<PAGE>


                         EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT, dated as of January 1, 2004 between AMERICAN
TECHNICAL CERAMICS CORP., a Delaware corporation having its principal place of
business at One Norden Lane, Huntington Station, New York 11746 (the "Company"),
and DAVID OTT, who resides at One Ethan Allen Court, South Setauket, New York
11720 ("Employee").

                              W I T N E S S E T H :

         WHEREAS, Employee is currently employed as the Senior Vice President -
New York Manufacturing Operations of the Company;

         WHEREAS, the Company desires to provide for Employee's continued
performance of services for the Company and any present or future parent,
subsidiary, or affiliate of the Company, and Employee desires to continue to
perform such services, on the terms and conditions hereinafter set forth;

         NOW, THEREFORE, in consideration of the mutual promises
contained herein and other good and valuable consideration, the
receipt, adequacy, and sufficiency of which are hereby acknowledged,
the Company and Employee hereby agree as follows:

         1. Term. The Company agrees to employ Employee, and Employee
agrees to serve as Senior Vice President - New York Manufacturing
Operations of the Company, upon the terms and conditions hereinafter
set forth, for a period commencing on January 1, 2004 and ending on
December 31, 2006, or for such shorter period as may be provided for
herein. The period during which Employee is employed hereunder is
hereinafter referred to as the "Employment Period."
<PAGE>

         2. Duties. Employee agrees to use his best efforts, skills, and
abilities to perform faithfully all duties consistent with his position (or any
other position of a similar nature) assigned to him from time to time by the
Company in accordance with all Company policies and procedures and to devote his
full business time, labor, energies, and attention to the performance of such
duties. Employee shall not to become involved in any personal investment or
other matters which may detract from the performance of his duties or otherwise
adversely affect the Company or any present or future parent, subsidiary, or
affiliate of the Company. In the performance of his duties, Employee shall be
subject to the direction of the Board of Directors, the Chief Executive Officer
of the Company, and any officer of the Company designated by the Board or the
Chief Executive Officer of the Company.

         3. Place of Performance. In connection with his employment by the
Company, Employee shall be based at the Company's offices in Huntington Station,
New York. Employee shall be available to travel at such times and to such places
as may be necessary in connection with the performance of his duties hereunder.

         4. Annual Compensation.

              (a) Salary. During the Employment Period, Employee shall receive a
base salary at the annual rate of $165,500 commencing on the date hereof, plus
such other amounts, if any, as the Board of Directors, in its sole discretion,
may from time to time determine. Employee's salary shall be payable in weekly
installments or at such other frequency as the Company may from time to time
determine (but not less frequently than monthly).

              (b) Bonus. During the Employment Period, Employee shall also be
entitled to participate in the Company's Officer's Profit Bonus Plan (the
"Plan"). Employee hereby acknowledges that bonuses under the Plan are awarded in
the sole discretion of the Board of

                                       2
<PAGE>

Directors of the Company and are generally paid on a quarterly basis, if at all.
Nothing contained herein shall require the Company to maintain the Plan.

              (c) Deductions. The Company shall deduct from all amounts payable
to Employee all taxes and other amounts which the Company is now or may
hereafter become obligated to deduct under any applicable law.

         5. Benefits.

              (a) Employee shall be entitled to participate in such employee
benefit plans established by the Company from time to time and generally made
available to employees at levels similar to Employee's for which he meets the
eligibility requirements. Nothing contained herein shall require the Company to
establish or maintain any employee benefit plan.

              (b) During the Employment Period, the Company shall provide
Employee with the use of an automobile and shall pay the expenses associated
with the maintenance and operation thereof.

         6. Termination.

              (a) Notwithstanding anything herein contained to the contrary, if
on or after the date hereof and prior to the end of the Employment Period, (i)
either (A) Employee shall be physically or mentally incapacitated or disabled or
otherwise unable fully to discharge his duties hereunder ("Disabled") for a
period of 90 consecutive days or for an aggregate of 90 days within any period
of twelve consecutive months, (B) Employee shall be convicted of a felony or
other crime of moral turpitude, (C) Employee shall commit any act or omit to
take any action in bad faith to the detriment of the Company or any present or
future parent, subsidiary, or affiliate of the Company, (D) Employee shall
willfully fail or refuse to perform any duties consistent with his position (or
any other position of a similar nature) assigned to him from time to time,

                                       3
<PAGE>

or (E) Employee shall breach any other term of this Agreement and fail to
correct such breach within 10 days after receiving notice of the same, or if
such breach is not capable of correction within such 10 day period, Employee
shall fail to take substantial steps necessary to correct such breach within
such 10 day period and shall not have corrected such beach within 30 days after
receiving such notice, then, and in each such case, the Company shall have the
right to give notice of termination of Employee's services hereunder as of a
date to be specified in such notice, and this Agreement shall terminate on the
date so specified, or (ii) Employee shall die, then this Agreement shall
terminate on the date of Employee's death.

