Document:

014-12-01MeeksIncentiveandNon-CompeteAgreementcln

                                                                                                                                       Exhibit 10.2
KEMET CORPORATION
INCENTIVE AWARD AND NON-COMPETITION AGREEMENT
THIS AGREEMENT is made as of December 1, 2014, between KEMET Corporation, a Delaware corporation (the “Company”), and Charles C. Meeks, Jr. (“Executive”).
In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Definitions.
(a)    “Cause” means (i) a termination as a result of the willful and continued failure by Executive for a significant period of time substantially to perform his duties with the Company (other than any such failure resulting from his Disability), after a demand for substantial performance is delivered to Executive in writing by the Chief Executive Officer which specifically identifies the manner in which the Company asserts that Executive has not substantially performed his duties, or (ii) the willful engaging by Executive in gross misconduct materially and demonstrably injurious to the Company or any intentional violation of any Company policy.  No act, or failure to act, on Executive’s part shall be considered “willful” unless done, or omitted to be done, by Executive, not in good faith and without reasonable belief that his action or omission was in the best interest of the Company.
(b)     “Change in Control” means any of the following events:
(i)  The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent (25%) or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”), or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subparagraph (i), the following acquisitions shall not constitute a Change in Control of the Company:  (1) any acquisition directly from the Company; (2) any acquisition by the Company; (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (4) any acquisition by any corporation pursuant to a transaction which complies with clauses (1), (2) and (3) of subparagraph (iii) below;
(ii)  Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall 

	
			
	 
	 
	 

be considered as though such individual were a member of the Incumbent Board, but excluding for this purpose any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
(iii)  Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, twenty-five percent (25%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (3) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination;
(iv)  Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. 
(c)    “CIC Agreement” means the July 28, 2014 Change In Control Severance Compensation Agreement between the Company and Executive, and any amendments and/or renewals thereof.
(d)    “Disability” shall mean Executive’s inability to perform the essential duties, responsibilities and functions of his position with the Company and its Subsidiaries as a result of any mental or physical incapacity even with reasonable accommodations of such incapacity provided by the Company and its Subsidiaries or if providing such accommodations would be unreasonable, all as determined by the Company in its reasonable good faith judgment.  Executive shall cooperate in all respects with the Company if a question arises as to whether he has become disabled (including, without limitation, submitting to an examination by a medical doctor or other 

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health care specialists selected by the Company and authorizing such medical doctor or such other health care specialist to discuss Executive’s condition with the Company).
(e)“Good Reason” shall mean the occurrence of any of the following events, without the express written consent of Executive, unless such events are fully corrected in all material respects by the Company within thirty (30) days following written notification by Executive to the Company of the occurrence of one of the reasons set forth below:
(i)    The assignment to Executive of any duties inconsistent with Executive’s position, duties, responsibilities and status with the Company as in effect on the date hereof, or a change in Executive’s employment title in effect on the date hereof, except in connection with  Executive’s Termination for Cause, death or Disability; or
(ii)    A material reduction by the Company in Executive’s base salary below that in effect on the date hereof.
(i)    Executive shall provide the Company with a written notice detailing the specific circumstances alleged to constitute Good Reason within ninety (90) days after the first occurrence of such circumstances, and actually terminate employment within thirty (30) days following the expiration of the Company’s thirty (30)-day cure period described above.  Otherwise, any claim of such circumstances as “Good Reason” shall be deemed irrevocably waived by Executive.
(a)    “Grant Date” means December 1, 2014.
(b)    “Non-compete Period” means one year following the termination (whether initiated by Executive or Company) of employment hereunder.. 
(c)    “Plan” means the Company’s 2011 Omnibus Equity Incentive Plan, as amended.
(d)    “Restricted Stock” means any share of Company common stock issued with the restriction that the holder may not sell, transfer, pledge or assign such share and with such other restrictions as the Company’s Compensation Committee, in its sole discretion, may impose, which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Compensation Committee may deem appropriate.
(e)    “Restricted Stock Unit” means an award that is valued by reference to a share of Company common stock, which value may be paid to the Executive in shares of Restricted Stock upon the satisfaction of vesting restrictions as set forth below.
(f)    “RSU” means a Restricted Stock Unit.
(g)    “Special Incentive Award” has the meaning set forth in Section 2 hereunder.
(h)    “Subsidiaries” means any corporation or other entity of which the securities or other ownership interests having the voting power to elect a majority of the board of directors or other governing body are, at the time of determination, owned by the Company, directly or through one or more Subsidiaries.

