Document:

AGREEMENT
                                    ---------

      This Agreement ("Agreement") is made and entered into as of this 6th day
of October, 2003, by and between Charles J. Grako (hereinafter referred to as
the "Executive") and UnionBancorp, Inc. (hereinafter referred to as the
"Company").

                                    RECITALS
                                    --------

      A.     Executive has provided many years of service to the Company and its
Affiliates (the term "Affiliates" as used herein means any direct or indirect
subsidiary of the Company).

      B.     Satisfaction of this Agreement shall fully satisfy the obligations
of the Company and the Executive under any and all contracts, benefit plans,
employment policies, perquisites and programs of the Company.

                                   AGREEMENTS
                                   ----------

      NOW, THEREFORE, in consideration of the recitals and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:

Section 1.   Termination of Employment and Duties. The parties agree that the
Executive has resigned and retired from employment with the Company and each of
its Affiliates. Effective September 3, 2003, Executive relinquished his titles
as President and Chief Executive Officer of the Company and also resigned and
retired from all other positions he had with the Company and the Affiliates,
including all positions on the Company's and the Affiliates' Boards of
Directors.

Section 2.   Payments to Executive. In satisfaction of the Company's and the
Affiliates' obligations under any and all contracts, employee benefit plans,
employment policies, perquisites and programs of the Company and the Affiliates
and as consideration for the promises made in this Agreement, including the
waivers and releases provided for in Section 7, the Company shall pay Executive
the following amounts:

      (a)    Executive shall be paid monthly Five Thousand Dollars ($5,000.00)
for a period of eighteen (18) consecutive monthly periods commencing October 31,
2003 and ending March 31, 2005.

      (b)    The Company shall continue in effect the bank owned life insurance
policy ("BOLI") on the life of Executive which provides for a benefit of Six
Hundred Thousand Dollars ($600,000.00) to be paid to a beneficiary designated by
the Executive upon the death of the Executive. In the event the Company shall
elect to terminate or otherwise modify the BOLI policy, it will make other
arrangements to provide for a benefit of Six Hundred Thousand Dollars
($600,000.00) to be paid to such beneficiary upon the Executive's death. The
Company will notify executive not less than thirty (30) days prior to any
termination or material modification of the BOLI policy.
<PAGE>

      (c)    Nothing contained herein shall be deemed to affect any rights the
Executive may have under any qualified plans of the Company or the Affiliates or
any stock option rights the Executive may have.

      Executive acknowledges and agrees:

            (i)   All payments to be made to Executive shall be subject to all
                  withholding requirements imposed by state and federal law.

            (ii)  Executive expressly agrees, understands, and acknowledges that
                  the payments and benefits provided the Executive under this
                  Section 2 constitute an amount in excess of that to which an
                  employee otherwise terminating his employment with the Company
                  would be entitled to receive. The Executive acknowledges that
                  the above payments and benefits are being provided as
                  consideration for the Executive's entering into this
                  Agreement, including the release of claims and waiver of
                  rights provided for in Section 7.

Section 3.   Conduct. Executive agrees that, at all times following the signing
of this Agreement, he shall not make Negative Statements about the Company or
the Affiliates. The Company agrees that, at all times following the signing of
this Agreement, its directors and executive officers shall not make any Negative
Statements about the Executive. The term Negative Statements shall mean false,
negative, critical or disparaging statements, in the case of the Company,
concerning the Company or the Affiliates, its management, its method of doing
business, the quality of its products and services, its role in the community,
or its treatment of employees, including the Executive, and in the case of the
Executive, concerning the Executive or his job performance. Executive and the
Company each further agree to do nothing that would damage the other's
reputation or goodwill. Nothing contained herein shall preclude the Company or
the Affiliates from making such statements as the Company may deem necessary or
appropriate, upon advice from legal counsel, in conjunction with securities or
banking laws or other legal requirements.

Section 4.   Cooperation. For a period of eighteen (18) months after the date
hereof, the Executive shall provide consulting services up to two (2) hours per
month to the Company and the Affiliates and shall cooperate and provide such
other assistance to the Company and the Affiliates as the Company may reasonably
request in conjunction with matters arising prior to the date hereof in the
course of his employment with the Company and the Affiliates. Executive will be
reimbursed for reasonable out-of-pocket expenses incurred in conjunction
therewith.

