exv10w1



 




Exhibit 10.1




EMPLOYMENT AGREEMENT




          This EMPLOYMENT AGREEMENT (the “Agreement”) is effective as of November 1,
2003 by and between RADYNE COMSTREAM INC., a Delaware corporation (the
"Company”) and Robert C. Fitting, an individual (“Executive”).




RECITALS




          WHEREAS, Executive is currently the Chief Executive Officer of the
Company;




          WHEREAS, the Company desires to retain the services of Executive, and
Executive desires to provide services to the Company, in accordance with the
terms, conditions and provisions of this Agreement;




          NOW THEREFORE, in consideration of the covenants and mutual agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in reliance upon the
representations, covenants and mutual agreements contained herein, the Company
and Executive agree as follows:




          1.   Employment. Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive as Chief Executive Officer of the Company,
and Executive agrees to diligently perform the duties associated with such
positions. Executive will report directly to the Board of Directors.
Executive will devote substantially all of his business time, attention and
energies to the business of the Company and will comply with the charters,
policies and guidelines established by the Company from time to time applicable
to its directors and senior management executives.




          2.   Term. Executive will be employed under this Agreement until December
31, 2005, unless Executive’s employment is terminated earlier pursuant to
Section 7. The Agreement will renew for additional periods by mutual agreement
of the Company and the Executive.




          3.   Director Status. For so long as Executive is Chief Executive Officer,
the Company shall use commercially reasonable efforts, subject to applicable
law and regulations of the New





 








 


York Stock Exchange (“NYSE”), to cause Executive to be nominated for
election as a director and to be recommended to the stockholders for election
as a director. Upon any termination of employment as Chief Executive Officer,
Executive will be deemed to have resigned from the Board of Directors, unless
within 30 days thereof a majority of the independent directors of the Board (as
defined by rules of the NYSE) vote to enable Executive to continue on the Board
through the balance of his term.




          4.   Salary. The Company will pay Executive a base salary at the annual
rate of $375,000 per year commencing November 1, 2003. Such salary will
increase to $400,000 commencing January 1, 2005. The Executive’s base salary
may be raised, but not lowered, without Executive’s consent.




          5.   Incentive Compensation.




          A.   Signing Bonus. The Company shall pay Executive a signing bonus of
$75,000 on or before November 1, 2003.




          B.   Bonus. Executive will be entitled to incentive compensation based on
the achievement of certain performance targets pursuant to the plan specified
in Exhibit A hereto. The bonus will be due and payable in accordance with
Exhibit A.




          C.   Options. The Company hereby grants the Executive options to acquire
150,000 shares, and will grant to Executive, if Executive is employed at the
time, an additional 50,000 shares subject to option on November 1, 2004. The
options will have an exercise price equal to the fair market value on the date
of grant as defined in the plan under which they are granted, and will vest 25%
upon grant and 25% on each anniversary of grant.




          6.   Executive Benefits. During the term of this Agreement, Executive will
be entitled to reimbursement of reasonable and customary business expenses.
The Company will provide to Executive such fringe benefits and other Executive
benefits as are regularly provided by the Company to its senior management;
provided, however, that nothing herein shall preclude the Company from amending
or terminating any employee or general executive benefit plans or





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programs. In addition, the Company shall provide the Executive with the
benefits set forth on Exhibit B, which benefits may not be terminated or
reduced during the term hereof.




          7.   Termination.




          A.   Voluntary Resignation by Executive or Termination Without Cause.




          If Executive voluntarily terminates his employment with the Company for
Good Reason, or the Company terminates Executive without Cause, then (i) the
Company will be obligated to continue to pay Executive salary for two years
following termination; (ii) any Bonus due Executive for the year of termination
shall be paid subject to Executive’s compliance with this Agreement, including
Sections 8 and 9 as provided therein; (iii) the Company shall reimburse
Executive for COBRA premiums for the period that the Company is required to
offer COBRA coverage as a matter of law; and (iv) any options granted on or
after the date hereof shall vest in full, and remain in effect as provided in
the applicable plan or agreement.




