGAINST EMPLOYEE FOR SO LONG AS ANY SUCH CONFIDENTIAL
INFORMATION OR PROPRIETARY DATA RETAINS ECONOMIC VALUE, WHETHER ACTUAL OR
POTENTIAL, FROM NOT BEING GENERALLY KNOWN TO OTHER PERSONS WHO CAN OBTAIN
ECONOMIC VALUE FROM ITS DISCLOSURE OR USE.

 

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5.3                               RETURN OF MATERIALS.  THE EMPLOYEE WILL NOT
REMOVE FROM THE COMPANY’S PREMISES (EXCEPT TO THE EXTENT SUCH REMOVAL IS FOR THE
PURPOSES OF THE PERFORMANCE OF EMPLOYEE’S DUTIES AT HOME OR WHILE TRAVELING),
ANY CONFIDENTIAL INFORMATION. EMPLOYEE RECOGNIZES THAT, AS BETWEEN THE COMPANY
AND EMPLOYEE, ALL THE CONFIDENTIAL INFORMATION, WHETHER OR NOT DEVELOPED BY THE
EMPLOYEE, ARE THE EXCLUSIVE PROPERTY OF THE COMPANY.  UPON TERMINATION OF
EMPLOYMENT BY THE COMPANY, EMPLOYEE SHALL PROMPTLY DELIVER TO THE COMPANY ALL
CONFIDENTIAL INFORMATION, AND ALL OTHER MATERIALS OF A SECRET OR CONFIDENTIAL
NATURE RELATING TO THE COMPANY’S BUSINESS, WHICH ARE IN THE POSSESSION OR UNDER
THE CONTROL OF EMPLOYEE AND EMPLOYEE SHALL NOT RETAIN COPIES OF ANY SUCH
CONFIDENTIAL INFORMATION.

 

6.             INVENTIONS AND DISCOVERIES.  EMPLOYEE HEREBY ASSIGNS TO THE
COMPANY ALL OF THE EMPLOYEE’S RIGHTS, TITLE AND INTEREST IN AND TO ALL
INVENTIONS, TECHNIQUES, DISCOVERIES, PROCESSES, DESIGNS OR IMPROVEMENTS (WHETHER
PATENTABLE OR NOT), ANY INDUSTRIAL DESIGN (WHETHER REGISTRABLE OR NOT), OR USES
CONFIDENTIAL INFORMATION AS DESCRIBED IN SECTION 5.1, OR OTHER INTELLECTUAL
PROPERTY RIGHTS PERTAINING THERETO, THAT RELATES IN ANY WAY TO, OR IS USEFUL IN
ANY MANNER IN, THE BUSINESS THEN BEING CONDUCTED OR PROPOSED TO BE CONDUCTED BY
THE COMPANY, AND ANY SUCH ITEM CREATED BY THE EMPLOYEE, EITHER SOLELY OR IN
CONJUNCTION WITH OTHERS, FOLLOWING TERMINATION OF EMPLOYEE’S EMPLOYMENT WITH THE
COMPANY (HEREINAFTER REFERRED TO COLLECTIVELY AS THE “INVENTIONS”).  PROMPTLY
UPON THE DEVELOPMENT OR MAKING OF ANY INVENTION OR IMPROVEMENT THEREON, EMPLOYEE
SHALL DISCLOSE THE SAME TO THE COMPANY AND SHALL EXECUTE AND DELIVER TO THE
COMPANY SUCH REASONABLE DOCUMENTS AS THE COMPANY MAY REQUEST TO CONFIRM THE
ASSIGNMENT OF EMPLOYEE’S RIGHTS THEREIN AND IF REQUESTED BY THE COMPANY, SHALL
ASSIST THE COMPANY IN APPLYING FOR AND PROSECUTING ANY PATENTS WHICH MAY BE
AVAILABLE IN RESPECT THEREOF.  EMPLOYEE ACKNOWLEDGES THAT ALL OF EMPLOYEE’S
COMPANY-RELATED WRITING, WORKS OF AUTHORSHIP, SPECIALLY COMMISSIONED WORKS AND
OTHER EMPLOYEE INVENTIONS ARE WORKS MADE FOR HIRE, PROPERTY OF THE COMPANY,
INCLUDING ALL COPYRIGHTS, PATENTS, AND OTHER INTELLECTUAL PROPERTY RIGHTS
PERTAINING THERETO.  IF IT IS DETERMINED THAT ANY SUCH WORKS ARE NOT WORKS MADE
FOR HIRE, THE EMPLOYEE HEREBY ASSIGNS TO THE COMPANY ALL OF THE EMPLOYEE’S
RIGHT, TITLE, AND INTEREST, INCLUDING ALL RIGHTS OF COPYRIGHT, PATENT, AND OTHER
INTELLECTUAL PROPERTY RIGHTS, TO OR IN SUCH INVENTIONS.

