<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 0-12489
SPECTRAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2729372
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 Hall Road, Sturbridge, Massachusetts 01566
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 347-2261
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No.
The number of shares of the registrant's Common Stock outstanding as of
October 31, 1996, was 5,398,354.
<PAGE> 2
PART I - FINANCIAL INFORMATION
SPECTRAN CORPORATION
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE)
(UNAUDITED)
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
----------------------------- -----------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales $ 44,915 $ 27,035 $ 16,161 $ 9,971
Cost of Sales 28,621 17,941 9,941 6,612
---------- ---------- ---------- ----------
Gross Profit 16,294 9,094 6,220 3,359
Selling and Administrative Expenses 9,909 6,698 3,641 2,532
Research and Development Costs 2,321 2,103 740 691
---------- ---------- ---------- ----------
Income from Operations 4,064 293 1,839 136
Other Income (Expense):
Interest Income 166 240 45 72
Interest Expense (528) (434) (208) (180)
Other, net 122 358 58 274
---------- ---------- ---------- ----------
(240) 164 (105) 166
---------- ---------- ---------- ----------
Income before Income Taxes 3,824 457 1,734 302
Income Tax Expense 1,300 187 727 123
---------- ---------- ---------- ----------
Net Income $ 2,524 $ 270 $ 1,007 $ 179
========== ========== ========== ==========
Weighted Average Number of Shares of
Common Stock Outstanding 5,929,796 5,409,585 6,003,798 5,478,445
========== ========== ========== ==========
Net Income per Share of Common Stock $ .43 $ .05 $ .17 $ .03
========== ========== ========== ==========
</TABLE>
See accompanying notes to these condensed consolidated financial statements.
2
<PAGE> 3
SPECTRAN CORPORATION
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
ASSETS (unaudited)
Current Assets:
Cash and Cash Equivalents $ 2,174 $ 1,625
Current Portion of Marketable Securities 972 4,088
Trade Accounts Receivable, net 10,201 7,799
Inventories 8,967 7,415
Current Deferred Income Taxes, net 685 588
Prepaid Expenses and Other Current Assets 567 513
------- -------
Total Current Assets 23,566 22,028
Property, Plant and Equipment, net 14,702 10,290
Other Assets:
Long-term Marketable Securities 1,422 1,133
License Agreements, net 854 1,004
Deferred Income Taxes, net 974 1,652
Goodwill, net 3,935 4,156
Other Long-term Assets 1,108 102
------- -------
Total Other Assets 8,293 8,047
------- -------
Total Assets $46,561 $40,365
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 2,727 $ 2,762
Income Taxes Payable 231 225
Accrued Liabilities 4,440 3,082
------- -------
Total Current Liabilities 7,398 6,069
Long-term Debt 12,000 10,000
Stockholders' Equity:
Common Stock, voting, $.10 par value; authorized
20,000,000 shares; outstanding 5,396,963 shares and 539 535
5,353,686 shares in 1996 and 1995, respectively
Common Stock, non-voting, $.10 par value;
authorized 250,000 shares; no shares outstanding -- --
Paid-in Capital 26,745 26,443
Net Unrealized Loss on Marketable Securities 15 (22)
Retained Earnings (Deficit) (136) (2,660)
------- -------
Total Stockholders' Equity 27,163 24,296
------- -------
Total Liabilities and Stockholders' Equity $46,561 $40,365
======= =======
</TABLE>
See accompanying notes to these condensed consolidated financial statements.
3
<PAGE> 4
SPECTRAN CORPORATION
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Nine Months Ended
September 30,
-------------------------
1996 1995
------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income ........................................................ $ 2,524 $ 270
Reconciliation of net income to net cash
provided by operating activities
Add charges (deduct credits) not affecting cash:
Depreciation and amortization ............................... 2,189 1,688
Loss (gain) on sale of assets ............................... -- 4
Loss on sale of marketable securities ....................... 19 --
Changes in valuation accounts ............................... (242) (150)
Change in long-term deferred income taxes ................... 832 --
Change in other long-term assets ............................ (1,019) 18
Changes in assets and liabilities, net of effects from
purchase of businesses:
Current deferred income taxes ............................... 23 --
Accounts receivable ......................................... (2,508) (481)
Inventories ................................................. (1,479) (1,501)
Prepaid expenses and other current assets ................... (54) (451)
Income taxes payable/receivable ............................. 6 455
Accounts payable and accrued liabilities .................... 1,323 233
------- --------
Net Cash Provided by Operating Activities ............................ 1,614 85
------- --------
Cash Flows from Investing Activities:
Acquisition of businesses, net of cash acquired ................... -- (3,818)
Acquisition of property, plant and equipment ...................... (6,209) (1,552)
Purchase of marketable securities ................................. (7,380) (6,494)
Proceeds from sale/maturity of marketable securities .............. 10,218 7,496
Proceeds from sale of equipment ................................... -- --
Acquisitions of other assets, net ................................. -- --
------- --------
Net Cash Used in Investing Activities ................................ (3,371) (4,368)
------- --------
Cash Flows from Financing Activities:
Borrowings of long-term debt ...................................... 2,000 4,760
Reduction of debt ................................................. -- --
Tax effect of disqualifying disposition of ISO shares ............. -- --
Proceeds from exercise of stock options and warrants .............. 306 --
------- --------
Net Cash Provided by Financing Activities ............................ 2,306 4,760
------- --------
Increase (Decrease) in Cash and Cash Equivalents ..................... 549 477
Cash and Cash Equivalents at Beginning of Period ..................... 1,625 477
------- --------
Cash and Cash Equivalents at End of Period ........................... $ 2,174 $ 954
======= ========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
SPECTRAN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The financial information for the nine months and three months ended
September 30, 1996 and 1995, is unaudited but reflects all adjustments
(consisting solely of normal recurring adjustments) which the Company considers
necessary for a fair statement of results for the interim periods. The results
of operations for the nine months ended September 30, 1996 and 1995, are not
necessarily indicative of the results for the entire year.
The consolidated results for the nine months ended September 30, 1996 and
1995, include the accounts of SpecTran Corporation (the Company) and all wholly
owned subsidiaries: SpecTran Communication Fiber Technologies, Inc. ("SpecTran
Communication"), SpecTran Specialty Optics Company ("SpecTran Specialty"), and
Applied Photonic Devices, Inc. ("APD"). All significant intercompany balances
and transactions have been eliminated.
These financial statements supplement, and should be read in conjunction
with, the Company's audited financial statements for the year ended December 31,
1995, as contained in the Company's Form 10-K as filed with the United States
Securities and Exchange Commission.
<TABLE>
2. INVENTORIES
Inventories consisted of:
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Raw Materials $4,142 $3,132
Work in Process 2,211 1,508
Finished Goods 2,614 2,775
------ ------
$8,967 $7,415
====== ======
</TABLE>
5
<PAGE> 6
<TABLE>
3. PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Property, plant and equipment consisted of:
Land and Land Improvements $ 497 $ 408
Buildings and Improvements 3,803 3,729
Machinery and Equipment 19,437 17,229
Construction in Progress 5,478 1,641
------- -------
29,215 23,007
Less Accumulated Depreciation and Amortization 14,513 12,717
------- -------
$14,702 $10,290
======= =======
</TABLE>
4. INCOME PER SHARE OF COMMON STOCK
Income per share of common stock is based on the weighted average of the
number of shares outstanding during the periods, including common stock
equivalents of stock purchase warrants and stock options for both primary and
fully diluted earnings per share. Fully diluted income per share approximates
primary income per share.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
<TABLE>
Three and Nine Months Ended September 30, 1996 Compared with Three and Nine
---------------------------------------------------------------------------
Months Ended September 30, 1995
- -------------------------------
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
----------------- ------------------
(Unaudited) (Unaudited)
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 100.0%
Cost of Sales 63.7% 66.4% 61.5% 66.3%
----- ----- ----- -----
Gross Profit 36.3% 33.6% 38.5% 33.7%
Operating Expenses
Selling and Administrative Expenses 22.1% 24.7% 22.5% 25.4%
Research and Development Costs 5.2% 7.8% 4.6% 6.9%
----- ----- ----- -----
Income from Operations 9.0% 1.1% 11.4% 1.4%
Other Income (Expense), net (0.5%) 0.6% (0.7%) 1.6%
----- ----- ----- -----
Income before Income Taxes 8.5% 1.7% 10.7% 3.0%
Income Tax Expense 2.9% 0.7% 4.5% 1.2%
----- ----- ----- -----
Net Income 5.6% 1.0% 6.2% 1.8%
===== ===== ===== =====
</TABLE>
Net Sales
- ---------
Net sales increased $6.2 million, or 62.1%, from $10.0 million to $16.2
million for the three months ended September 30, 1996 and $17.9 million, or
66.1%, from $27.0 million to $44.9 million for the nine months ended September
30, 1996. This increase was primarily due to strong market demand for the
Company's multimode and single-mode communications fiber. The acquisition of APD
in May 1995 also contributed to the increase in net sales for the nine month
1996 period. Selling prices for multimode and single-mode fiber have increased
in 1996, largely due to the strong market demand and price adjustments related
to certain raw material cost increases in the case of multimode fiber. SpecTran
Communication represented approximately half of the Company's net sales with the
balance divided relatively evenly between SpecTran Specialty and APD.
Gross Profit
- ------------
Gross profit increased $2.8 million, or 85.1%, from $3.4 million to $6.2
million for the three months ended September 30, 1996 and $7.2 million, or
79.2%, from $9.1 million to $16.3 million for the nine months ended September
30, 1996. As a percentage of net sales, the gross profit increased to 38.5% in
the third quarter of 1996 from 33.7% in the third quarter of 1995 and to 36.3%
for the nine months ended September 30, 1996 from 33.6% for the nine months
ended September 30, 1995. This increase in gross profit in both 1996 periods was
primarily due to increased net sales in 1996 and lower production costs
resulting from manufacturing process and yield improvements. The increase in
gross margin was partially offset by lower margins at APD which was acquired in
May 1995 and at SpecTran Specialty.
7
<PAGE> 8
As a percentage the net sales, royalties increased from 1.9% for the three
months ended September 30, 1995 to 3.4% for the three months ended September 30,
1996 and decreased from 4.2% for the nine months ended September 30, 1995 to
3.8% for the nine months ended September 30, 1996. The three month period of
1995 reflects a retroactive adjustment made in the third quarter of that year.
The nine month period decrease in royalties as a percentage of net sales was
primarily due to a decrease in the net sales relative to the total sales
subject to royalties.
Selling and Administration
- --------------------------
Selling and administrative expenses increased by $1.1 million, or 43.8%,
from $2.5 million to $3.6 million for the three months ended September 30, 1996
and by $3.2 million, or 47.9%, from $6.7 million to $9.9 million for the nine
months ended September 30, 1996. This increase was primarily due to including a
full nine months of APD expenses in the 1996 period versus only four months in
the 1995 period. For the three and nine month periods ended September 30, 1996,
a substantially higher provision for incentive compensation also contributed to
the increase. As a percentage of net sales, selling and administrative expenses
decreased to 22.5% for the three months ended September 30, 1996 from 25.4% for
the three months ended September 30, 1995 and to 22.1% for the nine months ended
September 30, 1996 from 24.7% for the nine months ended September 30, 1995.
Research and Development
- ------------------------
Research and development expenses increased by $49,000, or 7.1%, from
$691,000 to $740,000 for the three months ended September 30, 1996 and by
$218,000, or 10.4%, from $2.1 million to $2.3 million for the nine months ended
September 30, 1996. As a percentage of net sales, research and development
expenses decreased from 6.9% for the three months ended September 30, 1995 to
4.6% for the three months ended September 30, 1996 and from 7.8% for the nine
months ended September 30, 1995 to 5.2% for the nine months ended September 30,
1996. The Company's increased research and development spending, in absolute
dollars, is primarily in programs designed to improve manufacturing cost and
product performance in both the multimode and single-mode product lines, to
develop new special performance fiber products and to develop alternative
process technologies.
Other Income (Expense), net
- ---------------------------
Other income (expense), net decreased by $271,000 from $166,000 of net
other income for the three months ended September 30, 1995 to a net other
expense of $105,000 for the same three month period in 1996. The decline was
primarily due to a non-recurring material recovery income received in the
third quarter of 1995 compared with no such income in the comparable 1996
period. Other income (expense), net declined by $404,000 in the 1996 nine
month period compared with the 1995 nine month period. The decline was caused
by higher interest expense of $94,000 (21.7%) and lower interest income of
$74,000 (30.8%) in the 1996 nine month period versus the comparable 1995
period, in addition to the absence of the non-recurring material recovery
income in the 1996 nine month period.
8
<PAGE> 9
Income Taxes
- ------------
A tax provision of 42% and 34% of pre-tax income was provided in the three
and nine month periods of 1996, respectively, compared to a tax provision of 41%
of pre-tax income in the comparable periods of 1995. The estimated effective tax
rate for 1996 of 34% is lower than the statutory and prior year's tax rates due
to an anticipated reduction in 1996 in the valuation allowance for deferred tax
assets due to the Company's belief that it is more likely than not that the
additional deferred tax asset will be realized through the utilization of
operating loss and tax credit carryforwards. The higher rate in the 1996
September quarter was to adjust the year-to-date estimated tax rate up to 34%
from the 27% that had been used in the 1996 first half.
Net Income
- ----------
Net income for the three and nine months ended September 30, 1996 was $1.0
million, or 6.2% of net sales, and $2.5 million, or 5.6% of net sales,
respectively. Net income for the same periods in 1995 was $179,000, or 1.8% of
net sales, and $270,000, or 1.0% of net sales, respectively.
Liquidity and Capital Resources
- -------------------------------
The Company's principal sources of cash are cash flow from operations,
established bank credit facilities and existing cash balances. During the nine
months ended September 30, 1996, the Company generated $1.6 million in net cash
from operating activities, borrowed an additional $2 million under its bank
credit facility, and reduced its marketable securities by an additional
$2.8 million. Substantially all of this cash was used to fund capital
expenditures of approximately $6.2 million.
At September 30, 1996, the Company had approximately $4.6 million of cash,
cash equivalents and marketable securities, including approximately $1.4 million
in marketable securities classified at long-term which could be converted into
cash if necessary. The Company's net working capital position as of September
30, 1996 was approximately $16.2 million.
On April 25, 1996 and subsequently amended on September 4, 1996, SpecTran
and its subsidiaries entered into a Loan and Security Agreement with Fleet
National Bank ("Fleet Bank") pursuant to which the Company can borrow up to $22
million subject to certain limitations based on the Company's accounts
receivable and inventory and the appraisal value of certain machinery, equipment
and real property owned by the Company. The loan consists of a $14.5 million
revolving note which is payable April 1, 1999, a $4 million term note which is
payable in quarterly installments commencing January 1, 1997 and maturing on
April 1, 2001 and a $3.5 million mortgage note which is payable in quarterly
installments commencing July 1, 1997 and maturing on April 1, 2006. Interest on
each note is payable quarterly commencing July 1, 1996. The Company has the
option to select from time to time the interest rate on the notes at either
LIBOR rate plus 1.5% or the Fleet Bank's prime rate, provided that under certain
circumstances, Fleet Bank may deem that the LIBOR rate is not available. The
loans are secured by all of the Company's assets, including real property.
At September 30, 1996, the Company had outstanding $10 million under the
revolving credit agreement and $2 million under the term loan agreement with
Fleet Bank; the Company's September 30, 1996 borrowing base permits an
additional $5.2 million of borrowing.
9
<PAGE> 10
The Company has plans for capacity expansion requiring significant capital
expenditures through approximately the end of 1997. Planned expenditures for
capacity expansion include $32 million for SpecTran Communication and $9 million
for SpecTran Specialty. When completed, these expansions should increase
SpecTran Communication's capacity by 100% and SpecTran Specialty's by 50%. The
Company intends to finance a portion of these expansions through a combination
of cash flow from operations and borrowings under existing bank credit
agreements. The Company is in the process of arranging $24 million of long-term
debt. The senior secured debt is expected to mature in 7-8 years, with 5-6 equal
annual principal payments due beginning on the third anniversary of the date of
issuance and interest, payable semi-annually in the range of 325-340 basis
points over the interest rate for U.S. Treasury notes with comparable lives. The
terms of the senior secured debt are expected to include a first priority
security interest in all assets of the Company; certain financial and
non-financial covenants, including maintenance by the Company of a certain
consolidated adjusted net worth; and the obligation to repay if a person or
group of related persons acquires more than 50% of the Company's voting stock.
If the Company completes this financing the proceeds would be used principally
to refinance and replace existing credit facilities, and for planned expansion
and general corporate purposes. If the long-term financing is completed, the
company expects that Fleet Bank will establish a new $20 million revolving line
of credit for working capital and general corporate purposes. There is no
assurance that the long-term debt financing or the new revolving line of credit
will be completed. The Company is also exploring other ways of financing its
capacity expansion.
Subsequent Event
- ----------------
In October 1996, the Company announced a three year agreement to supply
Lucent Technologies Incorporated with multimode fiber valued at approximately
$35 million. Earlier in 1996, the Company had announced a three year agreement
to supply Corning Incorporated with multimode fiber valued at approximately $17
million. As previously announced, the optical fiber being manufactured and sold
under these contracts is not subject to certain volume restrictions contained in
the Company's patent license agreement from Corning.
10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 10.75 Contractual Agreement Between Lucent Technologies,
Inc. and SpecTran Corporation dated October 3, 1996.
(Registrant has applied for confidential treatment for
portions of this Exhibit)
Exhibit 10.76 Three year multimode optical fiber supply contract
between Corning, Incorporated and SpecTran Corporation
dated as of July 1, 1996. (Registrant has applied for
confidential treatment for portions of this Exhibit)
Exhibit 10.77 First Amendment to Loan and Security Agreement by
SpecTran Corporation, SpecTran Specialty Optics
Company, Applied Photonic Devices, Inc., SpecTran
Communication Fiber Technologies, Inc. and Fleet
National Bank dated September 4, 1996.
Exhibit 10.78 First Amendment to Mortgage among SpecTran Corporation
in Favor of Fleet National Bank dated September 4,
1996.
Exhibit 10.79 Key Employee Incentive Plan effective as of January 1,
1996.
Exhibit 10.80 Employment Agreement between SpecTran Corporation and
Raymond E. Jaeger dated as of December 14, 1992.
Exhibit 10.81 Employment Agreement between SpecTran Corporation and
Bruce A. Cannon dated as of December 14, 1992.
Exhibit 10.82 Employment Agreement between SpecTran Corporation and
John E. Chapman dated as of December 14, 1992.
Exhibit 10.83 Employment Agreement between SpecTran Corporation and
Crawford L. Cutts dated as of January 1, 1994.
Exhibit 10.84 Employment Agreement between SpecTran Corporation and
William B. Beck dated as of February 18, 1994.
Exhibit 10.85 Employment Agreement between SpecTran Corporation and
Glenn E. Moore dated as of December 1995.
11
<PAGE> 12
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the quarter
which this report was filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPECTRAN CORPORATION
(Registrant)
Date: November 13, 1996 BY:
/s/ Glenn E. Moore
----------------------------------------
Glenn E. Moore
President and Chief Executive Officer
Date: November 13, 1996 BY:
/s/ Bruce A. Cannon
----------------------------------------
Bruce A. Cannon
Senior Vice President and Chief
Financial Officer
12
<PAGE> 1
Exhibit 10.75
CONTRACT NO. LAK412D
CONTRACTUAL AGREEMENT
BETWEEN
LUCENT TECHNOLOGIES INC.
AND
SPECTRAN CORPORATION
<PAGE> 2
CONTRACT NO. LAK412D
pg 1 of 2
INDEX
<TABLE>
<CAPTION>
ARTICLE PAGE
<S> <C> <C>
INTRODUCTION 1
1.0 MATERIAL 1
2.0 ORDERING COMPANIES 1
3.0 TERM 1
4.0 OPTION TO EXTEND 1
5.0 PRODUCT SPECIFICATION 2
6.0 PACKAGING SPECIFICATION 2
7.0 QUANTITIES 2
8.0 SCHEDULE 2
9.0 3
10.0 F.O.B. 3
11.0 TERMS OF PAYMENT 3
12.0 PRICE 3
13.0 3
14.0 BANKRUPTCY AND TERMINATION FOR FINANCIAL SECURITY 4
15.0 4
16.0 ASSIGNMENT AND SUBCONTRACTING 5
17.0 CFC PACKAGING 5
18.0 CHANGES 5
19.0 CHOICE OF LAW 5
20.0 COMPLIANCE WITH LAWS 5
21.0 FORCE MAJEURE 5
22.0 GOVERNMENT CONTRACT PROVISIONS 6
23.0 HEAVY METALS IN PACKAGING 6
24.0 INDEMNITY 6
25.0 IDENTIFICATION 6
26.0 IMPLEADER 7
27.0 INFRINGEMENT 7
28.0 GRANT OF "HAVE MADE" RIGHTS 7
29.0 INSPECTION 7
30.0 INSURANCE 8
31.0 INVOICING 8
32.0 MEDIATION 8
33.0 NOTICES 8
34.0 OZONE DEPLETING SUBSTANCES LABELING 9
35.0 PAYMENT TERMS 9
36.0 PRODUCT CONFORMANCE 9
37.0 RELEASES VOID 9
38.0 RIGHT OF ENTRY AND PLANT RULES 9
</TABLE>
Page 1
<PAGE> 3
CONTRACT NO. LAK412D
pg 2 of 2
<TABLE>
<S> <C> <C>
39.0 SHIPPING 9
40.0 SURVIVAL OF OBLIGATIONS 9
41.0 TAXES 10
42.0 TITLE AND RISK OF LOSS 10
43.0 USE OF INFORMATION 10
44.0 WAIVER 10
45.0 WARRANTY 10
46.0 WORK DONE BY OTHERS 10
47.0 TOOLS AND EQUIPMENT 10
48.0 ENTIRE AGREEMENT 11
</TABLE>
Page 2
<PAGE> 4
CONTRACT NO. LAK412D
PAGE 1 OF 11
ACCEPTANCE SHALL BE
INDICATED BY SIGNING AND
RETURNING ORIGINAL TO:
SPECTRAN CORP. LUCENT TECHNOLOGIES INC.
Attn: Ray Jaeger Attn: Global Procurement
50 Hall Road 2000 Northeast Expressway
Sturbridge, Ma. 01566 Norcross, Georgia 30071
Lucent Technologies Inc. ("Company") agrees to purchase and SpecTran Corp. or
any affiliated corporation, partnership or venture of SpecTran Corp.
("Supplier") agrees to sell in accordance with the terms and conditions stated
within this Agreement, and Attachments A and B and C, which are attached hereto
and made part of this Agreement. Notwithstanding the foregoing, SpecTran Corp.
shall be responsible for all MATERIAL provided under this Agreement. The term
"MATERIAL" in this Agreement includes the and
any modifications to these specifications which may be made from time to time
in accordance with the PRODUCT SPECIFICATION AND PACKAGING clauses below, or
derivatives of these specifications which are minor modifications to the
Specifications.
The Attachments noted above are listed and described below:
Attachment C - Non-Disclosure Agreement Dated 10/21/92.
1.0 MATERIAL--MATERIAL shall be Multimode Optical Fiber manufactured to
2.0 ORDERING COMPANIES--Lucent Technologies Inc. or any affiliated corporation,
partnership, or venture, as may be designated in writing by Lucent Technologies
Inc. may order under this Agreement. For the purpose of this Agreement, the
term "Company" shall mean the corporation or other entity which enters into or
issues an Order under this Agreement. An affiliated corporation, partnership,
or venture is an entity, a majority of whose voting stock or ownership interest
is owned directly or indirectly by Lucent Technologies Inc. Any Order issued
under this Agreement shall be a contractual relationship between the ordering
Company and Supplier, and Supplier shall look only to the ordering Company for
performance of Company's obligations under such Order.
