Unassociated Document


    
      

    


    AMENDED
      AND RESTATED AGREEMENT

    REGARDING
      EMPLOYMENT/COMPENSATION

    UPON
      CHANGE IN CONTROL

    


    THIS
      AMENDED AND RESTATED AGREEMENT is entered into as of  SEPTEMBER
      15,
      2005,
      by and between APA ENTERPRISES, INC., a Minnesota corporation
      (herein called the "Company"), and ANIL K. JAIN (herein called the
      "Executive").

    


    WHEREAS,
      Executive has been employed by the Company for many years and is currently
      its President and Chief Executive Officer; and

    


    WHEREAS,
      Executive is a very important and valuable employee and the Company desires
      to keep Executive in its service; and

    


    WHEREAS,
      the Company desires to provide suitable compensation to the Executive
should
      his employment be terminated or substantially changed as a result of a "Change
      in Control" as defined herein or otherwise without "Cause" as defined herein;
      and

    


    WHEREAS,
      Executive acknowledges that this is not an employment agreement, but is
solely
      intended to provide for employment security and compensation in the event of
      termination of his employment in accordance with the terms and conditions of
      this Agreement.

    


    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants contained
      herein, the parties hereto agree as follows:

     

    1.            
      Definitions.
      For the
      purpose of this Agreement, the following words and phrases shall have the
      following meanings:

     

    (a)           "Change
      in Control" shall mean:

     

    (i)            
      the
      consummation of any consolidation or merger of the Company in which the Company
      is not the continuing or surviving corporation or pursuant to
      which
      shares of the Company's common stock would be converted into cash, securities,
      or other property, other than a merger of the Company in which the holders
      of
      the Company's common stock immediately prior to the merger have the
      same
      proportionate ownership of common stock of the surviving corporation
immediately
      after the merger; or

     

    (ii)            
      any
      sale,
      lease, exchange, or other transfer (in one transaction or a series
      of
      related transactions) of all, or substantially all, of the assets of the
Company;
      or

     

    (iii)            approval
      by the shareholders of the Company of any plan or proposal for the liquidation
      or dissolution of the Company; or

     

    (iv)            any
      person (as such term is used in Sections 13(d) and 14(d)(2) of the
      Securities Exchange Act of 1934, as amended (the "Exchange Act")
      shall become
      the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
      Act) of 30% or more of the Company's outstanding stock; or


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    (v)            
      during
      any period of two consecutive years, individuals who at the beginning
      of such period constitute the entire Board of Directors shall cease for any
      reason to constitute a majority thereof unless the election, or the nomination
      for election by the Company's shareholders, of each new director was approved
      by
      at
      least two-thirds of the directors then still in office who were directors at
      the
      beginning of the two-year period.

     

    (b)           "Cause"
      shall mean clear and convincing evidence of:

     

    (i)            
      material
      dishonesty by Executive involving the employer;

     

    (ii)            willful
      violation of any law, rule, or regulation;

     

    (iii)           failure
      or refusal to perform a material requirement of Executive's duties,
      or failure or refusal to comply with a reasonable, important general policy
      of
      the
      Company or its Board of Directors, after receipt by Executive of written
notice
      specifying in detail the failure or refusal, and a reasonable time in which
      to
perform;

     

    (iv)           breach
      of
      fiduciary duty to the employer; or

     

    (v)            Executive's
      (a) death or (b) disability (by reason of physical or mental
      disease, defect, accident or illness) such that Executive is or, in the opinion
      of
      two
      independent physicians, one selected by the Company and one by Executive
      or his representative, for purposes of making this determination, will be
unable
      for an aggregate of 180 or more days during any continuous 12-month period
      to
      render the services required of him. In his then current position with the
      Company.

