Document:

Exhibit 10.13

 

	
 
    	
 
    	

    
	
 
    	
 
    	
Isola Group
    

 

December 5, 2011

 

Re:                             Amendments to Employment Agreement

 

Dear Matt:

 

The purpose of this letter is to set forth certain corrections to the Employment Agreement between you and Isola USA Corp. (the “Company”), dated April 30, 2007 (the “Original Agreement”), that are intended to conform the Original Agreement to the requirements of Section 409A of the Internal Revenue Code (“Section 409A”) or exemptions therefrom.  Please indicate your agreement to these corrections by signing and dating the enclosed copy of this letter and returning it to me.

 

Section 2(b) of the Original Agreement is replaced in its entirety by the following:

 

2.                                       Compensation

 

(b)                                 In addition to the Base Salary, during the Employment Period, the Executive shall be eligible to participate in the executive bonus program (the “Program”) established and approved by the Board of Directors of the Company (the “Board”) and, pursuant to the Program, the Executive may earn an annual bonus (the “Annual Bonus”) in each fiscal year during the Employment Period with a target Annual Bonus of 50% of Base Salary up to a maximum of 100% of Base Salary, based on the achievement of annual performance objectives as set forth in the Program, subject to the Executive’s employment with the Company through the applicable payment date for any such Annual Bonus, which shall be no later than the ninetieth (90th) day following the end of the applicable fiscal year. The Bonus Target and Maximum goals will be set on an annual basis.

 

Sections 5(a) and (b) of the Original Agreement are replaced in their entirety by the following:

 

5.                                       Termination Payments

 

(a)                                  Without Cause.  In the event of the termination of the Executive’s employment during the Employment Period by the Company without Cause, in addition to the Executive’s accrued but unused vacation and Base Salary through the Date of Termination (to the extent not theretofore paid) the Executive shall be entitled to continue to receive his Base Salary at the rate in effect as of the Date of Termination for a period

 

 

of twelve (12) months following the Date of Termination, with such Base Salary to be paid in installments in accordance with the Company’s normal payroll practices beginning on the first regular payroll date occurring after the date on which the Release (as defined below) becomes effective and no later than the ninetieth (90th) day following the Date of Termination, provided that if such ninety (90) day period spans two calendar years, the installment payments shall begin in the second such calendar year.  The initial payment of continued Base Salary will include a catch-up payment consisting of the installments that otherwise would have been paid on the regular payroll dates occurring between the Date of Termination and such initial payment date.  The payments and benefits provided herein are subject to and conditioned upon the Executive executing a valid general release and waiver (in the form reasonably acceptable to the Company), waiving all claims the Executive may have against the Company, its successors, assigns, affiliates, executives, officers and directors (the “Release”), and such Release becoming effective in accordance with its terms on or before the sixtieth (60th) day following the Date of Termination, and the payments and benefits are subject to and conditioned upon the Executive’s compliance with the Restrictive Covenants provided in Sections 7 and 8 hereof. For the avoidance of doubt, upon a termination of the Employment Period without Cause, the Executive shall not be entitled to continuation of his Base Salary for more than the period of twelve (12) months described in the preceding sentence or to any other compensation or benefits not expressly provided for in this section, regardless of the time that would otherwise remain in the Employment Period had the Employment Period not been terminated without Cause. Notwithstanding the foregoing, the Executive shall be required to mitigate any damages that the Executive may incur as a result of a termination of his employment by the Company without Cause during the Employment Period by seeking employment comparable in terms of compensation, position and location to the Executive’s employment hereunder. Any amounts that the Executive earns pursuant to such employment shall offset and reduce the amount of severance required to be paid to the Executive pursuant to this Section 5(a) during the 12-month period following the Date of Termination. For purposes of this Section 5(a), “employment” shall mean any activity for which the Executive is compensated as a result of the rendering of services, whether such services are rendered as a common law employee, a partner, sole proprietor, independent contractor or otherwise. The Executive shall be required to provide such evidence as the Company may reasonably require regarding the amount of such earnings. Except as provided in this Section 5(a) and except for any vested benefits under any tax qualified pension plans of the Company, and continuation of health insurance benefits on the terms and to the extend required by Section 4980B of the Internal Revenue Code of 1986 and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known as “COBRA”), the Company shall have no additional obligations under this Agreement. During the severance period, the Executive shall be eligible to elect to receive Isola’s medical and dental plans. The Executive will be required to pay their normal employee contribution rate during the severance period. These benefits will be secondary and supplemental to any like benefits provided by another company.