 

7.             RESTRICTIVE COVENANT.

 

(A)           WHILE THE EMPLOYEE IS AN EMPLOYEE OF THE COMPANY AND DURING A
PERIOD IN WHICH THE COMPANY IS MAKING CONTINUATION PAYMENTS OF BASE SALARY
PURSUANT TO SECTION 4 HEREOF, EMPLOYEE SHALL NOT, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMPANY, (I) ENGAGE DIRECTLY OR INDIRECTLY IN ANY COMPETING
BUSINESS IN THE GEOGRAPHICAL AREA WHERE THE COMPANY DOES BUSINESS (INCLUDING,
WITHOUT LIMITATION, THE UNITED STATES AND ANY COUNTRY IN WHICH THE COMPANY HAS A
SALES REPRESENTATIVE AT THE TIME OF TERMINATION) WHETHER AS AN EMPLOYEE,
CONSULTANT OR ADVISOR, OR OWNER AS PRINCIPAL, SHAREHOLDER OR PARTNER OF ANY
EQUITY INTEREST IN EXCESS OF 5% OF ANY BUSINESS ENTITY (WHICH SHALL INCLUDE ANY
PROPRIETORSHIP, TRUST, JOINT VENTURE, PARTNERSHIP OR ANY TYPE OF CORPORATION OR
ASSOCIATION), OR (II) SERVE

 

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AS AN OFFICER, DIRECTOR, TRUSTEE, PARTNER OR THE LIKE IN ANY SUCH BUSINESS
ENTITY.

 

(B)           THE TERM “COMPETING BUSINESS” AS USED IN THIS SECTION 7 INCLUDES
ANY BUSINESS CONDUCTED BY THE COMPANY, WHICH INITIALLY INCLUDES THE DESIGN,
PRODUCTION AND MARKETING OF MOTION CONTROL PRODUCTS AND ANY OTHER PRODUCTS
MANUFACTURED OR MARKETED BY THE COMPANY AT THE DATE OF TERMINATION OF THIS
AGREEMENT.

 

8.             ARBITRATION.  ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE BREACH THEREOF SHALL BE SETTLED BY ARBITRATION IN THE
CITY AND COUNTY OF DENVER IN ACCORDANCE WITH THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION.  JUDGMENT UPON THE AWARD RENDERED BY THE ARBITRATORS
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.  THE COMPANY SHALL PAY
ALL COSTS OF ARBITRATION.  IN THE EVENT THAT IT SHALL BE NECESSARY OR DESIRABLE
FOR EMPLOYEE TO RETAIN LEGAL COUNSEL AND/OR INCUR OTHER COSTS AND EXPENSES IN
CONNECTION WITH INTERPRETATION OF HIS RIGHTS UNDER THIS AGREEMENT, INCLUDING ANY
PROCEDURE IN ARBITRATION, EMPLOYEE SHALL BE ENTITLED TO RECOVER FROM THE COMPANY
REASONABLE ATTORNEYS’ FEES AND COSTS AND EXPENSES INCURRED BY HIM IN CONNECTION
WITH SUCH INTERPRETATION OR ARBITRATION, REGARDLESS OF THE FINAL OUTCOME, UNLESS
THE ARBITRATOR SHALL DETERMINE THAT UNDER THE CIRCUMSTANCES SUCH PAYMENT WOULD
BE UNJUST.  REIMBURSEMENT OF ATTORNEYS’ FEES, COSTS AND EXPENSES SHALL BE
SUBJECT TO THE FOLLOWING REQUIREMENTS:  (A) SUCH REIMBURSEMENT SHALL BE
AVAILABLE TO THE EMPLOYEE FOR AS LONG AS HE HAS ENFORCEABLE RIGHTS UNDER THIS
AGREEMENT; (B) REIMBURSEMENTS PROVIDED DURING THE EMPLOYEE’S TAXABLE YEAR MAY
NOT AFFECT THE REIMBURSEMENTS PROVIDED IN ANY OTHER TAXABLE YEAR;
(C) REIMBURSEMENT MUST BE MADE ON OR BEFORE THE LAST DAY OF THE EMPLOYEE’S
TAXABLE YEAR FOLLOWING THE TAXABLE YEAR IN WHICH THE EXPENSE WAS INCURRED; AND
(D) NO REIMBURSEMENT PROVIDED UNDER THIS PARAGRAPH SHALL BE SUBJECT TO
LIQUIDATION OR EXCHANGE FOR ANOTHER BENEFIT.

