-----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, HfhQgcMX1xua/HmgkuSDgPfR12wcxEsuWCR0cHSA+GdelOAyZO1H00EZVRjNu1za AuEPer4LWj8ZCkR+8xkWGQ== 0000897101-07-002118.txt : 20071012 0000897101-07-002118.hdr.sgml : 20071012 20071012164736 ACCESSION NUMBER: 0000897101-07-002118 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20071005 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071012 DATE AS OF CHANGE: 20071012 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTRICON CORP CENTRAL INDEX KEY: 0000088790 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 231069060 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05005 FILM NUMBER: 071170023 BUSINESS ADDRESS: STREET 1: 1260 RED FOX ROAD CITY: ARDEN HILLS STATE: MN ZIP: 55112 BUSINESS PHONE: 6516369770 MAIL ADDRESS: STREET 1: 1260 RED FOX ROAD CITY: ARDEN HILLS STATE: MN ZIP: 55112 FORMER COMPANY: FORMER CONFORMED NAME: SELAS CORP OF AMERICA DATE OF NAME CHANGE: 19920703 8-K 1 intricon074082_8k.htm FORM 8-K DATED OCTOBER 5, 2007 IntriCon Corporation Form 8-K dated October 5, 2007

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 5, 2007

INTRICON CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania	1-5005	23-1069060
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1260 Red Fox Road, Arden Hills, MN 55112

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (651) 636-9770

____________________________________________________

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.

Entry into a Material Definitive Agreement

Employment Agreements with Executive Officers

On October 5, 2007, the Company entered into employment agreements with Mark S. Gorder, the President and Chief Executive Officer of the Company, and each of the other executive officers of the Company: Scott Longval, Chief Financial Officer, Steven M. Binnix, Vice President and General Manager of RTI Electronics, Christopher D. Conger, Vice President, Research and Development, Michael P. Geraci, Vice President, Sales and Marketing and Dennis L. Gonsior, Vice President, Global Operations.

The employment agreement with Mr. Gorder is based on his prior employment agreement and incorporates the provisions of the change in control agreement with the Company that was then in effect, and the existing change of control agreement was terminated. See Item 1.02. The employment agreements with the other executive officers also contain a similar change in control provision.

The employment agreements contain the following material terms:

•

a term expiring on April 30, 2008, subject to automatic renewal for additional one year terms unless either party gives notice of non-renewal;

•

a base salary as determined by the Board of Directors of the Company or the Compensation Committee, but in no event less than their current base salaries for 2007;

•

the right to performance bonuses based on such percentage of base salary as determined by the Board of Directors of the Company or the Compensation Committee;

•

participation in the Company’s employee benefit plans and programs, including medical benefit programs, stock options and equity awards under plans in effect from time to time or any additional plans or programs as the Company may provide for the Company’s executive officers;

•

in the event of the termination of the executive’s employment without cause, the payment of the executive’s base salary and medical benefits for a severance period equal to one year (two years in the case of Mr. Gorder with respect to salary); provided that for any employee that has less than 12 years of continuous service with the Company, the severance period will be equal to 30 days for each year of continuous full-time employment, but in no event less than 90 days or more than one year. The Company is required to pay the present value of the base salary in a lump sum, using a discount rate of 6%;

•

in the event that (i) there occurs a change in control of the Company or sale of the Company’s assets accounting for 90% of more of the Company’s sales and (ii) the executive’s employment is involuntarily terminated within one year afterwards, payment of his base salary for one year (two years for Mr. Gorder) in a lump sum and continuation of his medical benefits for a period of one year;

•

in the sole and absolute discretion of the Board of Directors, in the event that the executive is terminated without cause or there occurs a change of control of the Company followed by the Executive’s involuntary termination, the Company may elect to pay executive a prorated amount of the bonus that executive would have been entitled to receive for the year in which he was terminated;

•

the immediate vesting of all stock options and equity awards held by the executive in the event of a change in control or in the event that the executive’s employment is terminated (i) by the Company for any reason other than cause or (ii) by the executive under circumstances that constitute an involuntary termination; and

•

a one year non-competition covenant (or, if longer, for so long as the period with respect to which Executive is entitled to receive, or has received, payment of severance following a termination by the Company without cause or change of control) and covenants concerning confidentiality and inventions.

In the event that the Company gives a notice of non-renewal to the executive and, within 12 months after the date of the non-renewal notice, the executive’s employment is terminated by the Company for any reason other than cause or the death or disability of executive, then the executive shall be entitled to the severance benefits described above with respect to a termination without cause except that the severance period shall be reduced by the number of days between the date of the non-renewal notice and the termination of executive’s employment.

In addition, the Company’s employment agreement with Mr. Gorder provides that the Company will:

•

maintain a disability policy for his benefit;

•

reimburse him for his country club membership fees; and

•

provide him with an automobile for use in connection with the performance of his duties under the employment agreement and reimburse him for all expenses reasonably incurred by him for its maintenance and operation, including fuel.

As used in the Agreement:

“Asset Sale” means the sale of the assets of the Company (including the stock or assets of subsidiaries of the Company) to which are attributable 90% or more of the consolidated sales volume of the Company.

“Cause” means the following, provided that, in the case of circumstances described in the fourth through sixth clauses below, the Company must have first given written notice to executive, and executive shall have failed to remedy the circumstances as determined in the sole discretion of the Board of Directors of the Company within 30 days after such notice:

•

fraud or dishonesty in connection with executive’s employment or theft, misappropriation or embezzlement of the Company’s funds;

•

conviction of any felony, crime involving fraud or knowing misrepresentation, or of any other crime (whether or not such felony or crime is connected with his employment) the effect of which in the judgment of the Board of Directors of the Company is likely to adversely affect the Company or its affiliates;

•

material breach of executive’s obligations under the employment agreement;

•

repeated and consistent failure of executive to be present at work during normal business hours unless the absence is because of a disability as defined in the agreement;

•

willful violation of any express direction or requirement established by the Board of Directors of the Company, as determined by a majority of Board of Directors of the Company;

•

insubordination, gross incompetence or misconduct in the performance of, or gross neglect of, executive’s duties under the employment agreement, as determined by a majority of the Board of Directors of the Company; or

•

use of alcohol or other drugs which interfere with the performance by executive of his duties, or use of any illegal drugs or narcotics.

“Change of control” of the Company means an “asset sale” or a “change in majority stock ownership.”

“Change in majority stock ownership” means the acquisition by any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), including any affiliate or associate as defined in Rule 12b-2 under the Exchange Act of such person, or any group of persons acting in concert, other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation or other entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportion as their ownership of capital stock of the Company, of “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or more of the combined voting power of the Company’s then outstanding securities.

“Involuntarily terminated” means:

•

any termination of the employment of executive by the Company other than for cause, death or disability; or

•

any termination of employment of the executive by executive following:

•

a material diminution in the executive’s base compensation;

•

a material diminution in the executive’s authority, duties, or responsibilities;

•

a material diminution in the authority, duties, or responsibilities of the supervisor to whom the executive is required to report, including a requirement that a executive report to a corporate officer or employee instead of reporting directly to the board of directors;

•

a material diminution in the budget over which the executive retains authority;

•

a material change in the geographic location at which the executive must perform the services; or

•

any other action or inaction that constitutes a material breach by the Company of this Agreement.

Provided, however, that with respect to any termination by executive pursuant to the foregoing, executive shall have first provided notice to the Company of the existence of the condition proposed to be relied upon within 90 days of the initial existence of the condition, and shall have given the Company a period of 30 days during which it may remedy the condition and the Company shall have failed to do so during such period.

The foregoing description of the employment agreements does not purport to be complete and is qualified in its entirety by reference to such documents, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.

Amendment of Loan and Security Agreement

On October 5, 2007, the Company entered into a First Amendment to Loan and Security Agreement with La Salle Bank, National Association (the “Lender”). The amendment amended the tangible net worth covenant in the Loan and Security Agreement by and among the Company, Resistance Technology, Inc., RTI Electronics, Inc. and IntriCon Tibbetts Corporation and the Lender effective as of September 30, 2007. The foregoing description of the amendment does not purport to be complete and is qualified in its entirety by reference to such document, a copy of which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.

Item 1.02.

Termination of a Material Definitive Agreement.

As disclosed in Item 1.01 above, the Termination Agreement Following Change of Control or Asset Sale between the Company and Mark S. Gorder dated December 14, 2004 was terminated on October 5, 2007 in connection with the execution of Mr. Gorder’s new employment agreement. The terms of such agreement were substantially the same as the change of control provisions in Mr. Gorder’s new employment agreement.

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The disclosure in Item 1.01 above is incorporated herein by reference.

Item 5.03.

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On October 10, 2007, the Board approved an amendment to the bylaws to add Section 1.07 to provide that the presence of shareholders entitled to cast at least a majority of the votes that all shareholders are entitled to cast on a particular matter to be acted upon at a meeting of shareholders shall constitute a quorum for the purposes of consideration and action on the matter.

Prior to the amendment, the bylaws did not address quorum requirements; however, the quorum requirement provided by Section 1.07 is intended to provide the same requirement that exists under Pennsylvania law.

In connection with the amendment, the Bylaws were amended and restated to include such amendment. A copy of the amended and restated bylaws is attached hereto as Exhibit 3.1 and is incorporated herein by reference. The foregoing description of the bylaw amendment does not purport to be complete and is qualified in its entirety by reference to Section 1.07 of the amended and restated bylaws.

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

3.1

Amended and Restated Bylaws.

10.1

Employment Agreement between the Company and Mark S. Gorder dated as of October 5, 2007.

10.2

Form of Employment Agreement between the Company and each of the other executive officers of the Company dated as of October 5, 2007.

10.3

First Amendment to Loan and Security Agreement dated as of September 30, 2007, by and among IntriCon, Resistance Technology, Inc., RTI Electronics, Inc. and IntriCon Tibbetts Corporation and LaSalle Bank National Association.

SIGNATURE

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.

	IntriCon Corporation

	By:	/s/ Scott Longval
Date: October 12, 2007		Scott Longval Chief Financial Officer

Exhibit Index

3.1

Amended and Restated Bylaws.