Section 5.   Agreement Not to Compete; Confidential Information. Executive and
the Company have each reviewed the customer lists and operations of the Company
and the Affiliates and agree that the Company's and the Affiliates' primary
service area for lending and deposit activities which relate to Executive's
services encompass the counties of Bureau and LaSalle in Illinois (the
"Territory"). Executive agrees that commencing on the date hereof and ending
twenty-four (24) months after the date hereof, he will not, without the
Company's prior written consent, directly or indirectly Compete with the Company
or the Affiliates. For the purposes of this Section 5:

                                       2
<PAGE>

      (a)    "Compete" means directly or indirectly owning, managing, operating
or controlling a Competitor, or directly or indirectly serving as an employee,
officer or director of or a consultant to a Competitor, or soliciting or
inducing any employee or agent of the Company or the Affiliates to terminate
employment with the Company or the Affiliates or to become employed by a
Competitor, or soliciting or inducing any customer of the Company or the
Affiliates to terminate their relationship as a depositor, borrower or otherwise
as a customer of the Company or the Affiliates.

      (b)    "Competitor" means any person, firm, partnership, corporation,
trust or other entity that owns, controls or is a bank, savings and loan
association, credit union or other company which accepts deposits or makes loans
and which has an office located in the Territory (each a "Financial Services
Company").

      (c)    This Section 5 will not prohibit the Executive from having a
passive investment which involves the ownership of any capital stock or similar
securities which do not represent more than two percent (2%) of the outstanding
capital stock of any Financial Services Company.

      Executive further agrees that, without the prior written consent of the
Company, he will not use in any manner or disclose to any person any customer
lists, customer financial or other information, know how, marketing plans,
confidential information, correspondence, files or records pertaining to the
Company or the Affiliates.

      Notwithstanding any other term of this Agreement to the contrary, the
Company agrees that Executive shall not violate the terms of this Agreement, and
in particular the terms of this Section 5, if Executive (a) is employed by or
otherwise associated with an insurance company or brokerage company (by way of
example and not limitation, Edward Jones or Prudential), and (b) the services
that Executive provides are limited to investment and financial planning and
related services.

Section 6.   Payment Equalization. Notwithstanding anything to the contrary
herein, should the Executive collect or receive unemployment compensation, which
is treated in any respect as an unemployment compensation claim against the
Company or the Affiliates, under any state or federal unemployment compensation
law at any time while payments are being made under Section 2(a), then in such
event: (a) the Executive shall provide prompt written notice to the Company of
the foregoing, and (b) the payments which the Executive is entitled to receive
under Section 2(a) shall be reduced by the amount of unemployment compensation
collected or received by the Executive. The Company shall apply such reductions
ratably against each installment payment due to the Executive under Section 2(a)
to reflect the amount of unemployment compensation collected or received by the
Executive during each applicable installment period.

Section 7.   Release of Claims and Waiver of Rights.
             --------------------------------------

      (a)    The Company hereby releases and forever discharges the Executive,
and his heirs, personal representatives and assigns, of and from all liability,
claims and demands arising out of his employment with, and services as director
of, the Company and the Affiliates.

      (b)    Executive hereby releases and forever discharges the Company and
the Affiliates, and its and their respective present and former officers,
directors, shareholders, agents, employees, servants, attorneys,

                                       3
<PAGE>

representatives, predecessors, successors, and assigns from any and all known or
unknown grievances, disputes, actions, causes of action, claims of appointment,
employment, reemployment or reinstatement, claims at law or in equity, or
sounding in contract (including breach of express or implied employment contract
or other contract) or tort, arising under the common law, any federal, state or
local statute or ordinance, including, but not limited to, Title VII of the
Civil Rights Act of 1964, as amended (42 U.S.C. ss.2000e, et seq.), the Age
Discrimination in Employment Act of 1967, as amended (29 U.S.C. ss.621 et seq.)
("the ADEA"), the Illinois Human Rights Act (775 ILCS 5/1-101 et seq.), the
Americans with Disabilities Act (42 U.S.C. ss.12101 et seq.), the Equal Pay Act
(29 U.S.C. ss.206 et seq.), the Family and Medical Leave Act (29 U.S.C. ss.2601
et seq.), the Fair Labor Standards Act of 1938 (29 U.S.C. ss.201 et seq.) and
any other federal, state or local law dealing with payment of wages, minimum
wage, overtime or equal pay, the Consolidated Omnibus Budget Reconciliation Act
(COBRA), the Employee Retirement Income Security Act of 1974, as amended (29
U.S.C. ss.1001 et seq.), and any and all actions, charges, complaints or
allegations which have been or could in the future be filed with the Illinois
Department of Human Rights, the Illinois Human Rights Commission, the United
States Equal Employment Opportunity Commission, the National Labor Relations
Board, and any other local, state or federal administrative agency, which arise
out of, or are connected with, in any way, the employment of or any other
relationship between the Executive and the Company or the Affiliates, including
the Executive's separation and/or termination therefrom.