 

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(b)                                 Disability or Death.  If the Executive’s employment is terminated during the Employment Period as a result of the Executive’s death or Disability, the Company shall pay the Executive or the Executive’s estate, as the case may be, within thirty (30) days following the Date of Termination: (i) the Executive’s accrued but unused vacation, (ii) his accrued but unpaid Base Salary; and (iii) any Annual Bonus earned by the Executive in respect of the Company’s fiscal year ending immediately prior to the Date of Termination, which shall be paid in any event no later than the ninetieth (90th) day following the end of such fiscal year. Except as provided in this Section 5(b) and except for any vested benefits under any tax qualified pension plans for the Company, and continuation of health insurance benefits on the terms and to the extent required by COBRA, the Company shall have no additional obligations under this Agreement.

 

The following is added as a new Section 12 of the Original Agreement:

 

12.                                 Section 409A.

 

(a)                                  The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Internal Revenue Code (the “Code”) and the regulations and guidance promulgated thereunder (“Section 409A”), except to the extent exempt as short-term deferrals or otherwise, and. accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  The Company may reform any provision of this Agreement to the extent reasonably necessary to comply with Section 409A.

 

(b)                                 A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is  also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  The determination of whether and when a separation from service of the Executive from the Company has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-l(h) (or any successor provision).  Solely for purposes of this Section 13(b), “Company” shall include all persons with whom the Company would be considered a single employer under Sections 414(b) and 414(c) of the Code.  The following rules shall  apply with respect to distribution of the payments and benefits, if any, to be provided to the Executive under Section 3 as applicable:

 

(i)                                     Neither the Company nor the Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409; and

 

(ii)                                  If, as of the date of the “separation from service” of the Executive from the Company, the Executive is a “specified employee” (within the meaning of that

 

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term under Section 409A(a)(2)(B) of the Code, then with regard to any payment or the provision of any benefit that is subject to this Section 13 (whether under this Agreement, any other plan, program, payroll practice or any equity grant) and is due upon or as a result of the Executive’s separation from service, such payment or benefit shall not be made or provided, to the extent making or providing such payment or benefit would result in additional taxes or interest under Section 409 A, until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Executive, and (B) the date of the Executive’s death (the “Delay Period”) and this Agreement and each such plan, program, payroll practice or equity grant shall hereby be deemed amended accordingly.  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 13 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum on the first business day following expiration of the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(c)                                  All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A.  All expenses or other reimbursements  paid pursuant herewith that are taxable income to the Executive shall in no event be paid later than the end of the calendar year next following the calendar year in which Executive incurs such expense or pays such related tax.  With regard to any provision herein that provides far reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that, the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense occurred.

 

(d)                                 Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g. “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

 

[SIGNATURE PAGE TO FOLLOW]

 

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All other provisions of the Agreement will remain unchanged and in full force and effect.

 

Sincerely,

 

ISOLA USA CORP.

 

 

	
By:
    	
/s/   Raymond P. Sharpe
    	
 
    
	
 
    	
Raymond   P. Sharpe
    	
 
    
	
 
    	
President   and Chief Executive Officer 
    	
 
    

 

 

I agree to the foregoing amendments to my Original Agreement.

 

 

	
/s/   Matt LaRont
    	
 
    	
Date:
    	
December   20, 2011
    
	
Matt   LaRont
    	
 
    	
 
    

 

5Exhibit 10.14

 

RESTATED EMPLOYMENT AGREEMENT

 

This Restated Employment Agreement, effective as of October 1, 2004, is between Isola USA Corp., a Delaware corporation, (hereinafter the “Company”) and Tarun Amla, (hereinafter “the Executive”).

 

RECITALS:

 

1.             Whereas, the above-referenced parties were signatory to one or more prior Employment Agreement(s), the most recent of which is dated August 20, 2001 (hereinafter the “Prior Agreement”); and

 

2.             Whereas, ownership of the Company has recently changed; and

 

3.             Whereas, the parties have agreed to terminate their Prior Agreement and thereby rescind all of its terms and conditions and replace them with the terms and conditions in this Restated Employment Agreement, which supersedes for all purposes the Prior Agreement.