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2.    Incentive Award.
As of the Grant Date, the Company shall grant to Executive 160,000 Restricted Stock Units (the “Special Incentive Award”), to be settled upon vesting as Restricted Stock, pursuant to the terms and conditions of the Plan.  20,000 RSUs will vest on the first, second, and third anniversary of the Grant Date, respectively, and the remaining 100,000 RSUs will vest on the fourth anniversary of the Grant Date, and with such other terms and conditions as may be contained in the grant agreement.  Executive must be employed by the Company as of the date of vesting and must have been continuously employed by the Company from the date of this grant through the vesting date in order for the RSUs to vest, provided, however, that all unvested RSUs granted hereunder shall be become fully vested in the event that the Executive’s service with the Company is terminated prior to the RSUs becoming fully vested due to Executive’s death or Disability, termination by the Company for reasons other than Cause, resignation by Executive for Good Reason or termination by the Company within 24 months following a Change in Control.
3.    Non-Compete, Non-Solicitation.
(e)    In consideration of the compensation to be paid to Executive hereunder, Executive acknowledges that during the course of his employment with the Company and its Subsidiaries he has become familiar with the Company’s trade secrets and with other Confidential Information concerning the Company and its predecessors and its Subsidiaries and that his services are of special, unique and extraordinary value to the Company and its Subsidiaries, and therefore, Executive agrees that during his employment with the Company and ending on the end of the Non-compete Period, he shall not directly or indirectly own any interest in, manage, control, participate in, consult with, render services for, be employed by, or in any manner associate with or engage in any business competing with the businesses of the Company or its Subsidiaries, as such businesses exist or are in process during the his employment with the Company and on the date of the termination or expiration of his employment with any Company, within any geographical area in which the Company or its Subsidiaries engage or plan to engage in such businesses.  Nothing herein shall prohibit Executive from being a passive owner of not more than 5% of the outstanding stock of any class of a corporation which is publicly traded, so long as Executive has no active participation in the business of such corporation.  
(f)    During the Non-compete Period, Executive shall not directly or indirectly through another person or entity (i) induce or attempt to induce any employee of the Company or any Subsidiary to leave the employ of the Company or such Subsidiary, or in any way interfere with the relationship between the Company or any Subsidiary and any employee thereof, (ii) hire any person who was an employee of the Company or any Subsidiary at any time during the Employment Period or (iii) induce or attempt to induce any customer, supplier, licensee, licensor, franchisee or other business relation of the Company or any Subsidiary to cease doing business with the Company or such Subsidiary, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and the Company or any Subsidiary (including, without limitation, making any negative or disparaging statements or communications regarding the Company or its Subsidiaries).
(g)    If, at the time of enforcement of this Section 3, a court shall hold that the duration, scope or area restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope or area reasonable under such circumstances 

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shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law.  Executive acknowledges that the restrictions contained in this Section 3 are reasonable and that he has reviewed the provisions of this Agreement with his legal counsel.
(h)    In the event of the breach or a threatened breach by Executive of any of the provisions of this Section 3, the Company would suffer irreparable harm, and in addition and supplementary to other rights and remedies existing in its favor, the Company shall be entitled to specific performance and/or injunctive or other equitable relief from a court of competent jurisdiction in order to enforce or prevent any violations of the provisions hereof (without posting a bond or other security).  In addition, in the event of an alleged breach or alleged violation by Executive of this Section 3, the Non-compete Period shall be tolled until such breach or violation has been duly cured.  In the event of a violation by Executive of this Section 3, all unvested RSUs under the Special Incentive Award shall immediately be cancelled, all Restricted Stock received from vested RSUs under the Special Incentive Award not yet sold shall immediately be forfeited, and Executive shall immediately pay to the Company any gains realized from the sale of Restricted Stock received from vested RSUs under the Special Incentive Award.  Executive acknowledges that the restrictions contained in Section 3 are reasonable and that he has reviewed the provisions of this Agreement with his legal counsel. 
4.    Survival.  Sections 2 and 3 shall survive and continue in full force in accordance with their terms notwithstanding the expiration or termination of Executive’s employment with the Company.
5.    Complete Agreement.  This Agreement and those documents expressly referred to herein embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.
6.    Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive, the Company and their respective heirs, successors and assigns, except that Executive may not assign his rights or delegate his duties or obligations hereunder without the prior written consent of the Company.
7.    Choice of Law.  All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of South Carolina, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of South Carolina or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of South Carolina.
8.    Amendment and Waiver.  The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and Executive, and no course of conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any of the provisions of this Agreement (including, without limitation, the Company’s right to terminate the Executive’s employment for cause) shall affect the validity, binding effect or enforceability of this Agreement or be deemed to be an implied waiver of any provision of this Agreement.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
KEMET Corporation
By:    /s/ PER OLOF-LÖÖF    
Its:    Chief Executive Officer 
/s/ CHARLES C. MEEKS, JR.     
Charles C. Meeks, Jr.

6EX-10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is entered into as of November 26, 2014, by
and between Digi International Inc., a Delaware corporation (the “Company”), Ronald E.
Konezny (the “Executive”).

RECITALS

WHEREAS, the Company is in the business of providing for the sale of hardware, software or
other products and services related to Machine-to-Machine communications / Internet of Things
solutions;

WHEREAS, the Company desires to employ Executive as its President and Chief Executive Officer
and Executive desires to be employed by the Company as President and Chief Executive Officer of the
Company in accordance with the terms and conditions set forth herein; and

WHEREAS, in connection with Executive’s employment with the Company, Executive will have
access to confidential, proprietary and trade secret information of the Company, which
confidential, proprietary and trade secret information the Company desires to protect from
disclosure and unfair competition.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the respective agreements of
the Company and Executive set forth below, the Company and Executive, intending to be legally
bound, agree as follows:

1. Term of Employment. The term of Executive’s employment under this Agreement will
commence on December 17, 2014 (the “Effective Date”), and will continue until Executive’s
employment is terminated pursuant to Section 8 below (such period being the “Employment
Term”).

2. Position and Duties.

(a) Employment with the Company. While Executive is employed by the Company during
the Employment Term, Executive shall report to the Company’s Board of Directors (the
“Board”) and shall perform such duties and responsibilities for the Company and its
Affiliates (defined below) as the Board shall assign to him from time to time consistent with his
position. Executive’s title during the Employment Term shall be President and Chief Executive
Officer. For purposes of this Agreement, “Affiliate” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company, a trust, a joint
venture, or an unincorporated organization, that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with, the Company.