Section 8.   Representation by Executive. Executive acknowledges that, in
accordance with the ADEA, as amended by the Older Workers Benefit Protection Act
of 1990, and as to any potential claims that could be brought or filed or
brought by Executive under the ADEA, he has been given a period of twenty-one
(21) days to review and consider this Agreement before signing it. If he elects
to sign this Agreement without availing himself of the opportunity to consider
its provisions for at least twenty-one (21) days, the Executive hereby
acknowledges that his decision to shorten the time for considering this
Agreement prior to signing is knowing and voluntary, and such decision is not
induced by the Company or the Affiliates through fraud, misrepresentation, or a
threat to withdraw or alter the provisions set forth in this Agreement prior to
the expiration of the twenty-one (21) day time period, or by providing different
terms should he agree to execute this Agreement prior to the expiration of the
twenty-one (21) day time period.

      The Company advises and encourages the Executive to consult with his
attorneys concerning this Agreement prior to executing this Agreement. By
signing this Agreement, the Executive is acknowledging that he has read this
Agreement thoroughly, that he has been advised and encouraged by the Company,
and has had the opportunity, to consult with his attorneys prior to signing this
Agreement, and that his agreement to the terms of this Agreement is knowing,
willing, and voluntary.

                                       4
<PAGE>

      Executive understands that he may revoke this Agreement within seven (7)
days after the date on which he signs this Agreement, and that this Agreement
does not become effective until the expiration of the seven (7) day period. In
the event that the Executive wishes to revoke this Agreement, he must provide
such revocation in writing to UnionBancorp, Inc., 321 West Main Street, Ottawa,
Illinois 61350, Attention: Chairman of the Board. If sent by mail, any
revocation must be postmarked within the 7-day period and sent by certified mail
return receipt requested. In the event of such a revocation by the Executive,
this Agreement will be without effect as to any of the parties hereto.

Section 9.   Non-Waiver. Any waiver of a breach of this Agreement by the
Executive or the Company shall not be construed or operate as a waiver of any
subsequent breach by the Executive or the Company, as the case may be, of the
same or of any other provision of this Agreement.

Section 10.  Remedies. Executive agrees that a violation of Section 3, Section 4
or Section 5 of this Agreement would result in direct, immediate and irreparable
harm to the Company and the Affiliates, and in such event, the Executive agrees
that the Company and the Affiliates, in addition to their other right and
remedies, will be entitled to: (a) injunctive relief without bond enforcing the
terms and provisions of Section 3, Section 4 and Section 5 hereof; (b)
discontinue making the payments required by Section 2(a) hereof; and (c)
terminate all rights the Executive or his designated beneficiary have pursuant
to Section 2(b) hereof. In the event the institution of any action by either
party hereto pertaining to the enforcement hereof, the prevailing party shall be
entitled to recover the costs and expenses (including, but not limited to,
attorneys fees) incurred by such party.

Section 11.  Entire Agreement. This Agreement sets forth the entire agreement of
the parties, and supercedes all other agreements, and this Agreement is final
and binding as to all claims that have been or could have been advanced on
behalf of the Executive or the Company pursuant to any cause of action arising
out of or related in any way to the Executive's employment with the Company or
the Affiliates and termination of that employment.

Section 12.  Governing Law. This Agreement shall be governed by the laws of the
State of Illinois.

Section 13.  Heirs, Successors and Assigns. This Agreement and the rights and
obligations hereunder shall be binding on, and shall inure to the benefit of,
the estate, heirs, executors, personal representatives and assigns of the
Executive, and the successors and assigns of the Company.

      IN WITNESS WHEREOF, the undersigned have set their hands the day and year
first above written.

UNIONBANCORP, INC.                        EXECUTIVE

By: /s/ DEWEY R. YAEGER                   /s/ CHARLES J. GRAKO
    --------------------------------      ------------------------------------
    Name:  Dewey R. Yaeger                Charles J. Grako
    Title: President/CEO

ATTEST:                                   ATTEST:

   /s/ SUZANNE FECHTER                    /s/ SUZANNE FECHTER
   ---------------------------------      ------------------------------------
   Suzanne Fechter                        Suzanne Fechter

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Exhibit 10.11  

EXECUTION COPY  

 
 

EMPLOYMENT AGREEMENT
  Richard D. Smith    
    

        THIS EMPLOYMENT AGREEMENT, dated and effective as of August 1, 2003 is between Allied Motion Technologies, Inc., a Colorado corporation (the
"Company"), and Richard D. Smith ("Employee"). 

RECITALS:  

        The Employee has acknowledged skills and experience in the business conducted by the Company and the Company desires to obtain the benefit of the Employee's
knowledge, skills and experience and assure itself of the ongoing right to Employee's services from and after the date hereof, and is willing to do so on the terms and conditions set forth in this
Agreement. Employee is willing and able to render services to the Company, from and after the date hereof, on the terms and conditions set forth in this Agreement. 