              (b) If this Agreement is terminated by the Company for any of the
reasons set forth in Paragraph 6(a) hereof, Employee shall be entitled to
receive only his salary at the rate provided in Paragraph 4(a) hereof through
and including the date upon which termination shall take effect.

              (c) If Employee's employment by the Company pursuant to this
Agreement is terminated prior to the expiration of the Employment Period for any
reason other than any of the reasons set forth in Paragraph 6(a), or for no
reason, then, provided Employee continues to abide by the provisions of Section
7, 8 and 9 of this Agreement, the Company shall continue to pay to Employee his
base salary at the rate and at the times provided in Section 4(a) hereof for a
period of one year from the date upon which such termination shall take effect.

         7. Confidentiality.

              (a) Employee acknowledges and agrees that he has been and, during
the Employment Period, will continue to be, privy to confidential proprietary
and secret information relating to the Company, its present or future parents,
subsidiaries and affiliates and their respective customers, clients and
suppliers. Employee hereby agrees that, beginning on

                                       4
<PAGE>

the date hereof, and at any time hereafter, Employee shall treat as strictly
confidential any proprietary, confidential or secret information relating to the
business or interests of the Company or any present or future parent, subsidiary
or affiliate of the Company, or any customer, client or supplier of any of them,
including, but without limitation, the organizational structure, operations,
business plans or projects of the Company or any present or future parent,
subsidiary or affiliate of the Company, or any customer, client or supplier of
any of them, and any research datum or result, invention, trade secret, customer
list or customer information, process or other work product developed by or for
the Company or any present or future parent, subsidiary or affiliate of the
Company, or any customer, client or supplier of any of them, whether on the
premises of the Company or elsewhere ("Confidential Information"). Employee
hereby agrees that, beginning on the date hereof, and at any time hereafter, the
Employee shall not disclose to any person or entity, utilize for his own
purposes or for the benefit of any other person or entity or make accessible to
any person or entity, in any manner or in any form, any Confidential Information
other than in connection with performing the services required of him under this
Agreement, without the prior written consent of the Company.

              (b) Employee agrees that the provisions of this Paragraph 7 shall
survive the termination of his employment and of this Agreement.

         8. Assignment of Intellectual Property Rights.

              (a) If at any time or times during his employment by the Company
and during the six month period following his termination for any reason (or for
no reason) Employee shall (either alone or with others) make, conceive, discover
or reduce to practice any Intellectual Property (as hereinafter defined)
whatsoever or any interest therein ("Intellectual Property Rights"), whether or
not patentable or registrable under copyright or similar statutes or

                                       5
<PAGE>

subject to analogous protection (herein called "Developments"), that (i) relates
to the business of the Company or any present or future parent, subsidiary or
affiliate of the Company or any of their respective customers, clients or
suppliers or any of the products or services being developed, manufactured, sold
or provided by any of them which may be used in connection therewith, (ii)
results from tasks assigned to Employee by the Company or any present or future
parent, subsidiary or affiliate of the Company, or (iii) results from the use of
premises or personal property (whether tangible or intangible) owned, leased or
contracted for by the Company or any present or future parent, subsidiary or
affiliate of the Company, such Developments and the benefits thereof shall
immediately become the sole and absolute property of the Company and its
assigns, and Employee shall promptly disclose to the Company (or any persons
designated by it) each such Development and hereby assigns any rights Employee
may have or acquire in the Developments and benefits and/or rights resulting
therefrom to the Company and its assigns without further compensation and shall
communicate, without cost or delay, and without publishing the same, all
available information relating thereto (with all necessary plans and models) to
the Company. As used herein, the term "Intellectual Property" shall mean all
industrial and intellectual property, including, without limitation, patents,
patent applications, patent rights, trademarks, trademark applications, trade
names, service marks, service mark applications, copyrights, copyright
applications or registrations, databases, algorithms, computer programs and
other software, know-how, trade secrets, proprietary processes and formulae,
inventions, trade dress, logos, design and all documentation and media
constituting, describing or relating to the above.