3.0 TERM--Agreement shall begin on 9/1/96 and end on 12/31/99.
4.0 OPTION TO EXTEND--Company shall have the right to extend the period
specified in the clause TERM for up to one (1) year by giving Supplier written
notice a minimum of six (6) months prior to the expiration of the contract. At
the time of the request to extend this Agreement, pricing for the agreed upon
quantities shall be negotiated and agreed upon by both parties.
<PAGE> 5
Contract No. LAK412D
Page 2 of 11
5.0 PRODUCT SPECIFICATION--
Multimode Optical Fiber. Any changes to the current specifications set forth in
this Agreement can only be made with the consent and agreement of both parties
6.0 PACKAGING SPECIFICATION--
Any changes to the current specification set forth in this Agreement can only
be made with the consent and agreement of both parties.
7.0 QUANTITIES
(a)
(b)
(c)
(d)
8.0 SCHEDULE
<PAGE> 6
Contract No. LAK412D
Page 3 of 11
9.0
10.0 F.O.B.--Destination--Supplier shall be responsible for all transportation
cost for MATERIAL shipped to any U.S. destination.
11.0 TERMS OF PAYMENT--Net thirty (30) days for MATERIAL from date of receipt
of invoice.
12.0 PRICE--Pricing for MATERIAL shall be as follows:
13.0
<PAGE> 7
Contract No. LAK412D
Page 4 of 11
14.0 BANKRUPTCY AND TERMINATION FOR FINANCIAL SECURITY--Either party may
terminate this Agreement by notice in writing:
1. If the other party makes an assignment for the benefit of creditors
(other than solely an assignment of monies due); or
2. If the other party evidences an inability to pay debts as they become
due, unless adequate assurances of such ability to pay is provided
within thirty (30) days of such notice.
If a proceeding is commenced under any provisions of the United States
Bankruptcy Code, voluntary or involuntary, by or against either party, and
this Agreement has not been terminated, the non-debtor party may file a request
with the bankruptcy court to have the court set a date within sixty (60) days
after the commencement of the case, by which the debtor party will assume or
reject this Agreement, and the debtor party shall cooperate and take whatever
steps necessary to assume or reject the Agreement by such date.
15.0
<PAGE> 8
Contract No. LAK412D
Page 5 of 11
16.0 ASSIGNMENT AND SUBCONTRACTING - Company or Supplier shall not assign any
right or interest under this Agreement (excepting monies due or to become due)
or delegate or subcontract the manufacture of MATERIAL or other obligation to
be performed or owed under this Agreement without the prior written consent of
the other. Any attempted assignment, delegation or subcontracting in
contravention of the above provisions shall be void and ineffective except for
(1) Supplier, a wholly-owned subsidiary whose primary business is the
manufacture of fiber, or (2) for either party in a successor in ownership of
all or substantially all of the assigning party's operations. In case of any
such assignment, the assigning party fully guarantees the performance hereunder
of its assignee. Any assignment of monies shall be void and ineffective to the
extent that (1) Supplier shall not have given Company at least thirty (30) days
prior written notice of such assignment or (2) such assignment attempts to
impose upon Company obligations to the assignee additional to the payment of
such monies, or to preclude Company from dealing solely and directly with
Supplier in all matters pertaining to this Agreement including the negotiation
of amendments or settlements of charges due. All Work performed by Supplier's
subcontractor(s) at any tier shall be deemed Work performed by Supplier.
17.0 CFC PACKAGING - Supplier warrants that all packaging materials furnished
under this Agreement and all packaging associated with material furnished under
this Agreement were not manufactured using and do not contain
chlorofluorocarbons. "Packaging" means all bags, wrapping, boxes, cartons and
any other packing materials used for packaging. Supplier shall indemnify and
hold Company harmless for any liability, fine or penalty incurred by Company to
any third party or governmental agency arising out of Company's good faith
reliance upon said warranty.
18.0 CHANGES - Company may at any time during the manufacture of MATERIAL
require additions to or alterations of or deductions or deviations (all
hereinafter referred to as a "Change") from the MATERIAL called for by the
specifications as required by Industry Standards. No Change shall be considered
as an addition or alteration to or deduction or deviation from the MATERIAL
called for by the specifications nor shall Supplier be entitled to any
compensation for MATERIAL manufactured pursuant to or in contemplation of a
Change, unless made pursuant to a written Change Order issued by Company.
Within ten (10) days after a request for a Change, Supplier shall submit a
proposal to Company which includes any increases or decreases in Supplier's
cost or changes in the MATERIAL schedule necessitated by the Change. Company
shall, within ten (10) days of receipt of the proposal, either (i) accept the
proposal, in which event Company shall issue a written Change Order directing
Supplier to perform the Change or (ii) advise Supplier not to perform the
Change in which event Supplier shall proceed with the original MATERIAL.
19.0 CHOICE OF LAW - The construction, interpretation and performance of this
Agreement and all transactions under it shall be governed by the laws of the
State of New Jersey excluding its choice of laws rules and excluding the
Convention for the International Sale of Goods. The parties agree that the
provisions of the New Jersey Uniform Commercial Code apply to this Agreement
and all transactions under it, including agreements and transactions relating
to the furnishing of services, the lease or rental of equipment or material,
and the license of software. Supplier agrees to submit to the jurisdiction of
any court wherein an action is commenced against Company based on a claim for
which Supplier has agreed to indemnify Company under this Agreement.
20.0 COMPLIANCE WITH LAWS - Supplier and all persons furnished by Supplier
shall comply at their own expense with all applicable federal, state, local and
foreign laws, ordinances, regulations and codes, including those relating to
the use of chlorofluorocarbons, and including the identification and
procurement of required permits, certificates, licenses, insurance, approvals
and inspections in performance under this Agreement. Supplier agrees to
indemnify, defend (at Company's request) and save harmless Company, its
affiliates, its and their customers and each of their officers, directors and
employees from and against any losses, damages, claims, demands, suits,
liabilities, fines, penalties and expenses (including reasonable attorney's
fees) that arise out of or result from any failure to do so.
21.0 FORCE MAJEURE - If the performance of this Agreement or of any obligation
hereunder, other than the payment of any money, is prevented, restricted or
interfered with by reason of any act of God, civil disorder, strike,
<PAGE> 9
Contract No. LAK412D
Page 6 of 11
governmental act, war or, without limiting the foregoing, by any other cause
not within the control of a party hereto, then the party so affected, upon
giving prompt notice to the other party, shall be excused from such performance
to the extent of such prevention, restriction or interference; provided that
the party so affected shall use its best reasonable efforts to avoid or remove
such causes for nonperformance and shall continue performance hereunder with
the utmost dispatch whenever such causes are removed. If a party's performance
hereunder is continued to be delayed due to such force majeure so that Contract
objectives hereunder are not being carried out, then both parties shall use
their best reasonable efforts to remove the ramifications of the force majeure
so that the parties' performances hereunder may continue.
22.0 GOVERNMENT CONTRACT PROVISIONS - The following provisions regarding equal
opportunity, and all applicable laws, rules, regulations and executive orders
specifically related thereto, including applicable provisions and clauses from
the Federal Acquisition Regulation and all supplements thereto are incorporated
in this Agreement as they apply to work performed under specific U.S.
Government contracts: 41 CFR 60-1.4, Equal Opportunity; 41 CFR 60-1.7, Reports
and Other Required Information; 41 CFR 60-1.8, Segregated Facilities; 41 CFR
60-250.4, Affirmative Action For Disabled Veterans and Veterans of the Vietnam
Era (if in excess of $10,000); and 41 CFR 60-741.4, Affirmative Action for
Disabled Workers (if in excess of $2,500), wherein the terms "contractor" and
"subcontractor" shall mean "Supplier". In addition, orders placed under
this Agreement containing a notation that the material or services are intended
for use under Government contracts shall be subject to such other Government
provisions printed, typed or written thereon, or on the reverse side thereof,
or in attachments thereto.
23.0 HEAVY METALS IN PACKAGING - Supplier warrants to Company that no lead,
cadmium, mercury or hexavalent chromium have been intentionally added to any
packaging or packaging component (as defined under applicable laws) to be
provided to Company under this Agreement. Supplier further warrants to Company
that the sum of the concentration levels of lead, cadmium, mercury and
hexavalent chromium in the package or packaging component provided to Company
under this Agreement does not exceed 100 parts per million. Upon request,
Supplier shall provide to Company Certificates of Compliance certifying that
the packaging and/or packaging components provided under this Agreement are in
compliance with the requirements set forth above in this clause. Supplier shall
indemnify and hold Company harmless for any liability, fine or penalty incurred
by Company to any third party or governmental agency arising out of Company's
good faith reliance upon said warranties or any Certificates of Compliance.
24.0 INDEMNITY - All persons furnished by Supplier shall be considered solely
Supplier's employees or agents, and Supplier shall be responsible for payment
of all unemployment, social security and other payroll taxes, including
contributions when required by law. Supplier agrees to indemnify, defend and
save harmless Company, its affiliates and its and their customers and each of
their officers, directors, employees, successors and assigns (all hereinafter
referred to in this clause as "Company") from and against any losses, damages,
claims, demands, suits, liabilities, fines, penalties and expenses (including
reasonable attorney's fees) that arise out of or result from: (1) injuries or
death to persons or damage to property, including theft, in any way arising out
of or occasioned by, caused or alleged to have been caused by or on account of
the performance of the Work or services performed by Supplier or persons
furnished by Supplier; (2) assertions under Workers' Compensation or similar
acts made by persons furnished by Supplier or by any subcontractor or by reason
of any injuries to such persons for which Company would be responsible under
Workers' Compensation or similar acts if the persons were employed by Company;
(3) any failure on the part of Supplier to satisfy all claims for labor,
equipment, materials and other obligations relating directly or indirectly to
the performance of the Work; or (4) any failure by Supplier to perform
Supplier's obligations under this clause or the INSURANCE clause. Supplier
agrees to defend Company, at Company's request against any such claim, demand
or suit. Company agrees to notify Supplier in a timely manner of any written
claims or demands against Company for which Supplier is responsible under this
clause.
25.0 IDENTIFICATION - Supplier shall not, without Company's prior written
consent, engage in advertising, promotion or publicity related to this
Agreement, or make public use of any identification in any circumstances
related
<PAGE> 10
Contract No. LAK412D
Page 7 of 11
to this Agreement, "Identification" means any copy or semblance of any trade
name, trademark, service mark, insignia, symbol, logo, or any other product,
service or organization designation, or any specification or drawing of Lucent
Technologies, or its affiliates, or evidence of inspection by or for any of
them. Supplier shall remove or obliterate any Identification prior to any use
or disposition of any material rejected or not purchased by Company, and, shall
indemnify, defend (at Company's request) and save harmless Lucent Technologies
and its affiliates and each of their officers, directors and employees from and
against any losses, damages, claims, demands, suits, liabilities, fines,
penalties and expenses (including reasonable attorneys' fees) arising out of
Supplier's failure to so remove or obliterate.
26.0 IMPLEADER - Supplier shall not implead or bring an action against Company
or its customers or the employees of either based on any claim by any person
for personal injury or death to an employee of Company or its customers
occurring in the course or scope of employment and that arises out of material
or services furnished under this Agreement.
27.0 INFRINGEMENT -
28.0 GRANT OF "HAVE MADE" RIGHTS -
29.0 INSPECTION - Company's Representatives shall have with reasonable prior
notice access to the Work for the purpose of inspection or a Quality Review
and Supplier shall provide safe and proper facilities for such purpose.
<PAGE> 11
Contract No. LAK412D
Page 8 of 11
30.0 INSURANCE - Supplier shall maintain and cause Supplier's subcontractors to
maintain during the term of this Agreement: (1) Worker's Compensation insurance
as prescribed by the law of the state or nation in which the Work is performed;
(2) employer's liability insurance with limits of at least $300,000 for each
occurrence; (3) comprehensive automobile liability insurance if the use of
motor vehicles is required, with limits of at least $1,000,000 combined single
limit for bodily injury and property damage for each occurrence; (4) Commercial
General Liability ("CGL") insurance, including Blanket Contractual Liability
and Broad Form Property Damage, with limits of at least $1,000,000 combined
single limit for bodily injury and property damage for each occurrence; and (5)
if the furnishing to Company (by sale or otherwise) of products or material is
involved, CGL insurance endorsed to include products liability and completed
operations coverage in the amount of $5,000,000 for each occurrence. All CGL
and automobile liability insurance shall designate Lucent Technologies, its
affiliates, and each of their officers, directors and employees (all
hereinafter referred to in this clause as "Company") as an additional insured.
All such insurance must be primary and required to respond and pay prior to any
other available coverage. Supplier agrees that Supplier, Supplier's insurer(s)
and anyone claiming by, through, under or in Supplier's behalf shall have no
claim, right of action or right of subrogation against Company and its
customers based on any loss or liability insured against under the foregoing
insurance. Supplier and Supplier's subcontractors shall furnish prior to the
start of Work certificates or adequate proof of the foregoing insurance
including, if specifically requested by Company, copies of the endorsements
and insurance policies. Company shall be notified in writing at least thirty
(30) days prior to cancellation of or any change in the policy.
31.0 INVOICING - Supplier shall: (1) render original invoice, or as otherwise
specified in this Agreement, showing Agreement and order number, through
routing and weight; (2) render separate invoices for each shipment within
twenty-four (24) hours after shipment; and (3) mail invoices with copies of
bills of lading and shipping notices to the address shown on this Agreement or
order. If prepayment of transportation charges is authorized, Supplier shall
include the transportation charges from the FOB point to the destination as a
separate item on the invoice stating the name of of the carrier used.
32.0 MEDIATION - If a dispute arises out of or relates to this Agreement, or its
breach, and the parties have not been successful in resolving such dispute
through negotiation, the parties agree to attempt to resolve the dispute
through mediation by submitting the dispute to a sole mediator selected by the
parties or, at any time at the option of a party, to mediation by the American
Arbitration Association ("AAA"). Each party shall bear its own expenses and an
equal share of the expenses of the mediator and the fees of the AAA. The
parties, their representatives, other participants and the mediator shall hold
the existence, content and result of the mediation in confidence. If such
dispute is not resolved by such mediation, the parties shall have the right to
resort to any remedies permitted by law. All such defenses based on passage of
time shall be tolled pending the termination of the mediation. Nothing in this
clause shall be construed to preclude any party from seeking injunctive relief
in order to protect its rights pending mediation. A request by a party to a
court for such injunctive relief shall not be deemed a waiver of the obligation
to mediate.
33.0 NOTICES - Any notice or demand which under the terms of this Agreement or
under any statute must or may be given or made by Supplier or Company shall be
in writing and shall be given or made by telegram, tested telex, confirmed
facsimile, or similar communication or by certified or registered mail
addressed to the respective parties as follows:
To Company: Lucent Technologies Inc.
Attention: Purchasing Representative, Suite C110
2000 Northeast Expressway
Norcross, Ga. 30071
To Supplier: SpecTran Corp.
Attention: Ray Jaeger
50 Hall Road
Sturbridge, Ma. 01566
<PAGE> 12
Contract No. LAK412D
Page 9 of 11
Such notice or demand shall be deemed to have been given or made when sent by
telegram, telex, or facsimile, or other communication or when deposited postage
prepaid in the U.S. mail. The previous addresses may be changed at any time by
giving prior written notice as above provided.
34.0 OZONE DEPLETING SUBSTANCES LABELING - Supplier warrants and certifies that
all products, including packaging and packaging components, provided to Company
under this Agreement have been accurately labeled, in accordance with the
requirements of 40 CFR, Part 82 entitled "Protection of Stratospheric Ozone,
Subpart E - The Labeling of Products Using Ozone Depleting Substances."
Supplier agrees to indemnify, defend and save harmless Company, its officers,
directors and employees from and against any losses, damages, claims, demands,
suits, liabilities, fines, penalties and expenses (including reasonable
attorneys' fees) that may be sustained by reason of Supplier's noncompliance
with such applicable law or the terms of this warranty and certification.
35.0 PAYMENT TERMS
36.0 PRODUCT CONFORMANCE - Supplier shall be responsible for providing to
Company all Certified Test Data and any other information requested by Company
to verify that MATERIAL meets Company's specifications. Supplier shall be
responsible for sending the Certified Test Data information to Company's
Representative or others as may be delegated in writing prior to MATERIAL being
received by Company. Company's Representative shall be R. J. (Ron) Smith,
Member of Technical Staff.
37.0 - RELEASES VOID - Neither party shall require (i) waivers or releases of
any personal rights or (ii) execution of documents which conflict with the
terms of this Agreement, from employees, representatives or customers of the
other in connection with visits to its premises and both parties agree that no
such releases, waivers or documents shall be pleaded by them or third persons in
any action or proceeding.
38.0 RIGHT OF ENTRY AND PLANT RULES - Each party shall have the right to enter
the premises, with reasonable prior notice, of the other party during normal
business hours with respect to the performance of this Agreement, subject to
all plant rules and regulations, security regulations and procedures and U.S.
Government clearance requirements if applicable.
39.0 SHIPPING - Supplier shall: (1) ship the material covered by this Agreement
or Purchase Order complete unless instructed otherwise (partial shipments will
be accepted, but not preferred); (2) ship to the destination designated in the
Agreement or order; (3) ship according to routing instructions given by Company;
(4) place the Agreement and order number on all subordinate documents; (5)
enclose a packing memorandum with each shipment and, when more than one package
is shipped, identify the package containing the memorandum; and (6) mark the
Agreement number and order number on all packages and shipping papers. Adequate
protective packing shall be furnished at no additional charge. Shipping and
routing instructions may be furnished or altered by Company without a writing.
If Supplier does not comply with the terms of the FOB clause of the Agreement or
order or with Company's shipping or routing instructions, Supplier authorizes
Company to deduct from any invoice of Supplier (or to charge back to Supplier),
any increased cost incurred by Company as a result of Supplier's noncompliance.
40.0 SURVIVAL OF OBLIGATIONS - The obligations of the parties under this
Agreement which by their nature would continue beyond the termination,
cancellation or expiration of this Agreement, including, by way of illustration
only and not limitation, those in the clauses COMPLIANCE WITH LAWS,
IDENTIFICATION, IMPLEADER, INFRINGEMENT, RELEASES VOID, USE OF INFORMATION and
WARRANTY (and INSURANCE and INDEMNITY if included in this Agreement), shall
survive termination, cancellation or expiration of this Agreement.
<PAGE> 13
Contract No. LAK412D
Page 10 of 11
41.0 TAXES - Company shall reimburse Supplier only for the following tax
payments with respect to transactions under this Agreement unless Company
advises Supplier that an exemption applies: state and local sales and use
taxes, as applicable. Taxes payable by Company shall be billed as separate
items on Supplier's invoices and shall not be included in Supplier's prices.
Company shall have the right to have Supplier contest any such taxes that
Company deems improperly levied at Company's expense and subject to Company's
direction and control.
42.0 TITLE AND RISK OF LOSS - Title and risk of loss and damage to material
purchased by Company under this Agreement shall vest in Company when the
MATERIAL has been delivered at the FOB point. If this Agreement or order issued
pursuant to this Agreement calls for additional services including, but not
limited to, unloading, installation, or testing, to be performed after
delivery, Supplier shall retain title and risk of loss and damage to the
MATERIAL until the additional services have been performed. Notwithstanding the
foregoing sentence, if Supplier is expressly authorized to invoice Company for
MATERIAL upon shipment or prior to the performance of additional services, title
to such MATERIAL shall vest in Company upon payment of the invoice, but risk of
loss and damage shall pass to Company as provided in the foregoing sentence.
43.0 USE OF INFORMATION - In accordance with the Non-Disclosure Agreement dated
10/21/92, Supplier shall view as Company's property any idea, data, program,
technical, business or other intangible information, however conveyed, and any
document, print, tape, disk, tool, or other tangible information-conveying or
performance-aiding article owned or controlled by Company, and provided to, or
acquired by, Supplier under or in contemplation of this Agreement
(Information). Supplier shall, at no charge to Company, and as Company directs,
destroy or surrender to Company promptly at its request any such article or any
copy of such Information. Supplier shall keep Information confidential and use
it only in performing under this Agreement and obligate its employees,
subcontractors and others working for it to do so, provided that the foregoing
shall not apply to information previously known to Supplier free of obligation,
or made public through no fault imputable to Supplier.
44.0 WAIVER - The failure of either party at any time to enforce any right or
remedy available to it under this Agreement or otherwise with respect to any
breach or failure by the other party shall not be construed to be a waiver of
such right or remedy with respect to any other breach or failure by the other
party.
45.0 WARRANTY
46.0 WORK DONE BY OTHERS - If any of the manufacture of MATERIAL is dependent
on work done by others, Supplier shall inspect and promptly report to Company's
Representative any defect that renders such other work unsuitable for
Supplier's proper performance. Supplier's silence shall constitute approval of
such work as fit and suitable for Supplier's performance.
47.0 TOOLS AND EQUIPMENT - Unless otherwise specifically provided in this
Agreement, Supplier shall provide all labor, tools and equipment (the "tools")
for performance of this Agreement. Should Supplier actually use any tools owned
or rented by Company or its customer, Supplier acknowledges that Supplier
accepts the tools "as is, where is," that neither Company nor its customer have
any responsibility for the condition or state of repair of the tools and that
<PAGE> 14
Contract No. LAK412D
Page 11 of 11
Supplier shall have risk of loss and damage to such tools. Supplier agrees not
to remove the tools from Company's or its customer's premises and to return the
tools to Company or its customer upon completion of use, or at such earlier
time as Company or its customer may request, in the same condition as when
received by Supplier, reasonable wear and tear expected. Any special tooling,
special test equipment, designs or other facilities which are acquired,
produced or used within proprietary processes by Supplier in connection with
this Agreement shall remain the property of Supplier, notwithstanding anything
to the contrary found elsewhere in this Agreement.
48.0 ENTIRE AGREEMENT - The typed or written provisions on Company's orders
issued pursuant to this Agreement shall be subject to this Agreement and its
Attachments and together shall constitute the entire agreement between the
parties with respect to the subject matter of this Agreement and the order(s)
and shall not be modified or rescinded except by a writing signed by Supplier
and Company. All references of these terms and conditions to this Agreement or
to work services material, equipment, products, software or information
furnished under, in performance or pursuant or in contemplation of this
Agreement shall also apply to any orders issued pursuant to this Agreement.
Printed provisions on the reverse side of Company's orders (except as specified
otherwise in this Agreement) and all provisions on Supplier's forms shall be
deemed deleted. Additional or different terms inserted in the Agreement by
Supplier, or deletions thereto whether by alterations, addenda or otherwise
shall be of no force in effect, unless expressly consented to by Company in
writing. Estimates or forecasts furnished by Company shall not constitute
commitments. The provisions of this Agreement supersede all contemporaneous
oral agreements and all prior oral and written quotations, communications,
agreements and understandings of the parties with respect to the subject matter
of this Agreement.
SPECTRAN CORP. LUCENT TECHNOLOGIES INC.