10.1

Employment Agreement between the Company and Mark S. Gorder dated as of October 5, 2007.

10.2

Form of Employment Agreement between the Company and each of the other executive officers of the Company dated as of October 5, 2007.

10.3

EX-3.1 2 intricon074082_ex3-1.htm AMENDED AND RESTATED BYLAWS Exhibit 3.1 to IntriCon Corporation Form 8-K dated October 5, 2007

Exhibit 3.1

AMENDED AND RESTATED

BY-LAWS

INTRICON CORPORATION

(A Pennsylvania Corporation)

I. MEETINGS OF SHAREHOLDERS

Section 1.01. Place of Meeting. Meetings of shareholders of the Corporation shall be held at such place, within the Commonwealth of Pennsylvania or elsewhere, as may be fixed by the Board of Directors. If the Board shall not fix a place for such meetings, they shall be held at the Offices of the Corporation in Dresher, Pennsylvania.

Section 1.02. Annual Meeting. The Annual Meeting of Shareholders for the election of Directors and the transaction of any further business that may be brought before the meeting, shall, unless the Board of Directors shall fix some other hour or day therefore, be held at 2 o’clock p.m. on the last Tuesday in April of each year, if not a legal holiday under the laws of the Commonwealth of Pennsylvania, and, if a legal holiday, then on the next succeeding secular day not a legal holiday under the laws of said Commonwealth. If for any reason such meeting should not be held at the time fixed therefor, such election may be held at a subsequent meeting called for that purpose.

Section 1.03. Notice of Meetings. Notice of every Annual Meeting of Shareholders shall be given by the Secretary.

Notice of all meetings of shareholders shall be given to each shareholder of record entitled to vote at the meeting, at least ten days prior to the day named for the meeting, unless a greater period of notice is by law required in a particular case.

Section 1.04. Organization. At every meeting of the shareholders, the President, or in his absence, a Vice President shall act as Chairman; and the Secretary, or in his absence, a person appointed by the Chairman, shall act as Secretary.

Section 1.05. Voting. Except as otherwise specified herein or in the Articles or provided by law, all matters shall be decided by the vote of the holders of a majority of the outstanding shares entitled to vote, present in person or represented by proxy, at a meeting at which a quorum shall be present, though such a majority be less than a majority of all the shares entitled to vote thereon.

In each election for Directors, the candidates receiving the highest number of votes, up to the number of Directors to be elected in such election, shall be elected.

Section 1.06. Nomination of Directors and Submission of Proposals. Nominations for directors to be elected at a meeting of shareholders may be made by the nominating committee of the Board of Directors or another committee of the Board of Directors performing similar functions (the “Nominating Committee”) or by any shareholder of any outstanding class of the Corporation’s

stock entitled to vote on the election of directors. Proposals to be considered at a meeting of shareholders may be made by the Board of Directors or any holder of any outstanding class of the Corporation’s stock entitled to vote on the proposal at the meeting of shareholders. Nominations made by the Nominating Committee and proposals made by the Board of Directors shall be made pursuant to procedures established by the Nominating Committee or the Board of Directors, respectively. Nominations by shareholders for directors to be elected, or proposals by shareholders to be considered, at a meeting of shareholders and which have not been previously approved by the Nominating Committee or the Board of Directors, respectively, must be submitted to the Chairman of the Nominating Committee, in case of nominations for director, and the Secretary of the Corporation, in case of shareholder proposals, in writing, either by personal delivery, nationally recognized express mail or United States mail, postage prepaid, not later than (i) with respect to an election to be held, or a proposal to be considered, at an annual meeting of shareholders, the latest date upon which shareholder proposals must be submitted to the Corporation for inclusion in the Corporation’s proxy statement relating to such meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, or any successor rule or regulation promulgated by the Securities and Exchange Commission (“SEC”) or, if the Corporation is no longer subject to the proxy rules of the SEC, at least ninety (90) days prior to the date one year from the date of the immediately preceding annual meeting of shareholders, and (ii) with respect to an election to be held, or a proposal to be considered, at a special meeting of shareholders, the earlier of (a) thirty (30) days prior to the printing of the Corporation’s proxy materials or information statement with respect to such meeting or (b) if no proxy materials or information statement are being distributed to shareholders, at least the close of business on the fifth day following the date on which notice of such meeting is first given to shareholders. Each such nomination or proposal shall set forth:

1. The name and address of the shareholder making the nomination or proposal and the person or persons nominated, or the subject matter of the proposal submitted;

2. A representation that the shareholder is a holder of record, and/or beneficial owner, of the voting stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to vote for the person or persons nominated, or the proposal submitted;

3. A description of all arrangements and understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination was made, or the proposal was submitted, by the shareholder;

4. Such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had the nominee been nominated by the Nominating Committee, including but not limited to, the principal occupation of each proposed nominee; and

5. The consent of each nominee to serve as a director of the Corporation if so elected.

Subject to applicable law and SEC regulations: (a) the Nominating Committee shall have the sole authority to select, or recommend to the Board of Directors, the nominees to be considered for

election or appointment as a director and (b) the Board of Directors shall have the sole authority to accept or reject any shareholder proposal. The officer presiding over the meeting, in his or her sole and absolute discretion, may reject any nomination or proposal not made in accordance with the foregoing. Notwithstanding the foregoing, at any time prior to the election of directors at a meeting of shareholders, the Board of Directors may designate a substitute nominee to replace any bona fide nominee who was nominated as set forth above and who, for any reason, becomes unavailable for election as a director.

Section 1.07. Quorum. Except as otherwise specified herein or in the Articles or applicable law (including, without limitation all exceptions provided by Section 1756 of the Pennsylvania Business Corporation Law of 1988, as amended), the presence of shareholders entitled to cast at least a majority of the votes that all shareholders are entitled to cast on a particular matter to be acted upon at a meeting of shareholders shall constitute a quorum for the purposes of consideration and action on the matter.

II. DIRECTORS

Section 2.01. Number, Classification, Term of Office and Removal of Directors.

a) The number of Directors of the Corporation shall be from three to seven directors, with the actual number of directors to be determined by the Board of Directors from time to time.

(b) The Directors shall be classified with respect to the time for which they shall severally hold office. The Board of Directors shall be divided into three classes of Directors, as nearly equal in number of Directors as possible, to be known as Classes “A”, “B”, and “C”. Class A Directors shall each be elected and hold office initially for one (1) year, or until the next annual election; Class B Directors shall be elected and hold office initially for two (2) years or until the second annual election; and Class C Directors shall each be elected and hold office initially for three (3) years, or until the third annual election. Each Director shall hold office for the term for which he is elected and until his successor shall have been elected and qualified. At each annual election, the successors to the class of Directors whose term shall expire in that year shall be elected to hold office for the term of three (3) years, so that the term of office of one class of Directors shall expire each year. If the number of Directors is changed, any newly-created directorships or any decrease in directorships shall be so apportioned among the classes so as to make all classes as nearly equal in number as possible. Any Director or the entire Board of Directors may be removed with or without cause only upon the affirmative vote of two-thirds (2/3) of all of the shares outstanding and entitled to vote; provided that the Board of Directors shall retain the right conferred by Section 405B of the Pennsylvania Business Corporation Law, as amended from time to time, to declare vacant the office of a Director for the reasons specified therein.

Section 2.02. Resignations. Any Director may resign at any time by giving written notice to the Board of Directors or to the Secretary. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 2.03. Annual Meeting. Immediately after each annual election of Directors, the Board of Directors shall meet for the purpose of organization, election of Officers, and the transaction of other business, at the place where such election of Directors was held. Notice of such meeting need not be given. In the absence of a quorum at said meeting, the same may be held at any other time or place which shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors.

Section 2.04. Regular Meetings. Regular meetings of the Board of Directors shall be held at such time and place as shall be designated from time to time by standing resolution of the Board. If the date fixed for any such regular meeting be a legal holiday under the laws of the State where such meeting is to be held, then the same shall be held on the next succeeding secular day not a legal holiday under the laws of said State, or at such other time as may be determined by resolution of the Board. At such meetings, the Directors may transact such business as may be brought before the meeting.

Section 2.05. Special Meetings. Special meetings of the Board of Directors may be called by the President, by a Corporate Vice President, by the Secretary, or by two or more of the Directors, and shall be held at such time and place as shall be designated in the call for the meeting.

Section 2.06. Notice of Meetings. Written notice of each special meeting shall be given, by or at the direction of the person or persons authorized to call such meeting, to each Director at least two days prior to the day named for the meeting.

Notice of regular meetings need not be given.

Section 2.07. Organization. At every meeting of the Board of Directors, a Chairman chosen by a majority of the Directors present, shall preside, and the Secretary, or in his absence, any person appointed by the presiding officer, shall act as Secretary.

Section 2.08. Compensation of Directors. Each Director shall receive such compensation as from time to time may be fixed by the Board. Directors may also be reimbursed by the Corporation for all reasonable expenses incurred in traveling to and from the place of each meeting of the Board or any committee thereof.

Section 2.09. Indemnification and Liability of Directors and Officers.

A. Personal Liability of Directors. A director of the Corporation shall not be personally liable for monetary damages for any action taken, or any failure to take any action, as a director to the extent that under the terms of the Director’s Liability Act, 42 Pa. Cons. Stat. Para. 8361 et seq., as modified by any Pennsylvania statute thereafter enacted, a director’s liability for monetary damages may not be limited.

B. Indemnification. The Corporation shall indemnify any person who was or is a party (other than a party plaintiff suing in his own behalf or in the right of the Corporation) or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, including actions by or in the right of the Corporation, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the

Corporation, or is or was serving while a director or officer of the Corporation at the request of the Corporation as a director, officer, employee, agent fiduciary or other representative of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorney’s fees), judgements, fines, excise taxes and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding unless the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness.

C. Advancement of Expenses. Expenses actually and reasonably incurred by an officer or director of the Corporation in defending a civil or criminal action, suit or proceeding described in paragraph B shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding (regardless of the financial condition of such director or officer) upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that the person is not entitled to be indemnified by the Corporation.