 

NOW THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:

 

1.             Employment:

 

The Executive and the Company agree that the Executive will continue to be employed by the Company in the capacity of Vice President and Chief Technology Officer at the current base salary of $217,500.00 per year (or $18,125.00 per month). The Executive’s duties and base salary may be adjusted as deemed appropriate by the Company’s Chief Executive Officer. The parties acknowledge that the Executive’s continued employment will be on an at-will basis.

 

2.             Stock Options:

 

In conjunction with this Restated Employment Agreement, the parties are also entering into a separate Stock Option Agreement, which is incorporated herein by reference.

 

3.             Severance

 

If the Executive exercises his at-will prerogative to terminate this Restated Employment Agreement at any time for any reason, he shall receive his Base Salary through the date of termination but not be entitled to severance pay. If the Company exercises its at-will prerogative to terminate this Restated Employment Agreement at any time for any reason, the Executive will be eligible to receive severance pay equal to the Executive’s base salary, less lawfully-required withholdings, for a period of up to twelve (12) months. Such severance will be paid in installments in accordance with the Company’s normal payroll practices. Receipt of such severance pay is contingent upon the Executive returning all Company property and executing the Company’s Full Waiver and Release Agreement.

 

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If the Executive does not secure new employment during the Severance Period, then the Executive will receive unreduced severance payments throughout the entire Severance Period. If the Executive does secure new employment prior to the end of the Severance Period, then the remaining severance payments will be reduced to equal the difference between the Executive’s prior base salary while employed with the Company and the Executive’s new salary, for the remainder of the Severance Period. If the Executive’s new salary exceeds the Executive’s prior base salary, severance payments will be discontinued. For purposes of this Section, “employment” shall mean any activity for which the Executive is compensated in return for rendering services, whether such services are rendered as an employee, partner, sole proprietor, independent contractor or otherwise. The Executive agrees to promptly provide the Company with such evidence as the Company may reasonably require regarding the amount of income earned from such new employment. The above-described severance pay shall be the exclusive severance benefit provided by the Company to the Executive and this provision shall supersede any and all Company severance pay policies which may have been in affect at any time.

 

4.             Continued Medical Coverage

 

Should either party exercise its at-will prerogative to terminate this Agreement, the Executive shall be eligible to continue his current health insurance coverage pursuant to the terms and conditions of COBRA.

 

5.             Confidential Information

 

a.               Definition. As used in this Agreement, “Confidential Information” means information acquired, developed or used by the Company in connection with its business and which has value to the Company as long as it is maintained as confidential. Confidential Information includes, but is not limited to, information (including trade secrets) disclosing or constituting the manufacturing processes, product designs or product specifications of the Company; research and development activities and projects of the Company; quality control procedures used by the Company and product compliance with quality and performance standards; plans for new products or produce improvements; technical assistance to customers about produce performance or applications, the identities of customers and vendors and details of the Company’s relations and transactions with customers and vendors (including the identity of items purchased from vendors and products sold to customers, volume of purchases and sales, dates and frequency of transaction and pricing); internal financial or accounting details of the Company’s strategic business plans of the Company; and any other nonpublic information relating to the Company’s business.

 

b.              Nondisclosure of Confidential Information.

 

(1)           Executive acknowledges that during the course of his employment with the Company, Executive will have access to Confidential Information. Executive acknowledges that the Confidential Information has been maintained as confidential by the Company and is highly valuable and proprietary to the Company and that disclosure of Confidential Information to third parties or unauthorized use of it by Executive would cause the Company irreparable competitive harm.

 

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(2)           Executive shall not during the term of his employment disclose to any third parties Confidential Information and shall confine use of Confidential Information exclusively to carrying out duties specified by the Company. Executive shall not, following termination of employment, disclose or use in any way for any purpose Confidential Information without the express prior written consent of the Company; provided, however, that this nondisclosure obligation shall cease as to any Confidential Information when the information becomes publicly available or otherwise ceases to be confidential through no fault or action of the Company.

 

(3)           Executive shall, immediately upon termination of employment, return to the Company all documents containing or disclosing Confidential Information, as well as all copies made of any such documents, and any other material, whether in hard copies or machine-readable media, made or derived from Confidential Information.

 

c.             Disclosure of Prior Agreements: Non-Use of Third-Party Trade Secrets.