     

    (c)           "Competitive
      Activities" shall mean:

     

    (i)            
      directly
      or indirectly engaging in, continuing in, or carrying on any business
      which substantially competes with the business conducted by the Company;

     

    (ii)            soliciting
      or accepting orders for business on behalf of an entity other than the Company
      from any persons (whether individuals or entities) who were
      customers or bona fide prospects of the Company during the one-year period
      prior
      to
      Executive's termination of employment or inducing or attempting to induce such
      persons to terminate or modify their relationship with the Company for such
      business; or

     

    (iii)           offering,
      soliciting or agreeing to employ an employee of the Company,
      or inducing or attempting to induce such an employee to quit his or her
employ
      with the Company, without the prior written consent of the Company; Provided,
      however, that the term "Competitive Activities" shall not include the ownership
      of securities of corporations, which are listed on a national securities
exchange
      or quoted on a national over-the-counter market, by the Executive in an amount
      not exceeding 2% of the outstanding shares of any such
      corporation.


    
      
        
        

      

      
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    (d)           "Date
      of
      Termination" shall mean:

     

    
      (i)           if
        Executive's employment is terminated by the Company for disability, 90 days
        after Notice of Termination is given to Executive (provided that Executive
        shall
        not have returned to the performance of Executive's duties on a full-time
        basis
        during such 90-day period); or

      


      (ii)          if
        Executive's employment is terminated by the Company for any other reason,
        90
        days after Notice of Termination is given; provided, however, that
        if
        within 90 days after any Notice of Termination is given to Executive by the
        Company
        Executive notifies the Company that a dispute exists concerning the termination,
        the Date of Termination shall be the date the dispute is finally determined,
        whether by mutual agreement by the parties or upon final judgment, order,
        or
        decree of a court of competent jurisdiction (the time for appeal therefrom
        having expired and no appeal having been perfected).

    

     

    (e)           "Good
      Reason" shall mean any of the following (without Executive's express written
      consent):

     

    (i)           Assignment
      to Executive by the Company of duties inconsistent with Executive's position,
      duties, responsibilities, and status with the Company immediately prior to
      a
      Change in Control of the Company, or a change in Executive's
      titles or offices as in effect immediately prior to a Change in Control
of
      the
      Company, or any removal of Executive from or any failure to reelect or reappoint
      Executive to any of such positions, except in connection with the termination
      of his employment for disability, Retirement, or Cause or as a result
of
      Executive's death or by Executive other than for Good Reasons;

     

    (ii)          A
      reduction by the Company of Executive's base salary as in effect on
      the
      date hereof or as the same may be increased from time to time during the
term
      of
      this Agreement or the Company's failure to increase Executive's base
salary
      (within 12 months of Executive's last increase in base salary) after a Change
      in
      Control of the Company in an amount which at least equals, on a percentage
      basis, the average percentage increase in base salary for all executive officers
      of the Company effected during the preceding 12 months;

     

    (iii)         Any
      failure by the Company to continue in effect, or to provide a comparable
      substitute for, any benefit plan or arrangement (including, without limitation,
      any profit sharing plan, executive supplemental medical plan, group life
      insurance plan, and medical, dental, accident, and disability plans) in which
      Executive is participating at the time of a Change in Control of the Company
      (or
any
      other
      plans providing Executive with substantially similar benefits) (hereinafter
      referred to as "Benefit Plans"), the taking of any action by the Company that
      would adversely affect Executive's participation in or materially reduce
      Executive's benefits under any such Benefit Plan or deprive Executive of any
      material fringe benefit enjoyed by Executive at the time of a Change in
Control
      of the Company;


    
      
        
        

      

      
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    (iv)         Any
      failure by the Company to continue in effect, or to provide a comparable
      substitute for, any incentive plan or arrangement (including, without
      limitation, any incentive compensation plan, long-term incentive plan, bonus
      or
      contingent bonus arrangements or credits, the right to receive performance
      awards, or similar incentive compensation benefits) in which Executive is
participating,
      or is eligible to participate, at the time of a Change in Control of the
Company
      (or any other plans or arrangements providing him with substantially
similar
      benefits) (hereinafter referred to as "Incentive Plans") or the taking of any
      action by the Company which would adversely affect Executive's participation
      in
any
      such
      Incentive Plan, expressed as a percentage of his base salary, by more than
      ten
      percentage points in any fiscal year as compared to the immediately preceding
      fiscal year;