By /s/ R. E. Jaeger By /s/ E. J. Tracy
------------------------- ---------------------------
Name R. Jaeger Name E. J. Tracy
------------------------- ---------------------------
Title President Title Vice President Global Procurement
Organization
----------------------- ---------------------------------
Date 10-3-96 Date 9/27/96
----------------------- ---------------------------------
<PAGE> 15
Page 1 of 7
LUCENT TECHNOLOGIES NETWORK SYSTEMS
MATERIAL SPECIFICATION
Lucent TECHNOLOGIES Proprietary
Not for use or disclosure outside Lucent TECHNOLOGIES
except under written agreement
<PAGE> 16
Page 2 of 7
Lucent TECHNOLOGIES Proprietary
Not for use or disclosure outside Lucent TECHNOLOGIES
except under written agreement
<PAGE> 17
Page 3 of 7
Lucent TECHNOLOGIES Proprietary
Not for use or disclosure outside Lucent TECHNOLOGIES
except under written agreement
<PAGE> 18
Page 4 of 7
Lucent TECHNOLOGIES Proprietary
Not for use or disclosure outside Lucent TECHNOLOGIES
except under written agreement
<PAGE> 19
Page 5 of 7
Lucent TECHNOLOGIES Proprietary
Not for use or disclosure outside Lucent TECHNOLOGIES
except under written agreement
<PAGE> 20
Page 6 of 7
Lucent TECHNOLOGIES Proprietary
Not for use or disclosure outside Lucent TECHNOLOGIES
except under written agreement
<PAGE> 21
Page 7 of 7
Lucent TECHNOLOGIES Proprietary
Not for use or disclosure outside Lucent TECHNOLOGIES
except under written agreement
<PAGE> 22
LAK412D ATTACHMENT B
________________________________________________________________________________
CONTROLLED COPY if cover sheet is red or controlled number is listed
Page 1 of 5
<PAGE> 23
________________________________________________________________________________
CONTROLLED COPY if cover sheet is red or controlled number is listed
Page 2 of 5
<PAGE> 24
________________________________________________________________________________
CONTROLLED COPY if cover sheet is red or controlled number is listed
Page 3 of 5
<PAGE> 25
________________________________________________________________________________
CONTROLLED COPY if cover sheet is red or controlled number is listed
Page 4 of 5
<PAGE> 26
________________________________________________________________________________
CONTROLLED COPY if cover sheet is red or controlled number is listed
Page 5 of 5
<PAGE> 27
LAK412D
1DB111580 Attachment C
NON-DISCLOSURE AGREEMENT
THIS AGREEMENT is made and entered into effective 10/21/1992, by and between
SPECTRAN CORPORATION, a Delaware corporation, with offices located at
50 Hall Road Sturbridge, MA. 01566, and AMERICAN TELEPHONE AND TELEGRAPH
COMPANY, a New York corporation, with offices located at 32 Avenue of the
Americas, New York, New York 10013-2412 ("AT&T"), for itself and its
affiliated companies.
WHEREAS, both parties, for their mutual benefit, desire to disclose to the
other certain specifications, designs, plans, drawings, software, data,
prototypes, or other business and/or technical information related to the
manufacturing and inspection of optical fiber and optical fiber preforms
("INFORMATION") which is proprietary to the disclosing party or its'
affiliated companies.
NOW, THEREFORE, the parties agree as follows:
1. The receiving party, for 5 years after the disclosure of such INFORMATION,
shall hold such INFORMATION in confidence, shall use such INFORMATION only
for the purpose of the Corporation's preparation and AT&T's evaluation of
a proposal for potential business arrangements between the Corporation and
AT&T regarding the manufacturing and inspection of optical fiber and optical
fiber preforms, shall reproduce such INFORMATION only to the extent
necessary for such purpose, shall restrict disclosure of such INFORMATION
to its employees (and in the case of AT&T, employees of its affiliated
companies) with a need to know (and advise such employees of the obligations
assumed herein), and shall not disclose such INFORMATION to any third party
without prior written approval of the other party.
Each party agrees to protect such INFORMATION disclosed to it by the other
party with at least the same degree of care as it normally exercises to
protect its own proprietary information of a similar nature.
These restrictions on the use or disclosure of INFORMATION shall not apply
to any INFORMATION:
i. which is independently developed by the receiving party or its
affiliated company or lawfully received free of restriction from
another source having the right to so furnish such INFORMATION; or
<PAGE> 28
-2-
II. after it has become generally available to the public without breach of
this Agreement by the receiving party or its affiliated company; or
III. which at the time of disclosure to the receiving party was known to such
party or its affiliated company free of restriction as evidenced by
documentation in such party's possession; or
IV. which the disclosing party agrees in writing is free of such
restrictions.
2. INFORMATION shall be subject to the restrictions of paragraph 1, if it is
in writing or other tangible form, only if clearly marked as proprietary
when disclosed to the receiving party or, if not in tangible form, only if
summarized in a writing so marked and delivered to the receiving party
within thirty (30) days of such summary disclosure, in which case the
INFORMATION contained in such (not information contained solely in the
non-tangible disclosure) shall be subject to the restrictions herein.
Each party hereto shall endeavor to keep to a minimum the amount of
INFORMATION that is furnished to the other upon which restrictions are
imposed.
Information, other than proprietary INFORMATION identified as provided
above, shall not be subject to any restriction by the transmitting party as
to the receiving party's disclosure or use thereof.
3. No license to a party, under any trademark, patent, copyright, mask work
protection right or any other intellectual property right, is either
granted or implied by the conveying of INFORMATION to such party. None of
the INFORMATION which may be disclosed or exchanged by the parties shall
constitute any representation, warranty, assurance, guarantee or inducement
by either party to the other of any kind, and, in particular, with
respect to the non-infringement of trademarks, patents, copyrights, mask
work protection rights or any other intellectual property rights, or other
rights of third persons or of either party.
4. Neither this Agreement nor the disclosure or receipt of INFORMATION shall
constitute or imply any promise or intention to make any purchase of
products or services by either party or its affiliated companies or any
commitment by either party or its affiliated companies with respect to the
present or future marketing of any product or service.
5. All INFORMATION shall remain the property of the transmitting party and
shall be returned upon written request or upon the receiving party's
determination that it no longer has a need for such INFORMATION.
<PAGE> 29
-3-
6. Each party hereby assures the other that it does not intend to and
will not knowingly, without the prior written consent, if required, of the
Office of Export Administration of the U. S. Department of Commerce, P.O.
Box 273, Washington, D.C. 20044, transmit directly or indirectly:
I. any information received from the other hereunder; or
II. any immediate product (including processes and services) produced
directly by the use of such information; or
III. any commodity produced by such immediate product if the immediate
product of such information is a plant or a major component of a
plant;
to (1) Iraq, Afghanistan, the People's Republic of China or any Group Q,
S, W, Y or Z country specified in Supplement No. 1 to Part 770 of the
Export Administration Regulations issued by the U.S. Department of
Commerce or (2) any citizen or resident of any of the aforementioned
countries.
Each party agrees that it will not, without the prior written consent of
the other, transmit, directly or indirectly, the INFORMATION received from
the other hereunder or any portion thereof to any country outside of the
United States.
7. Each party agrees that all of its obligations undertaken herein as a
receiving party shall survive and continue after any termination of this
Agreement.
8. This Agreement constitutes the entire understanding between the parties
hereto as to the INFORMATION and merges all prior discussions between them
relating thereto.
9. No amendment or modification of this Agreement shall be valid or binding
on the parties unless made in writing and signed on behalf of each of the
parties by their respective duly authorized officers or representatives.
10. The parties are familiar with the principles of New York commercial law,
and desire and agree that the law of New York shall apply in any dispute
arising with respect to this agreement.
<PAGE> 30
-4-
IN WITNESS WHEREOF, the parties have executed this Agreement on the respective
dates entered below.
AMERICAN TELEPHONE AND SPECTRAN CORPORATION
TELEGRAPH COMPANY
By: J. F. Watson By: C. L. Cutts
-------------------------- --------------------------
(Signature) (Signature)
J. F. Watson Crawford. L. Cutts
- ------------------------------ ------------------------------
(Name) (Name)
Manager, Optical Fiber &
Cable Manufacturing and
Maintenance V.P. - Business Development
- ------------------------------ ------------------------------
(Title) (Title)
October 21, 1992 November 4, 1992
- ------------------------------ ------------------------------
(Date Signed) (Date Signed)
<PAGE> 1
Exhibit 10.76
CORNING CORPORATED
and
SPECTRAN CORPORATION
---------------------------------------
THREE YEAR MULTIMODE
OPTICAL FIBER SUPPLY CONTRACT
---------------------------------------
Dated as of January 1, 1996
<PAGE> 2
INDEX
-----
<TABLE>
<S> <C>
ARTICLE 1 Sales and Purchases of Multimode Optical Fiber
1.1 Multimode Fiber Purchase Amounts
1.2 Per Meter Pricing
1.3 Shipments
1.4 Technical Specifications and Product Mix
1.5 Payment Terms
1.6 Nonexclusive Supply
1.7 Claims for Missing or Damaged Optical Fiber
1.8
ARTICLE 2 Limited Warranty
2.1 Warranty
2.2 Limitation of Warranty
ARTICLE 3 Miscellaneous Provisions
3.1 "Have Made" Rights
3.2 SpecTran's Bank
3.3 Addresses
3.4 Assignability
3.5 Force Majeure
3.6 No Waiver
3.7 Governing Law
3.8 Entire Contract, Headings
3.9 Amendments
3.10 Severability
3.11 Advertising
3.12 Confidentiality
ATTACHMENT A Estimated Annual Shipment Schedule
ATTACHMENT B Optical Fiber Pricing and Purchase Specifications
</TABLE>
<PAGE> 3
Three Year Multimode Optical Fiber Supply Contract
--------------------------------------------------
This Contract is made as of January 1, 1996, between Corning
Incorporated, a New York corporation with its principal place of business in
Corning, New York ("Corning") and SpecTran Corporation, a Delaware corporation
with its principal place of business in Sturbridge, Massachusetts ("SpecTran").
WHEREAS, although SpecTran and Corning are both manufacturers of
multimode optical fiber, Corning in 1996, 1997 and 1998 will not have
sufficient capacity to manufacture needed quantities of such optical fiber, and
SpecTran is willing to sell limited quantities of such fiber to Corning as
provided in this Contract; and
WHEREAS, the parties will administer this Contract in a manner so that
there will be no discussions between them of general optical fiber pricing, of
specific optical fiber pricing that either is offering or has offered to third
parties or of proprietary aspects of optical fiber market developments; and
WHEREAS, both parties agree that there is no understanding between
them regarding optical fiber supply from SpecTran to Corning other than for the
three years of this Contract, and only for specific amounts stated herein; and
WHEREAS, prior to the date of this contract the parties have acted as
normal arm's length competitors in the marketplace; and
WHEREAS, during the term of this Contract the parties will continue to
act as normal arm's length competitors in the marketplace;
<PAGE> 4
-2-
THEREFORE, the parties hereto agree as follows:
ARTICLE 1
---------
Sales and Purchases of Multimode Optical Fiber
----------------------------------------------
1.1 Multimode Fiber Purchase Amounts.
--------------------------------
SpecTran hereby commits to sell to Corning and Corning commits
to purchase from SpecTran during 1996 kilometers of multimode
optical fiber. For 1997, (i) SpecTran shall have available to sell to
Corning of multimode optical fiber, and (ii) Corning commits to
purchase from SpecTran an amount at Corning's sole option which is
of multimode optical fiber. For 1998, (i) SpecTran shall have
available to sell to Corning kilometers of
multimode optical fiber, and (ii) Corning commits to purchase from
SpecTran an amount at Corning's sole option which is of multimode
optical fiber. By way of clarification, from the preceding two
sentences, Corning's only commitment, as of the date of this Contract,
to purchase multimode optical fiber from SpecTran for 1997 is
and for 1998 is .
Without regard to the preceding paragraph of this Section 1.1 as it
relates to projected 1998 multimode optical fiber quantities, prior to
the end of 1996 Corning and SpecTran will either reconfirm or change the
quantities stated in such paragraph for 1998, at which time such
reconfirmed or changed 1998 quantities will be quantities which SpecTran
will have available to sell and Corning will commit to purchase for
1998; the exact amounts to be purchased and
<PAGE> 5
-3-
sold for 1998 will be as specified quarterly as per the following
paragraph.
Not later than the last day of each calendar quarter in 1996, Corning
and SpecTran shall agree to the number of multimode fiber kilometers
which shall be SpecTran's committed supply and Corning's committed
purchase for the corresponding quarter in 1997. When the 1997 fourth
quarter amount is agreed to, the total agreed upon kilometers of
multimode optical fiber for 1997 shall be .
On a quarterly basis in 1997 the parties shall follow the same procedure
for 1998 actual quarterly committed SpecTran supply and committed
Corning purchase that they followed for 1997, as described in the first
sentence of this paragraph. When the 1998 fourth quarter amount is
agreed to, the total agreed upon kilometers of multimode optical fiber
for 1998 shall be unless such range
is changed by mutual agreement of the parties on the basis of the
preceding paragraph.
All optical fiber purchased hereunder by Corning may be resold by
Corning to any third party or parties of Corning's selection. Optical
fiber made for and sold to Corning hereunder shall not be subject to and
shall be outside of the terms of the license agreement effective as of
the first day of January 1991 by and between Corning and SpecTran.
If during 1996, 1997 or 1998, in addition to the above minimum SpecTran
supply commitment for that year, Corning at its sole option wants to
purchase any amounts of multimode optical fiber which would exceed the
total agreed upon number of kilometers for such year (as stipulated in
the second and third paragraphs of this Section 1.1), then not
<PAGE> 6
-4-
less than thirty (30) days prior to its needed delivery of such
additional fiber Corning shall submit its request therefore in writing
to SpecTran. Within fifteen (15) days after receiving such request,
SpecTran shall reply in writing, indicating which portion (or none or
all) of such additional fiber which SpecTran will also commit to supply
to Corning during such year. Any portion which SpecTran by such return
letter agrees to supply, SpecTran shall sell to Corning at the per meter
price referenced in Section 1.2.
Without regard to the preceding provisions of this Section 1.1 or any
other provisions of this Contract (unless the parties have mutually
agreed to purchase and sell more than in accordance with
the procedures provided above), at the point that Corning purchases
of multimode optical fiber from SpecTran during the term hereof,
then all of Corning's obligations to purchase multimode optical fiber
hereunder shall cease, even if these are purchased before
the end of the three year term hereof. Similarly, in such an event,
SpecTran's corresponding obligation to keep multimode optical fiber
available for Corning's possible purchases hereunder shall also cease.
1.2 Per Meter Pricing.
----------------
The FOB SpecTran factory per meter invoice prices to Corning for all
types of multimode fiber for 1996, 1997 and 1998 will be as shown in
Attachment B.
1.3 Shipments.
---------
The estimated 1996 monthly shipment schedule for multimode optical fiber
supplied hereunder is listed on Attachment A
<PAGE> 7
- 5 -
hereto. The 1997 schedule shall be agreed to prior to November 1, 1996
and the 1998 schedule prior to November 1, 1997. Shipments are made on an
FOB basis SpecTran's plant.
SpecTran, at Corning's option, will either ship optical fiber to Corning or
will drop ship it to a cable customer of Corning.
1.4 TECHNICAL SPECIFICATIONS AND PRODUCT MIX.
-----------------------------------------
The specifications for multimode optical fiber and the different types of
optical fiber sold hereunder are included in Attachment B.
1.5 PAYMENT TERMS.
--------------
All optical fiber sold hereunder shall be on the basis of payment due from
Corning within forty five (45) days after SpecTran's FOB factory shipment.
Interest at the rate of the current Citibank N.A., New York prime rate per
month will be charged on all accounts at least ten (10) days past due,
unless a lower rate is required by law.
1.6 NONEXCLUSIVE SUPPLY.
--------------------
By way of clarification, nothing in this Contract precludes Corning from
sourcing optical fiber from any party other than SpecTran or from SpecTran
selling optical fiber to any party other than Corning.
1.7 CLAIMS FOR MISSING OR DAMAGED OPTICAL FIBER.
--------------------------------------------
If for reasons attributable to SpecTran, there is physical damage to or
shortage in optical fiber supplied hereunder,
<PAGE> 8
- 6 -
resulting in any way from SpecTran's handling of such fiber after it was
produced by SpecTran, a return authorization shall be made and signed by
the parties. The determination under the preceding sentence must be made
no later than one hundred twenty days after SpecTran's FOB shipment of
the fiber with the missing or damaged portion. This signed return
authorization shall serve as the basis for any claim by Corning against
SpecTran, for SpecTran to give Corning appropriate credit for such
damaged or missing optical fiber or to replace such fiber, at Corning's
option, which credit or replacement shall be Corning's sole and exclusive
remedy under this Section 1.7.
1.8
A.
<PAGE> 9
- 7 -
B.
<PAGE> 10
- 8 -
ARTICLE 2
---------
Limited Warranty
----------------
2.1 Warranty.
---------
(a) SpecTran warrants that at the time of its shipment of multimode
optical fiber supplied hereunder will conform to the written
specifications identified in Attachment B and shall be free from
defects of design and/or workmanship and shall be fit for its
intended purposes (as per item 1.2 "Product Application" in
Attachment B "Purchase Specification").
(b)
2.2 Limitation of Warranty.
-----------------------
SpecTran guarantees and warrants all multimode optical fiber supplied by
it under this Contract only to the extent set forth in this Article 2. THIS
GUARANTEE CONSTITUTES THE SOLE GUARANTEE OF ANY SUCH OPTICAL FIBER
PROVIDED BY SPECTRAN, AND IS IN LIEU OF ALL OTHER WARRANTIES (WHETHER
<PAGE> 11
-9-
WRITTEN, ORAL OR IMPLIED), INCLUDING BUT NOT LIMITED TO ANY OTHER
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY OTHER PURPOSE OR ANY
LIABILITY FOR ANY SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE
USE OF ANY SUCH OPTICAL FIBER.
ARTICLE 3
---------
Miscellaneous Provisions
------------------------
3.1 Grant of "Have Made" Rights.
---------------------------
To the extent SpecTran is making and selling Optical Fiber to Corning
under this Contract, Corning grants to SpecTran with respect to such
Fiber a license under all "Have Made" rights possessed by
Corning under licenses between Corning and AT&T.
3.2 SpecTran's Bank.
---------------
All payments due SpecTran from Corning hereunder shall be made by wire
transfer to the following SpecTran bank account:
<PAGE> 12
- 10 -
3.3 Addresses.
----------
Formal communications under this Contract, except of an ongoing
technical/commercial nature, shall be in writing, addressed as follows:
If to Corning: (by mail) The Secretary
Corning Incorporated
One Riverside Plaza
Corning, New York 14831
(by fax) Corning Incorporated
The Secretary
FAX No. 607-974-6135
If to SpecTran: (by mail) Chairman
SpecTran Corporation
50 Hall Road
Sturbridge, MA 01566
(by fax) Chairman
SpecTran Corporation
FAX No. 508-347-2747
3.4 Assignability.
--------------
Neither party may assign any of its rights or privileges hereunder without
the prior written consent of the other and any attempted assignment without
such consent shall be void, except to (i) for SpecTran a wholly-owned
subsidiary whose primary business is the manufacture of optical fiber, or
(ii) for either party a successor in ownership of all or substantially all
the assets of the assigning party's operations. In case of any such
assignment, the assigning party fully guarantees the performance hereunder
of its assignee.
<PAGE> 13
- 11 -
3.5 Force Majeure.
--------------
If the performance of this Contract or of any obligation hereunder, other
than the payment of any money, is prevented, restricted or interfered with
by reason of any act of God, civil disorder, strike, governmental act, war
or, without limiting the foregoing, by any other cause not within the
control of a party hereto, then the party so affected, upon giving prompt
notice to the other party, shall be excused from such performance to the
extent of such prevention, restriction or interference; provided that the
party so affected shall use its best reasonable efforts to avoid or remove
such causes for nonperformance and shall continue performance hereunder
with the utmost dispatch whenever such cases are removed.
If a party's performance hereunder is continued to be delayed due to such
force majeure so that Contract objectives hereunder are not being carried
out, then both parties shall use their best reasonable efforts to remove
the ramifications of the force majeure so that the parties' performances
hereunder may continue.
3.6 No Waiver.
----------
Failure of a party to pursue any remedy available to it following breach of
this Contract by the other party or failure by such other party to comply
with any provision hereof shall not be deemed to constitute a waiver by
such first-mentioned party of any of its defenses, rights or causes of
action arising from such or any future breach or noncompliance of the same
or different nature.
<PAGE> 14
- 12 -
3.7 GOVERNING LAW.
--------------
This Contract shall be governed and construed in accordance with the laws
of the State of New York, except for conflicts of law principles.
3.8 ENTIRE CONTRACT, HEADINGS.
--------------------------
This Contract, with all Attachments hereto, constitutes the entire
agreement between the parties with respect to its subject matter (i.e.,
1996, 1997 and 1998 SpecTran sales to Corning of multimode optical fiber).
All prior or contemporaneous oral and written agreements between the
parties hereto relating to optical fiber supply from SpecTran to Corning
during the time period of this Contract, and all other memoranda and
representations relating thereto, are superseded by this Contract.
Headings used in this Contract are only for convenience and are not to
be used in the interpretation of the Contract.
3.9 AMENDMENTS.
-----------
This Contract may be amended only by a subsequent writing signed by
authorized representatives of both parties, indicating an intent to amend
the Contract.
3.10 SEVERABILITY.
-------------
If any provision of this Contract is held invalid or unenforceable, the
remaining provisions shall not be affected thereby, and the parties shall
in good faith attempt to amend this Contract to eliminate such invalidity
or unenforceability.
<PAGE> 15
-13-
3.11 Advertising.
-----------
Each party hereto agrees not to use the name of the other party in the
first party's advertising regarding any optical fiber without the
second party's prior written consent.
3.12 Confidentiality.
---------------
Each party agrees that all confidential information (which shall only
be commercial in nature of a type which may be legally shared between
competitors) provided hereunder to it by the other party (which the
transmitting party designates in writing as being confidential) will be
kept confidential by the receiving party (using the same standard of
care as the receiving party uses to protect its own similar
confidential information); and shall not be sold to or disclosed in any
other manner to any third party by the receiving party for a period of
five (5) years commencing on the date when the transmitting party
delivers such information to the receiving party.
The preceding sentence shall not apply to:
(a) Information which at the time of disclosure hereunder
is in the public domain;
(b) Information which after disclosure hereunder is published or
otherwise becomes part of the public domain through no fault of
the receiving party, but only after it is published or comes
into the public domain;
<PAGE> 16
- 14 -
(c) Information which the receiving party can document through written
records as having been in its possession at the time of its
disclosure to either hereunder; and
(d) Information which has been or may in the future be disclosed or
delivered to the receiving party by any third party which does not
have an obligation to the transmitting party to refrain from
disclosing such information.
In no event will either party transmit to the other any confidential
information relating to the design, composition or manufacture of optical fiber
or optical fiber coatings.
The parties have caused this Contract to be signed by their duly
authorized representatives in a manner legally binding upon the parties.
SPECTRAN CORPORATION CORNING INCORPORATED
By: /s/ R. E. Jaeger By: /s/ Wendell P. Weeks
---------------------------- ---------------------------
Printed Printed
Name: Raymond E. Jaeger Name: Wendell P. Weeks
-------------------------- --------------------------
Vice President &
Title: Chairman Title: Deputy General Manager
------------------------- -------------------------
Telecommunications
Products Division
By:
----------------------------
Printed
Name: James Krueger
--------------------------
Vice President, Matls. Mgmt.
