Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made this 31st day of August, 2006 and effective as of March
27, 2006 (the “Effective Date”), by and between TESSCO TECHNOLOGIES
INCORPORATED, a Delaware corporation (the “Company”), and ROBERT B. BARNHILL,
JR. (“Executive”).

BACKGROUND

A.            Pursuant to an Employment Agreement dated March 31, 1994 (as
heretofore amended, the “Existing Employment Agreement”), Executive currently
serves as President, Chief Executive Officer (“CEO”) and Chairman of the Board
(“Chairman”) of the Company. The term of the Existing Employment Agreement is
not fixed but rather is terminable by either party upon three years’ notice.

B.            The Board of Directors of the Company (the “Board”) is desirous of
securing Executive’s continued commitment to serving as President, Chief
Executive Officer, and Chairman of the Company for the five-fiscal-year period
commencing as of the Effective Date and extending through the Company’s fiscal
year ending in 2011 (the “Regular Term”), by which time the Board and Executive
intend to have developed a succession plan and to have engaged a new President
and CEO. The Board further wishes to obtain Executive’s commitment to serve in
the role of Executive Chairman (in addition to his service as a member of the
Board) during the five succeeding fiscal years extending through the end of the
Company’s fiscal year ending in 2016 (the “Transition Period”), during which
period he would initially be responsible for transition and then would serve as
a senior advisor to the new CEO and the Board.

C.            Executive is desirous of providing the commitment sought by the
Board.

D.            The Board and Executive believe that the Existing Employment
Agreement does not accommodate these shared objectives and is outdated in
certain other respects and, accordingly, that it is necessary and appropriate to
replace the Existing Agreement and to enter into this Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the premises and the mutual promises of the
parties herein set forth, and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the Company and Executive
intending to be legally bound agree as follows:

1.             DEFINED TERMS. AS USED IN THIS AGREEMENT, THE FOLLOWING
CAPITALIZED TERMS HAVE THE MEANINGS ASCRIBED TO THEM IN THIS SECTION:

 

(A)           “BENEFITS” MEANS, FOR PURPOSES OF SECTION 7, THOSE BENEFITS AND
PERQUISITES ACTUALLY AFFORDED TO EXECUTIVE OR TO WHICH EXECUTIVE SHALL BE
ENTITLED, AS CONTEMPLATED BY SECTION 5(C), IMMEDIATELY BEFORE THE TERMINATION
DATE.

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(B)           “BENEFIT EQUIVALENT PAYMENT” MEANS, WITH RESPECT TO ANY BENEFIT
THAT, AFTER THE TERMINATION OF EXECUTIVE’S EMPLOYMENT, CANNOT CONTINUE TO BE (OR
IS IN FACT NO LONGER, WITHOUT REGARD TO WHETHER IT CAN OR CANNOT CONTINUE TO BE)
PROVIDED BY THE COMPANY, AN AMOUNT EQUAL TO THE VALUE OF SUCH BENEFIT, GROSSED
UP TO THE EXTENT NECESSARY TO OFFSET ANY ADDITIONAL INCOME TAX COST THAT
EXECUTIVE INCURS BECAUSE SUCH BENEFIT IS NO LONGER PROVIDED DIRECTLY BY THE
COMPANY (THE AMOUNT OF WHICH GROSS-UP PAYMENT SHALL BE DETERMINED USING THE
HIGHEST MARGINAL FEDERAL AND STATE INCOME TAX RATES FROM TIME TO TIME APPLICABLE
TO EXECUTIVE) AND THE INCOME TAX COST OF THE GROSS-UP PAYMENT ITSELF.

 

(C)           “CAUSE” MEANS:

 

(1)           EXECUTIVE’S WILLFUL VIOLATION OF A COMPANY POLICY (EXCLUDING ANY
ACT OR OMISSION THAT EXECUTIVE REASONABLY BELIEVED IN GOOD FAITH TO HAVE BEEN IN
THE BEST INTEREST OF THE COMPANY), WILLFUL COMMISSION OF AN ACT OF FRAUD OR
DISHONESTY, OR WILLFUL ENGAGEMENT IN ILLEGAL CONDUCT OR GROSS MISCONDUCT, WHICH
IN EACH CASE IS MATERIALLY AND DEMONSTRABLY INJURIOUS TO THE COMPANY;

 