     

    (v)           Any
      failure by the Company to continue in effect, or to provide a comparable
      substitute for, any plan or arrangement to receive securities of the Company
      (including, without limitation, any stock option plan or any other plan or
      arrangement to receive and exercise stock options, stock appreciation rights,
      restricted stock, or grants thereof) in which Executive is participating, or
      is
      eligible to participate, at the time of a Change in Control of the Company
      (or
      plans or arrangements providing him with substantially similar benefits)
(hereinafter
      referred to as "Securities Plans") or the taking of any action by the Company
      which would adversely affect Executive's participation in or materially
reduce
      Executive's benefits under any such Securities Plan;

     

    (vi)          If
      at the
      time of a Change in Control of the Company Executive is employed at the
      Company's principal executive offices, a relocation of such principal executive
      offices to a location more than fifty miles outside of the Minneapolis-St.
      Paul
      Metropolitan Area or, if Executive is not employed at the Company's
      principal executive offices, Executive's relocation to any place other
than
      the
      location at which the Executive performed Executive's duties prior to a
Change
      in
      Control of the Company, except for required travel by Executive on the
Company's
      business to an extent substantially consistent with Executive's business
      travel obligations at the time of a Change in Control of the
      Company;

     

    (vii)         Any
      failure by the Company to provide Executive with at least the number
      of
      paid vacation days to which the Executive is entitled at the time of a
Change
      in
      Control of the Company;

     

    (viii)        Any
      material breach by the Company of any provision of this
      Agreement;


    
      
        
        

      

      
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    (ix)           Any
      failure by the Company to obtain the assumption of this Agreement
      by any successor or assign of the Company; or

     

    (x)           Any
      purported termination of Executive's employment which is not
      effected pursuant to a Notice of Termination satisfying the requirements of
      Section
      1
      (f) hereof.

     

    (f)           "Notice
      of Termination" shall mean a written notice which shall indicate those specific
      termination provisions in this Agreement relied upon and which sets forth
in
      reasonable detail the facts and circumstances claiming to provide a basis for
      termination
      of Executive's employment under the provisions so indicated. Any termination
      by the Company pursuant to this Agreement shall be communicated by Notice of
      Termination. For purposes of this Agreement, no such purported termination
      by
      the Company shall be effective without such Notice of Termination.

     

    (g)           "Retirement"
      shall mean termination by the Company or Executive of Executive's
      employment based on Executive's having reached age 65 or such other age
or
      upon
      such other terms as shall have been fixed in any arrangement established with
      Executive's
      consent.

     

    2.           
      Separate
      Employment Arrangements.
      Executive is, and shall be, employed by the Company
      solely upon the existing arrangements which are separate from this Agreement,
      as
those
      employment arrangements hereafter may be amended by the parties. The parties
      expressly acknowledge
      and agree that this Agreement is not intended to be an employment
      agreement.

     

    3.           
      Participation
      in Other Executive Benefit Plans.
      Nothing
      in this Agreement shall in
      any
      manner modify, impair, or affect the existing or future rights or interests
      of
      Executive (a)
      to
      receive any employee benefits from the Company to which he would otherwise
      be
      entitled or (b) as a participant in any incentive, profit-sharing or bonus
      plan,
      stock option plan or pension plan
      of
      the Company. The rights and interests of Executive to any employee benefits
      or
      as a participant
      or beneficiary in or under any or all such plans shall continue in full force
      and effect. Executive shall have the right at any future time to become a
      participant or beneficiary under or pursuant
      to any and all such plans. Any compensation payable under this Agreement shall
      not be deemed
      salary or other compensation to Executive for purposes of any retirement plans
      maintained by the Company or for purposes of any other fringe benefit
      obligations of the Company.

     

    4.           
      Nonassignability
      of Benefits.
      Executive shall not transfer, assign, encumber, or otherwise
      dispose of his right to receive payments hereunder and, in the event of any
      attempted transfer
      or assignment, the Company shall have no further liability to Executive under
      this Agreement.