Title: Corporate Procurement
-------------------------
TLS:rk
spectcmm.ofa
<PAGE> 17
ATTACHMENT A
ESTIMATED MONTHLY SHIPMENT SCHEDULE - 1996
Multimode
Fiber KKM
Calendar Month to be shipped
- -------------- -------------
January
February
March
April
May
June
July
August
September
October
November
December
<PAGE> 18
ATTACHMENT B
OPTICAL FIBER PRICING AND PURCHASE SPECIFICATIONS
<PAGE> 19
EXCEPTIONS
<PAGE> 20
THESE PURCHASE SPECIFICATIONS ARE SUBJECT TO THE PRECEDING TWO PAGES OF
ATTACHMENT B, WHICH PAGES ARE ENTITLED "OPTICAL FIBER PRICING AND PURCHASE
SPECIFICATIONS" AND "EXCEPTIONS."
PURCHASE SPECIFICATION
FOR
SPECTRAN INCORPORATED MULTIMODE
OPTICAL FIBER
SUPPLIED TO CORNING
INCORPORATED
<PAGE> 21
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 22
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 23
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 24
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 25
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 26
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 27
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 28
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 29
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 30
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 31
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 32
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 33
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 34
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 35
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 36
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 37
- --------------------------------------------------------------------------
TITLE: Purchase Specification for SpecTran
Incorporated Multimode
Optical Fiber Supplied to Corning Incorporated
- --------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 10.77
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (the
"First Amendment") is by and among FLEET NATIONAL BANK, a national
banking association having an office located at 370 Main Street.
Worcester, Massachusetts 01608, (the "Lender"), SPECTRAN CORPORATION, a
Delaware corporation with a principal place of business at 50 Hall
Road, Sturbridge, Massachusetts ("SpecTran"), SPECTRAN SPECIALTY OPTICS
COMPANY, a Delaware corporation with a principal place of business at
150 Fisher Drive, Avon, Connecticut ("Optics"), APPLIED PHOTONIC
DEVICES. INC., a Delaware corporation with a principal place of
business at 50 Tiffany Street, Brooklyn, Connecticut
("Photonic-Delaware") and SPECTRAN COMMUNICATION FIBER TECHNOLOGIES,
INC., a Delaware corporation with a principal place of business at 50
Hall Road, Sturbridge, Massachusetts ("Communication"). Each of
SpecTran, Optics, Photonic-Delaware and Communication are sometimes
referred to as a "Borrower" and collectively the "Borrowers".
WHEREAS, the Lender, SpecTran, Optics, Communication and
Applied Photonic Devices, Inc., a Connecticut corporation with a
principal place of business 50 Tiffany Street, Brooklyn, Connecticut
("Photonic") are parties to that certain Loan and Security Agreement
dated April 25, 1996 (the "Agreement"); and
WHEREAS, Photonic has been merged into Photonic-Delaware; and
WHEREAS, Photonic-Delaware should be a party to the Agreement;
and
WHEREAS, the Lender and the Borrowers desire to amend the
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Lender and the
Borrowers hereby amend the Agreement as set forth hereinafter:
A. AMENDMENTS TO AGREEMENT
1. The Agreement is amended in its entirety by replacing
Photonic with Photonic-Delaware as a party thereto. All
representations, warranties, covenants and agreements of Photonic
contained in the Agreement are, by operation of law and hereby,
assumed by Photonic-Delaware. References to the Borrowers in the
Agreement shall mean and include any one or more of SpecTran, Optics,
Photonic-Delaware and Communication. All Obligations including all
obligations to pay all amounts owed to the Lender pursuant to any and
all documents evidencing the Loans, including without limitation the
Agreement and the Notes are the joint and several obligations of each
of SpecTran, Optics, Photonic-Delaware and Communication. In
accordance with Article 4 of the Agreement, Photonic-Delaware, as
security for the prompt satisfaction of all of the Obligations, hereby
assigns to the Lender, all of its right, title and interest in and to,
and grants the Lender a lien upon and a continuing security interest
in, all of its assets, including without limitation, the Collateral
wherever located, whether now owned or hereafter acquired, together
with all replacements therefor and proceeds thereof (including, but
without limitation, insurance proceeds) and products thereof all as
more fully set forth in Article 4 of the Agreement.
2. Restate the initial paragraph of the Agreement as follows:
THIS LOAN AND SECURITY AGREEMENT is dated as of April 25, 1996
and is among SPECTRAN CORPORATION ("SpecTran"), SPECTRAN
SPECIALTY OPTICS
1
<PAGE> 2
EXHIBIT 10.77
COMPANY ("Optics"), APPLIED PHOTONIC DEVICES, INC.
("Photonic-Delaware"), SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC. ("Communication") and FLEET NATIONAL BANK
(the "Lender"). Each of SpecTran, Optics, Photonic-Delaware
and Communication are sometimes referred to as a "Borrower"
and collectively the "Borrowers".
3. Restate the paragraph under the heading "BACKGROUND" on
Page 1 of the Agreement as follows:
BACKGROUND. The Borrowers have requested the Lender to lend up
to the sum of (i) $14,500,000.00 on a revolving loan basis,
(ii) $4,000,000.00 on a term loan basis, and (iii)
$3,500,000.00 on a mortgage loan basis (collectively the
"Loans") and the Lender is willing to do so upon the terms and
conditions hereinafter set forth.
4. Restate Section 1.05(a) of the Agreement as follows:
(a) $14,500,000.00; or
5. Restate Section 2.01 the Agreement as follows:
2.01 General Terms.
Subject to the terms hereof, the Lender will lend the
Borrowers the principal sum of (i) $14,500,000.00 on a
revolving loan basis, (ii) $4,000,000.00 on a term loan basis,
and (iii) $3,500,000.00 on a mortgage loan basis.
6. Restate Section 2.05 of the Agreement as follows:
2.05 Term Note.
Subject to the terms hereof, the Lender agrees to lend to
the Borrowers on a term loan basis the amount of
$4,000,000.00, the payment terms to be in accordance with the
provisions of the Term Note. Advances under the Term Note will
only be made in accordance with and subject to the conditions
contained in EXHIBIT 2.05 attached hereto. The outstanding
principal balance of the Term Note is to be paid in equal
quarterly installments of $200,000.00. The Term Note is to be
due and payable in any event on April1, 2001. In addition, the
Borrowers will be required to prepay the Term Note to the
extent of the Borrowers' "Excess Cash Flow" as defined in the
Term Note. The outstanding principal balance of the Term Note
shall at no time exceed eighty and nine-tenths percent (80.9%)
of the orderly liquidation value of the Borrowers' Equipment,
and if, at any time, an excess for any reason shall exist, the
full amount of such excess, together with accrued and unpaid
interest thereon, shall be immediately due and payable in
full.
7. Amend Section 2.06 of the Agreement by deleting from the
second line "$5,000.000.00" and inserting "$3,500,000.00".
8. Amend Exhibit 2.05 of the Agreement by deleting from the
eleventh line "seventy-five percent (75%) of the auction value" and
inserting "eighty and nine-tenths percent (80.9%) of the orderly
liquidation value".
9. Amend Exhibit 2.06 of the Agreement be deleting from the
sixteenth line "seventy- five percent (75%)" and inserting "eighty
percent (80%)".
2
<PAGE> 3
EXHIBIT 10.77
10. Amend Exhibit 5.01 (a) to the Agreement by deleting
paragraph 2 and inserting the following:
2. The following companies are qualified to do business in
the following states:
Name State
---- -----
SpecTran Delaware, Massachusetts
Optics Delaware, Connecticut
Photonic-Delaware Delaware, Connecticut
Communication Delaware, Massachusetts
B. MISCELLANEOUS
1. All capitalized terms used herein and not defined herein
shall have the meanings ascribed in the Agreement.
2. The Borrowers hereby represent and warrant to the Lender
that no default or Event of Default exists under the Agreement and they
have performed all of their obligations to be performed to date under
the Agreement.
3. This First Amendment shall not extinguish, terminate or
impair any of the obligations of the Borrowers under the Agreement or
any of the financing instruments. In addition, this First Amendment
shall not release or impair the priority of any security interests or
liens held by the Lender on any assets of the Borrowers.
4. Except as herein expressly amended, the Agreement and the
financing instruments shall remain unchanged and are in full force and
effect, and the Borrowers, by executing this First Amendment, hereby
ratify and reaffirm each covenant, representation, warranty and
agreement contained in the Agreement and the financing instruments.
WITNESS the execution hereof as an instrument under seal as of
this 4th day of September, 1996.
SPECTRAN CORPORATION
By: /s/ Bruce A. Cannon
----------------------------------
Its Duly Authorized Officer
SPECTRAN SPECIALTY OPTICS COMPANY
By: /s/ Bruce A. Cannon
----------------------------------
Its Duly Authorized Officer
APPLIED PHOTONIC DEVICES, INC.
By: /s/ Bruce A. Cannon
----------------------------------
Its Duly Authorized Officer
SPECTRAN COMMUNICATION FIBER
TECHNOLOGIES, INC.
3
<PAGE> 4
EXHIBIT 10.77
By: /s/ Bruce A. Cannon
----------------------------------
Its Duly Authorized Officer
FLEET NATIONAL BANK
By: /s/ John F. Lynch, VP
----------------------------------
Its Duly Authorized Officer
4
<PAGE> 1
EXHIBIT 10.78
RECORD AND RETURN TO:
---------------------
Paul J. D'Onfro, Esquire
Mirich, O'Connell, DeMallie & Lougee
1700 Bank of Boston Tower
Worcester, MA 01608-1477
FIRST AMENDMENT TO MORTGAGE
---------------------------
THIS FIRST AMENDMENT TO MORTGAGE is dated as of September
4, 1996 and is between SPECTRAN CORPORATION, a Delaware corporation
with its principal place of business at 50 Hall Road, Sturbridge,
Massachusetts ("mortgagor") and FLEET NATIONAL BANK, a national
banking association having an office located at 370 Main Street,
Worcester, Massachusetts ("Mortgagee").
RECITALS:
WHEREAS, Mortgagee is the holder of the various loan documents
of Mortgagor and Spectran Specialty Optics Company, Applied Photonic
Devices, Inc. and SpecTran Communication Fiber Technologies, Inc. (the
"Loan Documents") secured by a mortgage (the "Mortgage") of real estate
located at 50 Hall Road, Sturbridge, Massachusetts (the "Premises")
dated April 26, 1996 and recorded with the Worcester District Registry
of Deeds in Book 17860, Page 385; and
WHEREAS, Mortgagor and Mortgagee have agreed to amend the
Mortgage.
In consideration of the mutual promises of the parties and
other valuable consideration, receipt of which is hereby acknowledged,
Mortgagor and Mortgagee agree as follows:
1. The Mortgage is hereby amended by restating the first
paragraph of the Mortgage as follows:
"SPECTRAN CORPORATION, a Delaware corporation having a
principal place of business at 50 Hall Road, Sturbridge, Massachusetts
("Mortgagor"), for consideration paid, grants the Premises to FLEET
NATIONAL BANK, a national banking association with a place of business
at 370 Main Street, Worcester, Massachusetts ("Mortgagee") with
MORTGAGE COVENANTS, to secure the payment, performance and observance
of all the Obligations. The term "Obligations" means all of the debts,
liabilities, agreements and other Obligations of Mortgagor, SPECTRAN
SPECIALTY OPTICS COMPANY ("Optics"), APPLIED PHOTONIC DEVICES, INC.
("Photonic") and SPECTRAN COMMUNICATION FIBER TECHNOLOGIES, INC.
("Communication") (Mortgagor, Optics, Photonic and Communication are
sometimes hereinafter referred to as "Obligors") due Mortgagee,
whether direct or indirect, absolute or contingent, joint or several,
due or to become due, now existing or arising in the future. The term
"Loan Documents" includes this Mortgage, the $5,000,000.00 Mortgage
Note of Obligors as amended by the First Modification of Mortgage Note
dated as of September 4, 1996 reducing the principal amount of such
note to $3,500,000.00, the $5,000,000.00 Term Note of Obligors as
amended by the First Modification of Term Note dated as of
September 4, 1996
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EXHIBIT 10.78
reducing the principal amount of such note to S4,000,000.00, the
$12,000,000.00 Revolving Note of Obligors as amended by the First
Modification of Revolving Note dated September 4, 1996 increasing the
principal amount of such note to $14,500,000.00, the Loan and Security
Agreement among Obligors and Mortgagee, as amended by, the First
Amendment to Loan and Security Agreement dated September 4, 1996, and
all other documents delivered to Mortgagee in connection with this
Mortgage by Obligors and all amendments, extensions and renewals of
this Mortgage and the other agreements and documents referred to above.
2. The mutual execution and delivery of this Agreement does
not constitute a waiver of any default in the performance of any
provisions contained in the Loan Documents or the Mortgage.
3. All references in the Mortgage to Applied Photonic
Devices, Inc. means Applied Photonic Devices, Inc., a Delaware
corporation with its principal place of business at 50 Tiffany Street,
Brooklyn, Connecticut.
4. All other provisions of the Loan Documents and the
Mortgage, as amended, will remain in effect, and the failure of the
Obligors to make any payment or to comply with any other provisions of
this First Amendment or of the Loan Documents or the Mortgage, as
amended, will constitute a breach of condition for which the unpaid
principal balance will, at the option of Mortgagee or its assigns,
become due without presentment, demand or other notice and may be
recovered, together with interest, attorneys fees and other lawful
charges as provided by law.
5. All capitalized terms used herein and not defined herein
have the meanings ascribed in the Mortgage.
6. This First Amendment is binding on and inures to the
benefit of Mortgagor, Mortgagee and their respective heirs, executors,
successors and assigns.
EXECUTED as a sealed instrument as of September 4, 1996.
SPECTRAN CORPORATION
By: /s/ Glenn E. Moore
-----------------------------
Its President
By: /s/Bruce A. Cannon
-----------------------------
Its Treasurer
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EXHIBIT 10.78
FLEET NATIONAL BANK
By: /s/ John F. Lynch, VP
---------------------------
Its Duly Authorized Officer
COMMONWEALTH OF MASSACHUSETTS
Worcester. ss. September 4, 1996
Then personally appeared the above-named Glenn Moore, its
President, and acknowledged the foregoing instrument to be the free act
and deed of SPECTRAN CORPORATION, before me,
/s/ Judith A. Jaeger
----------------------------------
Notary Public
My Commission Expires: 12/8/00
COMMONWEALTH OF MASSACHUSETTS
Worcester, ss. September 4, 1996
Then personally appeared the above-named Bruce A. Cannon, its
Treasurer, and acknowledged the foregoing instrument to be the free act
and deed of SPECTRAN CORPORATION, before me,
/s/ Judith A. Jaeger
----------------------------------
Notary Public
My Commission Expires: 12/8/00
COMMONWEALTH OF MASSACHUSETTS
Worcester, ss. September 4, 1996
Then personally appeared the above-named John F. Lynch, its
Vice President, and acknowledged the foregoing instrument to be the
free act and deed of FLEET NATIONAL BANK, before me.
/s/ Victoria L. Eves
----------------------------------
Notary Public
My Commission Expires: 10/18/2000
<PAGE> 1
Exhibit 10.79
SPECTRAN CORPORATION
KEY EMPLOYEE INCENTIVE PLAN
1. PURPOSE
-------
The Spectran Corporation (the "Company") Key Employee Incentive Plan
(the "Plan")is designed to provide Key Employees who have significant influence
on the Company's performance with additional incentive to achieve growth in
corporate earnings and to increase the return on equity to the Company's
stockholders.
2. EFFECTIVE DATE
--------------
The Plan is effective as of January 1, 1996, with the Company's fiscal
year ended December 31, 1996 being the first plan year. It is intended that the
Plan will be effective for the next two fiscal years, as well as in future
fiscal years, as determined by the Board of Directors. However, the Company's
Board of Directors may suspend or terminate the Plan at any time, and may change
the terms of and amend the Plan from time to time in such respects as the Board
deems advisable for the best interests of the Company.
3. TERMS AND CONDITIONS
--------------------
a) Eligibility.
-----------
The Key Employees that will directly participate in the Plan
are all of the Company's officer and director-level employees. Other employees,
either a named participant or not, who made significant contributions during the
year, may indirectly participate in the Plan through the grant of awards from a
discretionary pool.
b) Employment.
----------
Participation in the Plan is not intended to be, nor
should it be accepted as an offer or contract of employment. The
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should it be accepted as an offer or contract of employment. The relationship
between the Company and its personnel is one of voluntary employment "at will".
c) Administration.
--------------
The Plan will be administered by the Compensation committee of
the Company's Board of Directors (the "Committee"). The Committee shall have the
sole authority to interpret the provisions of the Plan, determine the amount of
awards earned under the Plan based upon input and recommendations from
management, including awards from the discretionary pool, and to authorize
management to generate payments to participants. The Committee shall determine
the disposition of any unused portion of the bonus pool, and may, in its
discretion, determine not to distribute such unused portion.
4. DETERMINATION OF AWARD
----------------------
a) Definitions.
-----------
"Adjusted Target Bonus Percentage" means the product of the
Target Bonus Percentage multiplied by the Adjustment Percentage Factor for
EBITDA return on operating assets. Adjusted Target Bonus Percentages are set
forth on Exhibit A, attached hereto.
"Bonus Pool" means the bonus pool created by assigning a
specified percentage of the excess of the Company's consolidated earnings before
interest, taxes, depreciation and amortization (EBITDA), over the Cost of
Capital Charge.
"Bonus Pool Percentage" means the percentage of the Bonus Pool
that will be available for distribution as bonus compensation. The Bonus Pool
Percentage shall be equal to 9.5% for the 1996 Fiscal Year."
"Cost of Capital Charge" means the product of the Cost of
Capital rate multipled by the Company's consolidated beginning of year total
capital (debt and equity).
"Cost of Capital Rate" means a specified percentage designated
by the Company for each Fiscal Year. The Cost of
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Capital Rate shall be equal to 10% for the 1996 Fiscal Year. The Cost of Capital
rate is applied to the Company's consolidated beginning of year total capital
(debt and equity) to determine the Cost of Capital Charge.
"EBITDA" means the Company's consolidated earnings before
interest, taxes, depreciation and amortization.
"Key Employees" means high level employees of the Company
(currently the Company's officers, Presidents and Vice Presidents of the
operating subsidiaries, and specified director-level employees of the Company or
its subsidiaries).
"Maximum Target Bonus" means 2.5 times the Target Bonus
Percentage, the product of which is the maximum amount payable in bonus
compensation to a participant.
"Target Bonus" means the Adjusted Target Bonus Percentage
times a participant's annual salary. The Target Bonus constitutes 70% of the
Bonus Pool.
"Target Bonus Percentage" means an amount that is keyed to the
participant's position in the Company and is based on a percent of salary.
(b) Summary of the Plan.
-------------------
Under the Plan, the Bonus Pool is created by the amount resulting from
a specified percentage of the excess of the Company's consolidated earnings
before interest, taxes, depreciation and amortization (EBITDA), essentially a
cash flow calculation, over the Cost of Capital Charge. Participants are high
level employees of the Company (currently the Company's officers, Presidents and
Vice Presidents of the operating subsidiaries, and specified director-level
employees of the Company or its subsidiaries) with the exception of the
discretionary portion of the bonus pool (described below) which may be paid out
to any employee as determined by the Compensation Committee. The Bonus Pool will
be distributed among participants as follows.
TARGET BONUS. Seventy percent (70%) of the Bonus Pool will be
distributed among participants, depending on
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how much EBITDA exceeds the cost of capital.
PERFORMANCE BONUS. An additional seventeen and one half percent (17.5%)
will be distributed among participants based upon the achievement of
individual goals and projects (or the achievement of a certain
percentage of those goals and projects if they are more than a year's
duration) specifically identified at the beginning of the year.
DISCRETIONARY BONUS. The remaining twelve and one half percent (12.5%)
of the Bonus Pool constitutes a pool to be used for discretionary
bonuses, to be awarded or not to any employee, whether a participant in
the Plan or not, if the Compensation Committee determines that such
employee has made an exceptional contribution to the Company's
performance not recognized elsewhere.
To determine how much each participant may be paid from the bonus pool,
he or she is assigned a Target Bonus Percentage which will be used in
determining how much of the Bonus Pool is allocated to that individual, which
percentage will be adjusted downwards (including to zero) if specified levels of
EBITDA return on operating assets (for the operating subsidiary or the Company,
or a blend of the two, as appropriate for the individual) are not achieved.
While the intent of the Plan is to permit participants to earn total
compensation potentially in excess of the fiftieth percentile when compared to
comparable employees in comparable companies as a result of excellent
performance, the Plan establishes a maximum amount that can be paid to any
participant under the non-discretionary portions of the Plan to attempt to avoid
excessive awards. The Plan also can result in total compensation at or less than
the fiftieth percentile if performance is not excellent.
No payments will be made under the Plan unless the Company is
profitable after the payments. There is no obligation to pay out either the
discretionary portion of the bonus pool or any remaining balance if the total of
all bonuses distributed is less than the total bonus pool; disposition of such
amounts will be determined by the Compensation Committee.
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(c) Calculation of Bonus Pool.
-------------------------
In calculating the Bonus Pool, the Plan will use the product of the
Bonus Pool Percentage multipled by the excess of the Company's consolidated
earnings before interest, taxes, depreciation and amortization (EBITDA), over
the Cost of Capital Charge.
(d) Calculation of Target Bonus.
---------------------------
The Target Bonus is a participant's Adjusted Target Bonus Percentage
times his annual salary and constitutes 70% of the Bonus Pool. The calculation
for the Adjusted Target Bonus Percentage is the product of the Target Bonus
Percentage multiplied by the Adjustment Percentage Factor for EBITDA return on
operating assets.
(I) Target Bonus Percentage. All participants in the Plan are
assigned a Target Bonus Percentage. The Target Bonus Percentage is an amount
that is keyed to the participant's position in the Company and is based on a
percent of salary.
(ii) Adjusted Target Bonus Percentage. The Target Bonus
Percentage is then adjusted to reflect the earnings of the Corporation and
which, depending on earnings, may be a downward adjustment. The Adjusted Target
Bonus Percentage is achieved by multiplying the Target Bonus Percentage by the
percentage range assigned to certain incremental benchmark levels of EBITDA
return on beginning of year operating assets. The Adjusted Target Bonus
Percentage will be calculated individually for each operating division and on a
consolidated basis for Corporate personnel.
(f) MAXIMUM TARGET BONUS. 70% of the Bonus Pool will be distributed to
participants based on the percentage of a participant's Target Bonus to the
total of all participants' Target Bonuses. The Target Bonus for a participant is
his Adjusted Participation Percentage times his annual salary. The Maximum
Target Bonus that can be distributed to a participant under the Plan is equal to
2.5 times the Target Bonus Percentage.
(g) Calculation of Performance Bonus.
--------------------------------
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17.5% of the Bonus Pool will be distributed to participants based on
the performance percentages for achieving predetermined goals. The maximum
amount of the Performance Bonus that can be distributed is 25% of the total
amount of funds distributable as the Target Bonus.
(h) Discretionary Bonus.
-------------------
The remaining 12.5% of the Bonus Pool may be paid as a
Discretionary Bonus to any employee who has made significant contributions
during the year, whether or not that employee is a named participant in the
Plan. In recognition of the fact that employees who are not Plan participants
may make unusually significant contributions to the increased profitability of
the company, the Committee may, at its sole discretion, make grants from the
bonus pool to any employee of the Company, whether or not they are Plan
participants. Such grants are not to reward employees for the normal performance
of their duties, but are to be used to reward employees who have made
extraordinary contributions that resulted in increased profitability or the
attainment of strategic objectives beyond the scope of their initial definition.
If no such accomplishments occur in a given year, the Committee may choose to
not make any bonus grants and may either retain the funds in the pool,
distribute the funds to Plan participants for achieving corporate strategic
objectives set at the beginning of the Plan year, or simply remove the bonus
pool funds from the Plan and take them as profit.