          B.   Termination upon Death or Disability. If Executive’s employment is
terminated as a result of Executive’s death or Disability, then the Company
will be obligated to pay to Executive, his heirs or personal representative,
(i) Executive’s then current salary through the Date of Termination, (ii) a pro
rated amount of Executive’s bonus for the year, payable at the time set forth
in Exhibit A, (iii) Executive’s COBRA premiums for the period that the Company
is required to offer COBRA coverage as a matter of law, (iv) Executive’s salary
for a period of one year after the event, and, at the one year anniversary of
the event, a lump sum equal to Executive’s final annual salary, in each case
less any payments made under Company-paid insurance policies, and (v) the
Executive’s options granted on or after the date herein shall accelerate and
become vested without further action and, to the extent permitted under the
plan’s governing documents, Executive or his heirs or personal representative
shall have a period of one year from the Date of Termination to exercise such
options.




          C.   Voluntary Termination (Without Good Reason) before December 31, 2005 or
Termination for Cause by the Company.




          (1)   If the Executive resigns without Good Reason, or if the Company
discharges Executive for Cause, then the Company will be obligated to pay
Executive’s base salary





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through the date of termination. No bonus shall be payable.
Options shall terminate as provided in the applicable plan or agreement.




          (2)   Upon voluntary termination without Good Reason by Executive, or
a termination for Cause by the Company, the provisions of Section 8
(Restrictive Covenant) shall automatically become applicable for the
one-year period set forth therein, without any further payment due
Executive. Executive acknowledges and agrees that the compensation
herein, including the signing bonus, is adequate consideration for such
covenants.




          D.   Definitions. For purposes of this Agreement:




          (1)   “Cause” shall have the meaning ascribed to it in the Change of
Control Agreement (the “Change of Control Agreement”) of Executive dated
March 20, 2002,




          (2)   “Disability” shall mean a disability that results in Executive
being medically unable to fulfill his duties under this Agreement for six
consecutive months, and




          (3)   “Good Reason” shall include the following circumstances: (a) if
the Company assigns you duties that are materially inconsistent with, or
constitute a material reduction of powers or functions associated with,
your position, duties, or responsibilities with the Company, or a
material adverse change in your titles, authority, or reporting
responsibilities, or in conditions of your employment, (b) if your base
salary is reduced or the potential incentive compensation (or bonus) to
which you may become entitled to at any level of performance by you or
the Company is reduced, (c) if the Company fails to cause any successor
to expressly assume and agree to be bound by the terms of this Agreement,
(d) any termination by the Company of your employment for grounds other
than for “Cause,” or (e) if you are required to relocate to an
employment location that is more than fifty (50) miles from Phoenix,
Arizona.




          8.   Restrictive Covenant. In consideration of Executive’s employment,
Executive agrees to the restrictive covenants set forth in Section 3 of his
Change in Control Agreement, which are incorporated herein.





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          9.   Non-Disclosure of Confidential Information.




          A.   It is understood that in the course of Executive’s employment with
Company, Executive will become acquainted with Company Confidential Information
(as defined below). Executive recognizes that Company Confidential Information
has been developed or acquired at great expense, is proprietary to the Company,
and is and shall remain the exclusive property of the Company. Accordingly,
Executive agrees that he will not, disclose to others, copy, make any use of,
or remove from Company’s premises any Company Confidential Information, except
as Executive’s duties may specifically require, without the express written
consent of the Board of Directors of the Company, during Executive’s employment
with the Company and thereafter until such time as Company Confidential
Information becomes generally known, or readily ascertainable by proper means
by persons unrelated to the Company.




          B.   Upon any termination of employment, Executive shall promptly deliver to
the Company the originals and all copies of any and all materials, documents,
notes, manuals, or lists containing or embodying Company Confidential
Information, or relating directly or indirectly to the business of the Company,
in the possession or control of Executive.




          C.   “Company Confidential Information” shall mean confidential, proprietary
information or trade secrets of Company and its subsidiaries and affiliates
including without limitation the following: (1) customer lists and customer
information as compiled by Company; (2) Company’s internal practices and
procedures; (3) internal Company financial information; (4) supply of materials
information, including sources and costs, designs, information on land and lot
inventories, and current and prospective projects; (5) strategic planning,
manufacturing, engineering, purchasing, finance, marketing, promotion,
distribution, and selling activities; (6) all other information which is
treated by Company as confidential, include all information having independent
economic value to Company that is not generally known to, and not readily
ascertainable by proper means by, persons who can obtain economic value from
its disclosure or use. Notwithstanding the foregoing provisions, the following
shall not be considered “Company Confidential Information”: (i) the general
skills of the Executive as an experienced entrepreneur and senior management
level employee; (ii) information generally known by senior management
executives within the industry in which the Company operates; (iii) persons,
entities, contacts or





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relationships of Executive that are also generally known in the industry;
and (iv) information which becomes available on a non-confidential basis from a
source other than Executive which source is not prohibited from disclosing such
confidential information by legal, contractual or other obligation.