D. Other Rights. The indemnification and advancement of expenses provided by or pursuant to this Section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Corporation’s Articles of Incorporation, any insurance or other agreement, vote of shareholders or directors or otherwise, both as to actions in their official capacity and as to actions in another capacity while holding an office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person.

E. Insurance. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any liability asserted against and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of these By-laws.

F. Security Fund; Indemnity Agreements. By action by the Board of Directors (notwithstanding their interest in the transaction) the Corporation may create and fund a trust fund or fund of any nature, and may enter into agreements with its directors, officers, employees and agents for the purpose of securing or insuring in any manner its obligation to indemnify or advance expenses provided for in this Section.

G. Modification. The duties of the Corporation to indemnify and to advance expenses to a director or officer provided in this Section shall be in the nature of a contract between the Corporation and each such director or officer, and no amendment or repeal of any provision of this Section, and no amendment or termination of any trust or other fund created pursuant to Paragraph F, shall alter, to the detriment of such director or officer, the right of such person to the advance of expenses or indemnification related to a claim based on an act or failure to act which took place prior to such amendment, repeal or termination.

Section 2.10. Participation in Meetings. One or more directors may participate in a meeting of the Board or a committee of the Board by means of conference telephone or similar communications equipment by which all persons participating at the meeting can hear each other.

III. COMMITTEES

Section 3.01. Executive Committee. The Board of Directors shall have authority to appoint an Executive Committee comprised of members of the Board of Directors. If such Executive Committee be appointed, it shall have such duties and responsibilities as shall be conferred upon it from time to time by the Board of Directors, including the right to act as to matters arising between meetings of the Board, except as to matters which, by law, require action by the Board. If so appointed, the Executive Committee shall report on its actions to the Board from time to time as appropriate or as may be requested by the Board.

Section 3.02. Other Committees. The Board of Directors may at any time and from time to time, appoint such standing committees and/or such special committees, consisting of Directors or others, to perform such duties and make such investigations and reports as the Board shall by resolution determine. Such committees shall determine their own organization and times and places of meeting, unless otherwise directed by such resolution.

IV. OFFICERS

Section 4.01. Number. The Officers of the Corporation shall be a President, a Secretary, a Treasurer and may include one or more Corporate Vice Presidents, and a Controller, and such other Officers and Assistant Officers as the Board of Directors may from time to time designate.

Section 4.02. Qualifications. Any two or more offices may be held by the same person, except that the offices of President and Secretary or Assistant Secretary shall not be held by the same person. The Officers shall be natural persons of full age.

Section 4.03. Election and Term of Office. The Officers of the Corporation shall be chosen by the Board of Directors at its Annual Meeting, but the Board may choose Officers or fill any vacancies among the Officers at any other meeting. Subject to earlier termination of office, each Officer shall hold office for one year and until his successor shall have been duly chosen and qualified.

Section 4.04. Resignations. Any Officer may resign at any time by giving written notice to the Board of Directors, or to the President, or to the Secretary of the Corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 4.05. Duties.

(a) The President. The President shall be the Chief Executive Officer of the Corporation and shall have general supervision over the business affairs of the Corporation, shall sign, or

countersign, all share certificates, contracts or other instruments of the Corporation as authorized by the Board of Directors, except in cases where the signing and execution thereof shall be expressly designated by the Board to some other officer or agent of the Corporation; shall make reports to the Board of Directors and shareholders and shall perform such other duties as are incident to his office or are properly required of him by the Board of Directors.

(b) The Vice Presidents. In the absence or disability of the President, any Corporate Vice President designated by the Board of Directors may perform all the duties of the President, and, when so acting, shall have all the powers and be subject to all the restrictions upon the President; provided, however, that no Corporate Vice President shall act as a member of, or as Chairman of, any special committee of which the President is a member, except when designated by the Board of Directors. The Corporate Vice Presidents shall perform such other duties as from time to time may be assigned to them by the Board of Directors or the President.

(c) The Secretary. The Secretary shall record all the votes of the shareholders and of the Directors and the minutes of the meetings of the shareholders and of the Board of Directors in a book or books to be kept for that purpose; he shall see that notices of meetings of the Board and shareholders are given and that all records and reports are properly kept and filed by the Corporation as required by law; he shall be the custodian of the Seal of the Corporation, and shall see that it is affixed to all documents to be executed on behalf of the Corporation under its Seal; and, in general, he shall perform all duties incident to the office of the Secretary, and such other duties as may from time to time be assigned to him by the Board of Directors or the President.

(d) Assistant Secretaries. In the absence or disability of the Secretary, or when so directed by the Secretary, any Assistant Secretary may perform all the

duties of the Secretary, and, when so acting, shall have all the powers of and be subject to all the restrictions placed upon the Secretary. The Assistant Secretaries shall perform such other duties from time to time as may be assigned to them respectively by the Board of Directors, the President or the Secretary.

(e) The Treasurer. The Treasurer shall have charge of all receipts and disbursement of the Corporation, and shall have or provide for the custody of its funds and securities; he shall have full authority to receive and give receipts for all money due and payable to the Corporation, and to endorse checks, drafts, warrants in its name and on its behalf and to give full discharge for the same; he shall deposit all funds of the Corporation, except such as may be required for current use, in such banks or other places of deposit as the Board of Directors may from time to time designate; and, in general, he shall perform all duties incident to the office of Treasurer and such other duties as may from time to time be assigned to him by the Board of Directors or the President.

(f) Assistant Treasurers. In the absence or disability of the Treasurer, or when so directed by the Treasurer, any Assistant Treasurer may perform all the duties of the Treasurer, and, when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. The Assistant Treasurers shall perform such other duties as from time to time may be assigned to them respectively by the Board of Directors, the President or the Treasurer.

Section 4.06. Compensation of Officers and Others. The compensation of all Officers shall be fixed from time to time by the Board of Directors, or by any committee or Officer authorized by the Board so to do. No Officer shall be precluded from receiving such compensation by reason of the fact that he is also a Director of the Corporation.

Additional compensation, fixed as above, may be paid to any Officers or employees for any year or years, based upon the success of the operations of the Corporation during such year.

V. BORROWING, DEPOSITS, PROXIES, ETC.

Section 5.01. Borrowing, etc. No Officer, agent or employee of the Corporation shall have any power or authority to borrow money on its behalf, to pledge its credit or to mortgage or pledge its real or personal property, except within the scope and to the extent of the authority delegated by resolution of the Board of Directors. Authority may be given by the Board for any of the above purposes and may be general or limited to specific instances.

Section 5.02. Deposits. All funds of the Corporation shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may approve or designate, and all such funds shall be withdrawn only upon checks signed by such one or more Officers or employees as the Board shall from time to time determine.

Section 5.03. Proxies. Unless otherwise ordered by the Board of Directors, any Officer of the Corporation may appoint an attorney or attorneys (who may be or include such Officer himself), in the name and on behalf of the Corporation, to cast the votes which the Corporation may be entitled to cast as a shareholder or otherwise in any other corporation any of whose shares or other securities are held by or for the Corporation, at meetings of the holders of the shares or other securities of such other corporation, or, in connection with the ownership of such shares or other securities, to consent in writing to any action by such other corporation, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name of and on behalf of the Corporation and under its Seal such written proxies or other instruments as he may deem necessary or proper in the premises.

Section 5.04. Non-Applicability of Certain Provisions of Law. The provisions of Subchapters E, G and H of Chapter 25 of the Pennsylvania Business Corporation Law of 1988, as amended, and any corresponding provisions of succeeding law shall not be applicable to the Corporation.

VI. SHARE CERTIFICATES; TRANSFER

Section 6.01. Share Certificates. To the extent permitted by law, share certificates shall be signed by the President, or a Corporate Vice President and by the Secretary or the Treasurer, or by an Assistant Secretary or Assistant Treasurer of the Corporation, but, to the extent permitted by law, such signatures may be facsimiles, engraved or printed.

Section 6.02. Transfer of Shares. Transfer of share certificates and the shares represented thereby shall be made only on the books of the Corporation by the owner thereof or by his attorney thereunto authorized, by a power of attorney duly executed and filed with the Secretary or a Transfer Agent of the Corporation, and on surrender of the share certificates.

Section 6.03. Transfer Agent and Registrar; Regulation. The Corporation may, if and whenever the Board of Directors so determines, maintain, in the Commonwealth of Pennsylvania, or any other State of the United States, one or more transfer offices or agencies, each in charge of a Transfer Agent designated by the Board, where the shares of the Corporation shall be transferable, and also one or more registry offices, each in charge of a Registrar designated by the Board, where such shares shall be registered; and no certificates for shares of the Corporation in respect of which a Transfer Agent and Registrar shall have been designated shall be valid unless countersigned by such Transfer Agent and registered by such Registrar. The Board may also make such additional rules and regulations as it may deem expedient concerning the issue, transfer, regulation and registration of share certificates.

Section 6.04. Lost, Destroyed and Mutilated Certificates. The Board of Directors, by standing resolution or by resolutions with respect to particular cases, may authorize the issue of new share certificates in lieu of share certificates lost, destroyed, or mutilated, upon such terms and conditions as the Board may direct.

VII. FINANCIAL REPORTS

Section 7.01. The Directors of the Corporation shall not be required to cause to be sent to the shareholders an annual financial report under Section 318 of the Business Corporation Law of the Commonwealth of Pennsylvania; nor need any financial report which the Directors in their discretion may cause to be sent to the shareholders be required to be verified by a Certified Public Accountant. Any accountant or firm of accountants employed by the Corporation for any purpose may be or include a Director or full-time employee of the Corporation, and shall not be required to be elected by the shareholders of the Corporation.

VIII. AMENDMENTS

Section 8.01. Any or all of the provisions of these By-Laws whether contractual in nature or merely regulatory of the internal affairs of the Corporation, may be amended, altered, or repealed by the Board of Directors or by the shareholders entitled to vote thereon, at any regular or special meeting duly convened after notice to the Directors or shareholders, as the case may be, giving a summary of the proposed amendment, alteration, or repeal; provided, that any such proposal relating to Section 2.01(b) of these By-Laws must receive the affirmative vote of at least two thirds (2/3) of all shares outstanding and entitled to vote and any proposal to change the two-thirds (2/3) approval required by this Section must also receive the affirmative vote of at least two-thirds (2/3) of all shares outstanding and entitled to vote.