5. DISPOSITION OF UNUSED FUNDS. If the total amount of all bonuses
distributed is less than the amount in the Bonus Pool, the disposition of the
unused portion of the Bonus Pool will be determined by the Committee. The
Committee may, in its sole discretion, decide not to distribute the unused
amount.
6. PAYMENTS.
--------
Earned Awards will be calculated and paid within ninety (90) days from
year end.
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Exhibit A
Adjusted Target Bonus Percentages
EBITDA Return Adjustment Percentage
on Operating Factors
Assets of:
Over 40% 100%
15% to 40% 75%-100%*
Under 15% 0%
- -----------------
* For EBITDA returns of between 15% and 40%, the range of percentages
to be applied to adjusting the Target Bonus Percentage is between 75% and 100%,
in 5% increments.
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Exhbit 10.80
EMPLOYMENT CONTRACT
-------------------
EMPLOYMENT AGREEMENT, executed as of December 14, 1992 between
SpecTran Corporation, a Delaware corporation (hereinafter referred to as the
"Corporation"), and Dr. Raymond E. Jaeger (hereinafter referred to as
"Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is presently employed by the Corporation; and
WHEREAS, the Corporation recognizes the effort, attention and skill
Executive has given the organization, operation and planning of the Corporation
and desires to enter into this employment agreement with Executive.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree with each other as follows:
<PAGE> 2
1. EMPLOYMENT. (a) The Corporation agrees to and does hereby
employ Executive, and Executive agrees to and does hereby accept employment by
the Corporation, as President and Chief Executive Officer of the Corporation,
subject to the supervision and direction of its Board of Directors, for the one
year period commencing on June 1, 1992, and ending at midnight on the 31st day
of May, 1993 (the "Base Term"). The Base Term shall be automatically renewed on
a daily basis so that on each date during which Executive is employed under this
Agreement the remaining term shall be a period of one year terminating at
midnight of the first anniversary of the day immediately preceding such date,
unless at any time the outside (i.e., non-employee) members of the Corporation's
Board of Directors terminate the automatic daily renewal feature of this
Agreement as provided in Article 1(b) below. The Base Term and all renewals
thereof shall be deemed the "Employment Period" and shall hereinafter be
referred to as such.
(b) At any time during the Employment Period the outside (i.e.,
non-employee) members of the Corporation's Board of Directors may by resolution
terminate the automatic daily renewal of this Agreement and set a termination
date which shall be midnight of the first anniversary of the date immediately
preceding
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the day on which such resolution was adopted (the "Termination Date"). Written
notice ("Notice of Nonrenewal") of the outside directors' resolution setting a
Termination Date shall be executed by each outside director and delivered to
Executive within two business days of the adoption of such resolution. A Notice
of Nonrenewal may be rescinded at any time by resolution of the outside members
of the Corporation's Board of Directors executed and delivered in the same
fashion.
(c) If, following delivery to Executive of the Notice of
Nonrenewal, neither the Corporation nor Executive terminates Executive's
employment under Article 12 below, this Agreement shall continue in full force
and effect for the one-year period set forth in the Notice of Nonrenewal, and
shall terminate on the Termination Date.
2. SCOPE OF DUTIES. Executive agrees that as President and Chief
Executive Officer of the Corporation he will devote his full time and effort
during the Employment Period to the performance of the duties of such office.
The Corporation will use its best efforts to nominate Executive for election to
the Board of Directors of the Corporation. Executive shall make his business
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headquarters at Sturbridge, Massachusetts and shall relocate should the
Corporation change its headquarters. Executive shall undertake such travel as
the Corporation may request.
It is understood and agreed that Executive will advise the Corporation
of his intentions to act as a director of other corporations and may hold such
directorships and shall be permitted to devote such time thereto as may
reasonably be necessary to discharge the ordinary duties attendant upon any such
directorships. Executive agrees that he will, upon request of the Board of
Directors of the Corporation, resign from any such directorship notwithstanding
that the Corporation may have theretofore approved his accepting or retaining
such directorship.
Notwithstanding the foregoing, in the event of termination of
Executive's employment hereunder in accordance with the terms of this Agreement,
the provisions of this Article 2 shall be null and void, and of no effect.
3. EMPLOYMENT PERIOD - ANNUAL COMPENSATION. For the services and
duties to be rendered and performed by Executive during the Employment Period,
the Corporation agrees to pay
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Executive annual compensation at the rate of not less than One Hundred
Fifty-Five Thousand Dollars and no cents ($155,000.00) per year, which amount
may be changed by action of the Compensation Committee of the Board of Directors
and subsequent resolution of the Board of Directors (this annual amount to be
referred to as "Annual Executive Compensation"). Annual Executive Compensation
shall be payable in equal semi-monthly installments. The Corporation shall
reimburse Executive for all expenses reasonably and necessarily incurred in
connection with his employment by the Corporation, including traveling expenses
while absent, on the Corporation's business, from his business headquarters. The
Board of Directors of the Corporation may increase Executive's Compensation at
such time or times and in such amount or amounts as it may in its sole
discretion determine. The Corporation may also pay a bonus to Executive, it
being expressly understood that determination of whether or not any such bonus
will be paid and the amount of any such bonus shall be at the sole discretion of
the Board of Directors.
4. VACATION. Executive shall be entitled to a vacation each year
equal to one (1) month. Said vacation may be taken all at once or weekly at the
sole discretion of Executive.
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5. SECRETS. Executive agrees that any trade secrets or any other
proprietary information (whether in written, verbal or any other form) relating
to the existing or contemplated business and/or field of interest of the
Corporation or any of its affiliates (for the purpose of this Agreement, an
affiliate of the Corporation shall be deemed to be any corporation or other
legal entity which controls the Corporation, which is controlled by the
Corporation, one which is under common control with the Corporation), or of any
corporation or other legal entity in which the Corporation or any of its
affiliates has an ownership interest of more than twenty-five percent (25%), and
any proprietary information (whether in written, verbal or any other form) of
any of the Corporation's customers, suppliers, licensor or licensees, including,
but not limited to, information relating to inventions, disclosures, processes,
systems, methods, formulae, patents, patent applications, machinery, materials,
notes, drawings, research activities and plans, costs of production, contract
forms, prices, volume of sales, promotional methods, list of names or classes or
customers, which he has heretofore acquired during his employment by the
Corporation or any of its affiliates or which he may hereafter acquire during
his employment with the Corporation or any of its affiliates, in both cases
whether during or outside business
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hours, whether or not on the Corporation's premises, as the result of any
disclosures to him, or in any other way, shall be regarded as held by him in a
fiduciary capacity solely for the benefit of the Corporation, its successors or
assigns, and shall not at any time, either during the term of this Agreement or
thereafter, be disclosed, divulged, furnished, or made accessible by him to
anyone, or be otherwise used by him, except in the regular course of business of
the Corporation or its affiliates. Upon termination of his employment, Executive
shall return or deliver to the Corporation all tangible forms of such
information in his possession or control, and shall retain no copies thereof.
Information shall, for purposes of this Agreement, be considered to be secret if
not known by the trade generally, even though such information may have been
disclosed to one or more third parties pursuant to any business discussion or
agreement, including distribution agreements, joint research agreements or other
agreements entered into by the Corporation or any of its affiliates.
6. PATENTS. Executive agrees to and does hereby sell, assign,
transfer and set over to the Corporation, its successors, assigns, or
affiliates, as the case may be, all his right, title,
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and interest in and to any inventions, improvements, processes, patents or
applications for patents which he develops or conceives individually or in
conjunction with others during his employment by the Corporation, or, having
possibly conceived same prior to his employment, may complete while in the
employ of the Corporation or any of its affiliates, in both cases whether during
or outside business hours, whether or not on the Company's premises, which
inventions, improvements, processes, patents or applications for patents are (i)
in connection with any matters within the scope of the existing or contemplated
business of the Corporation or any of its affiliates, or (ii) aided by the use
of time, materials, facilities or information paid for or provided by the
Corporation, all of the foregoing to be held and enjoyed by the Corporation, its
successors, assigns or affiliates, as the case may be, to the full extent of the
term for which any Letters Patent may be granted and as fully as the same would
have been held by Executive, had this Agreement, sale or assignment not been
made. Executive will make, execute and deliver any and all instruments and
documents necessary to obtain patents for such inventions, improvements and
processes in any and all countries. Executive hereby irrevocably appoints the
Corporation to be his attorney in fact in the name of and on behalf of Executive
to execute all such instruments and do all such
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things and generally to use the Executive's name for the purposes of assuring to
the Corporation (or its nominee) the full benefit of its rights under the
provisions of Articles 5 and 6.
7. DISABILITY. (a) In the event Executive becomes partially
disabled, or becomes totally disabled (as determined in accordance with Article
7(c) below) and such total disability has continued for less than six (6) full
consecutive calendar months, then the Corporation shall continue during the
Employment Period to pay Executive at the rate of his Annual Executive
Compensation as set forth in Article 3 and continue the benefits provided for
him in Articles 8 and 9 hereof. The Corporation shall retain the right,
notwithstanding Executive's partial disability, to deliver a Notice of
Nonrenewal during such time as such partial disability continues, unless
Executive has already received a Notice of Nonrenewal, in which event such prior
Notice of Nonrenewal shall remain effective notwithstanding Executive's partial
disability. In any event, the Corporation's obligations in the event of
Executive's partial disability shall terminate upon the end of the Employment
Period.
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(b) In the event Executive becomes totally disabled (as determined
in accordance with Article 7(c) below), and such total disability has continued
for six (6) full consecutive calendar months or more, then for so long
thereafter during the Employment Period as such total disability shall continue
or for a period of one (1) year, whichever is longer, Executive shall be paid at
seventy-five percent (75%) of the rate of his Annual Executive Compensation as
set forth in Article 3 hereof. For purposes of determining the balance of the
Employment Period under this Article 7(b), Executive shall be deemed to have
received a Notice of Nonrenewal effective on the last day of said six-month
period, unless he has already received a Notice of Nonrenewal, in which event
such prior Notice of Nonrenewal shall be controlling.
(c) For purposes of this Agreement, determination of whether
Executive is or is not totally disabled shall be made as follows:
(i) Executive's inability, physical or mental,
for whatever reason, to be able to perform his duties to the
Corporation shall be total disability; and
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(ii) If any difference shall arise between the
Corporation and Executive as to whether he is totally
disabled, such difference shall be resolved as follows:
Executive shall be examined by a physician appointed by the
Corporation and a physician appointed by Executive. If said
two physicians shall disagree concerning whether Executive is
totally disabled, that question shall be submitted to a third
physician, who shall be selected by such two physicians. The
medical opinion of such third physician, after examination of
Executive and consultation with such other two physicians,
shall decide the question.
(d) Should Executive become totally disabled then he may by action
of the Board of Directors be removed from his position and employment with the
Corporation.
8. DEATH. In the event of the death of Executive during the
Employment Period, the Corporation shall continue to pay Executive's Annual
Executive Compensation for a period of one (1) year from the date of death. The
salary payment will be made to
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the wife of Executive or if no wife shall survive Executive, to his Estate.
9. EMPLOYEE BENEFITS. (a) Executive may participate in any
pension plan, profit-sharing plan, life insurance, hospitalization or surgical
program, or insurance program presently in effect or hereafter adopted by the
Corporation, to the extent, if any, that he may be eligible to do so under the
provisions of such plan or program. The Corporation may terminate, modify, or
amend any such plan or program, in the manner and to the extent permitted
therein, and the rights of Executive under any such plan or program shall be
subject to any such right of termination, modification, or amendment. To the
extent any payments under any such plan or program are made to Executive because
he is disabled, such amounts shall be credited against amount due to Executive
under Article 7.
(b) For the sake of clarification, and notwithstanding any other
provision of this Agreement, it is understood and agreed that all benefits
provided to Executive under this Agreement shall be provided to the extent that
they exceed any employee benefit provided to Executive other than specifically
through this Agreement, such as the programs, plans, etc. referred to in Article
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9(a) above. The benefits provided under this Agreement shall be supplemental to
benefits provided otherwise to Executive by the Corporation, and shall not be
provided to the extent that they are duplicative.
10. COVENANT NOT TO SOLICIT EMPLOYEES. During the one-year period
immediately following termination of Executive's employment with the
Corporation, Executive agrees that he will not (a) solicit any past, present or
future customers of the Corporation in any way relating to any business in which
the Corporation was engaged during the term of his employment, or which the
Corporation planned during the term of his employment, to enter, or (b) induce
or actively attempt to influence any other employee or consultant of the
Corporation to terminate his or her employment or consultancy with the
Corporation. In the event that Executive violates any provision of this Article
10, then in addition to any other remedies available to the Corporation, the
Corporation shall have the right immediately to terminate any payments or
benefits provided or to be provided to Executive under this Agreement.
11. ASSIGNMENT. This Agreement may be assigned by the Corporation
as part of the sale of substantially all of its
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business; provided, however, that the purchaser shall expressly assume all
obligations of the Corporation under this Agreement. Further, this Agreement may
be assigned by the Corporation to an affiliate, provided that any such affiliate
shall expressly assume all obligations of the Corporation under this Agreement,
and provided further that the Corporation shall then fully guarantee the
performance of the Agreement by such affiliate. Executive agrees that if this
Agreement is so assigned, all the terms and conditions of this Agreement shall
remain between such assignee and himself with the same force and effect as if
said Agreement had been made with such assignee in the first instance.
12. Termination.
-----------
(a) SURVIVAL. The provisions of Articles 5, 6, 10, 12 and 14
shall survive the termination of this Agreement.
(b) TERMINATION BY EXECUTIVE. Subject to the provisions of Article
12(c)(iii) regarding a Change in Control, if at any time during the Employment
Period (whether or not Executive has received a Notice of Nonrenewal), Executive
elects to terminate his employment with the Corporation, then the Corporation's
obligations
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<PAGE> 15
to Executive under this Agreement shall be limited to the Annual Executive
Compensation and benefits earned up to the date of Executive's departure.
(c) Termination Without Cause.
-------------------------
(i) Subject to the provisions of Article
12(c)(ii) below, and provided there has been no Change in
Control (as defined in Article 12(c)(v) below), in the event
the Corporation dismisses Executive without Cause from
employment as President and Chief Executive Officer, the
Corporation shall continue to fulfill its obligations under
this Agreement until the later of: (A) the date six months
following Executive's dismissal, or (B) the end of the
Employment Period. For purposes of determining the end of the
Employment Period under this Article, Executive shall be
deemed to have received a Notice of Nonrenewal effective on
the date of his dismissal without Cause, unless he has already
received a Notice of Nonrenewal, in which event such prior
Notice of Nonrenewal shall be controlling.
(ii) Provided there has been no Change in Control
(as defined in Article 12(c)(v) below), if Executive takes
other employment during the six-month period following his
dismissal without Cause, then the
15
<PAGE> 16
Corporation's obligation to Executive shall be limited to
payment of Executive's Annual Executive Compensation for the
balance of said six-month period. Provided there has been no
Change in Control (as defined in Article 12(c)(v) below), if
Executive takes other employment after the end of the
six-month period following his dismissal without Cause but
before the end of the Employment Period, the Corporation's
obligations to Executive under this Agreement shall cease upon
Executive's taking such other employment.
(iii) In the event that a Change in Control occurs
during the Employment Period and either [A] Executive is
dismissed without Cause from employment as President and Chief
Executive Officer up to and including twelve (12) months from
such Change in Control or [B] Executive voluntarily leaves the
employ of the Corporation up to and including twelve (12)
months from such Change in Control, then in either case the
Corporation shall continue to fulfill its obligations under
this Agreement for a period of twelve (12) months from such
dismissal without Cause or voluntary departure,
16
<PAGE> 17
as the case may be; provided, however, that if Executive takes
other employment during said twelve-month period, the
Corporation's obligation to Executive for the balance of said
twelve-month period shall be limited to payment of Executive's
Annual Executive Compensation.
(iv) Notwithstanding anything to the contrary in
this Agreement, the Corporation, in its sole and absolute
discretion, may accelerate the payment of any amounts payable
under Article 12(c) hereof to Executive, provided, however,
that accelerating such payments does not affect Executive's
eligibility to continue his insurance benefits on the same
basis (both with respect to coverage and contributions) as the
Corporation's active employees until such time as he would
have received the last amount payable under Article 12(c)
hereof had payment thereof not been accelerated pursuant to
this Article 12(c)(iv).
(v) "Change in Control" shall mean [A] the date
of public announcement that a person has become, without the
approval of the Corporation's Board of Directors, the
17
<PAGE> 18
beneficial owner of 20% or more of the voting power of all
securities of the Corporation then outstanding; [B] the date
of the commencement of a tender offer or tender exchange by
any person, without the approval of the Corporation's Board of
Directors, if upon the consummation thereof such person would
be the beneficial owner of 20% or more of the voting power of
all securities of the Corporation then outstanding; or [C] the
date on which individuals who constituted the Board of
Directors of the Corporation on the date this Agreement was
adopted cease for any reason to constitute a majority thereof,
provided that any person becoming a director subsequent to
such date whose election or nomination was approved by at
least three quarters of such incumbent Board of Directors
shall be considered as though such person were an incumbent
director.
(vi) "Cause" shall mean [A] breach of Executive's
obligations under Article 5, 6 or 10 of this Agreement, [B]
stealing from the Corporation or [C] Executive's conviction of
a felony.
18
<PAGE> 19
(d) Executive agrees not to apply for or receive
unemployment insurance benefits while receiving any benefits under this
contract.
13. NOTICES. All notices required or permitted to be given
hereunder shall be mailed by registered mail or delivered by hand to the party
to whom such notice is required or permitted to be given hereunder. If mailed,
any such notice shall be deemed to have been given when mailed as evidenced by
the postmark at point of mailing. If delivered by hand, any such notice shall be
deemed to have been given when received by the party to whom notice is given, as
evidenced by written and dated receipt of the receiving party.
Any notice to the Corporation or to any assignee of the Corporation
shall be addressed as follows:
SpecTran Corporation
50 Hall Road
Sturbridge, MA 01566
Attn: Chief Financial Officer
Any notice to Executive shall be addressed to the address appearing on
the records of the Corporation at the time such notice is given.
19
<PAGE> 20
Either party may change the address to which notice to it is to be
addressed, by notice as provided herein.
14. APPLICABLE LAW. This Agreement shall be interpreted and
enforced in accordance with the laws of Massachusetts.
15. EFFECTIVE DATE. This Agreement shall become effective as
of the date first mentioned in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed the above
Agreement as of the day and year first above written.
SPECTRAN CORPORATION
By
------------------------------------------
------------------------------------------
Dr. Raymond E. Jaeger
20
<PAGE> 1
Exhibit 10.81
EMPLOYMENT CONTRACT
-------------------
EMPLOYMENT AGREEMENT, executed as of December 14, 1992 between
SpecTran Corporation, a Delaware corporation (hereinafter referred to as the
"Corporation"), and Bruce A. Cannon (hereinafter referred to as "Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is presently employed by the Corporation; and
WHEREAS, the Corporation recognizes the effort, attention and skill
Executive has given the organization, operation and planning of the Corporation
and desires to enter into this employment agreement with Executive.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree with each other as follows:
1. EMPLOYMENT. (a) The Corporation agrees to and does hereby
employ Executive, and Executive agrees to and does hereby
<PAGE> 2
accept employment by the Corporation, as Senior Vice President and Chief
Financial Officer of the Corporation or in any other Senior Executive capacity
as determined by its Board of Directors, subject to the supervision and
direction of its Board of Directors, for the one year period commencing on June
1, 1992, and ending at midnight on the 31st day of May, 1993 (the "Base Term").
The Base Term shall be automatically renewed on a daily basis so that on each
date during which Executive is employed under this Agreement the remaining term
shall be a period of one year terminating at midnight of the first anniversary
of the day immediately preceding such date, unless at any time the outside
(I.E., non-employee) members of the Corporation's Board of Directors terminate
the automatic daily renewal feature of this Agreement as provided in Article
1(b) below. The Base Term and all renewals thereof shall be deemed the
"Employment Period" and shall hereinafter be referred to as such.
(b) At any time during the Employment Period the outside (I.E.,
non-employee) members of the Corporation's Board of Directors may by resolution
terminate the automatic daily renewal of this Agreement and set a termination
date which shall be midnight of the first anniversary of the date immediately
preceding the day on which such resolution was adopted (the "Termination
2
<PAGE> 3
Date"). Written notice ("Notice of Nonrenewal") of the outside directors'
resolution setting a Termination Date shall be executed by each outside director
and delivered to Executive within two business days of the adoption of such
resolution. A Notice of Nonrenewal may be rescinded at any time by resolution of
the outside members of the Corporation's Board of Directors executed and
delivered in the same fashion.
(c) If, following delivery to Executive of the Notice of
Nonrenewal, neither the Corporation nor Executive terminates Executive's
employment under Article 12 below, this Agreement shall continue in full force
and effect for the one-year period set forth in the Notice of Nonrenewal, and
shall terminate on the Termination Date.
2. SCOPE OF DUTIES. Executive agrees that as Senior Vice
President and Chief Financial Officer of the Corporation or in any other Senior
Executive capacity as determined by its Board of Directors he will devote his
full time and effort during the Employment Period to the performance of the
duties of such office. Executive shall make his business headquarters at
Sturbridge, Massachusetts and shall relocate should the Corporation change its
3
<PAGE> 4
headquarters. Executive shall undertake such travel as the Corporation may
request.
It is understood and agreed that Executive will advise the Corporation
of his intentions to act as a director of other corporations and may hold such
directorships and shall be permitted to devote such time thereto as may
reasonably be necessary to discharge the ordinary duties attendant upon any such
directorships. Executive agrees that he will, upon request of the Board of
Directors of the Corporation, resign from any such directorship notwithstanding
that the Corporation may have theretofore approved his accepting or retaining
such directorship.
Notwithstanding the foregoing, in the event of termination of
Executive's employment hereunder in accordance with the terms of this Agreement,
the provisions of this Article 2 shall be null and void, and of no effect.
3. EMPLOYMENT PERIOD - ANNUAL COMPENSATION. For the services and
duties to be rendered and performed by Executive during the Employment Period,
the Corporation agrees to pay Executive annual compensation at the rate of not
less than One
4
<PAGE> 5
Hundred Thousand Dollars and no cents ($100,000.00) per year, which amount may
be changed by action of the Compensation Committee of the Board of Directors and
subsequent resolution of the Board of Directors (this annual amount to be
referred to as "Annual Executive Compensation"). Annual Executive Compensation
shall be payable in equal semi-monthly installments. The Corporation shall
reimburse Executive for all expenses reasonably and necessarily incurred in
connection with his employment by the Corporation, including traveling expenses
while absent, on the Corporation's business, from his business headquarters. The
Board of Directors of the Corporation may increase Executive's Compensation at
such time or times and in such amount or amounts as it may in its sole
discretion determine. The Corporation may also pay a bonus to Executive, it
being expressly understood that determination of whether or not any such bonus
will be paid and the amount of any such bonus shall be at the sole discretion of
the Board of Directors.
4. VACATION. Executive shall be entitled to a vacation each year
equal to one (1) month. Said vacation may be taken all at once or weekly at the
sole discretion of Executive.