AGREEMENT:  

        NOW, THEREFORE, the Company and Employee agree as follows: 

        1.    Employment.    

        1.1    Title and Duties of Employee.    The Company hereby
employs Employee as the Chief Executive Officer and Chief Financial Officer of the Company and Employee hereby accepts such employment with the Company. 

        (a)    Powers and Duties.    Employee shall have the powers and duties normally incident to the offices he holds as
provided in the bylaws of the Company and such other duties as shall be determined from time to time by the Company's Board of Directors (the "Board") consistent with Employee's qualifications and the
best interest of the Company. Employee shall report to the Board. Employee's powers and authorities shall be superior to those of any other officer or employee of the Company or any subsidiary
thereof. 

        (b)    Contract Rights.    Failure of the Board to elect Employee as Chief Executive Officer or Chief Financial
Officer, or action by the Board to remove Employee from such offices, shall be without prejudice to the contract rights in this Agreement. 

        (c)    Service on the Board.    So long as Employee is willing to serve on the Board and has not been terminated for
cause, the Board shall nominate Employee for election to the Board. Failure to elect to, or removal from, the position of director or Chief Executive Officer or termination of this Agreement for any
reason shall not constitute resignation from the Board or termination of Employee's service on the Board and termination of employment as Chief Executive Officer shall not include termination as a
director. 

        1.2    Performance.    Throughout the period of Employee's employment
hereunder, Employee shall devote Employee's full business time, attention, knowledge and skills, faithfully, diligently, and to the best of Employee's ability, to the active performance of Employee's
duties and responsibilities hereunder; provided, however, Employee may serve as a 

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director
of other corporations and entities and may engage in other activities to the extent they do not inhibit the performance of Employee's duties hereunder, or conflict with the business of the
Company. Employee shall disclose to the Company the name of any corporation or entity on which he serves as a director or in a similar capacity and describe other activities that are not personal in
nature in which he engages. Employee shall do such traveling as reasonably may be required in connection with the performance of such duties and responsibilities. Employee shall not be required to
relocate Employee's residence and Employee may conduct work out of his residence from time to time as he determines appropriate. 

        2.    Term of Employment.    Unless terminated as provided in
Section 4 hereof, the term of this Agreement shall extend to July 31, 2008 (the "Initial Period"), and thereafter shall automatically continue on a year to year basis (each a "Subsequent
Period") unless the Company or Employee shall give the other party notice at least 60 days prior to the termination of the Initial Period or any Subsequent Period of its or his election not to
renew the term of employment, in which case this Agreement shall terminate at the end of the period in which the notice is given; provided, however, the
Company's obligation to pay compensation pursuant to Section 3 or perform any other acts with respect to the last year for which this Agreement is effective shall continue and be enforceable
notwithstanding the termination of this Agreement. 

        3.    Compensation Benefits.    

        3.1    Base Salary.    As compensation for services to be rendered by
Employee hereunder, the Company shall pay to Employee an annual salary of not less than $235,000 per year, payable in periodic installments (but in no event less frequently than monthly) in accordance
with the standard payroll practices of the Company in effect from time to time. Employee's salary shall be reviewed annually for increase (but not decrease) on a merit basis. Such review shall be
conducted at the first meeting of the Board after the end of a fiscal year but not later than February 28 of each year and the effective date of any such increase shall be March 1. The
Employee's annual salary in effect from year to year is herein referred to as the "Base Salary". 

        3.2    Annual Bonus.    

        (a)    Performance Criteria.    The Company shall pay to Employee an Annual Bonus with respect to each fiscal year in
amounts determined as provided by the Board based on achieving performance criteria
established at the beginning of each fiscal year. Such performance criteria will recognize the overall financial performance of the Company and the improvements made in financial results. 

        (b)    Time of Payment.    The first payment of the Annual Bonus to Employee pursuant to Section 3.2
(a) shall be with respect to the fiscal year ended December 31, 2003. An Annual Bonus provided herein shall be paid, subject to achieving the performance criteria, with respect to each
fiscal year thereafter during the term of this Agreement. All Annual Bonuses payable under Section 3.2 (a) shall be paid in cash immediately following the first Board meeting held after
the end of the applicable fiscal year at which the Annual Bonus calculation is approved by the Board. 

        3.3    Long-Term Incentive Payment Plan.    On or before
the first Board meeting held in a current fiscal year, the Board shall consider whether to grant options to purchase the Company's Common Stock ("Stock Options") to Employee, including the terms and
the provisions of any Stock Options. Grants of Stock Options provided under this Section 3.3 are referred to herein as "Long-Term Incentive Payout". In making its determination the
Board shall consider, among other things, the Employee's responsibilities and efforts and 

2

 

performance
under this Agreement in relation to the business plan and forecast, the relationship between the benefits of Stock Options and improving shareholder value, the development of the Company's
products and the performance of the Company's products in the marketplace, impact of the Company's products and product development on future prospects for the Company, and an increase in the trading
price per share of the Company's Common Stock. The Board shall also consider customary business practices and Long-Term Incentive Payment Plan benefits granted to Employee in comparison to
such benefits provided to other executives in positions similar to the Employee. 