No provision of these By-Laws shall vest any property right in any shareholder.

Amended and Restated as of October 10, 2007.

EX-10.1 3 intricon074082_ex10-1.htm EMPLOYMENT AGREEMENT OF MARK S. GORDER Exhibit 10.1 to IntriCon Corporation Form 8-K dated October 5, 2007

Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made and dated as of October 5, 2007, between INTRICON CORPORATION, a Pennsylvania corporation (the “Company”), and MARK S. GORDER (“Executive”).

BACKGROUND

Executive has served as President and Chief Executive Officer of the Company since 2001. Executive wishes to remain in the employ of the Company in those capacities on the terms and conditions contained in this Agreement. Executive has been and will continue to be substantially involved with the Company’s operations and management and has and will continue to have trade secrets and other confidential information relating to the Company and its customers; accordingly, the noncompetition agreement and other restrictive covenants contained in Section 5 of this Agreement constitute essential elements hereof.

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and intending to be legally bound hereby, the parties hereto agree as follows:

SECTION 1. CAPACITY AND DUTIES

1.1 Employment; Acceptance of Employment. The Company hereby employs Executive and Executive hereby agrees to continue employment by the Company for the period and upon the terms and conditions hereinafter set forth.

1.2 Capacity and Duties.

(a) Executive shall serve as President and Chief Executive Officer of the Company. Executive shall continue to serve in all other offices and directorships he now holds with the Company and its subsidiaries, subject to the pleasure of the Boards of Directors of the Company and its subsidiaries. Executive shall perform such other duties and shall have such authority consistent with his position as may from time to time be specified by the Board of Directors of the Company.

(b) Executive shall devote his full working time, energy, skill and best efforts to the performance of his duties hereunder, in a manner that will comply with the Company’s rules and policies and will faithfully and diligently further the business and interests of the Company. Executive shall not be employed by or participate or engage in or in any manner be a part of the management or operation of any business enterprise other than the Company and its subsidiaries without the prior written consent, which consent may be granted or withheld in the sole discretion, of the Board of Directors of the Company.

SECTION 2. TERM OF EMPLOYMENT

unless written notice of termination of the automatic renewal of the term (“Non-renewal Notice”) is given by one party hereof to the other at least sixty (60) days prior to the end of the then current employment term (as so extended or earlier terminated, the “Term”).

SECTION 3. COMPENSATION

3.1 Basic Compensation. As compensation for Executive’s services, the Company or a subsidiary of the Company shall pay to Executive a salary at an annual rate as shall be established from time to time by the Board of Directors of the Company or the Compensation Committee of the Board of Directors of the Company. In no event shall Executive’s salary be less than $312,000, unless Executive consents to a lesser amount. Executive’s annual salary, as determined in accordance with this Section 3.1, is hereinafter referred to as his “Base Salary,” and shall be payable in periodic installments in accordance with the Company’s regular payroll practices in effect from time to time.

3.2 Performance Bonuses. Executive shall be entitled to receive performance bonuses of up to such percentage of his Base Salary as the Compensation Committee of the Board of Directors may determine from time to time in accordance with the policies and plans of the Company in place from time to time, if any, with respect to the payment of bonuses to executive officers.

3.3 Employee Benefits. During the Term, Executive shall be entitled to participate in such of the Company’s employee benefit plans and benefit programs, including medical benefit programs, stock options under the Company’s stock option plans in effect from time to time or any additional plans or programs, as may from time to time be provided by the Company for its executive officers. Additionally, the Company agrees to maintain disability insurance policies for Executive’s benefit (the “Disability Policies”) with coverage amounts and terms at least equivalent to the Unum Disability Policy Number 743820 paid for by the Company for Executive’s benefit while he was Chief Executive Officer of Resistance Technology, Inc.

3.4 Vacation. During the Term, Executive shall be entitled to a paid vacation of 30 business days per year.

3.5 Expense Reimbursement. The Company shall reimburse Executive for all reasonable expenses incurred by him in connection with the performance of his duties hereunder in accordance with its regular reimbursement policies as in effect from time to time.

3.6 Country Club Membership. The Company shall reimburse Executive for Executive’s Country Club Membership fees at North Oaks Country Club in North Oaks, Minnesota.

3.7 Automobile. During the Term, the Company shall provide Executive with an automobile for use in connection with the performance of his duties hereunder and shall reimburse him for all expenses reasonably incurred by him for the maintenance and operation, including fuel, of such automobile in connection with the performance of his duties hereunder in accordance with the Company’s regular reimbursement policies as in effect from time to time.

SECTION 4. TERMINATION OF EMPLOYMENT

4.1 Death of Executive. If Executive dies during the Term, the Company shall not thereafter be obligated to make any further payments hereunder to Executive’s estate, personal representative or beneficiary who acquired the right to such payments by bequest or inheritance, other than amounts (including salary, bonuses, expense reimbursement, etc.) due and payable as of the date of Executive’s death. Executive’s spouse (if any) shall be entitled to continue to receive medical benefits coverage in accordance with the Company’s policies in effect from time to time through the remainder of the then-current Term.

4.2 Disability of Executive. If Executive is or has been materially unable to perform his duties hereunder for a period of 180 consecutive days or for a period totaling 180 days in any period of 360 consecutive days due to physical or mental illness, then the Board of Directors of the Company shall have the right to terminate Executive’s employment upon 30 days’ prior written notice to Executive at any time during the continuation of such inability, in which event the Company shall not thereafter be obligated to make any further payments hereunder other than amounts (including salary, bonuses, expense reimbursement, etc.) due and payable under this Agreement as of the date of such termination. Upon such termination, Executive shall be entitled to continue to receive medical benefits coverage for Executive and Executive’s spouse (if any) in accordance with the Company’s policies in effect from time to time through the remainder of the then-current Term, and shall be entitled to benefits under any Disability Policies to the extent provided therein. Executive’s disability shall be determined in the reasonable judgment of the Board of Directors of the Company. Nothing in this Agreement shall require Company to continue to pay any compensation to Executive for any period in which he is unable to perform his duties hereunder due to physical or mental illness in excess of the Company’s paid sick leave policy period.

4.3 Termination for Cause. Executive’s employment hereunder shall terminate immediately upon notice that the Board of Directors of the Company is terminating Executive for Cause (as defined herein), in which event the Company shall not thereafter be obligated to make any further payments hereunder other than amounts (including salary, expense reimbursement, etc., but excluding bonuses) due and payable under this Agreement as of the date of such termination. “Cause” means the following, provided that, in the case of circumstances described in clauses (iv) through (vi) below, the Company shall have given written notice thereof to Executive, and Executive shall have failed to remedy the circumstances as determined in the sole discretion of the Board of Directors of the Company within 30 days thereafter:

(i) fraud or dishonesty in connection with Executive’s employment or theft, misappropriation or embezzlement of the Company’s funds;

(ii) conviction of any felony, crime involving fraud or knowing misrepresentation, or of any other crime (whether or not such felony or crime is connected with his employment) the effect of which in the judgment of the Board of Directors of the Company is likely to adversely affect the Company or its affiliates;

(iii) material breach of Executive’s obligations under this Agreement;

(iv) repeated and consistent failure of Executive to be present at work during normal business hours unless the absence is because of a disability as described in Section 4.2 herein;

(v) willful violation of any express direction or requirement established by the Board of Directors of the Company, as determined by a majority of Board of Directors of the Company;

(vi) insubordination, gross incompetence or misconduct in the performance of, or gross neglect of, Executive’s duties hereunder, as determined by a majority of Board of Directors of the Company; or

(vii) use of alcohol or other drugs which interfere with the performance by Executive of his duties, or use of any illegal drugs or narcotics.

4.4 Termination without Cause.

(a) If Executive’s employment is terminated by the Company prior to the end of the Term for any reason other than Cause or the death or disability of Executive:

(i) the Company shall pay Executive amounts (including salary, bonuses, expense reimbursement, etc.) due and payable as of the date of termination and shall pay Executive an amount equal to the present value of Executive’s then base salary for a period equal to the Severance Period (as defined below), payable in a lump sum within two weeks of Executive’s termination using a discount rate of 6 percent per year;

(ii) in the sole and absolute discretion of the Board of Directors, the Company may elect to pay Executive a prorated amount of the bonus that Executive would have been entitled to receive under Section 3.2 for the year in which he was terminated (which, if determined to be paid by the Board, shall be payable as and when the bonus is paid to other similarly situated officers);

(iii) Executive shall be entitled to receive medical benefits coverage in accordance with the Company’s policies in effect from time to time through the period ending 12 months after the date of the termination of Executive’s employment pursuant to Section 4.4(a);

(iv) Executive shall be entitled to have transferred to him any Company paid disability policy on the Executive for Executive’s benefit (if the policy so permits), and Executive shall assume responsibility for payment of premiums on such disability policy; and

(v) Executive shall be entitled to have transferred to him any Company paid life insurance policies on the Executive for Executive’s benefit (if the policies so permit) upon payment by the Executive to the Company of any cash surrender value of such policies, and Executive shall assume responsibility for payment of premiums on such life insurance policies.

(b) Except for the provisions of this Section 4.4, the Company shall have no further obligation to Executive hereunder.

(c) “Severance Period” means a period equal to two years beginning on the date of the termination of Executive’s employment pursuant to Section 4.4(a).

(d) In the event that the Company gives a Non-Renewal Notice to Executive pursuant to Section 2.1 and, within 12 months after the date of the Non-Renewal Notice, Executive’s employment is terminated by Company for any reason other than Cause or the death or disability of Executive, then the Executive shall be entitled to the benefits described in Section 4.4(a) except that the Severance Period shall be reduced by the number of days between the date of the Non-Renewal Notice and the termination of Executive’s employment.