(b) Performance of Duties and Responsibilities. Executive shall serve the Company
faithfully and to the best of his ability and shall devote his full working time, attention and
efforts to the business of the Company during his employment with the Company. Executive will
follow and comply with applicable policies and procedures adopted by the Company from time to time,
including without limitation policies relating to business ethics, conflict of interest,
non-discrimination, confidentiality and protection of trade secrets. Executive will not engage in
other employment or other material business activity, except as approved in writing by the Board.
Executive hereby represents and confirms that he is under no contractual or legal commitments that
would prevent him from fulfilling his duties and responsibilities as set forth in this Agreement.
During his employment with the Company, Executive may participate in civic, religious and
charitable activities and personal investment activities to a reasonable extent, so long as such
activities do not interfere with the performance of his duties and responsibilities hereunder. The
Board and Executive will evaluate any directorship Executive holds as of the Effective Date, and
Executive agrees to resign from any directorship if, in the sole discretion of the Board, it is
determined that such directorship poses a conflict of interest.

3. Board Appointment. On the Effective Date, the Board shall appoint Executive as a
director of the Company and shall during the Employment Term nominate and recommend Executive for
election as a director. Executive acknowledges and agrees that Executive is not entitled to any
additional compensation in respect of Executive’s appointment as a director of the Company. If
during the Employment Term Executive ceases to be a director of the Company for any reason,
Executive’s employment with the Company will continue (unless terminated in accordance with
Section 8) and all terms of this Agreement (other than those relating to Executive’s position as
a director of the Company) will continue in full force and effect and Executive will have no
claims in respect of such cessation of office. Executive agrees to abide by all statutory,
fiduciary or common law duties arising under applicable law that apply to Executive as a director
of the Company.

4. Compensation.

(a) Base Salary. While Executive is employed by the Company during the Employment
Term, the Company shall pay to Executive a base salary at the annual rate determined from time to
time by the Company (the “Base Salary”), which base salary will be paid in accordance with
the Company’s normal payroll policies and procedures. Upon commencement of the Employment Term,
Executive’s initial annualized base salary will be $450,000, less all legally required and
authorized deductions and withholdings. The Company will review Executive’s Base Salary no less
than annually and may, in its sole discretion, adjust Executive’s base salary upon such review;
provided that the Company may not decrease Executive’s base salary during the Employment Term
unless such decrease is part of an across-the-board uniformly applied reduction affecting all
senior executives of the Company and not disproportionately more to Executive.

(b) Sign-On Bonus. The Company shall pay to Executive an initial sign-on bonus in
the amount of $400,000 (the “Sign-On Bonus”), less all legally required and authorized
deductions and withholdings, paid within twenty-one (21) days after the Effective Date. If
Executive resigns his employment with the Company for any reason other than as a result of death or
Disability (defined below) prior to the first anniversary of the Effective Date, Executive shall
repay to the Company the full $400,000 Sign-On Bonus (inclusive of any deductions and withholdings
made by the Company) no later than 30 days following the effective date of such resignation. No
repayment shall be required in the event of (i) Executive’s death or Disability, (ii) the Company’s
termination of Executive’ employment without Cause, or (iii) Executive’s resignation for good
reason within one year following a change in control (for purposes of this Section 4(b), the term
Cause shall have the meaning given to it in this Agreement and the terms change in control and good
reason shall have the same meanings given to those terms in the form of equity award agreements
under the Company’s 2014 Omnibus Incentive Plan that were provided to Executive).

(c) Incentive Compensation. During the Employment Term, Executive shall be eligible
to receive an annual incentive bonus. During the first fiscal year of Executive’s employment the
annual incentive bonus will be targeted at 100% of base salary paid. The Board of Directors will
define a bonus plan annually within the first 90 days of each fiscal year, determining the
objectives for the fiscal year off of which the annual incentive bonus will be calculated. Such
objectives may include, in the sole discretion of the Board, the achievement of financial
objectives set forth in the Board-approved business plan for a particular fiscal year, or such
other objectives as the Board, in its sole discretion, shall determine. For fiscal year 2015,
Executive’s incentive compensation will be based 50% on quarterly and annual revenue results and
50% on quarterly and annual EBITDA results. Payment of the actual bonus for each fiscal year shall
be paid to Executive as soon as the Company determines whether the objectives for such bonus have
been met. Any such payments shall be made by no later than March 15 of the year
following the calendar year in which the bonus was earned.

(d) Equity Compensation.

(i) Stock Options. On the Effective Date (the “Grant Date”), the
Company will grant to Executive an option to purchase 325,000 shares of the common stock of
the Company (the “Options”) . The Options will have a per share exercise price
equal to the closing sale price of a share of common stock on the Grant Date. Twenty-five
percent of the Options will vest on each of the first four anniversary dates of the Grant
Date (except for such earlier vesting as otherwise provided in the Company’s 2014 Omnibus
Incentive Plan or in the applicable grant agreement between the Company and Executive). If,
within one year following a change in control, Executive’s employment is terminated either
by the Company without cause or by Executive for good reason, then any unvested Options
shall be accelerated and immediately vested. The Options will have a term of eight years.
The applicable grant agreement between the Company and Executive shall incorporate the terms
of this Agreement.

(ii) Restricted Stock Units. On the Grant Date, the Company will also grant to
Employee a restricted stock unit (the “RSU Award”) in the amount of 175,000 shares
of the Company’s common stock. Twenty-five percent of the RSU Award will vest on each of
the first four anniversary dates of the Grant Date (except for such earlier vesting as
otherwise provided in the Company’s 2014 Omnibus Incentive Plan or in the applicable RSU
agreement between the Company and Executive). If, within one year following a change in
control, Executive’s employment is terminated either by the Company without cause or by
Executive for good reason, then any unvested units shall be accelerated and immediately
vested. Vested units shall be settled in shares of the Company’s common stock as soon as
practicable (but no later than March 15 of the year following the calendar year in which
such units vest). The applicable RSU agreement between the Company and Executive shall
incorporate the terms of this Agreement.

