-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D/l+vaFKFjqJWlvY7Up4BQ0NAjYjpEfXP++3y3yexrb90SfVySBXiHirFczJkBCl SKosyZdaFVLDgP8K9PQ3kQ== 0000950135-96-004896.txt : 19961115 0000950135-96-004896.hdr.sgml : 19961115 ACCESSION NUMBER: 0000950135-96-004896 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPECTRAN CORP CENTRAL INDEX KEY: 0000718487 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 042729372 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12489 FILM NUMBER: 96662459 BUSINESS ADDRESS: STREET 1: 50 HALL ROAD CITY: STURBRIDGE STATE: MA ZIP: 01566 BUSINESS PHONE: 5083472261 10-Q 1 SPECTRAN CORPORATION QUARTERLY REPORT ON FORM 10-Q 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. 2 PART I - FINANCIAL INFORMATION SPECTRAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS EXCEPT PER SHARE) (UNAUDITED)
Nine Months Ended Three Months Ended September 30, September 30, ----------------------------- ----------------------------- 1996 1995 1996 1995 ---------- ---------- ---------- ---------- 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 ========== ========== ========== ==========
See accompanying notes to these condensed consolidated financial statements. 2 3 SPECTRAN CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)
September 30, 1996 December 31, 1995 ------------------ ----------------- 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 ======= =======
See accompanying notes to these condensed consolidated financial statements. 3 4 SPECTRAN CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED)
Nine Months Ended September 30, ------------------------- 1996 1995 ------- -------- 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 ======= ========
See accompanying notes to consolidated financial statements. 4 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. 2. INVENTORIES Inventories consisted of:
September 30, 1996 December 31, 1995 ------------------ ----------------- Raw Materials $4,142 $3,132 Work in Process 2,211 1,508 Finished Goods 2,614 2,775 ------ ------ $8,967 $7,415 ====== ======
5 6 3. PROPERTY, PLANT AND EQUIPMENT
September 30, 1996 December 31, 1995 ------------------ ----------------- 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 ======= =======
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 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - --------------------- Three and Nine Months Ended September 30, 1996 Compared with Three and Nine --------------------------------------------------------------------------- Months Ended September 30, 1995 - -------------------------------
Nine Months Ended Three Months Ended September 30, September 30, ----------------- ------------------ (Unaudited) (Unaudited) 1996 1995 1996 1995 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% ===== ===== ===== =====
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 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 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 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 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 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 EX-10.75 2 CONTRACTUAL AGREEMENT WITH LUCENT TECHNOLOGIES 1 Exhibit 10.75 CONTRACT NO. LAK412D CONTRACTUAL AGREEMENT BETWEEN LUCENT TECHNOLOGIES INC. AND SPECTRAN CORPORATION 2 CONTRACT NO. LAK412D pg 1 of 2 INDEX
ARTICLE PAGE 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
Page 1 3 CONTRACT NO. LAK412D pg 2 of 2 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
Page 2 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. 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 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 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 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, 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 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. 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 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. 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 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 ----------------------- --------------------------------- 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 16 Page 2 of 7 Lucent TECHNOLOGIES Proprietary Not for use or disclosure outside Lucent TECHNOLOGIES except under written agreement 17 Page 3 of 7 Lucent TECHNOLOGIES Proprietary Not for use or disclosure outside Lucent TECHNOLOGIES except under written agreement 18 Page 4 of 7 Lucent TECHNOLOGIES Proprietary Not for use or disclosure outside Lucent TECHNOLOGIES except under written agreement 19 Page 5 of 7 Lucent TECHNOLOGIES Proprietary Not for use or disclosure outside Lucent TECHNOLOGIES except under written agreement 20 Page 6 of 7 Lucent TECHNOLOGIES Proprietary Not for use or disclosure outside Lucent TECHNOLOGIES except under written agreement 21 Page 7 of 7 Lucent TECHNOLOGIES Proprietary Not for use or disclosure outside Lucent TECHNOLOGIES except under written agreement 22 LAK412D ATTACHMENT B ________________________________________________________________________________ CONTROLLED COPY if cover sheet is red or controlled number is listed Page 1 of 5 23 ________________________________________________________________________________ CONTROLLED COPY if cover sheet is red or controlled number is listed Page 2 of 5 24 ________________________________________________________________________________ CONTROLLED COPY if cover sheet is red or controlled number is listed Page 3 of 5 25 ________________________________________________________________________________ CONTROLLED COPY if cover sheet is red or controlled number is listed Page 4 of 5 26 ________________________________________________________________________________ CONTROLLED COPY if cover sheet is red or controlled number is listed Page 5 of 5 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 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. 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. 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) EX-10.76 3 CONTRACT WITH CORNING CORPORATED 1 Exhibit 10.76 CORNING CORPORATED and SPECTRAN CORPORATION --------------------------------------- THREE YEAR MULTIMODE OPTICAL FIBER SUPPLY CONTRACT --------------------------------------- Dated as of January 1, 1996 2 INDEX ----- 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
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; 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 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 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 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, 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. 9 - 7 - B. 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 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: 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. 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. 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. 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; 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 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 18 ATTACHMENT B OPTICAL FIBER PRICING AND PURCHASE SPECIFICATIONS 19 EXCEPTIONS 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 21 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 22 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 23 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 24 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 25 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 26 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 27 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 28 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 29 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 30 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 31 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 32 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 33 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 34 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 35 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 36 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- 37 - -------------------------------------------------------------------------- TITLE: Purchase Specification for SpecTran Incorporated Multimode Optical Fiber Supplied to Corning Incorporated - -------------------------------------------------------------------------- EX-10.77 4 FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT 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 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 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 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 EX-10.78 5 FIRST AMENDMENT TO MORTGAGE 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 2 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 3 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 EX-10.79 6 KEY EMPLOYEE INCENTIVE PLAN 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 1 2 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 2 3 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 3 4 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. 4 5 (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. -------------------------------- 5 6 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. 6 7 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. 7 EX-10.80 7 EMPLOYMENT AGREEEMENT WITH RAYMOND JAEGER 1 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: 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 2 3 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 3 4 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 4 5 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. 5 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 EX-10.81 8 EMPLOYMENT CONTRACT WITH BRUCE CANNON 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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. 18 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. 19 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 EX-10.82 9 EMPLOYMENT CONTRACT WITH JOHN CHAPMAN 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 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 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 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 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 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 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 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 EX-10.83 10 EMPLOYMENT CONTRACT WITH CRAWFORD CUTTS 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 19 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 EX-10.84 11 EMPLOYMENT AGREEMENT WITH WILLIAM B. BECK 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; 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 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 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. 4 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 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 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 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 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 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 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 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 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 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 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 EX-10.85 12 EMPLOYMENT AGREEMENT WITH GLEN MOORE 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 EX-27 13 FINANCIAL DATA SCHEDULE
5 1 U.S. DOLLARS 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 1 2,174,106 2,393,672 10,481,266 280,438 8,967,039 23,566,465 29,216,086 (14,513,408) 45,946,512 6,783,560 0 539,696 0 0 0 45,946,512 44,914,879 44,914,879 28,621,251 40,850,889 0 0 528,126 3,823,614 1,300,029 2,523,585 0 0 0 2,523,585 .43 .43
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