        3.4    Expenses.    The Company promptly shall reimburse Employee,
upon presentation of appropriate receipts and vouchers, for any reasonable business expenses incurred by Employee in connection with the performance of his duties and responsibilities hereunder. 

        3.5    Vacation.    Throughout the period of Employee's employment
hereunder, Employee shall be entitled to take, from time to time, 5 weeks of vacation annually with pay at such times as shall be mutually convenient to Employee and the Company. 

        3.6    Benefits and Perquisites.    

        (a)    Participation.    The Company shall make available to Employee, throughout the period of employment hereunder,
such benefits and perquisites as are generally provided by the Company to its employees. Without limiting the foregoing, Employee shall be eligible to participate in any bonus plan, stock option
plan, stock purchase plan, pension plan and group life, health and accident insurance plans as the Company shall continue to provide or which may hereafter be adopted by the Company for the benefit of
its employees generally. The Company shall provide and pay the premium on long term disability insurance for Employee. The Company shall not make any changes in such plans or arrangements which would
adversely affect the Employee's rights or benefits thereunder, unless such changes occur pursuant to a program applicable to all employees of the Company and do not result in a proportionately greater
reduction in the rights of, or benefits to, the Employee as compared with any other employee of the Company. 

        (b)    Office Space.    The Company shall provide office space and secretarial services at the Company's offices
suitable to Employee's position. 

        (c)    Life Insurance.    The Company shall provide whole life insurance on the life of Employee with death benefits
of $500,000 with all premiums paid by the Company. Employee may designate the beneficiary or beneficiaries of such policy. 

        (d)    Automobile.    The Company shall provide a new automobile no less frequently than every 3 years for
Employee's sole use and the Company shall pay all costs of operating and maintaining or repairing such automobile. At or before the time of replacement, Employee shall have the right to purchase, at
its depreciated cost to the Company, the automobile previously provided. 

        (e)    Benefit Plans.    The Company will make non-qualified contributions for Employees's benefit under
the Company's IRS §401(k) plan on the same basis as it makes contributions for other employees. 

        (f)    Retirement Plan Benefits.    The Company will provide to Employee retirement plan benefits under any plan on
the same basis it provides benefits to other employees. 

        4.    Termination.    This Agreement may be terminated by the Company
or Employee as provided in this Section 4. 

3

 

        4.1    Cause    

        (a)    Definition.    This Agreement may be terminated at any time at the option of the Company for Cause (as such
term is hereinafter defined), effective as provided in Section 4.9. As used herein, the term "Cause" shall mean and be limited to: (i) conviction of, the indictment for (or its
procedural equivalent), or the entering of a guilty plea or plea of no contest with respect to, a felony; (ii) the willful violation of the terms of this Agreement; (iii) gross
negligence by Employee in connection with the performance of Employee's duties, responsibilities, agreements and covenants hereof, which violation or negligence shall continue uncorrected for a period
of 45 days after receipt by Employee of a written notice from the Company; (iv) the appropriation (or attempted appropriation) of a material business opportunity of the Company,
including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company; (v) the misappropriation (or attempted misappropriation)
of any of the Company's funds or property; or (vi) the excessive use (following at least one written warning) of alcohol or any illegal use of drugs or narcotics. For purposes of this Section,
no act or failure to act on the Employee's part shall be considered "willful" unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was
in the best interest of the Company. Notwithstanding the foregoing, Employee shall not be deemed to have been terminated for Cause without written notice pursuant to Section 13 and providing
Employee an opportunity to be heard before the Board with the provisions relied upon for termination provided in reasonable detail. 

        (b)    Salary; Benefits; Bonuses.    Upon termination for Cause, the Company shall (i) continue the Base Salary
through the Date of Termination, (ii) pay all fringe benefits through the end of the calendar month in which termination occurs, and (iii) pay any annual bonuses pursuant to
Section 3.2 treating the effective Date of Termination as being the last day of the fiscal year in which termination under this Section 4 occurs. 

        4.2    Retirement.    Termination of employment based on "Retirement"
shall mean termination in accordance with any retirement arrangement established with Employee's consent, including settlement for the Annual Bonus pursuant to Section 3.2. 

        4.3    Death of Employee.    This Agreement shall terminate upon the
death of Employee; provided, however, the Company shall (i) continue Employee's Base Salary through the month in which death occurs and for the following three months and
(ii) shall make payments as provided in Section 4.5 in place of (x) Annual Bonus payments provided in Section 3.2 and (y) the Long-Term Incentive Payout
pursuant to Section 3.3. 