(iii) If there is a change in control during the four-year vesting period provided for
in the RSU Award or the Options, then any shares that would have vested on the immediately
following vesting date shall be accelerated and vested as of the change in control. For
purposes of clarity, this accelerated vesting shall only apply to the Options and RSU Award
provided for by this Agreement.

(iv) Additional equity awards are subject to annual review by the Compensation
Committee of the Board of Directors.

(e) Employee Benefits. While Executive is employed by the Company during the
Employment Term, Executive shall be entitled to participate in each employee benefit plan and
program of the Company to the extent that Executive meets the eligibility requirements for such
individual plan or program. In addition, following a medical exam the Company shall provide
$500,000 of term life insurance to Executive payable to a beneficiary designated by Executive.
Executive may receive other benefits commensurate with Executive’s position as may be approved from
time to time by the Compensation Committee.

(f) Expenses. While Executive is employed by the Company during the Employment Term,
the Company shall reimburse Executive for all reasonable and necessary out-of-pocket business,
travel and entertainment expenses incurred by him in the performance of his duties and
responsibilities hereunder, including without limitation cell phone costs and expenses incurred in
connection with the business of the Company, subject to the Company’s normal policies and
procedures for expense verification and documentation.

5. Confidential Information.

(a) Definition of Confidential Information. Except as expressly permitted by the
Board in writing, Executive shall at all times keep confidential and not disclose, divulge, furnish
or make accessible to anyone or use in any way other than in the ordinary course of the business of
the Company, any confidential, proprietary, nonpublic or secret knowledge or information of the
Company or any of its Affiliates that Executive acquires during his employment with the Company,
whether developed by himself or by others, concerning (i) any trade secrets, (ii) any confidential,
proprietary, nonpublic or secret design, process, formula, plan, model, specifications, device or
material (whether or not patented or patentable) directly or indirectly useful in any aspect of the
business of the Company or any of its Affiliates, (iii) any customer or supplier list of the
Company or any of its Affiliates, or any requirements, specifications or other confidential
information about or received from any customer or supplier, (iv) any confidential, proprietary,
nonpublic or secret development or research work of the Company or any of its Affiliates, (v) any
strategic or other business, marketing or sales plan of the Company or any of its Affiliates, (vi)
any financial data or plan respecting the Company or any of its Affiliates, or (vii) any other
confidential, nonpublic or proprietary information or secret aspects of the business of the Company
or any of its Affiliates (“Confidential Information”).

(b) Acknowledgement. Executive acknowledges that the above described Confidential
Information constitutes a unique and valuable asset of the Company and its Affiliates and
represents a substantial investment of time and expense by the Company and its Affiliates, and that
any disclosure or other use of such Confidential Information other than for the sole benefit of the
Company would be wrongful and may cause irreparable harm to the Company and its Affiliates. The
parties acknowledge and agree that Executive’s obligations under this Agreement to maintain the
confidentiality of the Company’s Confidential Information are in addition to any obligations of
Executive under applicable statutory or common law.

(c) Exceptions. The foregoing obligations of confidentiality shall not apply to any
Confidential Information to the extent that it (i) is now or subsequently becomes generally
publicly known or generally known in the industry in which the Company operates, (ii) is
independently made available to Executive in good faith by a third party who Executive reasonably
believes has not violated an obligation of confidentiality to the Company or any of its Affiliates,
or (iii) is required to be disclosed by legal process. Nothing contained in the preceding sentence
shall be interpreted to legitimize any disclosure of Confidential Information by Executive that
occurs outside of any of the events described in items (i) through (iii) of the preceding sentence.

6. Ventures. If, during Executive’s employment with the Company, Executive is engaged in
or associated with the planning or implementing of any project, program or venture involving the
Company (or any of its Affiliates) and a third party or parties, all rights in such project,
program or venture shall belong to the Company. Except as approved in writing by the Board,
Executive shall not be entitled to any interest in any such project, program or venture or to any
commission, finder’s fee or other compensation in connection therewith, other than the compensation
to be paid to Executive by the Company as provided herein. Executive shall have no interest,
direct or indirect, in any customer or supplier that conducts business with the Company (or any of
its Affiliates), unless such interest has been disclosed in writing to and approved by the Board
before such customer or supplier seeks to do business with the Company (or any of its Affiliates).
Ownership by Executive, as a passive investment, of less than 1.0% of the outstanding shares of
capital stock of any corporation traded on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this Section 6. In addition, it shall not
constitute a breach of this Section 6 for Executive to have an ownership interest of up to 5% in
any company for which Executive serves on its board of directors as of the date Executive signs
this Agreement.

7. Patents, Copyrights and Related Matters.

(a) Disclosure and Assignment. Executive shall promptly disclose to the Company any
and all improvements, discoveries, processes, know-how, trade-secrets and inventions that Executive
may conceive and/or reduce to practice individually or jointly or commonly with others
(“Discoveries”) while he is employed with the Company or any of its Affiliates. Executive agrees
to assign and does hereby immediately assign, transfer and set over to the Company his entire
right, title and interest in and to any and all Discoveries, and in and to any and all intellectual
property rights thereto. Executive agrees to execute all instruments deemed reasonably necessary
by the Company to protect and perfect rights in and to the Discoveries. This Section 7(a) shall not
apply to any invention for which no equipment, supplies, facilities, Confidential Information, or
other trade secret information of the Company was used and that was developed entirely on
Executive’s own time, and (i) that does not relate (A) directly to the business of the Company, or
(B) to the Company’s actual or demonstrably anticipated research or development, or (ii) that does
not result from any work performed by Executive for the Company.