 

(1)           Executive represents that he has disclosed to the Company any employment agreement or any other agreement, still in effect, that imposes any restrictions on Executive that could affect his performance of services on behalf of the Company.

 

(2)           Executive further represents that he has not disclosed and will not disclose to the Company and will not use on Company’s behalf any trade secrets or other confidential or proprietary information belonging to a third party without prior consent from that third party.

 

6.             Intellectual Property

 

a.             Executive shall, during the course of his employment and for a period of one year after termination of employment, report to the Company all inventions, improvements or discoveries of any kind created or made by Executive in connection with his employment or that relate in any way to the business or research and development of the Company or that could have any application in the business or research and development of the Company.

 

b.             All inventions, improvements or discoveries described in paragraph 5(a) of this Agreement shall be the property of the Company, and Executive shall execute and deliver all documents and shall give all necessary assistance to secure to, assign and vest in Company the sole and exclusive right, title and interest in and to all such inventions, improvements or discoveries, including, but not limited to, patent applications, assignments, affidavits, priority claims and other documents necessary, in Company’s sole judgment, to obtain, maintain or defend any patents or preserve any trade secrets or other know-how. Executive shall appear and give evidence in any suit, interferences or other legal proceedings that arise in connection with any of the inventions, improvements or discoveries. The provisions of this section shall survive the termination of Executive’s employment with Company.

 

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7.             Restrictive Covenants

 

In consideration of his continued employment by the Company and the compensation arrangements set forth herein, the Executive hereby covenants and agrees that:

 

a.     Non-Compete Covenant. During his employment with the Company and thereafter for the Severance Period contained in paragraph 2 above, he shall not accept employment with, or otherwise provide his services to, any other manufacturer of glass epoxy laminates used for printed circuit board and chip carrier without the prior written consent of the Company. At the time of the execution of this Agreement, the above-described competing manufacturers consist of:

 

1. Park Electrochemical

2. Polyclad Laminates

3. Masushita Electric

4. Kingboard

5. Nanya

6. Grace

 

The parties hereto recognize and agree, however, that this list  may change over time and, therefore, the foregoing list is not intended to be exclusive. Because the Company’s business, and hence the Executive’s duties, are international in scope, the geographic scope of this restriction is international.

 

b.             Anti-Piracy/Hands Off Covenant. During his employment with the Company and for a period of one year after that employment ends for any reason, he shall not divert, or attempt to divert, the business of any customer of the Company with whom the Executive  had contact while employed by the Company to a competitor of the Company.

 

c.             Anti-Raiding Covenant. During his employment with the Company and for a period of one year after that employment ends for any reason, he shall not induce, or attempt to induce, any employee of the Company to terminate his employment with the Company in order to accept employment or any other relationship with a competitor of the Company.

 

8.             Reasonableness of Restraints: Irreparable Harm. Executive acknowledges that the covenants contained in paragraphs 4, 5 and 6 of this Agreement are reasonably necessary to protect the goodwill, trade secrets and other business interests of the Company and that they will cause the Executive no undue hardship. The Executive acknowledges that any breach of the foregoing covenants will cause the Company immediate irreparable harm for which monetary relief would not be calculable or adequate, and Executive hereby consents to entry of injunctive relief to prevent any such breach and entry of such further equitable relief as may be needed to enforce the covenants or any other provisions of this Agreement.

 

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9.             Binding Effect: Benefits

 

This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors, assigns, heirs and legal representatives, including, without limitation, any entity with which the Company may merge, consolidate or to which it may transfer all or substantially all of its assets.

 

10.           Entire Agreement: Amendments

 

This Agreement and contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, between the parties hereto with respect to the subject matter hereof. This Agreement may not be changed orally, but only by an agreement, in writing, signed by the party against whom any waiver, change, amendment, modification or discharge is sought.

 

11.           Severability

 

If any provision or provisions of this Agreement (including, without limitation, any provision or provisions of paragraphs 4, 5 or 6) shall be declared invalid or unenforceable, any such provision or provisions shall be deemed severed from the remainder of the provisions contained herein which shall otherwise remain in full force and effect.

 

12.           Governing Law

 

This Agreement shall be governed by and construed in accordance with the law of the State of Arizona without giving effect to the principles of conflicts of law thereof.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
/s/ Tarun Amla
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
V.P. CTO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
/s/ Raymond P. Sharpe
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
CEO & President
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

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