Exhibit 10.4.1
SEVERANCE AND RESTRICTIVE COVENANT AGREEMENT
THIS SEVERANCE AND RESTRICTIVE COVENANT AGREEMENT (this “Agreement”) is dated as of ______, 20__ (the “Effective Date”), between TESSCO TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Company”), and _____ (“Executive”).
The term of this Agreement shall commence on and as of the Effective Date and continue until Executive’s employment has terminated and the obligations of the parties hereunder have terminated or expired or have been satisfied in accordance with their terms.
For purposes of this Agreement, the following terms have the meanings set forth in this Section:
(c) Executive’s conviction of (including a plea of nolo contendere to) a crime constituting a felony; |
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notice of such failure or (y) if such failure cannot be cured in such period and the continuation of such failure will not be materially and demonstrably injurious to the Company, Executive does not commence and diligently seek to cure such failure within such period and thereafter continue to seek to cure such failure until cured; or |
(a) any “person” (as that term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than Robert B. Barnhill, Jr., his affiliates, and members of his family) becomes the beneficial owner, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the then-outstanding securities of the Company; or |
(b) there is a change in the composition of a majority of the Board of Directors of the Company within twelve (12) months after any “person” (as defined above) (other than Robert B. Barnhill, Jr., his affiliates, and members of his family) becomes the beneficial owner, directly or indirectly, of securities of the Company representing thirty percent (30%) or more of the combined voting power of the then-outstanding securities of the Company; or |
(c) there is consummated any consolidation or merger or share exchange involving the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s common stock would be converted into cash, securities, or other property, other than a merger of the Company in which the holders of the Company’s common stock immediately before the merger have substantially the same proportionate ownership of common stock of the surviving entity immediately after the merger; or |
(d) there is consummated any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or a substantial portion of the assets of the Company other than to one or more of its wholly-owned subsidiaries; or |
(e) the stockholders of the Company approve a plan or proposal for the complete or partial liquidation, dissolution, or divisive reorganization of the Company. |
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unable to perform Executive’s duties hereunder for any period of one hundred eighty (180) consecutive days or two hundred seventy (270) days, whether or not consecutive, in any period of three hundred sixty five (365) days, despite provision by the Company of reasonable accommodations as required by law. The determination of whether a Disability exists shall be made by a licensed physician who is board certified in the specialty mutually determined by the Company and Executive to be applicable and who is mutually selected by the Company and Executive. If the parties cannot agree on such a physician or specialty, each party shall select a physician and the two physicians so selected shall select a third physician board certified in the specialty determined appropriate by the two physicians, and such board-certified physician shall make the determination of whether a Disability exists. Absent certification by the physician so selected that the circumstances of Executive’s condition have changed materially since the time of the then most recent determination, neither party shall be able to initiate a determination as to Disability for a period of nine months after the completion of the then most recent determination. |
2.7. “Good Reason” means the occurrence, without Executive’s express prior written consent, of any of the following: |
(c) Any relocation by the Company of Executive’s primary office work location to a point that is more than fifty (50) miles from 11126 McCormick Road, Hunt Valley, MD 21031 resulting from or in connection with a Change in Control; |
but only if (i) Executive delivers a written notice to the Company specifically identifying the occurrence and demanding that it be remedied within ninety (90) days of the initial existence of such occurrence and (ii) if the same is capable of being rectified, the Company fails to rectify the same within thirty (30) days after receiving such written notice or, if the same is not capable of being rectified within such period of time, the Company fails to commence diligently to seek to rectify the same within such period and thereafter to continue to seek to rectify such failure until rectified.
For the avoidance of doubt: (x) neither the relocation of Executive’s place of employment to another location nor the occurrence of a Change in Control shall, of itself, constitute “Good Reason” and (y) any prospective action that would, if actually taken or implemented, constitute Good Reason through the application of (a) or (b) above (after the expiration without cure of the applicable notice and cure period provided for above) shall not in any event be deemed to have occurred unless and until such action is actually taken or implemented.
2.8. “Separation from Service” means a termination of Executive’s employment that constitutes a separation from service under Section 409A(a)(2)(A)(i) of the Code. |
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(d) Effective Date of Termination. Unless otherwise agreed upon in writing by the Company and Executive: |
(i) The effective date of termination of Executive’s employment in the case of a termination of Executive’s employment by the Company for any or no reason shall not be more than ninety (90) days after the date the notice of termination is given by the Company; and |
(ii) The effective date of termination in the case of a termination of Executive’s employment by Executive for any reason shall not be less than thirty (30) nor more than thirty-five (35) days after the date the notice of termination is given by Executive. |
The foregoing, however, shall not preclude the Company from requiring that Executive take a leave of absence with pay until the expiration of the period between the date the notice of termination is given and the effective date of termination.