(b) Copyrightable Material. Executive hereby agrees to assign and does assign to the
Company all right, title and interest in all copyrightable material (including intellectual
property rights therein) that Executive conceives or originates individually or jointly or commonly
with others, and that arise during the Employment Term with the Company or any of its Affiliates
and out of the performance of his duties and responsibilities under this Agreement. Executive
shall execute any and all papers and perform all other acts reasonably necessary to assist the
Company to obtain and register copyrights on such materials. Where applicable, works of authorship
created by Executive for the Company in performing his duties and responsibilities hereunder shall
be considered “works made for hire,” as defined in the U.S. Copyright Act.

8. Termination of Employment.

(a) Executive’s employment with the Company shall terminate upon:

(i) the date specified in written notice from the Company to Executive notifying him
of the termination of his employment for any reason, provided that if Executive’s employment
is terminated by the Company without Cause, then the Company shall provide Executive at
least sixty days’ notice of termination or pay in lieu of notice;

(ii) Executive providing to the Company not less than 60 days’ prior written notice of
his resignation of employment effective at the end of such period, provided that the Company
may in its sole discretion elect to relieve Executive from his duties and place him on paid
leave during all or any portion of the notice period; or

(iii) Executive’s death or Disability (defined below).

(b) The date upon which Executive’s termination of employment with the Company is effective is
the “Termination Date.” For purposes of Section 9(a) and 9(b) of this Agreement only, with
respect to the entitlement to and timing of any payments thereunder, the Termination Date shall
mean the date on which a “separation from service” has occurred for purposes of Section 409A of the
Internal Revenue Code and the regulations and guidance thereunder (“Section 409A”).

9. Payments upon Termination of Employment.

(a) If Executive’s employment with the Company is terminated by the Company without Cause on
or prior to the one-year anniversary of the Effective Date, then, subject to Section 9(h) below,
and in addition to his Base Salary earned through the Termination Date:

(i) the Company shall pay to Executive severance pay at the rate of his Base Salary for
a period of eighteen (18) consecutive months after the Termination Date;

(ii) if Executive is eligible for and takes all steps necessary to continue his group
health insurance coverage with the Company following the termination of his employment with
the Company, the Company shall pay for the portion of the premium costs for such coverage
that the Company pays for then active employees of the Company, at the same level of
coverage that was in effect as of the Termination Date, for a period of eighteen (18)
consecutive months after the Termination Date; and

(iii) the Company shall pay to Executive $400,000, which represents his target annual
incentive bonus as of the Effective Date.

Any amount payable to Executive as severance pay under Section 9(a)(i) shall be paid to Executive
by the Company in accordance with the Company’s regular payroll cycle, commencing on the first
regular payroll date of the Company that occurs more than 60 days after the Termination Date (and
including any installment that would have otherwise been paid on regular payroll dates during the
period of 60 days following the Termination Date), provided the conditions specified in Section
9(h) have been satisfied. Any amount payable to Executive pursuant to Section 9(a)(iii) shall be
paid to Executive at the same time and in the same manner as bonuses are paid to other executives
of the Company for the 2015 fiscal year, provided the conditions specified in Section 9(h) have
been satisfied.

(b) If Executive’s employment with the Company is terminated by the Company without Cause
after the one-year anniversary of the Effective Date, then, subject to Section 9(h) below, and in
addition to his Base Salary earned through the Termination Date:

(i) the Company shall pay to Executive severance pay at the rate of his Base Salary for
a period of twelve (12) consecutive months after the Termination Date;

(ii) if Executive is eligible for and takes all steps necessary to continue his group
health insurance coverage with the Company following the termination of his employment with
the Company, the Company shall pay for the portion of the premium costs for such coverage
that the Company pays for then active employees of the Company, at the same level of
coverage that was in effect as of the Termination Date, for a period of twelve (12)
consecutive months after the Termination Date; and

(iii) the Company shall pay to Executive a pro rata portion (based on the number of
days of employment during the fiscal year) of any bonus that would have been payable to him
for such fiscal year pursuant to Section 4(c) hereof, waiving any employment condition
applicable to payment.

Any amount payable to Executive as severance pay under Section 9(b)(i) shall be paid to Executive
by the Company in accordance with the Company’s regular payroll cycle, commencing on the first
regular payroll date of the Company that occurs more than 60 days after the Termination Date (and
including any installment that would have otherwise been paid on regular payroll dates during the
period of 60 days following the Termination Date), provided the conditions specified in Section
9(h) have been satisfied. Any amount payable to Executive as a bonus shall be paid to Executive at
the same time and in the same manner as bonuses are paid to other executives of the Company for
such fiscal year, provided the conditions specified in Section 9(h) have been satisfied.

(c) If Executive’s employment with the Company is terminated due to either (x) Executive’s
death or Disability, or (y) Executive providing to the Company not less than 60 days’ prior written
notice of his resignation of employment, then Company shall pay to Executive or his beneficiary or
his estate, as the case may be, only his Base Salary earned through the Termination Date and a pro
rata portion (based on the number of calendar days of employment during the fiscal year) of any
bonus that would have been payable to him for such fiscal year pursuant to Section 4(c) hereof,
with such bonus paid at the same time and in the same manner as bonuses are paid to other
executives of the Company for such fiscal year, and, in the event of death or Disability, the
rights set forth in Section 4(d). Executive’s beneficiary shall be entitled to the life insurance
benefit provided in Section 4(e).