        4.4    Disability of Employee    

        (a)    Termination; Definition.    In the event Employee becomes mentally or physically disabled during the term of
employment hereunder, this Agreement shall terminate as of the date such disability is established. As used in this Section, the term "Disabled" or "Disability" means suffering from any mental or
physical condition, other than use of alcohol or illegal use of drugs or narcotics, which renders Employee unable to perform substantially all of Employee's duties and services under this Agreement in
a satisfactory manner for 120 consecutive days, or 180 days during any 12-month period. If, by reason of Disability, Employee is absent from the full-time
performance of his duties with the Company for the periods above provided, Notice of Termination may be given and if Employee has not returned to the full-time performance of his duties
within 30 days thereafter, Employee's Disability shall be deemed "established" at the end of such 30-day period. 

4

 

        (b)    Salary, Benefits.    During any period that Employee fails to perform his full duties with the Company because
he is Disabled, Employee shall continue to receive Base Salary until this Agreement is terminated pursuant to Section 4.8 at the rate in effect at the commencement of any such period adjusted
for any compensation payable to him under any Company paid disability plan during such period. In the event of termination for Disability the Company shall continue (i) Employee's Base Salary
adjusted for any compensation payable to him under any Company paid disability plan during such period and (ii) the same coverage under medical, dental, long-term disability and
life insurance for the greater of (x) the remaining term of this Agreement or (y) until long term disability insurance coverage becomes effective. 

        (c)    Bonuses.    In the event of termination upon established Disability the Company shall make payments as provided
in Section 4.5 in place of (i) the Annual Bonus payment provided in Section 3.2 and (ii) the Long-Term Incentive Payout pursuant to Section 3.3. 

        4.5    Death and Disability of Employee.    In the event of
termination upon death the Company shall make payments to Employee's personal representative, and in the event of termination for Disability the Company shall make payments to Employee, as hereinafter
provided. Such payments shall be made immediately following the first meeting of the Board held after the end of the fiscal year in which death or Disability occurred, but in no event later than
February 28 of such year. 

        (a)    Annual Bonus.    With respect to the Annual Bonus payment provided in Section 3.2(a) the Company
shall make a separate determination of the Annual Bonus based on the factors provided in Section 3.2(a) for the fiscal year in which death or Disability occurs 

        (b)    Long Term Incentive Plan.    With respect to the Long-Term Incentive Payout provided in
Section 3.3 the Company shall make a separate determination of the Long-Term
Incentive Payout based on the factors provided in Section 3.3 for the fiscal year in which death or Disability occurs. 

        4.6    Other than for Cause.    If Employee's employment shall be
terminated by the Company other than for Cause, Retirement, death or Disability, prior to a change in control of the Company or potential change in control of the Company as defined in the Severance
Agreement referred to in Section 4.7, then Employee shall be entitled to the payments provided below: 

        (a)    Base Salary.    On the effective Date of Termination the Company shall pay Employee his full Base Salary
through the end of the month in which termination occurs at the rate in effect at the time Notice of Termination is given, and for one full year thereafter with payments being made over the following
12 months and no less frequently than once per month. 

        (b)    Benefits.    The Company shall continue providing medical, dental, long-term disability and life
insurance equal to the coverages existing at the time Notice of Termination is given for one full year. 

        (c)    Annual and Long Term Bonus.    On the effective Date of Termination the Company shall make payments to and
issue to Employee with respect to, and in place of (i) the Annual Bonus payment provided in Section 3.2 an amount in cash equal to 0.9 multiplied by Base Salary for the year in which
employment is terminated and (ii) the Long Term Incentive Payout provided in Section 3.3 for the fiscal year in which employment is terminated under this Section. 

5

 

        4.7    Change in Control.    

        (a)    Severance Agreement Continued.    The letter agreement dated July 24, 2003, (Severance Agreement)
between the Company and Employee providing certain benefits to Employee upon a change in control of the Company is continued and upon a change in control of the Company the Severance Agreement shall
apply and have priority over this Agreement so that in the event of any conflict between this Agreement and the Severance Agreement the Severance Agreement shall apply. Any payments made or benefits
provided pursuant to the Severance Agreement are not to be duplicated by any requirements of this Agreement. 

        (b)    Definition.    As used in this Agreement the term "change in control of the Company" shall have the meaning
expressed in the Severance Agreement. 

        4.8    Notice of Termination.    Any purported termination of
employment by the Company or by Employee, other than for death, may be communicated orally or in writing. If communicated orally, such communication shall be followed within 10 days by a
written communication which, and if communicated by written communication the communication, shall indicate the specific termination provisions in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provisions so indicated and shall state an effective date of termination. 