              (b) Upon disclosure of each Development to the Company, Employee
will, during his employment and at any time thereafter, at the request and cost
of the Company, sign,

                                       6
<PAGE>

execute, make and do all such deeds, documents, acts and things as the Company
and its duly authorized agents may reasonably require to (i) apply for, obtain
and vest in the name of the Company alone (unless the Company otherwise directs)
letters, patents, copyrights or other analogous protection in any country
throughout the world and when so obtained or vested to renew and restore the
same, (ii) defend any actions or opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications for
revocation of such letters, patents, copyrights or other analogous protection,
and (iii) bring any action to enforce any rights in any Developments.

              (c) The Employee hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as the Employee's agent and
attorney-in-fact, to act for and in the Employee's behalf and stead to execute
and file any such application or applications and to do all other lawfully
permitted acts to further the prosecution and issuance of any such letters,
patents, copyrights and other analogous protection thereon with the same legal
force and effect as if executed by Employee.

              (d) In the event of the termination of Employee's employment for
any reason (or no reason), Employee agrees to deliver to the Company all
documents, notes, drawings, blueprints, formulae, specifications, computer
programs, data and other materials of any nature pertaining to any proprietary
information or Intellectual Property of the Company or to Employee's work with
the Company, and the Employee will not take any of the foregoing or any
reproduction of any of the foregoing that is embodied in a tangible medium of
expression.

              (e) The obligations of Employee pursuant to this Paragraph 8 shall
survive termination of his employment and of this Agreement.

                                       7
<PAGE>

         9. Non-Competition.

              (a) Employee acknowledges and agrees that the retention of
Confidential Information is essential to the continued existence of the Company,
and that such information constitutes trade secrets, disclosure of which would
irreparably harm the business of the Company. Employee further acknowledges that
the Company would find it extremely difficult to replace Employee. Accordingly,
Employee agrees that he will not during the period he is employed by the Company
or any present or future parent, subsidiary or affiliate of the Company, under
this Agreement or otherwise, and for a period of 12 months thereafter (i) engage
in, or otherwise directly or indirectly be employed by, or act as a consultant,
advisor or lender to, or be a director, officer, employee, stockholder, owner,
or partner of, any other Competitive Business (as hereinafter defined), (ii)
assist others in engaging in any Competitive Business, (iii) induce any employee
of the Company or any present or future parent, subsidiary or affiliate of this
Company to terminate his employment with the Company or such parent, subsidiary
or affiliate, or engage in any Competitive Business, within a period of one year
after such person is no longer employed by the Company or any present or future
parent, subsidiary or affiliate of the Company, or (iv) induce any entity or
person with which the Company or any of present or future parent, subsidiary or
affiliate has a business relationship to terminate or alter such business
relationship. As used herein "Competitive Business" means and includes the
business of designing, developing, manufacturing and marketing
RF/Microwave/Millimeter/ Wave ceramic capacitors, thin film products and other
passive components and any other business that provides services and/or products
which are comparable to the services and/or products provided or contemplated to
be provided by the Company or any present or future parent, subsidiary or
affiliate of the Company. Notwithstanding anything contained herein to the
contrary, the provisions of this Paragraph 9 will not be deemed breached merely
because

                                       8
<PAGE>

Employee owns not more than 1% of the outstanding common stock of a corporation,
if, at the time of its acquisition by Employee, such stock is listed on a
national securities exchange, is reported on NASDAQ, or is regularly traded in
the over-the-counter market by a member of a national securities exchange.

              (b) Employee understands that the foregoing restrictions may limit
his ability to earn a livelihood in a business similar to that of the Company or
any present or future parent, subsidiary or affiliate of the Company, but he
nevertheless believes that he has received and will receive sufficient
consideration and other benefits as an employee of the Company and as otherwise
provided hereunder to justify such restrictions which, in any event (given his
education, skills and ability), Employee does not believe would prevent him from
earning a livelihood.

              (c) The obligations of Employee pursuant to this Paragraph 9 shall
survive the termination of his employment and of this Agreement.