     

    5.           
      Payments
      and Benefits upon a Change in Control.
      If
      Executive is employed by the
      Company upon the occurrence of a Change in Control, the following provisions
      shall govern:

     

    (a)           Executive
      shall continue to be employed for at least thirty-six (36) months with
      substantially the same duties, compensation, and benefits in the same geographic
      location as existed just prior to the Change in Control.


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    (b)           Executive
      may terminate his employment during the thirty-six (36) months
      following the Change in Control for Good Reason, as defined herein, and, upon
      such termination, shall receive from the Company in a lump sum, in cash, on
      the
      fifth (5th)
      day
      following the Date of Termination, an amount equal to two and one-half (2
      1/2)
      times
      Executive's "annualized includible compensation for the base period" (as defined
      in
      Section 280G(d) of the Internal Revenue Code of 1986, as amended (the "Code")),
      and shall
      not
      engage in any Competitive Activities for one year following the Date of
Termination.

     

    (c)           If
      Executive's employment is terminated within thirty-six (36) months following
      the Change in Control, other than for Cause as defined herein or as a result
      of
his
      Retirement, disability, or death, the Executive shall receive as severance
      pay
      in a lump
      sum,
      in cash, on the fifth (5th)
      day
      following the Date of Termination, an amount equal
      to
      two and one-half (2 1/2) times Executive's "annualized includible compensation
      for
      the
      base period" (as defined in Section 280G(d) of the Code), and shall not engage
      in any Competitive Activities for one year following the Date of
      Termination.

     

    (d)           Executive
      may terminate his employment other than for Good Reason upon
      at
      least three months' notice following the Change in Control, thereby waiving
      any
further
      benefits hereunder except a severance benefit of three months' salary and a
      prorated
      portion of any annual bonus, provided that Executive then agrees not to engage
      in
      any
      Competitive Activities for six months following the Date of
      Termination.

     

    (e)           If
      Executive terminates his employment otherwise than under any of paragraphs
      (b) or (d) of this Section 5, Executive shall not be entitled to any payments
      for any period after the end of the employment and shall not receive any
      severance benefit.

     

    (f)           If
      the
      Executive holds any options to purchase stock of the Company after a Change
      in
      Control, Executive shall be entitled, upon involuntary termination except for
      Cause during the thirty-six (36) month period, to demand payment of the current
      value of such
      options (fair market value as of the Date of Termination less the then effective
      exercise
      price).

     

    (g)           If
      the
      lump sum severance payment provided for under this Section 5, calculated as
      set
      forth above, either alone or together with other payments which Executive has
      the right to receive from the Company, would constitute an "excess parachute
      payment" (as defined in Section 280G of the Code), such lump sum severance
      payment shall be reduced to the largest amount as will result in no portion
      of
      the lump sum
      severance payment under this Section 5 being subject to the excise tax imposed
      by Section 4999 of the Code. The determination of any reduction in the lump
      sum
      severance payment
      under this Section 5(g) pursuant to the foregoing sentence shall be made by
      Executive in good faith, and such determination shall be conclusive and binding
      on the Company.

     

    (h)           In
      the
      event of termination of Executive's employment for any reason, Executive shall
      be entitled to continue to participate in the Company's group health plan for
      employees following such termination. Executive shall be responsible for payment
      of premiums.
      This benefit shall be available until Executive's death or his election not
      to
continue
      such participation.


    
      
        
        

      

      
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    6.            
      Payments
      and Benefits Without a Change in Control.
      In the
      event that Executive's
      employment with the Company is terminated by the Company without Cause before
      a
      Change in Control or more than 36 months after a Change in Control, Employee
      shall be paid any bonus accrued at the Date of Termination and continuation
      of
      his salary for 24 months, payable at the end of every 3-month period after
      the
      Date of Termination.

     

    7.            
      No
      Obligation to Mitigate Damages; No Effect on Other Contractual
      Rights.

    


    (a)           Executive
      shall not be required to mitigate damages or the amount of any payment
      provided for under Section 5 hereof by seeking other employment or otherwise,
      nor
      shall
      the amount of any payment provided for under Section 5 be reduced by any
compensation
      earned by Executive as the result of employment by another employer after the
      Date of Termination, or otherwise.