4.5 Voluntary Termination. In the event Executive’s employment is voluntarily terminated by Executive, the Company shall not be obligated to make any further payments to Executive under this Agreement other than amounts (including salary, expense reimbursement, etc., but excluding bonuses) due and payable as of the date of Executive’s termination. Additionally, the following provisions shall apply in the event of a voluntary termination by Executive:

(a) Executive shall be entitled to have transferred to him the Company’s disability policy (if any) on the Executive for Executive’s benefit (if the policy so permits), and Executive shall assume responsibility for payment of premiums on such disability policy.

(b) Executive shall be entitled to have transferred to him any Company paid life insurance policies (if any) on the Executive for Executive’s benefit (if the policies so permit) upon payment by the Executive to the Company of any cash surrender value of such policies, and Executive shall assume responsibility for payment of premiums on such life insurance policies.

4.6 Termination following a Change of Control.

(a) If a Change of Control (as hereinafter defined) of the Company occurs during the Term, and if Executive’s employment by the Company is Involuntarily Terminated (as hereinafter defined) within one year after such Change of Control:

(i) the Company shall pay or cause to be paid to Executive, two years’ Base Salary at the rate being earned by Executive immediately prior to the Change of Control or immediately prior to such Involuntary Termination, whichever is greater (the “Change of Control Payment”), together with all unpaid bonus and salary due and payable to Executive; provided, however, that the Company need not make such Change of Control Payment if the Change of Control is an Asset Sale ( as defined below) and the purchaser in such Asset Sale or an affiliate of such purchaser offers to employ Executive commencing at the time of closing of the Asset Sale at not less than the same rate of compensation (including both base salary and good faith bonus potential) and level of benefits as Executive was receiving immediately prior to the Asset Sale and agrees to employ Executive for at least a one year period after the consummation of the Asset Sale;

(b) The Company agrees that any agreement concerning an Asset Sale shall include a provision obligating the purchaser to fulfill any of the Company’s obligations to Executive under this Agreement should the Company fail to fulfill said obligations.

(c) Any Change of Control Payment or other sums to be paid to Executive under this Section shall be paid in a lump sum within two weeks of an Involuntary Termination, except as otherwise provided in this Section.

(d) Notwithstanding any other provision hereof, the obligations of the Company hereunder shall arise, if at all, only in connection with the first Change of Control to occur after the date hereof; any second Change of Control which may occur following the first Change of Control shall neither diminish nor trigger again the obligations set forth herein to the extent that such obligations may be applicable.

(e) The following terms used herein have the meanings set forth below:

(i) “Asset Sale” means the sale of the assets of the Company (including the stock or assets of subsidiaries of the Company) to which are attributable 90% or more of the consolidated sales volume of the Company.

(ii) “Change of Control” of the Company means an “Asset Sale” or a “Change in Majority Stock Ownership.”

(iii) “Change in Majority Stock Ownership” means the acquisition by any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), including any affiliate or associate as defined in Rule 12b-2 under the Exchange Act of such person, or any group of persons acting in concert, other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation or other entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportion as their ownership of capital stock of the Company, of “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or more of the combined voting power of the Company’s then outstanding securities.

performance of his duties (reasonable absences because of sickness for up to six consecutive months excepted). If Executive shall not agree with a determination to terminate him because of Disability, the question of Executive’s ability shall be submitted to an impartial and reputable physician selected either by a mutual agreement of the parties or by the then president of the Medical Society of the county in which Executive is employed, and such physician’s determination of disability shall be binding on the parties.

(v) “Involuntary Termination” (or “Involuntarily Terminated”) means (a) any termination of employment of the Executive by Executive following (i) a material diminution in the Executive’s base compensation; (ii) a material diminution in the Executive’s authority, duties, or responsibilities; (iii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report, including a requirement that a Executive report to a corporate officer or employee instead of reporting directly to the board of directors; (iv) a material diminution in the budget over which the Executive retains authority; (v) a material change in the geographic location at which the Executive must perform the services; or (vi) any other action or inaction that constitutes a material breach by the Company of this Agreement; or (b) any termination of the employment of Executive by the Company other than for Cause, death or Disability; provided, however, that with respect to any termination by Executive pursuant to clause (a) of this paragraph, Executive shall have first provided notice to the Company of the existence of the condition proposed to be relied upon within 90 days of the initial existence of the condition, and shall have given the Company a period of 30 days during which it may remedy the condition and the Company shall have failed to do so during such period. Anything in the Agreement to the contrary notwithstanding, Executive’s employment with the Company shall not be deemed terminated if he is transferred from one subsidiary of the Company to another subsidiary of the Company.

(f) Upon the occurrence of a Change of Control, the Company or its assignee waives, and will not assert, any right to set off the amount of any claims, liabilities, damages or losses the Company or its assignee may have against any amounts payable by it to Executive hereunder, and any amounts payable to or otherwise payable to Executive in respect of any period prior to the termination of this Agreement shall be paid when due.

(g) Nothing in this Section shall diminish the Company’s right to terminate the employment of the Executive prior to a Change of Control or impose any obligation to make any payment to the Executive in connection with any such termination otherwise than as provided in the other Sections of this Agreement.

(h) Nothing in this Section shall prejudice Executive’s or his beneficiary’s right to receive any death, disability, pension, 401(k), qualified benefit, or other benefits under any contract or plan otherwise due to Executive upon or following termination.

4.7 No Duty to Mitigate. Executive’s benefits hereunder shall be considered severance pay in consideration of his past service to the Company, and pay in consideration of his continued service from the date hereof, and his entitlement thereto shall not be governed by any duty to mitigate his damages by seeking further employment, nor offset by any compensation which he may receive from future employment.

4.8 Withholding; Other Tax Matters. Any payment required under this Agreement shall be subject to all applicable requirements of law with regard to withholding, filing, making of reports and the like.

4.9 Stock Options. If during the Term: (a) Executive’s employment is terminated by the Company for any reason other than for Cause, (b) a Change of Control occurs or (c) Executive terminates his employment under circumstances that would constitute an Involuntary Termination (regardless that no Change of Control has occurred), then any stock options granted to Executive by the Company which have not been exercised by Executive prior to Executive’s termination shall accelerate and be exercisable in full and may be exercised by Executive or his legal representative, estate, personal representative or beneficiary who acquired the right to exercise such options by bequest or inheritance, as the case may be, to the extent provided by the terms of the applicable stock option plan or any option agreement; provided, however, that with respect to any acceleration of stock options as a result of the termination of Executive’s employment under clause (a) or (c), it shall be a condition precedent to such acceleration that Executive shall have complied with Section 4.10 of this Agreement.

4.10 Release. Notwithstanding the foregoing, in the event of the termination of Executive’s employment for any reason, the Company shall not be obligated to make any payments or provide any continuing benefits under this Section 4 (other than with respect to payments and benefits earned and payable with respect to period prior to the date of termination) unless Executive shall have executed and delivered to the Company a further agreement (“Release”), to be prepared at the time of Executive’s termination of employment in form acceptable to the Company, that shall provide (i) an unconditional release of all claims (other than claims for amounts due under this Agreement), charges, complaints and grievances, whether known or unknown to Executive, against the Company or any of its affiliates, through date of Executive’s termination of employment; (ii) an undertaking to maintain the confidentiality of such agreement; (iii) an undertaking to indemnify the Company if Executive breaches such agreement; and (iv) a covenant not to sue the Company or any of its affiliates with respect to the subject matter of such release; and any waiting period or revocation period provided by law for the effectiveness of such release shall have expired without Executive’s having revoked such Release.

SECTION 5. RESTRICTIVE COVENANTS

5.1 Confidentiality. Executive acknowledges a duty of confidentiality owed to the Company and shall not, at any time during or after his employment by the Company, retain in writing, use, divulge, furnish, or make accessible to any person or entity, without the express authorization of the Board of Directors of the Company, any trade secret, private or confidential information or knowledge of the Company obtained or acquired by him while so employed. All computer software, address books, rolodexes, business cards, telephone lists, customer lists, price lists, contract forms, catalogs, books, records, files and know-how acquired while an employee of the Company are acknowledged to be the property of the Company and shall not be duplicated, removed from the Company’s possession or premises or used other than in pursuit of the Company’s business and, upon termination of employment for any reason, Executive shall deliver to the Company, without further demand, all copies and summaries thereof (whether in written, electronic or other form) which are then in his possession or under his control.

of knowledge relating to the Company’s business interests (including business opportunities) heretofore or hereafter gained by him at any time during his employment with the Company are the property of the Company, and Executive hereby irrevocably assigns all such ideas, discoveries, inventions, improvements, and knowledge to the Company for its sole use and benefit, without additional compensation. The provisions of this Section 5.2 shall apply whether such ideas, discoveries, inventions, improvements or knowledge were or are conceived, made or gained by him alone or with others, whether during or after usual working hours, whether on or off the job, whether applicable to matters directly or indirectly related to the Company’s business interests (including potential business interests), and whether or not within the specific realm of his duties. It shall be conclusively presumed that ideas, discoveries, inventions, and improvements relating to the Company’s business interests or potential business interests conceived by Executive during the six month period following termination of his employment are, for the purposes of this Agreement, conceived prior to termination of his employment hereunder. Executive shall, upon request of the Company, but at no expense to Executive, at any time during or after his employment with the Company, sign all instruments and documents reasonably requested by the Company and otherwise cooperate with the Company to protect its right to such ideas, discoveries, inventions, improvements, and knowledge, including applying for, obtaining, and enforcing patents and copyrights thereon in such countries as the Company shall determine.