         10. Scope of Agreement. Employee acknowledges that the restrictions
contained in Paragraphs 7, 8 and 9 are a condition of his employment by the
Company. Employee further acknowledges that such restrictions are reasonable in
view of the nature of the business in which the Company is engaged and his
knowledge of the Company's business, and that any breach of his obligations
under Paragraphs 7, 8 and 9 hereof will cause the Company irreparable harm for
which the Company will have no adequate remedy at law. As a result, the Company
shall be entitled to the issuance by a court of competent jurisdiction of an
injunction, restraining order or other equitable relief in favor of itself
restraining Employee from committing or continuing any such violation. Any right
to obtain an injunction, restraining

                                       9
<PAGE>

order or other equitable relief hereunder will not be deemed a waiver of any
right to assert any other remedy the Company may have under this Agreement or
otherwise at law or in equity.

         11. Representations and Warranties. Employee represents and warrants
that the execution and delivery of this Agreement and the performance of all the
terms of this Agreement do not and will not breach any agreement to which he is
a party, including, without limitation, any agreement to keep in confidence
proprietary information acquired by Employee in confidence or trust. Employee
has not entered into and shall not enter into any agreement, either written or
oral, in conflict with this Agreement. Employee further represents and warrants
that he has not brought and will not bring with him to the Company or use at the
Company any materials or documents of an employer or a former employer that are
not generally available to the public, unless express written authorization from
such employer for their possession and use has been obtained. Employee further
understands that he is not to breach any obligation of confidentiality that he
has to any employer or former employer and agrees to fulfill all such
obligations during the period of his affiliation with the Company.

         12. Assignment. Under no circumstances shall Employee assign, pledge or
otherwise dispose of any of his rights or obligations under this Agreement, and
any such attempted assignment, pledge, or disposition shall be void and shall
relieve the Company of all its obligations under this Agreement. The Company may
assign any of its rights or obligations under this Agreement to any present or
future parent, subsidiary, affiliate, or successor.

         13. Entire Agreement. This Agreement is the entire agreement between
the Company and Employee with respect to the subject matter hereof and
supersedes all other agreements, written or oral, concerning the subject matter
hereof.

                                       10
<PAGE>

         14. Waivers and Further Agreements Any waiver of any breach of any
terms or conditions of this Agreement shall not operate as a waiver of any other
breach of such terms or conditions or any other term or condition, nor shall any
failure to enforce any provision hereof on any one occasion operate as a waiver
of such provision or of any other provision hereof or a waiver of the right to
enforce such provision or any other provision on any subsequent occasion.

         15. Amendments. This Agreement may not be amended, nor shall any
waiver, change, modification, consent, or discharge be effected, except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any such amendment, waiver, change, modification, consent, or
discharge is sought.

         16. Severability

              (a) If any provision of this Agreement shall be held or deemed to
be invalid, inoperative, or unenforceable as written, it shall be construed, to
the greatest extent possible, in a manner which shall render it valid and
enforceable, and any limitation on the scope or duration of any such provision
necessary to make it valid and enforceable shall be deemed to be part thereof.

              (b) If any provision of this Agreement shall be held or deemed to
be invalid, inoperative, or unenforceable as applied to any particular case in
any jurisdiction or jurisdictions, or in all jurisdictions or in all cases,
because of the conflict or any provision with any constitution or statute or
rule of public policy or for any other reason, such circumstance shall not have
the effect of rendering the provision or provisions in question invalid,
inoperative, or

                                       11
<PAGE>

unenforceable in any other jurisdiction or in any other case or circumstance or
of rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to the extent that such other provisions are not
themselves actually in conflict with such constitution, statute, or rule of
public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, or unenforceable provision
had never been contained herein, and such provision reformed so that it would be
valid, operative, and enforceable to the maximum extent permitted in such
jurisdiction or in such case.

         17. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
giving effect to rules governing conflicts of law.

         18. Courts. Any action to enforce any of the provisions of this
Agreement shall be brought in the courts of the State of New York. The parties
hereby consent to the jurisdiction of the courts of the State of New York.

         19. Notices. Any notices required or permitted by this Agreement shall
be in writing and personally delivered or mailed by certified or registered
mail, return receipt requested, addressed to the parties at their addresses set
forth above, or to such other addresses as one party may specify to the other
party, from time to time, in writing. Any notice personally delivered shall be
deemed given at the time of receipt thereof, and any notice given by certified
or registered mail shall be deemed given at the time of certification or
registration thereof.

         20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

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

                                       12
<PAGE>

                           AMERICAN TECHNICAL CERAMICS CORP.

                           By:
                              -----------------------------------
                              Kathleen M. Kelly
                              Vice President, Administration and
                              Corporate Secretary



                           ----------------------------------------
                              David Ott



                                       13