5
<PAGE> 6
5. SECRETS. Executive agrees that any trade secrets or any other
proprietary information (whether in written, verbal or any other form) relating
to the existing or contemplated business and/or field of interest of the
Corporation or any of its affiliates (for the purpose of this Agreement, an
affiliate of the Corporation shall be deemed to be any corporation or other
legal entity which controls the Corporation, which is controlled by the
Corporation, one which is under common control with the Corporation), or of any
corporation or other legal entity in which the Corporation or any of its
affiliates has an ownership interest of more than twenty-five percent (25%), and
any proprietary information (whether in written, verbal or any other form) of
any of the Corporation's customers, suppliers, licensor or licensees, including,
but not limited to, information relating to inventions, disclosures, processes,
systems, methods, formulae, patents, patent applications, machinery, materials,
notes, drawings, research activities and plans, costs of production, contract
forms, prices, volume of sales, promotional methods, list of names or classes or
customers, which he has heretofore acquired during his employment by the
Corporation or any of its affiliates or which he may hereafter acquire during
his employment with the Corporation or any of its affiliates, in both cases
whether during or outside business
6
<PAGE> 7
hours, whether or not on the Corporation's premises, as the result of any
disclosures to him, or in any other way, shall be regarded as held by him in a
fiduciary capacity solely for the benefit of the Corporation, its successors or
assigns, and shall not at any time, either during the term of this Agreement or
thereafter, be disclosed, divulged, furnished, or made accessible by him to
anyone, or be otherwise used by him, except in the regular course of business of
the Corporation or its affiliates. Upon termination of his employment, Executive
shall return or deliver to the Corporation all tangible forms of such
information in his possession or control, and shall retain no copies thereof.
Information shall, for purposes of this Agreement, be considered to be secret if
not known by the trade generally, even though such information may have been
disclosed to one or more third parties pursuant to any business discussion or
agreemnt, including distribution agreements, joint research agreements or other
agreements entered into by the Corporation or any of its affiliates.
6. PATENTS. Executive agrees to and does hereby sell, assign,
transfer and set over to the Corporation, its successors, assigns, or
affiliates, as the case may be, all his right, title,
7
<PAGE> 8
and interest in and to any inventions, improvements, processes, patents or
applications for patents which he develops or conceives individually or in
conjunction with others during his employment by the Corporation, or, having
possibly conceived same prior to his employment, may complete while in the
employ of the Corporation or any of its affiliates, in both cases whether during
or outside business hours, whether or not on the Company's premises, which
inventions, improvements, processes, patents or applications for patents are (i)
in connection with any matters within the scope of the existing or contemplated
business of the Corporation or any of its affiliates, or (ii) aided by the use
of time, materials, facilities or information paid for or provided by the
Corporation, all of the foregoing to be held and enjoyed by the Corporation, its
successors, assigns or affiliates, as the case may be, to the full extent of the
term for which any Letters Patent may be granted and as fully as the same would
have been held by Executive, had this Agreement, sale or assignment not been
made. Executive will make, execute and deliver any and all instruments and
documents necessary to obtain patents for such inventions, improvements and
processes in any and all countries. Executive hereby irrevocably appoints the
Corporation to be his attorney in fact in the name of and on behalf of Executive
to execute all such instruments and do all such
8
<PAGE> 9
things and generally to use the Executive's name for the purposes of assuring to
the Corporation (or its nominee) the full benefit of its rights under the
provisions of Articles 5 and 6.
7. DISABILITY. (a) In the event Executive becomes partially
disabled, or becomes totally disabled (as determined in accordance with Article
7(c) below) and such total disability has continued for less than six (6) full
consecutive calendar months, then the Corporation shall continue during the
Employment Period to pay Executive at the rate of his Annual Executive
Compensation as set forth in Article 3 and continue the benefits provided for
him in Articles 8 and 9 hereof. The Corporation shall retain the right,
notwithstanding Executive's partial disability, to deliver a Notice of
Nonrenewal during such time as such partial disability continues, unless
Executive has already received a Notice of Nonrenewal, in which event such prior
Notice of Nonrenewal shall remain effective notwithstanding Executive's partial
disability. In any event, the Corporation's obligations in the event of
Executive's partial disability shall terminate upon the end of the Employment
Period.
9
<PAGE> 10
(b) In the event Executive becomes totally disabled (as determined
in accordance with Article 7(c) below), and such total disability has continued
for six (6) full consecutive calendar months or more, then for so long
thereafter during the Employment Period as such total disability shall continue
or for a period of one (1) year, whichever is longer, Executive shall be paid at
seventy-five percent (75%) of the rate of his Annual Executive Compensation as
set forth in Article 3 hereof. For purposes of determining the balance of the
Employment Period under this Article 7(b), Executive shall be deemed to have
received a Notice of Nonrenewal effective on the last day of said six-month
period, unless he has already received a Notice of Nonrenewal, in which event
such prior Notice of Nonrenewal shall be controlling.
(c) For purposes of this Agreement, determination of whether
Executive is or is not totally disabled shall be made as follows:
(i) Executive's inability, physical or mental,
for whatever reason, to be able to perform his duties to the
Corporation shall be total disability; and
10
<PAGE> 11
(ii) If any difference shall arise between the
Corporation and Executive as to whether he is totally
disabled, such difference shall be resolved as follows:
Executive shall be examined by a physician appointed by the
Corporation and a physician appointed by Executive. If said
two physicians shall disagree concerning whether Executive is
totally disabled, that question shall be submitted to a third
physician, who shall be selected by such two physicians. The
medical opinion of such third physician, after examination of
Executive and consultation with such other two physicians,
shall decide the question.
(d) Should Executive become totally disabled then he may by action
of the Board of Directors be removed from his position and employment with the
Corporation.
8. DEATH. In the event of the death of Executive during the
Employment Period, the Corporation shall continue to pay Executive's Annual
Executive Compensation for a period of one (1) year from the date of death. The
salary payment will be made to
11
<PAGE> 12
the wife of Executive or if no wife shall survive Executive, to his Estate.
9. EMPLOYEE BENEFITS. (a) Executive may participate in any
pension plan, profit-sharing plan, life insurance, hospitalization or surgical
program, or insurance program presently in effect or hereafter adopted by the
Corporation, to the extent, if any, that he may be eligible to do so under the
provisions of such plan or program. The Corporation may terminate, modify, or
amend any such plan or program, in the manner and to the extent permitted
therein, and the rights of Executive under any such plan or program shall be
subject to any such right of termination, modification, or amendment. To the
extent any payments under any such plan or program are made to Executive because
he is disabled, such amounts shall be credited against amount due to Executive
under Article 7.
(b) For the sake of clarification, and notwithstanding any other
provision of this Agreement, it is understood and agreed that all benefits
provided to Executive under this Agreement shall be provided to the extent that
they exceed any employee benefit provided to Executive other than specifically
through this Agreement, such as the programs, plans, etc. referred to in Article
12
<PAGE> 13
9(a) above. The benefits provided under this Agreement shall be supplemental to
benefits provided otherwise to Executive by the Corporation, and shall not be
provided to the extent that they are duplicative.
10. COVENANT NOT TO SOLICIT EMPLOYEES. During the one-year period
immediately following termination of Executive's employment with the
Corporation, Executive agrees that he will not (a) solicit any past, present or
future customers of the Corporation in any way relating to any business in which
the Corporation was engaged during the term of his employment, or which the
Corporation planned during the term of his employment, to enter, or (b) induce
or actively attempt to influence any other employee or consultant of the
Corporation to terminate his or her employment or consultancy with the
Corporation. In the event that Executive violates any provision of this Article
10, then in addition to any other remedies available to the Corporation, the
Corporation shall have the right immediately to terminate any payments or
benefits provided or to be provided to Executive under this Agreement.
11. ASSIGNMENT. This Agreement may be assigned by the Corporation
as part of the sale of substantially all of its
13
<PAGE> 14
business; provided, however, that the purchaser shall expressly assume all
obligations of the Corporation under this Agreement. Further, this Agreement may
be assigned by the Corporation to an affiliate, provided that any such affiliate
shall expressly assume all obligations of the Corporation under this Agreement,
and provided further that the Corporation shall then fully guarantee the
performance of the Agreement by such affiliate. Executive agrees that if this
Agreement is so assigned, all the terms and conditions of this Agreement shall
remain between such assignee and himself with the same force and effect as if
said Agreement had been made with such assignee in the first instance.
12. Termination.
-----------
(a) SURVIVAL. The provisions of Articles 5, 6, 10, 12 and 14 shall
survive the termination of this Agreement.
(b) TERMINATION BY EXECUTIVE. Subject to the provisions of Article
12(c)(iii) regarding a Change in Control, if at any time during the Employment
Period (whether or not Executive has received a Notice of Nonrenewal), Executive
elects to terminate his employment with the Corporation, then the Corporation's
obligations
14
<PAGE> 15
to Executive under this Agreement shall be limited to the Annual Executive
Compensation and benefits earned up to the date of Executive's departure.
(c) Termination Without Cause.
-------------------------
(i) Subject to the provisions of Article
12(c)(ii) below, and provided there has been no Change in
Control (as defined in Article 12(c)(v) below), in the event
the Corporation dismisses Executive without Cause from
employment in a Senior Executive capacity with the Corporation
shall continue to fulfill its obligations under this Agreement
until the later of: (A) the date six months following
Executive's dismissal, or (B) the end of the Employment
Period. For purposes of determining the end of the Employment
Period under this Article, Executive shall be deemed to have
received a Notice of Nonrenewal effective on the date of his
dismissal without Cause, unless he has already received a
Notice of Nonrenewal, in which event such prior Notice of
Nonrenewal shall be controlling.
(ii) Provided there has been no Change in Control
(as defined in Article 12(c)(v) below), if Executive takes
other employment during the six-month period following his
dismissal without Cause, then the
15
<PAGE> 16
Corporation's obligation to Executive shall be limited to
payment of Executive's Annual Executive Compensation for the
balance of said six-month period. Provided there has been no
Change in Control (as defined in Article 12(c)(v) below), if
Executive takes other employment after the end of the
six-month period following his dismissal without Cause but
before the end of the Employment Period, the Corporation's
obligations to Executive under this Agreement shall cease upon
Executive's taking such other employment.
(iii) In the event that a Change in Control occurs
during the Employment Period and either [A] Executive is
dismissed without Cause from employment in Senior Executive
capacity up to and including twelve (12) months from such
Change in Control or [B] Executive voluntarily leaves the
employ of the Corporation up to and including twelve (12)
months from such Change in Control, then in either case the
Corporation shall continue to fulfill its obligations under
this Agreement for a period of twelve (12) months from such
dismissal
16
<PAGE> 17
without Cause or voluntary departure, as the case may be;
provided, however, that if Executive takes other employment
during said twelve-month period, the Corporation's obligation
to Executive for the balance of said twelve-month period shall
be limited to payment of Executive's Annual Executive
Compensation.
(iv) Notwithstanding anything to the contrary in
this Agreement, the Corporation, in its sole and absolute
discretion, may accelerate the payment of any amounts payable
under Article 12(c) hereof to Executive, provided, however,
that accelerating such payments does not affect Executive's
eligibility to continue his insurance benefits on the same
basis (both with respect to coverage and contributions) as the
Corporation's active employees until such time as he would
have received the last amount payable under Article 12(c)
hereof had payment thereof not been accelerated pursuant to
this Article 12(c)(iv).
(v) "Change in Control" shall mean [A] the date
of public announcement that a person has become, without the
17
<PAGE> 18
approval of the Corporation's Board of Directors, the
beneficial owner of 20% or more of the voting power of all
securities of the Corporation then outstanding; [B] the date
of the commencement of a tender offer or tender exchange by
any person, without the approval of the Corporation's Board of
Directors, if upon the consummation thereof such person would
be the beneficial owner of 20% or more of the voting power of
all securities of the Corporation then outstanding; or [C] the
date on which individuals who constituted the Board of
Directors of the Corporation on the date this Agreement was
adopted cease for any reason to constitute a majority thereof,
provided that any person becoming a director subsequent to
such date whose election or nomination was approved by at
least three quarters of such incumbent Board of Directors
shall be considered as though such person were an incumbent
director.
(vi) "Cause" shall mean [A] breach of Executive's
obligations under Article 5, 6 or 10 of this Agreement, [B]
stealing from the Corporation or [C] Executive's conviction of
a felony.
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<PAGE> 19
(d) Executive agrees not to apply for or receive
unemployment insurance benefits while receiving any benefits under this
contract.
13. NOTICES. All notices required or permitted to be given
hereunder shall be mailed by registered mail or delivered by hand to the party
to whom such notice is required or permitted to be given hereunder. If mailed,
any such notice shall be deemed to have been given when mailed as evidenced by
the postmark at point of mailing. If delivered by hand, any such notice shall be
deemed to have been given when received by the party to whom notice is given, as
evidenced by written and dated receipt of the receiving party.
Any notice to the Corporation or to any assignee of the Corporation
shall be addressed as follows:
SpecTran Corporation
50 Hall Road
Sturbridge, MA 01566
Attn: President and Chief Executive Officer
Any notice to Executive shall be addressed to the address appearing on
the records of the Corporation at the time such notice is given.
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<PAGE> 20
Either party may change the address to which notice to it is to be
addressed, by notice as provided herein.
14. APPLICABLE LAW. This Agreement shall be interpreted and
enforced in accordance with the laws of Massachusetts.
15. EFFECTIVE DATE. This Agreement shall become effective as
of the date first mentioned in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed the above
Agreement as of the day and year first above written.
SPECTRAN CORPORATION
By
-------------------------------------------
-------------------------------------------
Bruce A. Cannon
20
<PAGE> 1
Exhibit 10.82
EMPLOYMENT CONTRACT
-------------------
EMPLOYMENT AGREEMENT, executed as of December 14, 1992 between
SpecTran Corporation, a Delaware corporation (hereinafter referred to as the
"Corporation"), and John E. Chapman (hereinafter referred to as "Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is presently employed by the Corporation; and
WHEREAS, the Corporation recognizes the effort, attention and skill
Executive has given the organization, operation and planning of the Corporation
and desires to enter into this employment agreement with Executive.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree with each other as follows:
1. EMPLOYMENT. (a) The Corporation agrees to and does hereby
employ Executive, and Executive agrees to and does hereby
<PAGE> 2
accept employment by the Corporation, as Senior Vice President, Manufacturing
and Technology, of the Corporation or in any other Senior Executive capacity as
determined by the Board of Directors, subject to the supervision and direction
of its Board of Directors, for the one year period commencing on June 1, 1992,
and ending at midnight on the 31st day of May, 1993 (the "Base Term"). The Base
Term shall be automatically renewed on a daily basis so that on each date during
which Executive is employed under this Agreement the remaining term shall be a
period of one year terminating at midnight of the first anniversary of the day
immediately preceding such date, unless at any time the outside (I.E.,
non-employee) members of the Corporation's Board of Directors terminate the
automatic daily renewal feature of this Agreement as provided in Article 1(b)
below. The Base Term and all renewals thereof shall be deemed the "Employment
Period" and shall hereinafter be referred to as such.
(b) At any time during the Employment Period the outside (I.E.,
non-employee) members of the Corporation's Board of Directors may by resolution
terminate the automatic daily renewal of this Agreement and set a termination
date which shall be midnight of the first anniversary of the date immediately
preceding the day on which such resolution was adopted (the "Termination
2
<PAGE> 3
Date"). Written notice ("Notice of Nonrenewal") of the outside directors'
resolution setting a Termination Date shall be executed by each outside director
and delivered to Executive within two business days of the adoption of such
resolution. A Notice of Nonrenewal may be rescinded at any time by resolution of
the outside members of the Corporation's Board of Directors executed and
delivered in the same fashion.
(c) If, following delivery to Executive of the Notice of
Nonrenewal, neither the Corporation nor Executive terminates Executive's
employment under Article 12 below, this Agreement shall continue in full force
and effect for the one-year period set forth in the Notice of Nonrenewal, and
shall terminate on the Termination Date.
2. SCOPE OF DUTIES. Executive agrees that as Senior Vice
President, Manufacturing and Technology, of the Corporation or in any other
Senior Executive capacity as determined by its Board of Directors he will devote
his full time and effort during the Employment Period to the performance of the
duties of such office. Executive shall make his business headquarters at
Sturbridge, Massachusetts and shall relocate should the Corporation change its
3
<PAGE> 4
headquarters. Executive shall undertake such travel as the Corporation may
request.
It is understood and agreed that Executive will advise the Corporation
of his intentions to act as a director of other corporations and may hold such
directorships and shall be permitted to devote such time thereto as may
reasonably be necessary to discharge the ordinary duties attendant upon any such
directorships. Executive agrees that he will, upon request of the Board of
Directors of the Corporation, resign from any such directorship notwithstanding
that the Corporation may have theretofore approved his accepting or retaining
such directorship.
Notwithstanding the foregoing, in the event of termination of
Executive's employment hereunder in accordance with the terms of this Agreement,
the provisions of this Article 2 shall be null and void, and of no effect.
3. EMPLOYMENT PERIOD - ANNUAL COMPENSATION. For the services and
duties to be rendered and performed by Executive during the Employment Period,
the Corporation agrees to pay Executive annual compensation at the rate of not
less than One
4
<PAGE> 5
Hundred Six Thousand Dollars and no cents ($106,000.00) per year, which amount
may be changed by action of the Compensation Committee of the Board of Directors
and subsequent resolution of the Board of Directors (this annual amount to be
referred to as "Annual Executive Compensation"). Annual Executive Compensation
shall be payable in equal semi-monthly installments. The Corporation shall
reimburse Executive for all expenses reasonably and necessarily incurred in
connection with his employment by the Corporation, including traveling expenses
while absent, on the Corporation's business, from his business headquarters. The
Board of Directors of the Corporation may increase Executive's Compensation at
such time or times and in such amount or amounts as it may in its sole
discretion determine. The Corporation may also pay a bonus to Executive, it
being expressly understood that determination of whether or not any such bonus
will be paid and the amount of any such bonus shall be at the sole discretion of
the Board of Directors.
4. VACATION. Executive shall be entitled to a vacation each year
equal to one (1) month. Said vacation may be taken all at once or weekly at the
sole discretion of Executive.
5
<PAGE> 6
5. SECRETS. Executive agrees that any trade secrets or any other
proprietary information (whether in written, verbal or any other form) relating
to the existing or contemplated business and/or field of interest of the
Corporation or any of its affiliates (for the purpose of this Agreement, an
affiliate of the Corporation shall be deemed to be any corporation or other
legal entity which controls the Corporation, which is controlled by the
Corporation, one which is under common control with the Corporation), or of any
corporation or other legal entity in which the Corporation or any of its
affiliates has an ownership interest of more than twenty-five percent (25%), and
any proprietary information (whether in written, verbal or any other form) of
any of the Corporation's customers, suppliers, licensor or licensees, including,
but not limited to, information relating to inventions, disclosures, processes,
systems, methods, formulae, patents, patent applications, machinery, materials,
notes, drawings, research activities and plans, costs of production, contract
forms, prices, volume of sales, promotional methods, list of names or classes or
customers, which he has heretofore acquired during his employment by the
Corporation or any of its affiliates or which he may hereafter acquire during
his employment with the Corporation or any of its affiliates, in both cases
whether during or outside business
6
<PAGE> 7
hours, whether or not on the Corporation's premises, as the result of any
disclosures to him, or in any other way, shall be regarded as held by him in a
fiduciary capacity solely for the benefit of the Corporation, its successors or
assigns, and shall not at any time, either during the term of this Agreement or
thereafter, be disclosed, divulged, furnished, or made accessible by him to
anyone, or be otherwise used by him, except in the regular course of business of
the Corporation or its affiliates. Upon termination of his employment, Executive
shall return or deliver to the Corporation all tangible forms of such
information in his possession or control, and shall retain no copies thereof.
Information shall, for purposes of this Agreement, be considered to be secret if
not known by the trade generally, even though such information may have been
disclosed to one or more third parties pursuant to any business discussion or
agreement, including distribution agreements, joint research agreements or other
agreements entered into by the Corporation or any of its affiliates.
6. PATENTS. Executive agrees to and does hereby sell, assign,
transfer and set over to the Corporation, its successors, assigns, or
affiliates, as the case may be, all his right, title,
7
<PAGE> 8
and interest in and to any inventions, improvements, processes, patents or
applications for patents which he develops or conceives individually or in
conjunction with others during his employment by the Corporation, or, having
possibly conceived same prior to his employment, may complete while in the
employ of the Corporation or any of its O21
8
<PAGE> 1
Exhibit 10.83
EMPLOYMENT CONTRACT
-------------------
EMPLOYMENT AGREEMENT, executed as of January 1, 1994 between SpecTran
Corporation, a Delaware corporation (hereinafter referred to as the
"Corporation"), and Crawford L. Cutts (hereinafter referred to as "Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is presently employed by the Corporation; and
WHEREAS, the Corporation recognizes the effort, attention and skill
Executive has given the organization, operation and planning of the Corporation
and desires to enter into this employment agreement with Executive.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree with each other as follows:
1. EMPLOYMENT. (a) The Corporation agrees to and does hereby
employ Executive, and Executive agrees to and does hereby
<PAGE> 2
accept employment by the Corporation, as Vice President, Business Development,
of the Corporation or in any other Senior Executive capacity as determined by
the Board of Directors, subject to the supervision and direction of its Board of
Directors, for the one year period commencing, retroactively, on June 1, 1993,
and ending at midnight on the 31st day of May, 1994 (the "Base Term"). The Base
Term shall be automatically renewed on a daily basis so that on each date during
which Executive is employed under this Agreement the remaining term shall be a
period of one year terminating at midnight of the first anniversary of the day
immediately preceding such date, unless at any time the outside (i.e.,
non-employee) members of the Corporation's Board of Directors terminate the
automatic daily renewal feature of this Agreement as provided in Article 1(b)
below. The Base Term and all renewals thereof shall be deemed the "Employment
Period" and shall hereinafter be referred to as such.
(b) At any time during the Employment Period the outside (i.e.,
non-employee) members of the Corporation's Board of Directors may by resolution
terminate the automatic daily renewal of this Agreement and set a termination
date which shall be midnight of the first anniversary of the date immediately
preceding the day on which such resolution was adopted (the "Termination
2
<PAGE> 3
Date"). Written notice ("Notice of Nonrenewal") of the outside directors'
resolution setting a Termination Date shall be executed by each outside director
and delivered to Executive within two business days of the adoption of such
resolution. A Notice of Nonrenewal may be rescinded at any time by resolution of
the outside members of the Corporation's Board of Directors executed and
delivered in the same fashion.
(c) If, following delivery to Executive of the Notice of
Nonrenewal, neither the Corporation nor Executive terminates Executive's
employment under Article 12 below, this Agreement shall continue in full force
and effect for the one-year period set forth in the Notice of Nonrenewal, and
shall terminate on the Termination Date.
2. SCOPE OF DUTIES. Executive agrees that as Vice President,
Business Development, of the Corporation or in any other Senior Executive
capacity as determined by its Board of Directors he will devote his full time
and effort during the Employment Period to the performance of the duties of such
office. Executive shall make his business headquarters at Sturbridge,
Massachusetts and shall relocate should the Corporation change its headquarters.
3
<PAGE> 4
Executive shall undertake such travel as the Corporation may request.
It is understood and agreed that Executive will advise the Corporation
of his intentions to act as a director of other corporations and may hold such
directorships and shall be permitted to devote such time thereto as may
reasonably be necessary to discharge the ordinary duties attendant upon any such
directorships. Executive agrees that he will, upon request of the Board of
Directors of the Corporation, resign from any such directorship notwithstanding
that the Corporation may have theretofore approved his accepting or retaining
such directorship.
Notwithstanding the foregoing, in the event of termination of
Executive's employment hereunder in accordance with the terms of this Agreement,
the provisions of this Article 2 shall be null and void, and of no effect.