(e) Section 409A. |
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3.3. Termination Without Cause or With Good Reason. If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, the Company shall pay to Executive: |
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the Date of Termination and (y) the tenth (10th) day after Executive has executed and delivered to the Company the general release agreement required by Section 3.7 (and provided that Executive has not thereafter revoked or rescinded such release) and (B) continuing thereafter monthly until paid in full. |
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Company from any obligation it would otherwise have to make further payments or provide further benefits under this Agreement. Executive expressly acknowledges that the Company is prepared to vigorously enforce these promises and that violation of Executive’s obligations could result in an award of damages or other legal remedies against Executive and Executive’s subsequent employers. |
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(b) Executive’s obligations under this Section 3.9 and Section 4 shall survive termination of Executive’s employment and the expiration of this Agreement. |
(c) Upon termination of Executive’s employment, Executive will be deemed to have resigned from all offices and directorships then held with the Company or any of its affiliates. |
3.11. No Duty to Mitigate. No amount due to Executive under this Agreement by virtue of the termination of Executive’s employment (other than payments to be provided in respect of health benefits to the extent that Executive is entitled to similar benefits by virtue of new employment) shall be reduced by or on account of any compensation received by Executive as the result of employment by another employer. |
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For the avoidance of doubt and without limitation, subsection (i) above is intended, among other things, to prohibit, during the Employment Period and Restriction Period, the solicitation by Executive of any customer, client, or vendor of the Company for the benefit of or in furtherance of a Competitive Business and the engagement or participation of Executive by or with any business that solicits or engages in business with any customer, client, or vendor of the Company in furtherance of a Competitive Business.
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(c) Notwithstanding the foregoing, Executive may own up to a five percent (5%) interest in a publicly traded corporation or other person engaged in a Competitive Business. |
(d) For purposes hereof, “Restriction Period” means the period beginning upon the Date of Termination and ending on the first anniversary thereof. |
(a) Certain Rules of Construction.Number. The definitions contained in Section 2 and elsewhere in this Agreement shall be equally applicable to both the singular and plural forms. |
(b) “Including”; “Or.” The word “including” means and shall be read as “including but not limited to” and the word “or” means “or” in the nonexclusive sense, i.e., either “and” or “or.” |
(c) Section and Subsection References. Except as otherwise specified herein, references in this Agreement to Sections, subsections, and paragraphs are references to the Sections, subsections, and paragraphs of this Agreement. |
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(d) Headings. The headings of the Sections, subsections, and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or affect the construction hereof. |
(e) “Herein.” Words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. |
(f) “Person.” Except as may be expressly provided otherwise herein, the word “person” includes an individual, corporation, general or limited partnership, joint venture, limited liability company, business trust, firm, association, or other form of business entity. |
(g) Joint Drafting. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring either party by virtue of the authorship of any of the provisions of this Agreement. |
5.2. Successors; Binding Agreement. |
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transmission, in each case with receipt confirmed, (iii) one business day after delivery to an overnight courier for next day delivery, or (iv) upon receipt if sent by certified or registered mail. In each case, notice shall be addressed as follows: |
If to Executive:As set forth below Executive’s signature
to this Agreement
If to the Company:TESSCO Technologies Incorporated
11126 McCormick Road
Hunt Valley, MD 21031
Attention: President and CEO
Fax: (410) 229-1669
or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon actual receipt.
5.8. Nondisparagement. The Company and Executive agree that neither will knowingly make any false statement intended or reasonably likely to disparage or defame the other to any person not a party to this Agreement relating to the employment relationship between the Company and Executive, the Company's business, or Executive’s performance. |
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(c) Without implying any limitation on the requirement of subsection (a) that disputes be submitted to and resolved by arbitration, each party hereby irrevocably waives any right to a trial by jury in any action or proceeding arising under or relating to this Agreement or to the terms or conditions of Executive’s employment with the Company. |
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IN WITNESS WHEREOF, the parties have executed this Severance and Restrictive Covenant Agreement as of the date and year first above written.
TESSCO TECHNOLOGIES INCORPORATED
By:___________________________________
Robert B. Barnhill, Jr.
President and CEO
EXECUTIVE:
______________________________________
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