     

    (b)           The
      provisions of Section 5, and any payment provided for thereunder, shall not
      reduce any amounts otherwise payable, or in any way diminish Executive's
      existing rights, or rights which would accrue solely as a result of the passage
      of time, under
      any
      Benefit Plan, Incentive Plan, Securities Plan, employment agreement, or other
      contract, plan, or arrangement.

     

    8.            
      Entire
      Agreement; Headings.
      This
      Agreement is the entire Agreement between the
      parties on its subject matter and shall be deemed to supersede any other
      agreements allegedly made
      between the parties regarding the subject matter. Without limitation of the
      foregoing, this Agreement amends, restates and supersedes the Agreement
      Regarding Employment/ Compensation
      Upon Change in Control dated August 20, 1997. Headings shall not be utilized
      in
      any interpretation of this Agreement.

     

    9.            
      Notices.
      Any
      notice or other communication provided for herein or given hereunder
      shall be in writing and shall be delivered in person or, in the case of the
      Company, to the
      Board
      of Directors, or mailed by first class registered or certified mail, postage
      prepaid, addressed
      to the Company at its registered office in the State of Minnesota and addressed
      to the Executive or any other person at the last known address of such person
      appearing on the books of
      the
      Company.

     

    10.           Amendment.
      This
      Agreement may not be changed, modified or amended except in wilting signed
      by
      both parties.

     

    11.           Waiver
      of Breach.
      The
      waiver by either party of the breach of any provision of this
      Agreement shall not operate or be construed as a waiver of any subsequent breach
      by either party.

     

    12.           Invalidity
      of Any Provision.
      The
      provisions of this Agreement are severable, it being
      the
      intention of the parties hereto that should any provision hereof by invalid
      or
unenforceable,
      such invalidity or unenforceability of any provision shall not affect the
      remaining provisions
      hereof, but the same shall remain in full force and effect as if such invalid
      or
unenforceable
      provision or provisions were omitted.


    
      
        
        

      

      
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    13.           Resolution
      of Disputes.
      Any
      dispute or claim arising out of this Agreement, or breach
      thereof, shall be decided by arbitration, under the commercial arbitration
      rules
      of the American Arbitration Association (the "AAA"), and shall be conducted
      in
      the Minneapolis, Minnesota
      metropolitan area. Demand for arbitration hereunder may be made by either party
      hereto
      upon written notification to the other party. The arbitration shall be by a
      single arbitrator mutually
      selected by Executive and the Company. If the parties do not agree upon an
      arbitrator within
      20
      days after the date of a demand for arbitration, the selection of the single
      arbitrator shall be made in accordance with the rules of the AAA. This agreement
      to arbitrate shall be specifically enforceable. Any decision rendered by the
      arbitrator shall be final and binding, and judgment
      may be entered upon it by any court having jurisdiction. The arbitrator shall
      assess arbitration
      fees, expenses, attorneys' fees, and compensation in accordance with the
      applicable AAA rules. Nothing herein contained shall bar either party from
      seeking equitable remedies in a court
      of
      appropriate jurisdiction.

     

    14.           Successors
      and Assigns.
      This
      Agreement shall be binding upon, and inure to the benefit
      of, the Company, its successors and assigns, and Executive, his heirs, legal
      representatives
      and assigns.

     

    15.           Governing
      Law.
      This
      Agreement is being delivered and is intended to be performed
      in the State of Minnesota and shall be construed and enforced in accordance
      with
      the laws of such state.

     

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

     

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

     

    

      
        	 	
                APA
                  ENTERPRISES, INC.

              
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	Jack
                Reddan
	 	 	
                Its:

              	Director
	 	 	 	 
	 	 	 	 
	 	
                EXECUTIVE:

              	 
	 	 	 	 
	 	 	 	 
	 	/s/
                Anil K. Jain
	 	
                Anil
                  K. Jain

              	 


      

       

      
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