 

9.             MITIGATION.  EMPLOYEE SHALL NOT BE REQUIRED TO MITIGATE THE
AMOUNT OF ANY PAYMENT PROVIDED IN THIS AGREEMENT BY SEEKING OTHER EMPLOYMENT OR
OTHERWISE, NOR SHALL THE AMOUNT OF ANY PAYMENT OR BENEFIT PROVIDED IN THIS
AGREEMENT BE REDUCED BY ANY COMPENSATION EARNED BY EMPLOYEE AS THE RESULT OF
EMPLOYMENT BY ANOTHER EMPLOYER, BY RETIREMENT BENEFITS, BY OFFSET AGAINST ANY
AMOUNT CLAIMED TO BE OWED BY EMPLOYEE TO THE COMPANY, OR OTHERWISE.

 

10.          ANNOUNCEMENTS.  NO PUBLIC ANNOUNCEMENT REGARDING TERMINATION OF
EMPLOYMENT OF THE EMPLOYEE OR ANY CHANGE IN STATUS OF THE EMPLOYEE OF THE
COMPANY SHALL BE MADE WITHOUT EMPLOYEE’S APPROVAL EXCEPT THE COMPANY MAY
ANNOUNCE EMPLOYEE’S TERMINATION IF COMPANY IS OTHERWISE REQUIRED TO DO SO
PURSUANT TO THE RULES OF THE SECURITIES AND EXCHANGE COMMISSION OR TO ANY OTHER
LEGAL REQUIREMENT.  ALL MATTERS WITH RESPECT TO TERMINATION OF EMPLOYMENT OF
EMPLOYEE, RETIREMENT OF EMPLOYEE OR OTHER ACTION TAKEN PURSUANT TO THIS
AGREEMENT SHALL BE KEPT CONFIDENTIAL AND NEITHER COMPANY NOR EMPLOYEE WILL MAKE
UNFAVORABLE COMMENTS ABOUT THE OTHER IN CONNECTION WITH THIS AGREEMENT.

 

11.          SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT, INCLUDING THE
RESTRICTIVE COVENANT IN SECTION 7, IS HELD INVALID OR UNENFORCEABLE, EITHER IN
ITS ENTIRETY OR BY VIRTUE OF ITS SCOPE OR APPLICATION TO GIVEN CIRCUMSTANCES,
SUCH PROVISION SHALL THEREUPON BE DEEMED MODIFIED ONLY TO THE EXTENT NECESSARY
TO RENDER SAME VALID, OR NOT APPLICABLE TO GIVEN CIRCUMSTANCES, OR EXCISED FROM
THIS AGREEMENT, AS THE SITUATION MAY REQUIRE, AND THIS AGREEMENT SHALL BE
CONSTRUED

 

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AND ENFORCED AS IF SUCH PROVISION HAD BEEN INCLUDED HEREIN AS SO MODIFIED IN
SCOPE OR APPLICATION, OR HAD NOT BEEN INCLUDED HEREIN, AS THE CASE MAY BE.

 

12.          NON-ASSIGNABILITY.  IN LIGHT OF THE UNIQUE PERSONAL SERVICES TO BE
PERFORMED BY EMPLOYEE HEREUNDER, IT IS ACKNOWLEDGED AND AGREED THAT ANY
PURPORTED OR ATTEMPTED ASSIGNMENT OR TRANSFER BY EMPLOYEE OF THIS AGREEMENT OR
ANY OF EMPLOYEE’S DUTIES, RESPONSIBILITIES OR OBLIGATIONS HEREUNDER SHALL BE
VOID.  THIS AGREEMENT MAY NOT BE ASSIGNED BY THE COMPANY WITHOUT THE PRIOR
WRITTEN CONSENT OF EMPLOYEE.

 

13.          NOTICES.  ANY NOTICE, REQUEST, DEMAND OR OTHER COMMUNICATION
REQUIRED OR PERMITTED UNDER THIS AGREEMENT SHALL BE IN WRITING AND SHALL BE
DEEMED TO HAVE BEEN GIVEN WHEN DELIVERED PERSONALLY OR ON THE DATE OF RECEIPT
WHEN MAILED BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED AS FOLLOWS:

 

If to the Company:

Allied Motion Technologies Inc.