5.3 Noncompetition. During the term of Executive’s employment and for one year after any termination of employment, or, if longer, for so long as the period with respect to which Executive is entitled to receive, or has received, payment of amounts pursuant to Section 4.4(a) herein following a termination by the Company without Cause or pursuant to Section 4.6 herein following a Change of Control, Executive shall not directly or indirectly: (i) engage, anywhere in any geographic market served by the Company or any of its subsidiaries in any activity which competes in whole or in part with the products or activities of the Company at the time of such termination; (ii) be or become a stockholder, partner, owner, officer, director or employee or agent of, or a consultant to or give financial or other assistance to, any person or entity engaged in any such activities; (iii) seek in competition with the business of the Company to procure orders from or do business with any customer of the Company; (iv) solicit, or contact with a view to, the engagement or employment by any person or entity of any person who is an employee of the Company; (v) seek to contract with or engage (in such a way as to adversely affect or interfere with the business of the Company) any person or entity which has been contracted with or engaged to manufacture, assemble, supply or deliver products, goods, materials or services to the Company; or (vi) engage in or participate in any effort or act to induce any of the customers, associates, consultants, or employees of the Company to take any action which might be disadvantageous to the Company; provided, however, that nothing herein shall prohibit Executive and his affiliates from owning, as passive investors, in the aggregate not more than 5% of the outstanding publicly traded stock of any corporation so engaged. The duration of Executive’s covenants set forth in this Section shall be extended by a period of time equal to the number of days, if any, during which Executive is in violation of the provisions hereof.

5.4 Injunctive and Other Relief.

(a) Executive acknowledges and agrees that the covenants contained herein are fair and reasonable in light of the consideration paid hereunder, and that damages alone shall

not be an adequate remedy for any breach by Executive of his covenants contained herein and accordingly expressly agrees that, in addition to any other remedies which the Company may have, the Company shall be entitled to injunctive or other equitable relief in any court of competent jurisdiction for any breach or threatened breach of any such covenants by Executive. Nothing contained herein shall prevent or delay the Company from seeking, in any court of competent jurisdiction, specific performance or other equitable remedies in the event of any breach or intended breach by Executive of any of his obligations hereunder.

(b) Notwithstanding the equitable relief available to the Company, Executive, in the event of a breach of his covenants contained in Section 5 herein, understands and agrees that the uncertainties and delay inherent in the legal process would result in a continuing breach for some period of time, and therefore, continuing injury to the Company until and unless the Company can obtain such equitable relief. Therefore, in addition to such equitable relief, the Company shall be entitled to monetary damages for any such period of breach until the termination of such breach, in an amount deemed reasonable to cover all actual and consequential losses, plus all monies received by Executive as a result of said breach and all costs and attorneys’ fees incurred by the Company in enforcing this Agreement. If Executive should use or reveal to any other person or entity any confidential information, such use or revelation would be considered a continuing violation on a daily basis, for as long as such confidential information is made use of by Executive or any such other person or entity.

(c) If any provision of Section 5 herein is determined to be invalid or unenforceable by reason of its duration or scope, such duration or scope, or both, shall be deemed to be reduced to a duration or scope to the extent necessary to render such provision valid and enforceable. In such event, Executive shall negotiate in good faith to provide the Company with lawful and enforceable protection that is most nearly equivalent to that found to be invalid or unenforceable.

(d) The existence of any claim or cause of action that Executive or any other person or entity may have against the Company shall not constitute a defense or bar to the enforcement of any of the provisions of this Section 5.

5.5 Definition of the “Company.” The “Company” as used in this Section 5 includes all affiliates and subsidiaries of the Company.

SECTION 6. MISCELLANEOUS

6.1 Litigation. At the request of the Company, Executive shall during and after the Term render reasonable assistance to the Company in connection with any litigation or other proceeding involving the Company or any of its affiliates. The Company will pay Executive reasonable compensation as mutually agreed for any such services performed after the Term. The Company agrees that during the Term that at all times it shall carry appropriate amounts of officers and directors liability insurance naming the Executive as an insured party.

competent jurisdiction. The cost of such arbitration shall be borne equally by the parties or as otherwise directed by the arbitrators. This Section 6.2 shall not limit the right of the Company to seek judicial relief pursuant to Section 5.4 herein without prior arbitration.

6.3 Assignment; Benefit. This Agreement shall not be assignable by Executive, and shall be assignable by the Company only to any affiliate or to any person or entity which may become a successor in interest (by purchase of assets or stock, or by merger, or otherwise) to the Company in the business or substantially all of the business presently operated by it. Subject to the foregoing, this Agreement and the rights and obligations set forth herein shall inure to the benefit of, and be binding upon, the parties hereto and each of their respective permitted successors, assigns, heirs, executors and administrators.

6.4 Notices. All notices hereunder shall be in writing and shall be sufficiently given if hand-delivered, sent by documented overnight delivery service or registered or certified mail, postage prepaid, return receipt requested or by telegram or telefax (confirmed by U.S. mail), receipt acknowledged, addressed as set forth below or to such other person and/or at such other address as may be furnished in writing by any party hereto to the other. Any such notice shall be deemed to have been given as of the date received, in the case of personal delivery, or on the date shown on the receipt or confirmation therefor, in all other cases. Any and all service of process and any other notice in any action, suit or proceeding-shall be effective against any party if given as provided in this Agreement; provided that nothing herein shall be deemed to affect the right of any party to serve process in any other manner permitted by law.

(a)

If to the Company:

IntriCon Corporation

Arden Hills Office

1260 Red Fox Road

Arden Hills, MN 55112

Attention: Chief Financial Officer

Telecopy No.: 651-636-3682

(b)

If to Executive:

Mark S. Gorder

24 North Deep Lake Road

North Oaks, Minnesota 55127

Telecopy No.: 651-636-3682

6.5 Entire Agreement; Modification; Advice of Counsel.

(a) This Agreement constitutes the entire agreement between the parties hereto with respect to the matters contemplated herein and therein and supersedes all prior agreements and understandings with respect thereto. Without limiting the generality of the foregoing, this Agreement supersedes (i) the Employment Agreement dated as of December 4, 2004, between Executive and the Company and (ii) the Agreement Re: Termination Following Change of Control or Asset Sale dated as of December 14, 2004 between Executive and the Company. No amendment, modification, or waiver of this Agreement shall be effective unless

in writing. Neither the failure nor any delay on the part of any party to exercise any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise of the same or of any other right or remedy with respect to such occurrence or with respect to any other occurrence.

(b) Executive acknowledges that he has been afforded an opportunity to consult with his counsel with respect to this Agreement. The Company agrees to reimburse Executive for the cost of consulting with counsel in an amount not to exceed $2,500. In view of the fact that each of the parties hereto have been represented by their own counsel and this Agreement has been fully negotiated by all parties, the legal principle that ambiguities in a document are construed against the draftsperson of that document shall not apply to this Agreement.

6.6 Governing Law. This Agreement is made pursuant to, and shall be construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania and the federal laws of the United States of America, to the extent applicable, without giving effect to otherwise applicable principles of conflicts of law.

6.7 Headings; Counterparts. The headings of paragraphs in this Agreement are for convenience only and shall not affect its interpretation. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an-original and all of which, when taken together, shall be deemed to constitute the same Agreement.

6.8 Further Assurances. Each of the parties hereto shall execute such further instruments and take such additional actions as the other party shall reasonably request in order to effectuate the purposes of this Agreement.

6.9 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and his heirs and administrators and the Company and its, successors and assigns, except that Executive may not assign Executive’s rights or delegate Executive’s obligations hereunder without the prior written consent of the Company. Without limiting the generality of the foregoing, the Company’s rights and obligations under this Agreement may be assigned by the Company to the purchaser or its affiliate in connection with an Asset Sale if the Executive becomes an employee of the purchaser or an affiliate immediately after the Asset Sale, in which case the assignee shall expressly assume and agree to perform the obligations set forth in this Agreement in the same manner and to the same extent as if it were the Company and the Company shall by virtue thereof and without further act be released from its obligations hereunder.

[Signatures begin on the next page.]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

INTRICON CORPORATION

/s/ Scott Longval

Name: Scott Longval

Title: Chief Financial Officer

	EXECUTIVE
	/s/ Mark. S. Gorder
	Mark S. Gorder

EX-10.2 4 intricon074082_ex10-2.htm FORM OF EMPLOYMENT AGREEMENT FOR EXECUTIVE OFFICERS Exhibit 10.2 to IntriCon Corporation Form 8-K dated October 5, 2007

Exhibit 10.2

Form of Employment Agreement between the Company and

each of the other executive officers of the Company

The following agreement is the form of employment agreement that the Company uses for its executive officers other than its chief executive officer. On October 5, 2007, the Company entered into an employment agreement with each of the executive officers listed below using the attached form. The form of each employment agreement is identical except for the principal position, annual compensation and period for which the executive is entitled to receive severance in the event that his employment is terminated without cause, as defined in the agreement.

Name and Principal Position	Minimum Base Salary	Severance Period
Scott Longval, Chief Financial Officer	$130,000	three months

Steven M. Binnix, Vice President and General Manager of RTI Electronics	$156,000	one year

Christopher D. Conger, Vice President, Research and Development	$145,600	ten months

Michael P. Geraci, Vice President, Sales and Marketing	$156,000	one year

Dennis L. Gonsior, Vice President, Global Operations	$145,600	one year

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is made and dated as of October 5, 2007, between INTRICON CORPORATION, a Pennsylvania corporation (the “Company”), and ___________________________ (“Executive”).

BACKGROUND

Executive is to be in the employ of the Company in the capacity of _______________ on the terms and conditions contained in this Agreement. Executive will be substantially involved with the Company’s operations and management and will have trade secrets and other confidential information relating to the Company and its customers; accordingly, the noncompetition agreement and other restrictive covenants contained in Section 5 of this Agreement constitute essential elements hereof.

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and intending to be legally bound hereby, the parties hereto agree as follows:

SECTION 1. CAPACITY AND DUTIES

1.1 Employment; Acceptance of Employment. The Company hereby employs Executive and Executive hereby agrees to employment by the Company for the period and upon the terms and conditions hereinafter set forth.

1.2 Capacity and Duties.

(a) Executive shall serve as _________________. Executive shall perform such other duties and shall have such authority consistent with his position as may from time to time be specified by the Board of Directors of the Company.

SECTION 2. TERM OF EMPLOYMENT

2.1 Term. Unless earlier terminated in accordance with the other provisions hereof, the term of Executive’s employment hereunder shall continue until April 30, 2008, provided that the employment term automatically shall be extended for successive periods of one (1) year each unless written notice of termination of the automatic renewal of the term (“Non-renewal Notice”) is given by one party hereof to the other at least sixty (60) days prior to the end of the then current employment term (as so extended or earlier terminated, the “Term”).