        4.9    Date of Termination, Etc.    "Date of Termination" shall mean:
(i) if employment is terminated for Disability, the date as provided in Section 4.4(a), and (ii) if employment is terminated for Cause pursuant to Section 4.1 or for any
other reason (other than Disability), the date specified in the Notice of Termination (which, in the case of a termination pursuant to Section 4.1 shall be the end of a calendar month but not
less than 15 days). Amounts paid under this Section are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under
this Agreement. 

        4.10    Termination by Employee.    Employee may terminate this
Agreement by resigning as Chief Executive Officer upon at least 30 days prior written notice of the effective Date of Termination. In such event the Company shall continue Employee's Base
Salary and all fringe benefits to the effective Date of Termination. Termination of this Agreement under this Section does not affect the Company's obligation to make all payments to Employee which
were fixed and determined prior to the effective Date of Termination. 

        5.    Confidential Information    

        5.1    Definition.    Confidential Information means: 

        (a)   Any
and all (i) trade secrets concerning the business and affairs of the Company, product specifications, data, know-how, formula, compositions,
processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current, and planned research and development, current and planned manufacturing or distribution
methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code and source
code), computer software and database technologies, systems, structures, architectures (and related formula), improvements, devices, discoveries, concepts, ideas, methods and information, and any
other information, however documented, that is a trade secret within the meaning of Colorado Revised Statutes § 7-74-101 et
seq. and 

        (b)   information
concerning the business and affairs of the Company (which includes historical financial statements, financial projections and budgets, historical and
projected 

6

 

sales,
capital spending budgets and plans, the names and backgrounds of key personnel, personnel training and techniques and materials), however documented; and 

        (c)   notes,
analyses, compilations, studies, summaries and other material prepared by or for the Company containing or based, in whole or in part, on any information included
in the foregoing. 

        5.2    Disclosure and Use.    Employee shall not disclose, either
during or subsequent to Employee's employment with the Company, any Confidential Information or proprietary data of the Company, whether or not developed by Employee, except (i) as may be
required for Employee to perform Employee's employment duties with the Company; (ii) to the extent such information has been disclosed to Employee by a third party who is not subject to
restriction on the dissemination of such information; (iii) as such information becomes generally available to the public other than as a result of a disclosure by Employee;
(iv) information which must be disclosed as a result of a subpoena or other legal process, or (v) if Employee shall first secure the Company's prior written authorization. This covenant
shall survive the termination of the Employee's employment with the Company, and shall remain in effect and be enforceable against Employee for so long as any such Confidential Information or
proprietary data retains economic value, whether actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use. 

        5.3    Return of Materials.    The Employee will not remove from the
Company's premises (except to the extent such removal is for the purposes of the performance of Employee's duties at home or while traveling, or except as otherwise specifically authorized by the
CEO), any Confidential Information Employee recognizes that, as between the Company and Employee, all the Confidential Information, whether or not developed by the Employee, are the exclusive property
of the Company. Upon termination of employment by the Company, Employee shall promptly deliver to the Company all Confidential Information, and all other materials of a secret or confidential nature
relating to the Company's business, which are in the possession or under the control of Employee and Employee shall not retain copies of any such Confidential Information. 

        6.    Inventions and Discoveries.    Employee hereby assigns to the
Company all of the Employee's rights, title and interest in and to all inventions, techniques, discoveries, processes, designs or improvements (whether patentable or not), any industrial design
(whether registrable or not), or uses Confidential Information as described in Section 5.1, or other intellectual property rights pertaining thereto, that relates in any way to, or is useful in
any manner in, the business then being conducted or proposed to be conducted by the Company, and any such item created by the Employee, either solely or in conjunction with others, following
termination of Employee's employment with the Company (hereinafter referred to collectively as the "Inventions"). Promptly upon the development or making of any Invention or improvement thereon,
Employee shall disclose the same to the Company and shall execute and deliver to the Company such reasonable documents as the Company may request to confirm the assignment of Employee's rights therein
and if requested by the Company, shall assist the Company in applying for and prosecuting any patents which may be available in respect thereof. Employee acknowledges that all of Employee's
Company-related writing, works of authorship, specially commissioned works and other Employee Inventions are works made for hire, property of the Company, including all copyrights, patents, and other
intellectual property rights pertaining thereto. If it is determined that any such works are not works made for hire, the Employee hereby assigns to the Company all of the Employee's right, title, and
interest, including all rights of copyright, patent, and other intellectual property rights, to or in such Inventions. 