 

23 Inverness Way East, Ste 150

 

Englewood, Colorado 80112

 

Attention: CEO and Secretary

 

 

If to the Employee:

Richard D. Smith

 

8422 Newland Drive

 

Arvada, CO 80003

 

or to such other address or addresses as may be specified from time to time by
notice; provided however, that any notice of change of address shall not be
effective until its receipt by the party to be charged therewith.

 

14.          GENERAL.

 

14.1                        AMENDMENTS.  NEITHER THIS AGREEMENT NOR ANY OF THE
TERMS OR CONDITIONS HEREOF MAY BE WAIVED, AMENDED OR MODIFIED EXCEPT BY MEANS OF
A WRITTEN INSTRUMENT DULY EXECUTED BY THE PARTY TO BE CHARGED THEREWITH.

 

14.2                        CAPTIONS AND HEADINGS.  THE CAPTIONS AND PARAGRAPH
HEADINGS USED IN THIS AGREEMENT ARE FOR CONVENIENCE OF REFERENCE ONLY, AND SHALL
NOT AFFECT THE CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT OR ANY OF THE
PROVISIONS HEREOF.

 

14.3                        GOVERNING LAW.  THIS AGREEMENT, AND ALL MATTERS OR
DISPUTES RELATING TO THE VALIDITY, CONSTRUCTION, PERFORMANCE OR ENFORCEMENT
HEREOF, SHALL BE GOVERNED, CONSTRUED AND CONTROLLED BY AND UNDER THE LAWS OF THE
STATE OF COLORADO WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

14.4                        SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL BE
BINDING UPON AND SHALL INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR
RESPECTIVE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS AND PERMITTED ASSIGNS.

 

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(A)           THE COMPANY SHALL REQUIRE ANY SUCCESSOR (WHETHER DIRECT OR
INDIRECT, BY PURCHASE, MERGER, CONSOLIDATION OR OTHERWISE) TO ALL OR
SUBSTANTIALLY ALL OF THE BUSINESS AND/OR ASSETS OF THE COMPANY, BY AGREEMENT IN
FORM AND SUBSTANCE SATISFACTORY TO EMPLOYEE, TO EXPRESSLY ASSUME AND AGREE TO
PERFORM THIS AGREEMENT IN THE SAME MANNER AND TO THE SAME EXTENT THAT THE
COMPANY WOULD BE REQUIRED TO PERFORM IT IF NO SUCH SUCCESSION HAD TAKEN PLACE. 
FAILURE OF THE COMPANY TO OBTAIN SUCH AGREEMENT PRIOR TO THE EFFECTIVENESS OF
ANY SUCH SUCCESSION SHALL BE A BREACH OF THIS AGREEMENT AND SHALL ENTITLE
EMPLOYEE TO ALL RIGHTS FOR BREACH HEREUNDER.

 

(B)           IF EMPLOYEE SHOULD DIE WHILE ANY AMOUNTS WOULD STILL BE PAYABLE TO
HIM HEREUNDER IF HE HAD CONTINUED TO LIVE, ALL SUCH AMOUNTS, UNLESS OTHERWISE
PROVIDED HEREIN, SHALL BE PAID IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT TO
EMPLOYEE’S PERSONAL REPRESENTATIVES OR TO HIS ESTATE.

 

14.5        COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL HEREOF, BUT ALL OF
WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

14.6        ENTIRE AGREEMENT.  EXCEPT AS OTHERWISE SET FORTH OR REFERRED TO IN
THIS AGREEMENT, THIS AGREEMENT CONSTITUTES THE SOLE AND ENTIRE AGREEMENT AND
UNDERSTANDING BETWEEN THE PARTIES HERETO AS TO THE SUBJECT MATTER HEREOF, AND
SUPERSEDES ALL PRIOR DISCUSSIONS, AGREEMENTS AND UNDERSTANDINGS OF EVERY KIND
AND NATURE BETWEEN THEM AS TO SUCH SUBJECT MATTER.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the date first set forth above.

 

 

ALLIED MOTION TECHNOLOGIES INC.

 

 

 

 

 

 

 

By

/s/ Delwin Hock             

 

 

Delwin Hock — Lead Director

 

 

 

 

 

 

 

 

/s/ Richard D. Smith

 

 

Richard D. Smith - Employee

 

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