(d) If Executive’s employment with the Company is terminated by the Company for Cause or for
any reason not covered by Sections 9(a), (b) or (c), then the Company shall pay to Executive only
his Base Salary earned through the Termination Date.

(e) “Cause” hereunder shall mean:

(i) indictment or conviction of, or a plea of nolo contendere to, (A) any felony (other
than any felony arising out of negligence), or any misdemeanor involving moral turpitude
with respect to the Company, or (B) any crime or offense involving dishonesty with respect
to the Company;

(ii) theft or embezzlement of Company property or commission of similar acts involving
dishonesty or moral turpitude;

(iii) repeated material negligence in the performance of Executive’s duties;

(iv) Executive’s repeated failure to devote to the Company substantially all of his
working time and efforts during normal business hours;

(v) knowing engagement in conduct that is materially injurious to the Company;

(vi) knowing failure, for Executive’s own benefit, to comply with the covenants
contained in Sections 5, 6, or 10 of this Agreement; or

(vii) knowingly providing materially misleading information concerning the Company to
the Company’s Board of Directors, any governmental body or regulatory agency or to any
lender or other financing source or proposed financing source of the Company,

provided, however, that the above events shall not constitute Cause unless (x) the Board, within 90
days of the date the Board becomes aware of the occurrence of an event constituting Cause, provides
Executive written notice of termination for Cause setting forth the reason or reasons constituting
Cause (the “Written Notice”), and (y) if Executive’s employment is terminated for Cause pursuant to
Section 9(e)(iii) or (iv), Executive has had a period of at least thirty (30) days to attempt to
remedy or cure the basis on which the Board is considering terminating his employment, except that
no cure period need be provided to the extent that the act or omission is not curable.

(f) “Disability” hereunder shall mean the inability of Executive to perform on a
full-time basis the duties and responsibilities of his employment with the Company by reason of his
illness or other physical or mental impairment or condition, if such inability continues for an
uninterrupted period of 120 days or more during any 180-day period. A period of inability shall be
“uninterrupted” unless and until Executive returns to full-time work for a continuous period of at
least thirty (30) days.

(g) In the event of termination of Executive’s employment, the sole obligation of the Company
shall be its obligation to make the payments called for by Section 9(a), (b), (c) or (d) hereof, as
the case may be, and the Company shall have no other obligation to Executive or to his beneficiary
or his estate, except for compensation earned for services performed through the Termination Date
or as otherwise provided by law, under the terms of any other applicable agreement between
Executive and the Company or under the terms of any equity and employee benefit plans or programs
then maintained by the Company in which Executive participates.

(h) Notwithstanding the foregoing provisions of this Section 9, the Company will not be
obligated to make any payments to or on behalf of Executive under Section 9(a) or Section 9(b), as
applicable, unless (i) Executive signs a release of claims in favor of the Company in a form to be
prescribed by the Company (the “Release”), (ii) all applicable consideration periods and
rescission periods provided by law with respect to the Release have expired without Executive
rescinding the Release, and (iii) Executive is in strict compliance with the terms of this
Agreement as of the dates of the payments. The cessation of these payments will be in addition to,
and not as an alternative to, any other remedies at law or in equity available to the Company,
including without limitation the right to seek specific performance or an injunction.

10. Non-Competition/Non-Solicitation. Executive acknowledges that the Company has spent
significant time, effort and resources protecting its Confidential Information, including its trade
secrets, customer goodwill, and employee, supplier, and vendor relationships. Executive has had
access to the Company’s Confidential Information, and has significant control and influence over
the Company’s customers, suppliers, vendors and employees, and he will continue to do so under this
Agreement. In order to protect the Company’s Confidential Information, trade secrets, customer
goodwill and the stability of the Company’s workforce, and other legitimate business interests,
Executive agrees to the following covenants:

(a) Non-Competition. During Executive’s employment with the Company or any Affiliate
and for a period of one (1) year following the termination of such employment, whether initiated by
Executive or the Company, Executive shall not, either directly or indirectly in any manner or
capacity, including without limitation as a proprietor, principal, agent, partner, officer,
director, stockholder, employee, member of any association, consultant or otherwise, perform
services for or have any interest in any Competitive Business in the Territory. “Competitive
Business” means any person, entity or business operation (other than the Company) that engages
in any other business that is competitive with the then-current businesses of the Company or with
any business or market the Company is actively preparing to enter as of the date of termination of
Executive’s employment. Executive acknowledges that the Company conducts its business throughout
the United States and internationally, and, therefore, that the term “Territory” as used herein
shall be worldwide. Ownership by Executive, as a passive investment, of less than 1.0% of the
outstanding shares of capital stock of any corporation traded on a national securities exchange or
publicly traded in the over-the-counter market shall not constitute a breach of this Section 10(a).
In addition, it shall not constitute a breach of this Section 10(a) for Executive to have an
ownership interest of up to 5% in any company for which Executive serves on its board of directors
as of the date Executive signs this Agreement.