SECTION 3. COMPENSATION

3.1 Basic Compensation. As compensation for Executive’s services, the Company or a subsidiary of the Company shall pay to Executive a salary at an annual rate as shall be established from time to time by the Board of Directors of the Company or the Compensation Committee of the Board of Directors of the Company. In no event shall Executive’s salary be less than $_________, unless Executive consents to a lesser amount. Executive’s annual salary, as determined in accordance with this Section 3.1, is hereinafter referred to as his “Base Salary,” and shall be payable in periodic installments in accordance with the Company’s regular payroll practices in effect from time to time.

3.4 Vacation. During the Term, Executive shall be entitled to a paid vacation in accordance with the Company’s vacation policy.

SECTION 4. TERMINATION OF EMPLOYMENT

amounts (including salary, bonuses, expense reimbursement, etc.) due and payable under this Agreement as of the date of such termination. Upon such termination, Executive shall be entitled to continue to receive medical benefits coverage for Executive and Executive’s spouse (if any) in accordance with the Company’s policies in effect from time to time through the remainder of the then-current Term, and shall be entitled to benefits under any Disability Policies to the extent provided therein. Executive’s disability shall be determined in the reasonable judgment of the Board of Directors of the Company. Nothing in this Agreement shall require Company to continue to pay any compensation to Executive for any period in which he is unable to perform his duties hereunder due to physical or mental illness in excess of the Company’s paid sick leave policy period.

(i) fraud or dishonesty in connection with Executive’s employment or theft, misappropriation or embezzlement of the Company’s funds;

(iii) material breach of Executive’s obligations under this Agreement;

(iv) repeated and consistent failure of Executive to be present at work during normal business hours unless the absence is because of a disability as described in Section 4.2 herein;

(v) willful violation of any express direction or requirement established by the Board of Directors of the Company, as determined by a majority of Board of Directors of the Company;

(vi) insubordination, gross incompetence or misconduct in the performance of, or gross neglect of, Executive’s duties hereunder, as determined by a majority of Board of Directors of the Company; or

(vii) use of alcohol or other drugs which interfere with the performance by Executive of his duties, or use of any illegal drugs or narcotics.

4.4 Termination without Cause.

(a) If Executive’s employment is terminated by the Company prior to the end of the Term for any reason other than Cause or the death or disability of Executive:

(iii) Executive shall be entitled to receive medical benefits coverage in accordance with the Company’s policies in effect from time to time through the Severance Period;

(b) Except for the provisions of this Section 4.4, the Company shall have no further obligation to Executive hereunder.

(c) “Severance Period” means a period equal to 30 days for each year of continuous full-time service (“year of service”) that Executive has been employed by Company but in no event shall the Severance Period be less than 90 days or greater than 365 days, regardless of the Executive’s years of service. The Severance Period shall begin on the date of the termination of Executive’s employment pursuant to Section 4.4(a). The parties acknowledge that, as of the date of this Agreement, Executive has ___ years of service, based on an initial employment date of _________. [Note: If Executive has 12 years of service, this section will read as follows: “Severance Period” means a period equal to one year beginning on the date of the termination of Executive’s employment pursuant to Section 4.4(a).]

4.6 Termination following a Change of Control.

(i) the Company shall pay or cause to be paid to Executive, one year’s Base Salary at the rate being earned by Executive immediately prior to the Change of Control or immediately prior to such Involuntary Termination, whichever is greater (the “Change of Control Payment”), together with all unpaid bonus and salary due and payable to Executive; provided, however, that the Company need not make such Change of Control Payment if the Change of Control is an Asset Sale ( as defined below) and the purchaser in such Asset Sale or an affiliate of such purchaser offers to employ Executive commencing at the time of closing of the Asset Sale at not less than the same rate of compensation (including both base salary and good faith bonus potential) and level of benefits as Executive was receiving immediately prior to the Asset Sale and agrees to employ Executive for at least a one year period after the consummation of the Asset Sale.

(e) The following terms used herein have the meanings set forth below:

(ii) “Change of Control” of the Company means an “Asset Sale” or a “Change in Majority Stock Ownership.”

(iv) “Disability” of Executive means that after being provided with any accommodation or leave required of the Company by law, the Executive still shall be physically or mentally incapacitated and as a result thereof shall be unable to continue substantially proper performance of his duties (reasonable absences because of sickness for up to six consecutive months excepted). If Executive shall not agree with a determination to terminate him because of Disability, the question of Executive’s ability shall be submitted to an impartial and reputable physician selected either by a mutual agreement of the parties or by the then president of the Medical Society of the county in which Executive is employed, and such physician’s determination of disability shall be binding on the parties.

4.9 Stock Options.

If during the Term: (a) Executive’s employment is terminated by the Company for any reason other than for Cause, (b) a Change of Control occurs or (c) Executive terminates his employment under circumstances that would constitute an Involuntary Termination (regardless that no Change of Control has occurred), then any stock options granted to Executive by the Company which have not been exercised by Executive prior to Executive’s termination shall accelerate and be exercisable in full and may be exercised by Executive or his legal representative, estate, personal representative or beneficiary who acquired the right to exercise

such options by bequest or inheritance, as the case may be, to the extent provided by the terms of the applicable stock option plan or any option agreement; provided, however, that with respect to any acceleration of stock options as a result of the termination of Executive’s employment under clause (a) or (c), it shall be a condition precedent to such acceleration that Executive shall have complied with Section 4.10 of this Agreement.

4.10 Release.

Notwithstanding the foregoing, in the event of the termination of Executive’s employment for any reason, the Company shall not be obligated to make any payments or provide any continuing benefits under this Section 4 (other than with respect to payments and benefits earned and payable with respect to period prior to the date of termination) unless Executive shall have executed and delivered to the Company a further agreement (“Release”), to be prepared at the time of Executive’s termination of employment in form acceptable to the Company, that shall provide (i) an unconditional release of all claims (other than claims for amounts due under this Agreement), charges, complaints and grievances, whether known or unknown to Executive, against the Company or any of its affiliates, through date of Executive’s termination of employment; (ii) an undertaking to maintain the confidentiality of such agreement; (iii) an undertaking to indemnify the Company if Executive breaches such agreement; and (iv) a covenant not to sue the Company or any of its affiliates with respect to the subject matter of such release; and any waiting period or revocation period provided by law for the effectiveness of such release shall have expired without Executive’s having revoked such Release.

SECTION 5. RESTRICTIVE COVENANTS

5.2 Inventions and Improvements. Executive shall promptly communicate to the Company all ideas, discoveries, inventions and business opportunities which are or may be useful to the Company or its business. Executive acknowledges that all such ideas, discoveries, inventions, and improvements which heretofore have been or are hereafter made, conceived, or reduced to practice by him at any time during his employment with the Company and every item of knowledge relating to the Company’s business interests (including business opportunities) heretofore or hereafter gained by him at any time during his employment with the Company are the property of the Company, and Executive hereby irrevocably assigns all such ideas, discoveries, inventions, improvements, and knowledge to the Company for its sole use and

benefit, without additional compensation. The provisions of this Section 5.2 shall apply whether such ideas, discoveries, inventions, improvements or knowledge were or are conceived, made or gained by him alone or with others, whether during or after usual working hours, whether on or off the job, whether applicable to matters directly or indirectly related to the Company’s business interests (including potential business interests), and whether or not within the specific realm of his duties. It shall be conclusively presumed that ideas, discoveries, inventions, and improvements relating to the Company’s business interests or potential business interests conceived by Executive during the six month period following termination of his employment are, for the purposes of this Agreement, conceived prior to termination of his employment hereunder. Executive shall, upon request of the Company, but at no expense to Executive, at any time during or after his employment with the Company, sign all instruments and documents reasonably requested by the Company and otherwise cooperate with the Company to protect its right to such ideas, discoveries, inventions, improvements, and knowledge, including applying for, obtaining, and enforcing patents and copyrights thereon in such countries as the Company shall determine.

5.4 Injunctive and Other Relief.

(a) Executive acknowledges and agrees that the covenants contained herein are fair and reasonable in light of the consideration paid hereunder, and that damages alone shall not be an adequate remedy for any breach by Executive of his covenants contained herein and accordingly expressly agrees that, in addition to any other remedies which the Company may have, the Company shall be entitled to injunctive or other equitable relief in any court of competent jurisdiction for any breach or threatened breach of any such covenants by Executive. Nothing contained herein shall prevent or delay the Company from seeking, in any court of competent jurisdiction, specific performance or other equitable remedies in the event of any breach or intended breach by Executive of any of his obligations hereunder.

5.5 Definition of the “Company.” The “Company” as used in this Section 5 includes all affiliates and subsidiaries of the Company.

SECTION 6. MISCELLANEOUS

6.2 Arbitration. All claims and disputes relating to this Agreement or concerning Executive’s employment or termination shall be conclusively resolved by arbitration in Philadelphia, Pennsylvania, under the then existing rules of the American Arbitration Association. Judgment upon any award rendered may be entered by either party in any court of competent jurisdiction. The cost of such arbitration shall be borne equally by the parties or as otherwise directed by the arbitrators. This Section 6.2 shall not limit the right of the Company to seek judicial relief pursuant to Section 5.4 herein without prior arbitration.

(a)

If to the Company:

IntriCon Corporation

Arden Hills Office

1260 Red Fox Road

Arden Hills, MN 55112

Attention: Mark S. Gorder

Telecopy No.: 651-636-3682

(b)

If to Executive:

_________________________

Telecopy No:______________

6.5 Entire Agreement; Modification; Advice of Counsel.

(a) This Agreement constitutes the entire agreement between the parties hereto with respect to the matters contemplated herein and therein and supersedes all prior agreements and understandings with respect thereto. No amendment, modification, or waiver of this Agreement shall be effective unless in writing. Neither the failure nor any delay on the part of any party to exercise any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise of the same or of any other right or remedy with respect to such occurrence or with respect to any other occurrence.