3. EMPLOYMENT PERIOD - ANNUAL COMPENSATION. For the services and
duties to be rendered and performed by Executive during the Employment Period,
the Corporation agrees to pay Executive annual compensation at the rate of not
less than One
4
<PAGE> 5
Hundred Six Thousand Five Hundred Dollars and no cents ($106,500.00) per year,
which amount may be changed by action of the Compensation Committee of the Board
of Directors and subsequent resolution of the Board of Directors (this annual
amount to be referred to as "Annual Executive Compensation"). Annual Executive
Compensation shall be payable in equal semi-monthly installments. The
Corporation shall reimburse Executive for all expenses reasonably and
necessarily incurred in connection with his employment by the Corporation,
including traveling expenses while absent, on the Corporation's business, from
his business headquarters. The Board of Directors of the Corporation may
increase Executive's Compensation at such time or times and in such amount or
amounts as it may in its sole discretion determine. The Corporation may also pay
a bonus to Executive, it being expressly understood that determination of
whether or not any such bonus will be paid and the amount of any such bonus
shall be at the sole discretion of the Board of Directors.
4. VACATION. Executive shall be entitled to a vacation each year
equal to one (1) month. Said vacation may be taken all at once or weekly at the
sole discretion of Executive.
5
<PAGE> 6
5. SECRETS. Executive agrees that any trade secrets or any other
proprietary information (whether in written, verbal or any other form) relating
to the existing or contemplated business and/or field of interest of the
Corporation or any of its affiliates (for the purpose of this Agreement, an
affiliate of the Corporation shall be deemed to be any corporation or other
legal entity which controls the Corporation, which is controlled by the
Corporation, one which is under common control with the Corporation), or of any
corporation or other legal entity in which the Corporation or any of its
affiliates has an ownership interest of more than twenty-five percent (25%), and
any proprietary information (whether in written, verbal or any other form) of
any of the Corporation's customers, suppliers, licensors or licensees,
including, but not limited to, information relating to inventions, disclosures,
processes, systems, methods, formulae, patents, patent applications, machinery,
materials, notes, drawings, research activities and plans, costs of production,
contract forms, prices, volume of sales, promotional methods, list of names or
classes or customers, which he has heretofore acquired during his employment by
the Corporation or any of its affiliates or which he may hereafter acquire
during his employment with the Corporation or any of its affiliates, in both
cases whether during or outside business
6
<PAGE> 7
hours, whether or not on the Corporation's premises, as the result of any
disclosures to him, or in any other way, shall be regarded as held by him in a
fiduciary capacity solely for the benefit of the Corporation, its successors or
assigns, and shall not at any time, either during the term of this Agreement or
thereafter, be disclosed, divulged, furnished, or made accessible by him to
anyone, or be otherwise used by him, except in the regular course of business of
the Corporation or its affiliates. Upon termination of his employment, Executive
shall return or deliver to the Corporation all tangible forms of such
information in his possession or control, and shall retain no copies thereof.
Information shall, for purposes of this Agreement, be considered to be secret if
not known by the trade generally, even though such information may have been
disclosed to one or more third parties pursuant to any business discussion or
agreement, including distribution agreements, joint research agreements or other
agreements entered into by the Corporation or any of its affiliates.
6. PATENTS. Executive agrees to and does hereby sell, assign,
transfer and set over to the Corporation, its successors, assigns, or
affiliates, as the case may be, all his right, title,
7
<PAGE> 8
and interest in and to any inventions, improvements, processes, patents or
applications for patents which he develops or conceives individually or in
conjunction with others during his employment by the Corporation, or, having
possibly conceived same prior to his employment, may complete while in the
employ of the Corporation or any of its affiliates, in both cases whether during
or outside business hours, whether or not on the Company's premises, which
inventions, improvements, processes, patents or applications for patents are (i)
in connection with any matters within the scope of the existing or contemplated
business of the Corporation or any of its affiliates, or (ii) aided by the use
of time, materials, facilities or information paid for or provided by the
Corporation, all of the foregoing to be held and enjoyed by the Corporation, its
successors, assigns or affiliates, as the case may be, to the full extent of the
term for which any Letters Patent may be granted and as fully as the same would
have been held by Executive, had this Agreement, sale or assignment not been
made. Executive will make, execute and deliver any and all instruments and
documents necessary to obtain patents for such inventions, improvements and
processes in any and all countries. Executive hereby irrevocably appoints the
Corporation to be his attorney in fact in the name of and on behalf of Executive
to execute all such instruments and do all such
8
<PAGE> 9
things and generally to use the Executive's name for the purposes of assuring to
the Corporation (or its nominee) the full benefit of its rights under the
provisions of Articles 5 and 6.
7. DISABILITY. (a) In the event Executive becomes partially
disabled, or becomes totally disabled (as determined in accordance with Article
7(c) below) and such total disability has continued for less than six (6) full
consecutive calendar months, then the Corporation shall continue during the
Employment Period to pay Executive at the rate of his Annual Executive
Compensation as set forth in Article 3 and continue the benefits provided for
him in Articles 8 and 9 hereof. The Corporation shall retain the right,
notwithstanding Executive's partial disability, to deliver a Notice of
Nonrenewal during such time as such partial disability continues, unless
Executive has already received a Notice of Nonrenewal, in which event such prior
Notice of Nonrenewal shall remain effective notwithstanding Executive's partial
disability. In any event, the Corporation's obligations in the event of
Executive's partial disability shall terminate upon the end of the Employment
Period.
9
<PAGE> 10
(b) In the event Executive becomes totally disabled (as determined
in accordance with Article 7(c) below), and such total disability has continued
for six (6) full consecutive calendar months or more, then for so long
thereafter during the Employment Period as such total disability shall continue
or for a period of one (1) year, whichever is longer, Executive shall be paid at
seventy-five percent (75%) of the rate of his Annual Executive Compensation as
set forth in Article 3 hereof. For purposes of determining the balance of the
Employment Period under this Article 7(b), Executive shall be deemed to have
received a Notice of Nonrenewal effective on the last day of said six-month
period, unless he has already received a Notice of Nonrenewal, in which event
such prior Notice of Nonrenewal shall be controlling.
(c) For purposes of this Agreement, determination of whether
Executive is or is not totally disabled shall be made as follows:
(i) Executive's inability, physical or mental,
for whatever reason, to be able to perform his duties to the
Corporation shall be total disability; and
10
<PAGE> 11
(ii) If any difference shall arise between the
Corporation and Executive as to whether he is totally
disabled, such difference shall be resolved as follows:
Executive shall be examined by a physician appointed by the
Corporation and a physician appointed by Executive. If said
two physicians shall disagree concerning whether Executive is
totally disabled, that question shall be submitted to a third
physician, who shall be selected by such two physicians. The
medical opinion of such third physician, after examination of
Executive and consultation with such other two physicians,
shall decide the question.
(d) Should Executive become totally disabled then he may by action
of the Board of Directors be removed from his position and employment with the
Corporation.
8. DEATH. In the event of the death of Executive during the
Employment Period, the Corporation shall continue to pay Executive's Annual
Executive Compensation for a period of one (1) year from the date of death. The
salary payment will be made to
11
<PAGE> 12
the wife of Executive or if no wife shall survive Executive, to his Estate.
9. EMPLOYEE BENEFITS. (a) Executive may participate in any
pension plan, profit-sharing plan, life insurance, hospitalization or surgical
program, or insurance program presently in effect or hereafter adopted by the
Corporation, to the extent, if any, that he may be eligible to do so under the
provisions of such plan or program. The Corporation may terminate, modify, or
amend any such plan or program, in the manner and to the extent permitted
therein, and the rights of Executive under any such plan or program shall be
subject to any such right of termination, modification, or amendment. To the
extent any payments under any such plan or program are made to Executive because
he is disabled, such amounts shall be credited against amount due to Executive
under Article 7.
(b) For the sake of clarification, and notwithstanding any other
provision of this Agreement, it is understood and agreed that all benefits
provided to Executive under this Agreement shall be provided to the extent that
they exceed any employee benefit provided to Executive other than specifically
through this Agreement, such as the programs, plans, etc. referred to in Article
12
<PAGE> 13
9(a) above. The benefits provided under this Agreement shall be supplemental to
benefits provided otherwise to Executive by the Corporation, and shall not be
provided to the extent that they are duplicative.
10. COVENANT NOT TO SOLICIT EMPLOYEES. During the one-year period
immediately following termination of Executive's employment with the
Corporation, Executive agrees that he will not (a) solicit any past, present or
future customers of the Corporation in any way relating to any business in which
the Corporation was engaged during the term of his employment, or which the
Corporation planned during the term of his employment, to enter, or (b) induce
or actively attempt to influence any other employee or consultant of the
Corporation to terminate his or her employment or consultancy with the
Corporation. In the event that Executive violates any provision of this Article
10, then in addition to any other remedies available to the Corporation, the
Corporation shall have the right immediately to terminate any payments or
benefits provided or to be provided to Executive under this Agreement.
11. ASSIGNMENT. This Agreement may be assigned by the Corporation
as part of the sale of substantially all of its
13
<PAGE> 14
business; provided, however, that the purchaser shall expressly assume all
obligations of the Corporation under this Agreement. Further, this Agreement may
be assigned by the Corporation to an affiliate, provided that any such affiliate
shall expressly assume all obligations of the Corporation under this Agreement,
and provided further that the Corporation shall then fully guarantee the
performance of the Agreement by such affiliate. Executive agrees that if this
Agreement is so assigned, all the terms and conditions of this Agreement shall
remain between such assignee and himself with the same force and effect as if
said Agreement had been made with such assignee in the first instance.
12. Termination.
-----------
(a) SURVIVAL. The provisions of Articles 5, 6, 10, 12 and 14
shall survive the termination of this Agreement.
(b) TERMINATION BY EXECUTIVE. Subject to the provisions of Article
12(c)(iii) regarding a Change in Control, if at any time during the Employment
Period (whether or not Executive has received a Notice of Nonrenewal), Executive
elects to terminate his employment with the Corporation, then the Corporation's
obligations
14
<PAGE> 15
to Executive under this Agreement shall be limited to the Annual Executive
Compensation and benefits earned up to the date of Executive's departure.
(c) Termination Without Cause.
-------------------------
(i) Subject to the provisions of Article
12(c)(ii) below, and provided there has been no Change in
Control (as defined in Article 12(c)(v) below), in the event
the Corporation dismisses Executive without Cause from
employment in a Senior Executive capacity, the Corporation
shall continue to fulfill its obligations under this Agreement
until the later of: (A) the date six months following
Executive's dismissal, or (B) the end of the Employment
Period. For purposes of determining the end of the Employment
Period under this Article, Executive shall be deemed to have
received a Notice of Nonrenewal effective on the date of his
dismissal without Cause, unless he has already received a
Notice of Nonrenewal, in which event such prior Notice of
Nonrenewal shall be controlling.
(ii) Provided there has been no Change in Control
(as defined in Article 12(c)(v) below), if Executive takes
other employment during the six-month period
15
<PAGE> 16
following his dismissal without Cause, then the Corporation's
obligation to Executive shall be limited to payment of
Executive's Annual Executive Compensation for the balance of
said six-month period. Provided there has been no Change in
Control (as defined in Article 12(c)(v) below), if Executive
takes other employment after the end of the six-month period
following his dismissal without Cause but before the end of
the Employment Period, the Corporation's obligations to
Executive under this Agreement shall cease upon Executive's
taking such other employment.
(iii) In the event that a Change in Control occurs
during the Employment Period and either [A] Executive is
dismissed without Cause from employment in a Senior Executive
capacity up to and including twelve (12) months from such
Change in Control or [B] Executive voluntarily leaves the
employ of the Corporation up to and including twelve (12)
months from such Change in Control, then in either case the
Corporation shall continue to fulfill its obligations under
this Agreement
16
<PAGE> 17
for a period of twelve (12) months from such dismissal without
Cause or voluntary departure, as the case may be; provided,
however, that if Executive takes other employment during said
twelve-month period, the Corporation's obligation to Executive
for the balance of said twelve-month period shall be limited
to payment of Executive's Annual Executive Compensation.
(iv) Notwithstanding anything to the contrary in
this Agreement, the Corporation, in its sole and absolute
discretion, may accelerate the payment of any amounts payable
under Article 12(c) hereof to Executive, provided, however,
that accelerating such payments does not affect Executive's
eligibility to continue his insurance benefits on the same
basis (both with respect to coverage and contributions) as the
Corporation's active employees until such time as he would
have received the last amount payable under Article 12(c)
hereof had payment thereof not been accelerated pursuant to
this Article 12(c)(iv).
17
<PAGE> 18
(v) "Change in Control" shall mean [A] the date
of public announcement that a person has become, without the
approval of the Corporation's Board of Directors, the
beneficial owner of 20% or more of the voting power of all
securities of the Corporation then outstanding; [B] the date
of the commencement of a tender offer or tender exchange by
any person, without the approval of the Corporation's Board of
Directors, if upon the consummation thereof such person would
be the beneficial owner of 20% or more of the voting power of
all securities of the Corporation then outstanding; or [C] the
date on which individuals who constituted the Board of
Directors of the Corporation on the date this Agreement was
adopted cease for any reason to constitute a majority thereof,
provided that any person becoming a director subsequent to
such date whose election or nomination was approved by at
least three quarters of such incumbent Board of Directors
shall be considered as though such person were an incumbent
director.
(vi) "Cause" shall mean [A] breach of Executive's
obligations under Article 5, 6 or 10 of this Agreement,
18
<PAGE> 19
[B] stealing from the Corporation or [C] Executive's
conviction of a felony.
(d) Executive agrees not to apply for or receive
unemployment insurance benefits while receiving any benefits under this
contract.
13. NOTICES. All notices required or permitted to be given
hereunder shall be mailed by registered mail or delivered by hand to the party
to whom such notice is required or permitted to be given hereunder. If mailed,
any such notice shall be deemed to have been given when mailed as evidenced by
the postmark at point of mailing. If delivered by hand, any such notice shall be
deemed to have been given when received by the party to whom notice is given, as
evidenced by written and dated receipt of the receiving party.
Any notice to the Corporation or to any assignee of the Corporation
shall be addressed as follows:
SpecTran Corporation
50 Hall Road
Sturbridge, MA 01566
Attn: President and Chief Executive Officer
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<PAGE> 20
Any notice to Executive shall be addressed to the address appearing on
the records of the Corporation at the time such notice is given.
Either party may change the address to which notice to it is to be
addressed, by notice as provided herein.
14. APPLICABLE LAW. This Agreement shall be interpreted and
enforced in accordance with the laws of Massachusetts.
15. EFFECTIVE DATE. This Agreement shall become effective on
January 1, 1994.
IN WITNESS WHEREOF, the parties hereto have executed the above
Agreement as of the day and year first above written.
SPECTRAN CORPORATION
By
----------------------------------------
----------------------------------------
Crawford L. Cutts
20
<PAGE> 1
Exhibit 10.84
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT, executed as of February 18, 1994 between SpecTran
Specialty Optics Company, a Delaware corporation (hereinafter referred to as the
"Corporation"), and William B. Beck (hereinafter referred to as "Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Corporation has, on the date hereof, entered into an Asset
Purchase Agreement to purchase the assets of Ensign-Bickford Optics Company
("EBOC"), and EBOT Acquisition Corp., an affiliate of the Corporation, has
entered into a Stock Purchase Agreement with Ensign-Bickford Optical
Technologies, Inc. ("EBOT") to purchase all of the issued and outstanding
capital stock of EBOT's wholly owned subsidiary, Cal Optics, Inc.;
WHEREAS, both EBOC and EBOT have both employed Executive; and
WHEREAS, simultaneous with the closing of the above mentioned purchase
of the assets of EBOC and the stock of Cal Optics, Inc. (the "Closing"), the
Corporation wishes to employ Executive and Executive wishes to be employed by
the Corporation;
<PAGE> 2
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree with each other as follows:
1. EMPLOYMENT. The Corporation agrees to and does hereby employ
Executive effective upon the Closing, and Executive agrees to and does hereby
accept employment by the Corporation effective upon the Closing, as Vice
President and General Manager of the Corporation, or in any other capacity as
determined by its Board of Directors, subject to the supervision and direction
of its Board of Directors, for the one-year period commencing on the date hereof
and ending on midnight one year later (the "Base Term"). The Base Term may be
extended for successive one-year periods, upon terms mutually agreed to by the
parties, subject to prior termination in accordance with the provisions of
Article 12 hereof. The Base Term and any extensions thereof shall be referred to
in this Agreement as the "Employment Period" .
2. SCOPE OF DUTIES. Executive agrees that he will devote his full
time and effort during the Employment Period to the performance of the duties of
his office. Executive shall make his business headquarters at Avon, Connecticut
and shall relocate should the Corporation change its headquarters. Executive
shall undertake such travel as the Corporation may request.
2
<PAGE> 3
3. Employment Period - Compensation.
--------------------------------
(a) EXECUTIVE COMPENSATION. For the services and duties
to be rendered and performed by Executive during the Employment Period, the
Corporation agrees to pay Executive compensation at the rate of Nine Thousand
One Hundred Eighty-Six Dollars and Sixty-Seven Cents ($9,186.67) per month,
(this amount to be referred to as "Executive Compensation"). Executive shall be
considered for an increase in Executive Compensation effective June 1, 1994.
Executive Compensation shall be payable in equal semi-monthly installments. The
Corporation shall reimburse Executive for all expenses reasonably and
necessarily incurred in connection with his employment by the Corporation,
including traveling expenses while absent on the Corporation's business from its
business headquarters. The Board of Directors of the Corporation may increase
Executive's Executive Compensation at such time or times and in such amount or
amounts as it may in its sole discretion determine.
(b) Other Compensation.
------------------
i. PROFIT SHARING PLAN. Executive will
participate in the Corporation's Profit Sharing Plan which is based upon the
Corporation's performance and can earn all employees a bonus of 5.5% of base
earnings (Executive Compensation) if the Corporation achieves in 1994 pre-tax,
pre-bonus income of at least $704,000 on revenues of $8.5 million or a return on
sales of 8.3%. Executive understands that the
3
<PAGE> 4
targets set for the Profit Sharing Plan are established annually by the
Corporation's Board of Directors and often vary from year to year.
ii. INCOME GROWTH INCENTIVE PLAN. Executive will
participate in the Corporation's Income Growth Incentive Plan which is based
upon the Corporation's performance, with the targets established by the
Corporation's Board of Directors annually and with those targets often varying
from year to year. Executive's participation in this Plan will permit Executive
to earn a bonus or up to twenty five percent (25%) of Executive's base salary
(Executive Compensation).
iii. STOCK OPTIONS. Executive will receive an initial
grant of fifteen thousand (15,000) options to purchase the stock of the
Corporation's parent company, SpecTran Corporation ("SpecTran") under SpecTran's
Incentive Stock Option Plan. The exercise price of those options will equal the
market price of SpecTran's stock on the date of grant and will be subject to the
terms of SpecTran's Incentive Stock Option Plan and related Agreement. The
above-mentioned fifteen thousand (15,000) options will be granted at the Closing
(February 18, 1994). Executive will be eligible for consideration for
additional grants of stock options on an annual basis beginning in 1995.
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<PAGE> 5
4. VACATION. Executive shall be entitled to a vacation each year
equal to one (1) month. Said vacation may be taken all at once or weekly at the
sole discretion of Executive.
5. SECRETS. Executive agrees that any trade secrets or any other
proprietary information (whether in written, verbal or any other form) relating
to the existing or contemplated business and/or field of interest of the
Corporation or any of its Affiliates (for the purpose of this Agreement, an
affiliate of the Corporation shall be deemed to be any corporation or other
legal entity which controls the Corporation, which is controlled by the
Corporation, or which is under common control with the Corporation), or of any
corporation or other legal entity in which the Corporation or any of its
Affiliates has an ownership interest of more than twenty-five percent (25%), and
any proprietary information (whether in written, verbal or any other form) of
any of the Corporation's customers, suppliers, licensors or licensees,
including, but not limited to, information relating to inventions, disclosures,
processes, systems, methods, formulae, patents, patent applications, machinery,
materials, notes, drawings, research activities and plans, costs of production,
contract forms, prices, volume of sales, promotional methods, list of names or
classes or customers, which he has heretofore acquired during his employment by
EBOC, EBOT, any of their respective Affiliates (as defined below) or which he
may hereafter acquire during his employment with the Corporation or any of its
Affiliates, in both cases
5
<PAGE> 6
whether during or outside business hours, whether or not on EBOC's EBOT's or the
Corporation's premises, as the result of any disclosures to him, or in any other
way, shall be regarded as held by him in a fiduciary capacity solely for the
benefit of the Corporation, its successors or assigns, and shall not at any
time, either during the term of this Agreement or thereafter, be disclosed,
divulged, furnished, or made accessible by him to anyone, or be otherwise used
by him, except in the regular course of business of the Corporation or its
Affiliates. Upon termination of his employment, Executive shall return or
deliver to the Corporation all tangible forms of such information in his
possession or control, and shall retain no copies thereof. Information shall,
for purposes of this Agreement, be considered to be secret if not known by the
trade generally, even though such information may have been disclosed to one or
more third parties pursuant to any business discussion or agreement, including
distribution agreements, joint research agreements or other agreements entered
into by EBOC, EBOT or the Corporation or any of their Affiliates. For the
purposes of this Agreement, "Affiliates" shall mean any corporation,
partnership, joint venture, other entity of any type or individual that directly
or indirectly, through one or more intermediaries, controls or is controlled, or
is under common control with, EBOC, EBOT or the Corporation, as the case may be.
6. PATENTS. Executive agrees to and does hereby sell, assign,
transfer and set over to the Corporation, its successors,
6
<PAGE> 7
assigns, or Affiliates, as the case may be, all his right, title, and interest
in and to any inventions, improvements, processes, patents or applications for
patents which he develops or conceives individually or in conjunction with
others during his employment by the Corporation, or, having possibly conceived
same prior to his employment, may complete while in the employ of the
Corporation or any of its Affiliates, in both cases whether during or outside
business hours, whether or not on the Corporation's premises, which inventions,
improvements, processes, patents or applications for patents are (i) in
connection with any matters within the scope of the existing or contemplated
business of the Corporation or any of its Affiliates, or (ii) aided by the use
of time, materials, facilities or information paid for or provided by the
Corporation, all of the foregoing to be held and enjoyed by the Corporation, its
successors, assigns or Affiliates, as the case may be, to the full extent of the
term for which any Letters Patent may be granted and as fully as the same would
have been held by Executive, had this Agreement not been made. Executive will
make, execute and deliver any and all instruments and documents necessary to
obtain patents for such inventions, improvements and processes in any and all
countries. Executive hereby irrevocably appoints the Corporation to be his
attorney in fact in the name of and on behalf of Executive to execute all such
instruments and do all such things and generally to use the Executive's name for
the purposes of assuring to the Corporation
7
<PAGE> 8
(or its nominee) the full benefit of its rights under the provisions of Articles
5 and 6.
7. DISABILITY. (a) In the event Executive becomes partially
disabled, or becomes totally disabled (as determined in accordance with Article
7(c) below) and such total disability has continued for less than six (6) full
consecutive calendar months, then the Corporation shall continue during the
Employment Period to pay Executive at the rate of his Annual Executive
Compensation as set forth in Article 3 and continue the benefits provided for
him in Articles 8 and 9 hereof. The Corporation's obligations in the event of
Executive's partial disability shall terminate upon the end of the Employment
Period.
(b) In the event Executive becomes totally disabled (as
determined in accordance with Article 7(c) below), and such total disability has
continued for six (6) full consecutive calendar months or more, then for so long
thereafter during the Employment Period as such total disability shall continue
or for a period of one (1) year, whichever is longer, Executive shall be paid at
seventy-five percent (75%) of the rate of his Annual Executive Compensation as
set forth in Article 3 hereof.