(b) Non-Solicitation of Customers and Suppliers. During Executive’s employment with
the Company or any Affiliate and for a period of one (1) year following the termination of such
employment, whether initiated by Executive or the Company, Executive shall not, either directly or
indirectly on behalf of himself or any third party (i) call on or solicit any customers for the
purpose of marketing or selling any products or services competitive with the business of the
Company, or for the purpose of diverting any business away from the Company; (ii) persuade or
attempt to persuade, or induce or attempt to induce, any actual or prospective customer, client,
vendor, service provider, supplier, contractor or any other person having business dealings with
the Company to cease doing business or otherwise transacting business with the Company or to reduce
the amount of business it conducts or will conduct with the Company; (iii) call on or solicit any
suppliers of the Company; or (iv) otherwise disrupt, damage or interfere in any manner with the
relationship between the Company and its actual or prospective customers, clients, vendors, service
providers, or suppliers. Executive acknowledges that the Company has invested material time and
resources in the identification and qualification of its customers and/or suppliers and that the
identity, nature and details of its relationships with customers and/or suppliers are unique and
proprietary.

(c) Non-Solicitation of Employees. During Executive’s employment with the Company or
any Affiliate and for a period of one (1) year following the termination of such employment,
whether initiated by Executive or the Company, Executive shall not, either directly or indirectly
on behalf of himself or any third party, in any manner or capacity, including without limitation as
a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any
association, consultant or otherwise, hire, engage, recruit, solicit, or otherwise interfere with
the employment or retention of any person who is then an employee or independent contractor of the
Company or any of its Affiliates or who was an employee or independent contractor of the Company or
any of its Affiliates as of the Termination Date. Anonymous job postings in a general publication
or website to which an employee responds shall not violate this Section 10(c).

(d) Reasonableness of Covenants. Executive agrees that the scope and duration of
Section 10 are reasonable and necessary to protect the Company’s legitimate business interests.
If, at any time, any term or provision contained in Section 10 is finally adjudicated by a court or
arbitrator of competent jurisdiction as invalid or unenforceable, the parties hereby agree that the
court or arbitrator making this determination will have the power to reform the scope and/or
duration of the term or provision to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and enforceable which comes
closest to expressing the intention of the invalid or unenforceable term or provision; and that
such reformation will not impact the other provisions of this Agreement and will be enforceable as
so modified.

11. Non-Disparagement. During the Employment Term and thereafter, to the fullest extent
permitted by law, Executive shall not make any statement that is disparaging or reflects negatively
upon the Company or its Affiliates, or any of their officers, directors or employees, to, or that
is likely to come to the attention of, (a) any customer, vendor, supplier, distributor or other
trade related business relation of the Company or any of its Affiliates, (b) any employee of the
Company or its Affiliates, or (c) any member of the media. Nothing herein shall prevent Executive
from responding truthfully to any inquiry from a governmental entity.

12. Other Post-Termination Obligations.

(a) Resignation From Positions. Unless otherwise requested by the Board in writing,
upon Executive’s termination of employment with the Company for any reason Executive shall
automatically resign as of the Termination Date from all titles, positions and appointments
Executive then holds with the Company, whether as an officer, director, trustee, fiduciary or
employee (without any claim for compensation related thereto), and Executive hereby agrees to take
all actions necessary to effectuate such resignations.

(b) Return of Property. Upon termination of his employment with the Company, or at
such earlier time requested by the Company, Executive shall promptly deliver to the Company any and
all Company records and any and all Company property in his possession or under his control,
including without limitation manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, printouts, computer storage devices, source codes, data, tables or calculations
and all copies thereof, documents that in whole or in part contain any trade secrets or
confidential, proprietary or other secret information of the Company or any of its Affiliates, and
all copies thereof, and keys, vehicles, access cards, access codes, passwords, credit cards,
personal computers, telephones and other electronic equipment belonging to the Company or any of
its Affiliates. Executive’s retention of information and materials related to his personal
compensation and benefits, which will not violate this subsection.

(c) Cooperation. Following termination of Executive’s employment with the Company for
any reason, Executive will, upon reasonable request of the Company or its designee and provided the
Company is not in material breach of any provision of this Agreement, respond to inquiries and
cooperate with the Company in connection with the transition of his duties and responsibilities for
the Company for up to six months following the Termination Date; and be reasonably available at
mutually convenient times, with or without subpoena, to be interviewed, review documents or things,
give depositions, testify, or engage in other reasonable activities in connection with any
litigation or investigation, with respect to matters that Executive then has or may have knowledge
of by virtue of his employment by or service to the Company or any of its Affiliates. In
connection with such cooperation requested by the Company, the Company shall reimburse Executive
for reasonable out-of-pocket costs incurred as a result of his compliance with his obligations,
and, with respect to such cooperation provided by Executive during any period for which he is not
receiving payments under Section 9(a)(i) or 9(b)(i), as applicable, the Company shall compensate
Executive at a daily rate comparable to his regular salary rate in effect as of the Termination
Date. The Company will endeavor to schedule such activities taking into account other obligations
Executive may have and so as not to materially interfere with Executive’s then-current employment
or other business activities.

13. Remedies. Executive acknowledges that it would be difficult to fully compensate the
Company for monetary damages resulting from any breach by him of the provisions of Sections 5, 6,
7, 10 or 11 hereof. Accordingly, in the event of any actual or threatened breach of any such
provisions, the Company shall, in addition to any other remedies it may have, be entitled to
injunctive and other equitable relief to enforce such provisions, and such relief may be granted
without the necessity of proving actual monetary damages.