7

 

        7.    Restrictive Covenant.    

        (a)   While
the Employee is an employee of the Company and during a period in which the Company is making continuation payments of Base Salary pursuant to Section 4
hereof, Employee shall not, without the prior written consent of the Company, (i) engage directly or indirectly in any Competing Business in the geographical area where the Company does
business (including, without limitation, the United States and any country in which the Company has a sales representative at the time of termination) whether as an employee, consultant or advisor, or
owner as principal, shareholder or partner of any equity interest in excess of 5% of any business entity (which shall include any proprietorship, trust, joint venture, partnership or any type of
corporation or association), or (ii) serve as an officer, director, trustee, partner or the like in any such business entity. 

        (b)   The
term "Competing Business" as used in this Section 7 includes any business conducted by the Company, which initially includes the design, production and
marketing of motion control products and any other products manufactured or marketed by the Company at the date of termination of this Agreement. 

        8.    Arbitration.    Any controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be settled by arbitration in the City and County of Denver in accordance with the rules of the American Arbitration Association. Judgment upon
the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The Company shall pay all costs of arbitration. In the event that it shall be necessary or desirable for
Employee to retain legal counsel and/or incur other
costs and expenses in connection with interpretation of his rights under this Agreement, including any procedure in arbitration, Employee shall be entitled to recover from the Company reasonable
attorneys' fees and costs and expenses incurred by him in connection with such interpretation or arbitration, regardless of the final outcome, unless the arbitrator shall determine that under the
circumstances such payment would be unjust. 

        9.    Mitigation.    Employee shall not be required to mitigate the
amount of any payment provided in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided in this Agreement be reduced by any compensation
earned by Employee as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by Employee to the Company, or otherwise. 

        10.    Announcements.    No public announcement regarding termination
of employment of the Employee or any change in status of the Employee of the Company shall be made without Employee's approval except the Company may announce Employee's termination if Company is
otherwise required to do so pursuant to the rules of the Securities and Exchange Commission or to any other legal requirement. All matters with respect to termination of employment of Employee,
retirement of Employee or other action taken pursuant to this Agreement shall be kept confidential and neither Company nor Employee will make unfavorable comments about the other in connection with
this Agreement. 

        11.    Severability.    If any provision of this Agreement, including
the Restrictive Covenant in Section 7, is held invalid or unenforceable, either in its entirety or by virtue of its scope or application to given circumstances, such provision shall thereupon
be deemed modified only to the extent necessary to render same valid, or not applicable to given circumstances, or excised from this Agreement, as the situation may require, and this Agreement shall
be construed and enforced as if such provision had been included herein as so modified in scope or application, or had not been included herein, as the case may be. 

        12.    Non-Assignability.    In light of the unique
personal services to be performed by Employee hereunder, it is acknowledged and agreed that any purported or attempted assignment or transfer by 

8

 

Employee
of this Agreement or any of Employee's duties, responsibilities or obligations hereunder shall be void. This Agreement may not be assigned by the Company without the prior written consent of
Employee. 

        13.    Notices.    Any notice, request, demand or other communication
required or permitted under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or on the date of receipt when mailed by certified mail, return receipt
requested, addressed as follows: 

	If to the Company:	 	Allied Motion Technologies, Inc.

23 Inverness Way East, Ste 150

Englewood, Colorado 80112

Attention: Chairman and Secretary
	

If to the Employee:	
 	

Richard D. Smith

8422 Newland Drive

Arvada, CO 80003

or
to such other address or addresses as may be specified from time to time by notice; provided however, that any notice of change of address shall not
be effective until its receipt by the party to be charged therewith. 

        14.    General    

        14.1    Amendments.    Neither this Agreement nor any of the terms or
conditions hereof may be waived, amended or modified except by means of a written instrument duly executed by the party to be charged therewith. 

        14.2    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. 

        14.3    Governing Law.    This Agreement, and all matters or disputes
relating to the validity, construction, performance or enforcement hereof, shall be governed, construed and controlled by and under the laws of the State of Colorado without regard to principles of
conflicts of law. 

        14.4    Successors and Assigns.    This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns. 

        (a)   The
Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company, by agreement in form and substance satisfactory to Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Employee to all rights for breach hereunder. 

        (b)   If
Employee should die while any amounts would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to Employee's personal representatives or to his estate. 

9

 

        14.5    Counterparts.    This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original hereof, but all of which together shall constitute one and the same instrument. 

        14.6    Entire Agreement.    Except as otherwise set forth or referred
to in this Agreement, this Agreement constitutes the sole and entire agreement and understanding between the parties hereto as to the subject matter hereof, and supersedes all prior discussions,
agreements and understandings of every kind and nature between them as to such subject matter. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the date first set forth above. 

	 	 	ALLIED MOTION TECHNOLOGIES, INC.
	

 	
 	

By:	

/s/  EUGENE E. PRINCE      
 Eugene E. Prince—Chairman
	

 	
 	

By:	

/s/  RICHARD D. SMITH      
 Richard D. Smith—Employee

10

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EMPLOYMENT AGREEMENT Richard D. Smith

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