          D.   Executive hereby agrees that the periods of time provided for in
Sections 8 and 9 and other provisions and restrictions set forth herein are
reasonable and necessary to protect the Company and its successors and assigns
in the use and employment of the goodwill of the business conducted by
Executive. Executive further agrees that damages cannot compensate the Company
in the event of a violation of Section 8 or 9 and that, if such violation
should occur, injunctive relief shall be essential for the protection of the
Company and its successors and assigns. Accordingly, Executive hereby
covenants and agrees that, in the event any of the provisions of Section 8 or 9
shall be violated or breached, the Company shall be entitled to obtain
injunctive relief against the party or parties violating such covenants,
without bond but upon due notice, in addition to such further or other relief
as may be available at equity or law. Obtainment of such an injunction by the
Company shall not be considered an election of remedies or a waiver of any
right to assert any other remedies which the Company has at law or in equity.
No waiver of any breach or violation hereof shall be implied from forbearance
or failure by the Company to take action thereof. The prevailing party in any
litigation, arbitration or similar dispute resolution proceeding to enforce
this provision will recover any and all reasonable costs and expenses,
including attorneys’ fees.




          E.   For purposes of Sections 8 and 9, the term “Company” includes Radyne
ComStream Inc. and its subsidiaries and affiliates. For purposes hereunder, an
affiliate shall be deemed to be any corporation or other business entity in
which the Company or its subsidiaries owns a controlling interest.




          10.   Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under any applicable law, then such
provision will be deemed to be modified to the extent necessary to render it
legal, valid and enforceable, and if no such modification will make the
provision legal, valid and enforceable, then this Agreement will be construed
as if not containing the provision held to be invalid, and the rights and
obligations of the parties will be construed and enforced accordingly.





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          11.   Assignment by Company. Nothing in this Agreement shall preclude the
Company from consolidating or merging into or with, or transferring all or
substantially all of its assets to, another corporation or entity that assumes
this Agreement and all obligations and undertakings hereunder. Upon such
consolidation, merger or transfer of assets and assumption, the term “Company”
as used herein shall mean such other corporation or entity, as appropriate, and
this Agreement shall continue in full force and effect.




          12.   Entire Agreement. This Agreement, the Change of Control Agreement of
Executive, and any agreements concerning stock options or other benefits,
embody the complete agreement of the parties hereto with respect to the subject
matter hereof and supersede any prior written, or prior or contemporaneous
oral, understandings or agreements between the parties that may have related in
any way to the subject matter hereof. This Agreement may be amended only in
writing executed by the Company and Executive. Notwithstanding the foregoing,
nothing in this Agreement is intended to affect any previous agreements
pertaining to the grant of options to the Executive, including without
limitation, provisions in Executive’s prior Change of Control Agreement,
providing for acceleration upon a change-in-control.




          13.   Governing Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement, shall be governed by and
construed in accordance with the internal laws, and not the law of conflicts,
of the State of Arizona.




          14.   Notice. Any notice required or permitted under this Agreement must be
in writing and will be deemed to have been given when delivered personally or
by overnight courier service or three days after being sent by mail, postage
prepaid, at the address indicated below or to such changed address as such
person may subsequently give such notice of:





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	if to Parent or Company:	 	
Radyne ComStream
	 	 	
3138 E. Elwood
	 	 	
Phoenix, AZ 85034 8501
	 	 	
Attention: Chief Financial Officer
	 	 	 
	with a copy to:	 	
Snell & Wilmer L.L.P.
	 	 	
One Arizona Center
	 	 	
400 E. Van Buren Street
	 	 	
Phoenix, Arizona 85004-0001
	 	 	
Phone: (602) 382-6252
	 	 	
Fax: (602) 382-6070
	 	 	
Attn: Steven D. Pidgeon, Esq.
	 	 	 