(b) Executive acknowledges that he has been afforded an opportunity to consult with his counsel with respect to this Agreement. In view of the fact that each of the parties hereto have been represented by their own counsel and this Agreement has been fully negotiated by all parties, the legal principle that ambiguities in a document are construed against the draftsperson of that document shall not apply to this Agreement.

[Signatures begin on the next page.]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

	INTRICON CORPORATION

	By
		Name: Mark S. Gorder Title: President and Chief Financial Officer

	EXECUTIVE

EX-10.3 5 intricon074082_ex10-3.htm FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT Exhibit 10.3 to IntriCon Corporation Form 8-K dated October 5, 2007

Exhibit 10.3

FIRST AMENDMENT

LOAN AND SECURITY AGREEMENT

THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made and entered into as of September 29, 2007, by and among INTRICON CORPORATION a Pennsylvania corporation (“IntriCon”), RESISTANCE TECHNOLOGY, INC., a Minnesota corporation (“RTI”), RTI ELECTRONICS, INC., a Delaware corporation (“RTIE”), and INTRICON TIBBETTS CORPORATION (formerly known as TI Acquisition Corporation), a Maine corporation (“ITC”) (each, a “Borrower”; collectively, the “Borrowers”), and LASALLE BANK NATIONAL ASSOCIATION, a national banking association (the “Bank”).

RECITALS:

A. Borrowers and Bank are parties to a certain Loan and Security Agreement dated as of May 22, 2007 (the “Loan Agreement”). Capitalized terms not otherwise defined in this Amendment shall have the meanings assigned to them in the Loan Agreement.

B. Borrowers have requested that Bank modify the Tangible Net Worth Covenant, and Bank has agreed to do so upon the terms and subject to the conditions set forth in this Amendment.

AGREEMENTS:

NOW, THEREFORE, in consideration of the premises herein set forth and for other good and valuable consideration, the nature, receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

Recitals. Borrowers and Bank agree that the Recitals set forth above are true and correct.

Amendment to Tangible Net Worth Covenant.

a. Restated Tangible Net Worth. Section 10.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

10.1 Tangible Net Worth. As of each of the measurement dates set forth in the chart below, the Borrowers shall maintain consolidated Tangible Net Worth in an amount not less than the amount set opposite such date in the chart below:

Measurement Date	Tangible Net Worth Requirement
September 30, 2007:	$4,700,000
December 31, 2007:	$5,000,000
March 31, 2008, and the last day of each fiscal quarter thereafter:	Tangible Net Worth Requirement as of the immediately preceding Measurement Date, plus fifty percent (50.00%) of the aggregate consolidated Net Income earned by the Borrowers and their respective Subsidiaries during the immediately preceding fiscal quarter, provided, however, that net losses incurred in any fiscal quarter shall not be subtracted in the determination of the Tangible Net Worth Requirement.

b. Subject to Section 3 below, this Amendment shall be deemed effective as of September 30, 2007.

3. Conditions Precedent. This Amendment shall become effective upon delivery to the Bank of the following, each in form and substance acceptable to the Bank:

a. This Amendment, duly executed by Borrowers.

b. With respect to each Borrower, a copy of the resolutions of the Board of Directors of such Borrower authorizing the execution, delivery and performance of this Amendment certified as true and accurate by an officer of such Borrower, along with a certificate of such officer which certifies that, except as disclosed in and attached to such certificate, there has been no amendment to either the Articles of Incorporation or the Bylaws of such Borrower since true and accurate copies of the same were last delivered and certified to Bank, and that said Articles of Incorporation and the Bylaws (i) remain in full force and effect as of the date of this Amendment, (ii) identify each officer of such Borrower authorized to execute this Amendment and any other instrument or agreement executed by such Borrower in connection with this Amendment, and (iii) set forth specimen signatures of each officer of such Borrower referred to above and identifies the office or offices held by such officer.

c. Such other documents, instruments and agreements as Bank may reasonably require, and payment of all unpaid legal fees and expenses incurred by Bank through the date of this Amendment in connection with the Loan Agreement and this Amendment.

4. Representations; No Default. Each Borrower represents and warrants that: (a) such Borrower has the power and legal right and authority to enter into this Amendment and has duly authorized the execution and delivery of this Amendment and other agreements and documents executed and delivered by such Borrower in connection herewith, (b) neither this Amendment nor the agreements contained herein contravene or constitute a Default or Event of Default under the Loan Agreement or a default under any other agreement, instrument or indenture to which such Borrower is a party or a signatory, or any provision of such Borrower’s Articles of Incorporation or Bylaws or, to the best of such Borrower’s knowledge, any other agreement or requirement of law, or result in the imposition of any lien or other encumbrance on any of its property under any agreement binding on or applicable to such Borrower or any of its property except, if any, in favor of Bank, (c) no consent, approval or authorization of or registration or declaration with any party, including but not limited to any governmental authority, is required in connection with the execution and delivery by such Borrower of this Amendment or other agreements and documents executed and delivered by such Borrower in connection herewith or the performance of obligations of such Borrower herein described, except for those which such Borrower has obtained or provided and as to which such Borrower has delivered certified copies of documents evidencing each such action to Bank, (d) no events have taken place and no circumstances exist at the date hereof which would give such Borrower grounds to assert a defense, offset or counterclaim to the obligations of such Borrower under the Loan Agreement or any of the other Loan Documents, (e) there are no known claims, causes of action, suits, debts, liens, obligations, liabilities, demands, losses, costs and expenses (including attorneys’ fees) of any kind, character or nature whatsoever, fixed or contingent, which such Borrower may have or claim to have against the Bank, which might arise out of or be connected with any act of commission or omission of the Bank existing or occurring on or prior to the date of this Amendment, including, without limitation, any claims, liabilities or obligations arising with respect to the indebtedness evidenced by the Notes, and (f) no Event of Default has occurred and is continuing under the Loan Agreement.

5. Affirmation, Further References. Bank and Borrowers each acknowledge and affirm that the Loan Agreement, as hereby amended, is hereby ratified and confirmed in all respects and all terms, conditions and provisions of the Loan Agreement (except as amended by this Amendment) and of each of the other Loan Documents shall remain unmodified and in full force and effect. All references in any document or instrument to the Loan Agreement are hereby amended and shall refer to the Loan Agreement as amended by this Amendment.

6. Merger and Integration, Superseding Effect. This Amendment, from and after the date hereof, embodies the entire agreement and understanding between the parties hereto and supersedes and has merged into it all prior oral and written agreements on the same subjects by and between the parties hereto with the effect that this Amendment, shall control with respect to the specific subjects hereof and thereof.

7. Severability. Whenever possible, each provision of this Amendment and any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto shall be interpreted in such manner as to be effective, valid and enforceable under the applicable law of any jurisdiction, but, if any provision of this Amendment or any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto shall be held to be prohibited, invalid or unenforceable under the applicable law, such provision shall be ineffective in such jurisdiction only to the extent of such prohibition, invalidity or unenforceability, without invalidating or rendering unenforceable the remainder of such provision or the remaining provisions of this Amendment or any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto in such jurisdiction, or affecting the effectiveness, validity or enforceability of such provision in any other jurisdiction.

8. Successors. This Amendment shall be binding upon Borrowers and Bank and their respective successors and assigns, and shall inure to the benefit of Borrowers and Bank and to the respective successors and assigns of Bank.

9. Costs and Expenses. Each Borrower jointly and severally agrees to reimburse Bank, upon execution of this Amendment, for all reasonable out-of-pocket expenses (including attorneys’ fees and legal expenses of counsel for Bank) incurred in connection with the Loan Agreement, including in connection with the negotiation, preparation and execution of this Amendment and all other documents negotiated, prepared and executed in connection with this Amendment, and in enforcing the obligations of Borrowers under this Amendment, and to pay and save Bank harmless from all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of this Amendment.

10. Headings. The headings of various sections of this Amendment have been inserted for reference only and shall not be deemed to be a part of this Amendment.

11. Counterparts. This Amendment may be executed in several counterparts as deemed necessary or convenient, each of which, when so executed, shall be deemed an original, provided that all such counterparts shall be regarded as one and the same document, and any party to this Amendment may execute any such agreement by executing a counterpart of such agreement.

12. Governing Law. This Amendment shall be governed by the internal laws of the State of Minnesota, without giving effect to conflict of law principles thereof.

13. Release of Rights and Claims. Each Borrower, for itself and its successors and assigns, hereby releases, acquits, and forever discharges the Bank and its successors and assigns for any and all manner of actions, suits, claims, charges, judgments, levies and executions occurring or arising from the transactions entered into with the Bank prior to entering into this Amendment whether known or unknown, liquidated or unliquidated, fixed or contingent, direct or indirect which such Borrower may have against the Bank.

14. No Waiver. Nothing contained in this Amendment (or in any other agreement or understanding between the parties) shall constitute a waiver of, or shall otherwise diminish or impair, the Bank’s rights or remedies under the Loan Agreement or any of the other Loan Documents, or under applicable law.

[Remainder of page intentionally left blank;

signature page follows]

IN WITNESS WHEREOF, the parties hereto have entered into this Amendment as of the date first above written.

BORROWERS:	INTRICON CORPORATION, a Pennsylvania corporation

	By:	/s/ Scott Longval
	Name: Scott Longval Title: Chief Financial Officer

	RESISTANCE TECHNOLOGY, INC., a Minnesota corporation

	By:	/s/ Scott Longval
	Name: Scott Longval Title: Chief Financial Officer

	RTI ELECTRONICS, INC., a Delaware corporation

	By:	/s/ Scott Longval
	Name: Scott Longval Title: Chief Financial Officer

	INTRICON TIBBETTS CORPORATION, (formerly known as TI Acquisition Cororation), a Maine corporation

	By:	/s/ Scott Longval
	Name: Scott Longval Title: Chief Financial Officer

BANK:	LASALLE BANK NATIONAL ASSOCIATION, a national banking association

	By:	/s/ Peter Pricco
	Name: Peter Pricco Title: Vice President

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