SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): April 18, 2006
TII NETWORK TECHNOLOGIES, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE
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(State of Incorporation)
1-8048 66-0328885
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(Commission File No.) (IRS Employer Identification No.)
1385 Akron Street, Copiague, New York 11726
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Address of Principal Executive Offices) (Zip Code)
(631) 789-5000
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(Registrant's telephone number, including area code)
Not Applicable
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(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:
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[_] Pre-commencement communication pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communication 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.
On April 18, 2006, the Company and Timothy J. Roach entered into a
Third Amended and Restated Employment Agreement ("Employment Agreement"), which
replaced an Amended and Restated Employment Agreement dated May 17, 2005. The
following summary of the Employment Agreement is qualified in its entirety by
reference to the full text of the Employment Agreement, a copy of which is
attached to this Report as Exhibit 99.1 and is incorporated herein by reference.
The Employment Agreement now provides for Mr. Roach to continue to
serve as the Company's President and Chief Executive Officer for a term ending
June 30, 2008, with automatic one year extensions unless the Company gives
notice of termination of Mr. Roach's employment at least three months prior to
the then scheduled termination date. Alternatively, the Company may elect to
terminate the Employment Agreement and retain the services of Mr. Roach as an
employee on an "at will" basis by offering him a severance agreement of the type
entered into by the Company with certain executive officers and described in the
Company's Current Report on Form 8-K dated (date of earliest event reported)
October 14, 2005 (which description is incorporated herein by reference), but
with a twelve, rather than six, month severance period. Mr. Roach may, at that
time, elect to terminate his employment, accept the Company's alternative offer,
if extended to him, or, in lieu of an extension of his Employment Agreement,
elect to become an "at will" employee under such severance agreement.
Under the Employment Agreement, Mr. Roach is entitled to an annual
salary of $300,000 per year (unchanged from the prior agreement), subject to
increases and bonuses at the discretion of the Board of Directors or
Compensation or other authorized Committee of the Board. The Company also is to
continue to maintain the medical, dental and disability insurance provided to
Mr. Roach at levels and terms no less favorable than in effect on April 18,
2006. In addition to group life insurance under Company programs that Mr. Roach
is eligible to participate in, the Company is also to pay the premiums of up to
$24,000 per annum on one or more life insurance policies that Mr. Roach may
elect to acquire, with Mr. Roach to be the owner of, and to have the right to
designate beneficiaries of, such policies.
If Mr. Roach's employment is terminated by the Company for any reason,
other than death, disability or for cause, or if Mr. Roach terminates his
employment for good reason (in general, an adverse change in his powers, duties
or position, a reduction of his salary or benefits, or certain changes in the
location where his duties are to be performed), as a result of a breach of the
Employment Agreement by the Company which remains uncured for ten days after
notice, or within one year after a "change in control" (as defined) of the
Company if Mr. Roach reasonably determines that the change in control has caused
him to be unable to effectively carry out the authorities, powers, functions or
duties attendant to his position immediately prior to the change in control and
such situation is not remedied within thirty days after notice, Mr. Roach will
be entitled to receive, in general, his compensation and benefits until the then
scheduled end of the term of his Employment Agreement, his bonus for the year in
which termination occurs on a pro rated basis in the case of such termination by
the Company and, as severance, a lump sum in an amount equal to the sum (two
times the sum in the case of termination as a result of a change in control in
the circumstances described above) of his annual salary in effect immediately
prior to his cessation of employment (or, if greater, his highest annual salary
rate in effect at any time during the year preceding the date of such
termination) and all bonuses paid or payable in respect
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of the Company's most recent fiscal year ended prior to the date of such
termination (or, if greater, the bonus paid in respect of the Company's then
current fiscal year or the immediately preceding fiscal year). In addition,
during the one year period following the date of such termination, Mr. Roach
would continue to receive the benefits provided for in his Employment Agreement
and any additional benefits that may be provided to executive officers or their
dependents during such period in accordance with the Company's policies and
practices, and, assuming that his employment had been terminated by the Company
other than for cause or by Mr. Roach for good reason or as a result of a change
in control in the circumstances described above, any stock options granted to
him which had not vested would become vested on the date of such termination and
become exercisable for the maximum time allowed for the exercise thereof under
the terms of the applicable stock option but for not less than six months. In
the event of termination of his employment by reason of his death or disability
(as defined), Mr. Roach (or his beneficiaries) will also be entitled to
severance equal to one year's annual salary, a continuation of benefits (to him
or his beneficiaries) for one year in the case of death or two years in the case
of termination by reason of disability and his bonus for the year in which
termination occurs on a pro rated basis, and all outstanding options held by Mr.
Roach will fully vest and become exercisable for the maximum time allowed for
the exercise thereof under the terms of the applicable stock option but for not
less than six months.
Mr. Roach has agreed, among other things, not to disclose confidential
information of the Company and, during the term of the agreement and for a
Restricted Period (as described below) thereafter, not to directly or
indirectly, engage, participate, invest or have an interest in any business that
engages in the manufacture and sale of surge protector devices for the telephone
industry or any other activity which is competitive with the Company's business
as conducted within twelve months preceding the end of the term of his
Employment Agreement. The Restricted Period is one year after the date of
termination of Mr. Roach's employment in the case of termination due to
disability, for cause (as defined) or Mr. Roach's voluntary termination of
employment (other than for good reason or as a result of a change in control of
the Company in the circumstances described above) or if the term of the
Employment Agreement expires and Mr. Roach's elects to terminate his employment
after the Company offers an employment alternative provided in the Employment
Agreement. If the Company elects to terminate Mr. Roach's employment (other than
due to disability or for cause), including at the end of the term of the
Employment Agreement, or if Mr. Roach terminates his employment for good reason
or as a result of a change in control of the Company under the circumstances
described above, the Company may invoke a one year Restricted Period by paying
him an amount equal to his annual salary at the rate in effect immediately prior
to his termination of employment (or, if greater, his highest salary in effect
at any time during the one year period preceding the date of such termination).
Except with respect to termination by reason of Mr. Roach's disability, the
Company may extend the Restricted Period for a second year by paying Mr. Roach
50% of his annual salary in effect immediately prior to his cessation of
employment (or, if greater, 50% of the highest annual salary rate in effect at
any time during the one-year period preceding the date of termination of his
employment).
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Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired: None
(b) Pro Forma Financial Information: None
(c) Exhibits:
99.1 Third Amended and Restated Employment
Agreement, dated April 18, 2006, between the
Company and Timothy J. Roach.
99.2 Description of the Company's Severance
Agreements contained in the Company's
Current Report on Form 8-K dated (date of
earliest event reported) October 14, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TII NETWORK TECHNOLOGIES, INC.
Date: April 21, 2006 By: /s/ Kenneth A. Paladino
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Kenneth A. Paladino,
Vice President-Finance, Treasurer and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number
99.1 Third Amended and Restated Employment Agreement, dated April 18, 2006,
between the Company and Timothy J. Roach.
99.2 Description of the Company's Severance Agreements contained in the
Company's Current Report on Form 8-K dated (date of earliest event
reported) October 14, 2005.