	if to Executive:	 	
Robert C. Fitting
	 	 	
6035 E. Cholla Lane
	 	 	
Scottsdale, Arizona 85253
	 	 	
Phone: (480) 481-9394






          15.   Arbitration. Any dispute, controversy, or claim, whether contractual
or non-contractual, between the parties hereto arising directly or indirectly
out of or connected with this Agreement, relating to the breach or alleged
breach of any representation, warranty, agreement, or covenant under this
Agreement, unless mutually settled by the parties hereto, shall be resolved by
binding arbitration in accordance with the Employment Arbitration Rules of the
American Arbitration Association (the “AAA”). Any arbitration shall be
conducted by arbitrators approved by the AAA and mutually acceptable to Company
and Executive. All such disputes, controversies, or claims shall be conducted
by a single arbitrator, unless the dispute involves more than $50,000 in the
aggregate in which case the arbitration shall be conducted by a panel of three
arbitrators. If the parties hereto are unable to agree on the arbitrator(s),
then the AAA shall select the arbitrator(s). The resolution of the dispute by
the arbitrator(s) shall be final, binding, nonappealable, and fully enforceable
by a court of competent jurisdiction under the Federal Arbitration Act. The
arbitrator(s) shall award damages to the prevailing party. The arbitration
award shall be in writing and shall include a statement of the reasons for the
award. The arbitration shall be held in the Phoenix metropolitan area. The
arbitrator(s) shall award reasonable attorneys’ fees and costs to the
prevailing party.




          16.   Withholding; Release; No Duplication of Benefits. All of Executive’s
compensation under this Agreement will be subject to deduction and withholding
authorized or





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required by applicable law. The Company’s obligation to make any
post-termination payments hereunder (other than salary payments and expense
reimbursements through a date of termination), shall be subject to receipt by
the Company from Executive of a mutually agreeable release, and compliance by
Executive with the covenants set forth in Sections 8 and 9 hereof. If there is
any conflict between the provisions of the Change in Control Agreement and this
Agreement, such conflict shall be resolved so as to provide the greater benefit
to Executive. However, in order to avoid duplication of any monetary benefits,
any payments or benefits due hereunder will be reduced by any payments or
benefits provided under the Change in Control Agreement.




          17.   Successors and Assigns. This Agreement is solely for the benefit of
the parties and their respective successors, assigns, heirs and legatees.
Nothing herein shall be construed to provide any right to any other entity or
individual.




          18.   Legal Counsel. Executive recognizes that Snell & Wilmer LLP is
counsel to the Company and has been advised to seek his own counsel to assist
him with this Agreement.





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          IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.




	 	 	 	 	 
	 	 	RADYNE COMSTREAM INC., a Delaware

corporation
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By:
	 	\s\ Ming Seong Lim
	 	 	 	 	

	 	 	
Name:
	 	Ming Seong Lim
	 	 	 	 	

	 	 	
Title:
	 	Chairman of the Board of Directors
	 	 	 	 	

	 	 	 	 	 
	 	 	 	 	 
	 	 	EXECUTIVE: ROBERT C. FITTING
	 	 	 	 	 
	 	 	 	 	 
	 	 	\s\ Robert C. Fitting, CEO
	 	 	








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EXHIBIT A




INCENTIVE COMPENSATION SCHEDULE




	•	 	Annual Bonus—Incentive bonus tied to performance against key
parameters, principally financial.





	o	 	Financial performance based upon reported (for year
end, audited) pretax earnings, excluding any extraordinary items,
compared with annual budget approved by BoD prior to fiscal year
commencement. Board will determine acceptable earnings for
budget upon significant corporate changes, e.g., acquisitions,
board will approve revised budget. Bonus to be paid within 30
days of earnings releases.





	o	 	Performance Bonus determined based on earnings as follows:





	•	 	Less than 80% of budget earns no bonus





	•	 	Earnings of 80%-100% of budget earn a bonus
of $5 K for each percentage point of earnings over 80% of
budget. i.e., no bonus is earned for 80% of budgeted
earnings and $100K is earned for 100% of budgeted earnings





	•	 	Earnings over 100% of budget would earn an
additional bonus of 20% of earnings over budget. i.e., if
budgeted earnings were $2 M and audited earnings were $3 M,
the bonus would be 20% of $1 M or $200 K plus the $100 K
for achieving budget.





	•	 	Performance Bonus plan would commence with 2004 and bonus for
current year, 2003, will be determined by the BoD based on pretax
earnings, excluding extraordinary items as compared to the latest
forecast, with a target bonus of $60 K for achieving forecast.






 








 



EXHIBIT B




SPECIFIED BENEFITS




          1.  Retirement payments of one week of salary and health benefits
(COBRA) for each month worked, upon commencement of this agreement with the
Company, payable at the normal time for salary installments. Such payments
are payable upon termination for any reason.




          1.  Six weeks paid vacation per year (which may not be carried over or
paid if not used).