(c) For purposes of this Agreement, determination of
whether Executive is or is not totally disabled shall be made as follows:
8
<PAGE> 9
(i) Executive's inability, physical or mental,
for whatever reason, to be able to perform
his duties to the Corporation shall be total
disability; and
(ii) If any difference shall arise between the
Corporation and Executive as to whether he
is totally disabled, such difference shall
be resolved as follows: Executive shall be
examined by a physician appointed by the
Corporation and a physician appointed by
Executive. If said two physicians shall
disagree concerning whether Executive is
totally disabled, that question shall be
submitted to a third physician, who shall be
selected by such two physicians. The medical
opinion of such third physician, after
examination of Executive and consultation
with such other two physicians, shall decide
the question.
(d) Should Executive become totally disabled then he may
by action of the Board of Directors be removed from his position and employment
with the Corporation.
8. DEATH. In the event of the death of Executive during the
Employment Period, the Corporation shall continue to pay
9
<PAGE> 10
Executive's Annual Executive Compensation for a period of one (1) year from the
date of death. The salary payment will be made to the wife of Executive or if no
wife shall survive Executive, to his Estate.
9. EMPLOYEE BENEFITS. (a) Executive may participate in all
benefit plans to the extent, if any, that he may be eligible to do so under the
provisions of such plan or program. Those benefit plans may include medical and
insurance, life and accidental death/dismemberment insurance, short- and
long-term disability, tuition reimbursement, 401(k) plan, stock purchase plan,
vacation and pension plans. The Corporation may terminate, modify, or amend any
such plan or program, in the manner and to the extent permitted therein, and the
rights of Executive under any such plan or program shall be subject to any such
right of termination, modification, or amendment. To the extent any payments
under any such plan or program are made to Executive because he is disabled,
such amounts shall be credited against amounts due to Executive under Article 7.
(b) For the sake of clarification, and notwithstanding
any other provision of this Agreement, it is understood and agreed that all
benefits provided to Executive under this Agreement shall be provided to the
extent that they exceed any employee benefit provided to Executive other than
specifically through this Agreement, such as the programs, plans, etc. referred
to in Article 9(a) above. The benefits provided under
10
<PAGE> 11
this Agreement shall be supplemental to benefits provided otherwise to Executive
by the Corporation, and shall not be provided to the extent that they are
duplicative.
10. COVENANT NOT TO COMPETE. During the Employment Period,
Executive agrees not to compete with the Corporation either directly, or by
stock interest exceeding five percent (5%), or otherwise in any way in any
business in which it is then engaged anywhere in the world. During the one-year
period immediately following termination of Executive's employment with the
Corporation, Executive agrees that he will not (a) engage, directly or
indirectly, or by stock interest exceeding five percent (5%), or otherwise in
any way, in any business in which the Corporation was engaged during the term of
his employment or which the Corporation planned, during the term of his
employment to enter, (b) solicit any past, present or future customers of the
Corporation in any way relating to any business in which the Corporation was
engaged during the term of his employment, or which the Corporation planned
during the term of his employment, to enter, or (c) induce or actively attempt
to influence any other employee or consultant of the Corporation to terminate
his or her employment or consultancy with the Corporation. During this one-year
period, provided that the Corporation has requested the non-competition
agreement referred to above with respect to said period, Executive shall receive
Annual Executive Compensation and employee benefits paid or maintained in the
same fashion and in amounts not less than those he received during the
11
<PAGE> 12
last year of employment with the Corporation, and the Corporation shall have the
right to call upon Executive's services as a consultant. In the event that
Executive violates any provision of this Article 10, then in addition to any
other remedies available to the Corporation, the Corporation shall have the
right immediately to terminate any payments or benefits provided or to be
provided to Executive under this Agreement.
11. ASSIGNMENT. This Agreement may be assigned by the Corporation
as part of the sale of substantially all of its business; provided, however,
that the purchaser shall expressly assume all obligations of the Corporation
under this Agreement. Further, this Agreement may be assigned by the Corporation
to an affiliate, provided that any such affiliate shall expressly assume all
obligations of the Corporation under this Agreement, and provided further that
the Corporation shall then fully guarantee the performance of the Agreement by
such affiliate. Executive agrees that if this Agreement is so assigned, all the
terms and conditions of this Agreement shall remain between such assignee and
himself with the same force and effect as if said Agreement had been made with
such assignee in the first instance.
12. Termination.
-----------
(a) FOR CAUSE. The Corporation may terminate Executive's
employment and this Agreement for Cause by delivery written notice to Executive,
setting forth the reason for termination. For the purpose of this Agreement,
"Cause" shall
12
<PAGE> 13
mean (i) the arrest of the Executive on charges of having committed any felony,
(ii) stealing from the Corporation, (iii) a willful breach by Executive of a
material provision of this Agreement and (iv) if Executive engages in gross
misconduct, such as fraud, dishonesty, gross negligence or insubordination. If
this Agreement is terminated for Cause, the Corporation's obligation to
Executive hereunder shall be limited to the Executive Compensation and benefits
earned up to the date notice of termination is delivered to Executive.
(b) TERMINATION WITHOUT CAUSE. If the Corporation
dismisses Executive without Cause, the Corporation shall continue to fulfill its
obligations under this Agreement until the later of: (A) the date six months
following Executive's dismissal, or (B) the end of the Employment Period.
(c) TERMINATION BY EXECUTIVE. If Executive elects to
terminate his employment with the Corporation, the Corporation's obligations to
Executive under this Agreement shall be limited to the Executive Compensation
and benefits earned up to the date of Executive's departure.
13. SURVIVAL. The provisions of Articles 5, 6, 10, 12 and 15 shall
survive the termination of this Agreement.
14. NOTICES. All notices required or permitted to be given
hereunder shall be mailed by registered mail or delivered by hand
13
<PAGE> 14
to the party to whom such notice is required or permitted to be given hereunder.
If mailed, any such notice shall be deemed to have been given when mailed as
evidenced by the postmark at point of mailing. If delivered by hand, any such
notice shall be deemed to have been given when received by the party to whom
notice is given, as evidenced by written and dated receipt of the receiving
party.
Any notice to the Corporation or to any assignee of the Corporation
shall be addressed as follows:
SpecTran Specialty Optics Company
c/o SpecTran Corporation
50 Hall Road
Sturbridge, Massachusetts 01566
Attn: Raymond E. Jaeger
President and Chief Executive Officer
Any notice to Executive shall be addressed to the address appearing on
the records of the Corporation at the time such notice is given.
Either party may change the address to which notice to it is to be
addressed, by notice as provided herein.
15. APPLICABLE LAW. This Agreement shall be interpreted and
enforced in accordance with the laws of Massachusetts governing contracts made
in and to be performed solely in such State.
14
<PAGE> 15
16. EFFECTIVE DATE. This Agreement shall become effective as of
the date first mentioned in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed the above
Agreement as of the day and year first above written.
SPECTRAN SPECIALTY OPTICS COMPANY
By /s/ William B. Beck
------------------------------------------
William B. Beck
15
<PAGE> 1
Exhibit 10.85
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT, executed as of December , 1995 between SpecTran
Corporation, a Delaware corporation (hereinafter referred to as the
"Corporation"), and Glenn Moore (hereinafter referred to as "Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Corporation wishes to employ Executive and
Executive wishes to be employed by the Corporation;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree with each other as follows:
1. EMPLOYMENT. The Corporation agrees to and does hereby employ
Executive, and Executive agrees to and does hereby accept employment by the
Corporation, as President and Chief Executive Officer of the Corporation, or in
any other executive capacity as determined by its Board of Directors, subject to
the supervision and direction of its Board of Directors, for the two-year period
<PAGE> 2
commencing January 1, 1996 and ending at midnight two years later (the "Base
Term"). The Base Term shall be automatically extended for successive one-year
periods unless either party provides notice to the other to the contrary at
least five (5) business days prior to the end of the Base Term or any extension
thereof, subject to prior termination in accordance with the provisions of
Article 14 hereof. The Base Term and any extensions thereof shall be referred to
in this Agreement as the "Employment Period".
2. SCOPE OF DUTIES. Executive agrees that he will devote his full
time and effort during the Employment Period to the performance of the duties of
his office. Executive shall make his business headquarters at Sturbridge,
Massachusetts, and shall relocate should the Corporation change its
headquarters. Executive shall undertake such travel as the Corporation may
request.
3. Employment Period - Compensation.
--------------------------------
(a) EXECUTIVE COMPENSATION. For the services and duties
to be rendered and performed by Executive during the Employment Period, the
Corporation agrees to pay Executive compensation at the rate of Fourteen
Thousand Five Hundred Eighty Three Dollars and Thirty Three Cents ($14,583.33)
per month (this amount to be
2
<PAGE> 3
referred to as "Executive Compensation"). Executive Compensation shall be
payable in equal semi-monthly installments. The Corporation shall reimburse
Executive for all expenses reasonably and necessarily incurred in connection
with his employment by the Corporation, including traveling expenses while
absent on the Corporation's business from its business headquarters. The Board
of Directors of the Corporation may increase Executive's Executive
Compensation at such time or times and in such amount or amounts as it may in
its sole discretion determine.
(b) Other Compensation.
------------------
i. INCENTIVE COMPENSATION. Executive will
participate in incentive compensation plans for key employees adopted by the
Corporation from time to time. Executive understands that compensation under any
incentive compensation plan adopted by the Corporation will be based upon the
Corporation's performance, with targets established by the Corporation's Board
of Directors annually and with those targets often varying from year to year.
Executive's participation in an incentive compensation plan will permit
Executive to earn a bonus or up to thirty percent (30%) of Executive's Executive
Compensation.
3
<PAGE> 4
ii. STOCK OPTIONS. Executive will receive an
initial grant of fifty thousand (50,000) options to purchase shares of the stock
of the Corporation under the Corporation's Incentive Stock Option Plan, subject
to the approval of the Incentive Stock Option Committee of the Board of
Directors, which will consider such grant at it first meeting following the
commencement of the Employment Period. The exercise price of those options will
equal the market price of the Corporation's stock on the date of grant and will
be subject to the terms of the Corporation's Incentive Stock Option Plan and
related Agreement. Executive will be eligible for consideration for additional
grants of stock options on an annual basis beginning in 1997.
iii. AUTOMOBILE ALLOWANCE. Executive will
receive a car allowance of $800 per month.
4. VACATION. Executive shall be entitled to a vacation each
year equal to one (1) month which may be taken all at once or weekly in the sole
discretion of Executive.
5. RELOCATION EXPENSES. The Corporation will pay all of the costs
incurred by Executive in moving his household and family
4
<PAGE> 5
members from Harrisburg, Pennsylvania to Sturbridge, Massachusetts. The
Corporation will also pay Executive Ten Thousand Dollars ($10,000) upon the
commencement of the Employment Period to cover temporary living expenses and
transportation costs between Harrisburg and Sturbridge, and an additional Ten
Thousand Dollars ($10,000) after Executive completes his relocation to
Sturbridge, to cover closing costs and other incidental expenses.
6. SECRETS. Executive agrees that any trade secrets or any
other proprietary information (whether in written, verbal or any other form)
relating to the existing or contemplated business and/or field of interest of
the Corporation or any of its Affiliates (as defined below), or of any
corporation or other legal entity in which the Corporation or any of its
Affiliates has an ownership interest of more than twenty-five percent (25%), and
any proprietary information (whether in written, verbal or any other form) of
any of the Corporation's customers, suppliers, licensors or licensees,
including, but not limited to, information relating to inventions, disclosures,
processes, systems, methods, formulae, patents, patent applications, machinery,
materials, notes, drawings, research activities and plans, costs of production,
contract forms, prices, volume of sales, promotional methods, list
5
<PAGE> 6
of names or classes or customers, which he has heretofore acquired or which he
may hereafter acquire during his employment with the Corporation or any of its
Affiliates, in both cases whether during or outside business hours, whether or
not on the Corporation's premises, as the result of any disclosures to him, or
in any other way, shall be regarded as held by him in a fiduciary capacity
solely for the benefit of the Corporation and/or its Affiliates, its successors
or assigns, and shall not at any time, either during the term of this Agreement
or thereafter, be disclosed, divulged, furnished, or made accessible by him to
anyone, or be otherwise used by him, except in the regular course of business of
the Corporation or its Affiliates. Upon termination of his employment, Executive
shall return or deliver to the Corporation all tangible forms of such
information in his possession or control, and shall retain no copies thereof.
Information shall, for purposes of this Agreement, be considered to be secret if
not known by the trade generally, even though such information may have been
disclosed to one or more third parties pursuant to any business discussion or
agreement, including distribution agreements, joint research agreements or other
agreements entered into by the Corporation or any of its Affiliates. For the
purposes of this Agreement, "Affiliates" shall mean any corporation,
partnership, joint
6
<PAGE> 7
venture, other entity of any type or individual that directly or indirectly,
through one or more intermediaries, controls or is controlled, or is under
common control with the Corporation.
7. PATENTS. Executive agrees to and does hereby sell, assign,
transfer and set over to the Corporation, its successors, assigns, or
Affiliates, as the case may be, all his right, title, and interest in and to any
inventions, improvements, processes, patents or applications for patents which
he develops or conceives individually or in conjunction with others during his
employment by the Corporation, or, having possibly conceived same prior to his
employment, may complete while in the employ of the Corporation or any of its
Affiliates, in both cases whether during or outside business hours, whether or
not on the Corporation's premises, which inventions, improvements, processes,
patents or applications for patents are (i) in connection with any matters
within the scope of the existing or contemplated business of the Corporation or
any of its Affiliates, or (ii) aided by the use of time, materials, facilities
or information paid for or provided by the Corporation, all of the foregoing to
be held and enjoyed by the Corporation, its successors, assigns or Affiliates,
as the case may be, to the full extent of the term for which any Letters Patent
may be granted and
7
<PAGE> 8
as fully as the same would have been held by Executive, had this Agreement not
been made. Executive will make, execute and deliver any and all instruments and
documents necessary to obtain patents for such inventions, improvements and
processes in any and all countries. Executive hereby irrevocably appoints the
Corporation to be his attorney in fact in the name of and on behalf of Executive
to execute all such instruments and do all such things and generally to use the
Executive's name for the purposes of assuring to the Corporation (or its
nominee) the full benefit of its rights under the provisions of Articles 6 and
7.
8. DISABILITY. (a) In the event Executive becomes partially
disabled, or becomes totally disabled (as determined in accordance with Article
8(c) below) and such total disability has continued for less than six (6) full
consecutive calendar months but Executive remains partially disabled, then the
Corporation shall continue during the Employment Period to pay Executive at the
rate of his Executive Compensation as set forth in Article 3 and continue the
benefits provided for him in Articles 9 and 10 hereof. The Corporation's
obligations in the event of Executive's partial disability shall terminate upon
the end of the Employment Period.
8
<PAGE> 9
(b) In the event Executive becomes totally disabled (as
determined in accordance with Article 8(c) below), and such total disability has
continued for six (6) full consecutive calendar months or more, then for so long
thereafter during the Employment Period as such total disability shall continue
or for a period of one (1) year, whichever is longer, Executive shall be paid at
seventy-five percent (75%) of the rate of his Executive Compensation as set
forth in Article 3 hereof.
(c) For purposes of this Agreement, determination of
whether Executive is or is not totally disabled shall be made as follows:
(i) Executive's inability, physical or mental,
for whatever reason, to be able to perform
his duties to the Corporation shall be total
disability; and
(ii) If any difference shall arise between the
Corporation and Executive as to whether he
is totally disabled, such difference shall
be resolved as follows: Executive shall be
9
<PAGE> 10
examined by a physician appointed by the
Corporation and a physician appointed by
Executive. If said two physicians shall
disagree concerning whether Executive is
totally disabled, that question shall be
submitted to a third physician, who shall be
selected by such two physicians. The medical
opinion of such third physician, after
examination of Executive and consultation
with such other two physicians, shall decide
the question.
(d) Should Executive become totally disabled then he may
by action of the Board of Directors be removed from his position and employment
with the Corporation.
9. DEATH. In the event of the death of Executive during the
Employment Period, the Corporation shall continue to pay Executive's Annual
Executive Compensation for a period of one (1) year from the date of death. The
salary payment will be made to the wife of Executive or if no wife shall survive
Executive, to his Estate.
10
<PAGE> 11
10. EMPLOYEE BENEFITS. (a) Executive may participate in all
benefit plans to the extent, if any, that he may be eligible to do so under the
provisions of such plan or program. Those benefit plans may include medical and
insurance, life and accidental death/dismemberment insurance, short- and
long-term disability, tuition reimbursement, 401(k) plan, stock purchase plan,
vacation and pension plans. The Corporation may terminate, modify, or amend any
such plan or program, in the manner and to the extent permitted therein, and the
rights of Executive under any such plan or program shall be subject to any such
right of termination, modification, or amendment. To the extent any payments
under any such plan or program are made to Executive because he is disabled,
such amounts shall be credited against amounts due to Executive under Article 8.
(b) For the sake of clarification, and notwithstanding
any other provision of this Agreement, it is understood and agreed that all
benefits provided to Executive under this Agreement shall be provided to the
extent that they exceed any employee benefit provided to Executive other than
specifically through this Agreement, such as the programs, plans, etc. referred
to in Article 10(a) above. The benefits provided under this Agreement shall be
supplemental to benefits provided otherwise to Executive by the
11
<PAGE> 12
Corporation, and shall not be provided to the extent that they are duplicative.
For example, if a disability benefit is available under a program referred to in
Article 10(a) above and it provides the same or greater benefit than provided in
Article 8 hereof, then no benefit will be paid out under Article 8 hereof. If a
disability benefit available under Article 10(a) above is less than that
provided in Article 7 hereof, then supplemental payments would be available
under Article 7 hereof to the extent that the total of the payment would equal
the aggregated benefits provided by Article 7.
11. COVENANT NOT TO COMPETE. During the Employment Period,
Executive agrees not to compete with the Corporation either directly, or by
stock interest exceeding five percent (5%), or otherwise in any way in any
business in which it or its Affiliates is then engaged anywhere in the world. No
later than thirty (30) days immediately following termination of Executive's
employment with the Corporation (the "Termination Date"), the Corporation may,
by written notice, exercise the right to retain Executive as a consultant during
the one year period immediately following the Termination Date and to require
that Executive will not (a) engage, directly or indirectly, or by stock interest
exceeding five percent
12
<PAGE> 13
(5%), or otherwise in any way, in any business in which the Corporation or any
of its Affiliates was engaged during the term of his employment or which the
Corporation or any of its Affiliates planned, during the term of his employment
to enter, (b) solicit any past, present or future customers of the Corporation
or any of its Affiliates in any way relating to any business in which the
Corporation or any of its Affiliates was engaged during the term of his
employment, or which the Corporation or any of its Affiliates planned during the
term of his employment, to enter, or (c) induce or actively attempt to influence
any other employee or consultant of the Corporation or any of its Affiliates to
terminate his or her employment or consultancy with the Corporation or any of
its Affiliates. During this one-year period, Executive will receive compensation
and employee benefits paid or maintained in the same fashion and in amounts not
less than those he received during the last year of employment with the
Corporation. In the event that Executive violates any provision of this Article
11 or of Article 6, then in addition to any other remedies available to the
Corporation (which can include obtaining injunctive relief as the parties
acknowledge that irreparable damage not compensable by money can result), the
Corporation shall have the right immediately to terminate any payments or
benefits provided or to be provided to
13
<PAGE> 14
Executive under this Agreement. For the purposes of this Article 11, the phrase
"the Corporation" shall mean the Corporation and its Affiliates.
12. ASSIGNMENT. This Agreement may be assigned by the Corporation
as part of the sale of substantially all of its business; provided, however,
that the purchaser shall expressly assume (and the Corporation shall be relieved
of) all obligations of the Corporation under this Agreement. Further, this
Agreement may be assigned by the Corporation to an Affiliate, provided that any
such Affiliate shall expressly assume all obligations of the Corporation under
this Agreement, and provided further that the Corporation shall then fully
guarantee the performance of the Agreement by such Affiliate. Executive agrees
that if this Agreement is so assigned, all the terms and conditions of this
Agreement shall remain between such assignee and himself with the same force and
effect as if said Agreement had been made with such assignee in the first
instance.
13. NON-VIOLATION OF AGREEMENTS WITH PRIOR EMPLOYER. Executive
represents that prior to accepting employment with the Corporation, he was
employed by AMP Incorporated ("AMP") and party
14
<PAGE> 15
to a Confidentiality Agreement, an Intellectual Property Agreement and a Limited
Non-Competition Agreement. Executive represents that he has discussed accepting
employment as President and Chief Executive Officer of the Corporation with AMP
executives to whom he reports and that he will not be in violation of any of
those agreements by accepting such employment.
14. Termination.
-----------
(a) FOR CAUSE. The Corporation may terminate Executive's
employment and this Agreement for Cause by delivering written notice to
Executive, setting forth the reason for termination. For the purpose of this
Agreement, "Cause" shall mean (i) the arrest of the Executive on charges of
having committed any felony, (ii) stealing from the Corporation, (iii) a willful
breach by Executive of a material provision of this Agreement and (iv) if
Executive engages in gross misconduct, such as fraud, dishonesty, gross
negligence or gross insubordination. If this Agreement is terminated for Cause,
the Corporation's obligation to Executive hereunder shall be limited to the
Executive Compensation and benefits earned up to the date notice of termination
is delivered to Executive.
15
<PAGE> 16
(b) TERMINATION WITHOUT CAUSE. If the Corporation
dismisses Executive without Cause, the Corporation shall continue to fulfill its
obligations under this Agreement until the later of (A) the date six months
following Executive's dismissal, or (B) the end of the Employment Period.
(c) TERMINATION BY EXECUTIVE. If Executive elects to
terminate his employment with the Corporation, the Corporation's obligations to
Executive under this Agreement shall be limited to the Executive Compensation
and benefits earned up to the date of Executive's departure. Nonetheless, the
Corporation may notify Executive that it wishes Executive not to compete and to
be available as a consultant in accordance with and for the compensation set out
in Article 11.
15. SURVIVAL. The provisions of Articles 6, 7, 11, 15, 16, and 17
shall survive the termination of this Agreement.
16. NOTICES. All notices required or permitted to be given
hereunder shall be mailed by registered mail or delivered by hand to the party
to whom such notice is required or permitted to be given hereunder. If mailed,
any such notice shall be deemed to
16
<PAGE> 17
have been given when mailed as evidenced by the postmark at point of mailing. If
delivered by hand, any such notice shall be deemed to have been given when
received by the party to whom notice is given, as evidenced by written and dated
receipt of the receiving party.
Any notice to the Corporation or to any assignee of the Corporation
shall be addressed as follows:
17
<PAGE> 18
SpecTran Corporation
50 Hall Road
Sturbridge, Massachusetts 01566
Attn: Raymond E. Jaeger
Chairman of the Board
Any notice to Executive shall be addressed to the address appearing on
the records of the Corporation at the time such notice is given.
Either party may change the address to which notice to it is to be
addressed, by notice as provided herein.
17. APPLICABLE LAW. This Agreement shall be interpreted and
enforced in accordance with the laws of Massachusetts governing contracts made
in and to be performed solely in such State.
18. EFFECTIVE DATE. This Agreement shall become effective as of
the date first mentioned in this Agreement.
18
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have executed the above
Agreement as of the day and year first above written.
SPECTRAN CORPORATION
By
------------------------------------
Raymond E. Jaeger
Chairman of the Board
------------------------------------
Glenn Moore
19
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<CGS> 28,621,251
<TOTAL-COSTS> 40,850,889
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 528,126
<INCOME-PRETAX> 3,823,614
<INCOME-TAX> 1,300,029
<INCOME-CONTINUING> 2,523,585
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,523,585
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