14. Miscellaneous.

(a) Taxes. The Company will deduct or withhold from any payment made or benefit
provided hereunder all federal, state and local taxes which the Company is required or authorized
by law to deduct or withhold therefrom or otherwise collect in connection with the wages and
benefits provided in connection with Executive’s employment with the Company. This Agreement and
the payments and benefits provided hereunder are intended to be exempt from the requirements of
Sections 409A to the maximum extent possible, whether pursuant to the short-term deferral exception
described in Treasury Regulation Section 1.409A-1(b)(4), the involuntary separation pay plan
exception described in Treasury Regulation Section 1.409A-1(b)(9)(iii), or otherwise.
Notwithstanding anything in this Agreement to the contrary, this Agreement and the payments and
benefits provided hereunder shall be interpreted, operated and administered in a manner consistent
with such intentions. Without limiting the generality of the foregoing, if and to the extent
required to comply with Section 409A, (i) each payment made under this Agreement shall be treated
as a separate payment and the right to a series of installment payments under this Agreement shall
be treated as a right to a series of separate payments; (ii) any expenses eligible for
reimbursement in one taxable year shall not affect the expenses eligible for reimbursement in any
other taxable year, the reimbursement of an eligible expense shall be made no later than the end of
the year after the year in which such expense was incurred, and the right to reimbursement shall
not be subject to liquidation or exchange for another benefit; and (iii) no payment or benefit
required to be paid under this Agreement on account of a termination of Executive’s employment
shall be made unless and until Executive incurs a “separation from service” within the meaning of
Section 409A. If Executive is a “specified employee” within the meaning of Section
409A(a)(2)(B)(i), then to the extent necessary to avoid subjecting Executive to the imposition of
any additional tax under Section 409A with respect to amounts that are not otherwise exempt from
Code 409A, amounts that would otherwise be payable under this Agreement during the six-month period
immediately following a “separation from service” within the meaning of Section 409A(a)(2)(A)(i)
shall not be paid during such period, but shall instead be accumulated and paid in a lump sum on
the first business day following the earlier of (a) the date that is six months after the
separation from service or (b) Executive’s death.

(b) Jurisdiction and Venue. Executive and the Company consent to jurisdiction of the
courts of the State of Minnesota and/or the federal district courts of the District of Minnesota
for the purpose of resolving all issues of law, equity, or fact, arising out of or in connection
with this Agreement. Any action involving claims for interpretation, breach or enforcement of this
Agreement shall be brought in such courts. Each party consents to personal jurisdiction over such
party in the state and/or federal courts of Minnesota and hereby waives any defense of lack of
personal jurisdiction or inconvenient forum.

(c) Governing Law. All matters relating to the interpretation, construction,
application, validity and enforcement of this Agreement shall be governed by the laws of the State
of Minnesota without giving effect to any choice or conflict of law provision or rule, whether of
the State of Minnesota or any other jurisdiction, that would cause the application of laws of any
jurisdiction other than the State of Minnesota.

(d) Entire Agreement. This Agreement and the documents referenced herein contain the
entire agreement and understanding of the parties concerning the terms and conditions of
Executive’s employment with the Company, and supersedes, terminates and nullifies all prior
commitments, agreements and understandings with respect to such relationship between the parties.
The parties hereto have made no agreements, representations or warranties relating to the subject
matter of this Agreement that are not set forth herein.

(e) Amendments. No amendment or modification of this Agreement shall be deemed
effective unless made in writing and signed by the parties hereto.

(f) No Waiver. No term or condition of this Agreement shall be deemed to have been
waived, except by a statement in writing signed by the party against whom enforcement of the waiver
is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated,
shall operate only as to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that specifically waived.

(g) Assignment. Neither party may, without the written consent of the other, assign
or delegate any of its rights or obligations under this Agreement, except that the Company may,
without the consent of Executive, assign or delegate any of its rights or obligations under this
Agreement to (i) any corporation or other business entity with which the Company may merge or
consolidate, or (ii) any corporation or other business entity to which the Company may sell or
transfer all or substantially all of its assets or capital stock or equity. After any such
assignment or delegation by the Company, the Company shall be discharged from all further liability
hereunder and such assignee shall thereafter be deemed to be the “Company” for purposes of all
terms and conditions of this Agreement, including this Section 14.

(h) Counterparts. This Agreement may be executed in two counterparts and delivered by
facsimile or other means of electronic communication, each of which shall be deemed an original but
both of which shall constitute but one instrument.

(i) Notices. All notices, requests, demands or other communications required by or
otherwise with respect to this Agreement shall be in writing and shall be deemed to have been duly
given to the other party on the date delivered when delivered personally, one business day
following the date when sent by nationally recognized overnight delivery service for next business
day delivery, or three business days following the date of postmark if sent by first-class U.S.
registered or certified mail, postage prepaid and return receipt requested, provided in each case
such notice is properly addressed to the applicable addresses set forth below (or such other
address as such party may indicate in writing to the other party pursuant to this Section 14(i)):

If to the Company:

Digi International Inc.

11001 Bren Road East

Minnetonka, MN 55343

Attention: General Counsel

If to Executive:

At the last known address in the personnel records of the Company.

With a copy to his attorney:

Edward J. Wegerson

Lindquist & Vennum LLP

80 South 8th Street, Ste. 4200

Minneapolis, MN 55402

(j) Severability. To the extent that any portion of any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of
such provision and this Agreement shall be unaffected and shall continue in full force and effect.

(k) Captions and Headings. The captions and paragraph headings used in this Agreement
are for convenience of reference only and shall not affect the construction or interpretation of
this Agreement or any of the provisions hereof.

IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date set forth below:

DIGI INTERNATIONAL INC.

By:       /s/ Ahmed Nawaz      

	 	 	Its:       Lead Director      

EXECUTIVE

      /s/ Ronald E. Konezny      

	 	 	Ronald E. Konezny

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