(2)           EXECUTIVE’S CONTINUED FAILURE TO SUBSTANTIALLY PERFORM HIS DUTIES
WITH THE COMPANY OR TO SUBSTANTIALLY COMPLY WITH A SPECIFIC AND LAWFUL DIRECTIVE
OF THE BOARD (OTHER THAN A CONTINUED FAILURE CAUSED BY OR ATTRIBUTABLE TO
PHYSICAL OR MENTAL ILLNESS OR INFIRMITY), IN EACH CASE AFTER A WRITTEN DEMAND
FOR SUBSTANTIAL PERFORMANCE OR SUBSTANTIAL COMPLIANCE IS DELIVERED TO EXECUTIVE
BY OR ON BEHALF OF THE BOARD, WHICH DEMAND IS BASED ON A GOOD-FAITH
DETERMINATION BY THE BOARD, AFTER REASONABLE INQUIRY, SPECIFICALLY IDENTIFYING
THE MANNER IN WHICH THE BOARD BELIEVES EXECUTIVE HAS NOT SUBSTANTIALLY PERFORMED
HIS DUTIES OR SUBSTANTIALLY COMPLIED WITH A LAWFUL DIRECTIVE;

 

(3)           EXECUTIVE’S CONVICTION OF (INCLUDING A PLEA OF NOLO CONTENDERE TO)
A CRIME CONSTITUTING A FELONY;

 

(4)           EXECUTIVE’S EMBEZZLEMENT OR CRIMINAL DIVERSION OF FUNDS;

 

(5)           EXECUTIVE’S FAILURE (OTHER THAN BY REASON OF PHYSICAL OR MENTAL
ILLNESS OR INFIRMITY) TO PERFORM OR TO COMPLY WITH ANY MATERIAL TERM OR
CONDITION OF THIS AGREEMENT, WHICH FAILURE:

 

(I)            IS OF SUCH A NATURE THAT IT IS REASONABLY CAPABLE OF BEING CURED,
BUT ONLY IF (X) EXECUTIVE DOES NOT CURE SUCH FAILURE WITHIN THIRTY (30) DAYS
AFTER WRITTEN 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

 

(II)           IS OF SUCH A NATURE THAT IT IS NOT REASONABLY CAPABLE OF BEING
CURED, IN WHICH CASE EXECUTIVE SHALL BE GIVEN WRITTEN NOTICE THEREOF BUT SHALL
NOT BE ENTITLED TO ANY OPPORTUNITY TO CURE SUCH FAILURE.

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(D)           “CHANGE IN CONTROL” MEANS:

 

(1)           ANY “PERSON” (AS SUCH TERM IS USED IN SECTION 13(D) AND 14(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (THE “EXCHANGE ACT”)) (OTHER THAN, UNTIL
SUCH TIME AS EXECUTIVE FOR THE FIRST TIME HEREAFTER NO LONGER CONTINUES TO OWN
AT LEAST FIFTEEN PERCENT (15%) OF THE COMPANY’S ISSUED AND OUTSTANDING COMMON
STOCK, EXECUTIVE OR ANY AFFILIATE, AFFILIATED PERSON OR ENTITY (INCLUDING ANY
GROUP WITH WHICH EXECUTIVE ACTS IN CONCERT), TRUST, ESTATE, BENEFICIARY, OR
LEGATEE OF EXECUTIVE) BECOMES THE BENEFICIAL OWNER, DIRECTLY OR INDIRECTLY, OF
SHARES OF THE COMPANY’S COMMON STOCK OR OTHER INTERESTS IN THE COMPANY
REPRESENTING FIFTY PERCENT (50%) OR MORE OF THE COMBINED VOTING POWER OF THE
THEN-OUTSTANDING COMPANY VOTING SECURITIES; EXCEPT THAT THE FOLLOWING SHALL NOT
CONSTITUTE OR RESULT IN A CHANGE IN CONTROL: (I) ANY ACQUISITION OF
THEN-OUTSTANDING OR NEWLY ISSUED COMPANY VOTING SECURITIES BY THE COMPANY OR ANY
ENTITY CONTROLLED BY THE COMPANY, (II) ANY ACQUISITION OF THEN-OUTSTANDING OR
NEWLY ISSUED COMPANY VOTING SECURITIES BY ANY EMPLOYEE BENEFIT PLAN (OR RELATED
TRUST) SPONSORED OR MAINTAINED BY THE COMPANY OR ANY ENTITY CONTROLLED BY THE
COMPANY, OR (III) ANY INCREASE IN THE PERCENTAGE OF THE THEN-OUTSTANDING COMPANY
VOTING SECURITIES HELD BY ANY PERSON THAT DOES NOT INVOLVE ANY ACQUISITION OF
COMPANY VOTING SECURITIES (WHETHER THEN OUTSTANDING OR NEWLY ISSUED) BY SUCH
PERSON BUT RESULTS SOLELY FROM A REDUCTION IN THE NUMBER OF COMPANY VOTING
SECURITIES OUTSTANDING (SUCH AS MAY RESULT FROM THE COMPANY’S ACQUISITION OF
OUTSTANDING COMPANY VOTING SECURITIES)); PROVIDED, HOWEVER, THAT IF (A) A PERSON
BECOMES THE BENEFICIAL OWNER OF 50% OR MORE OF THE OUTSTANDING COMPANY VOTING
SECURITIES BY REASON OR AS A RESULT OF AN ACQUISITION OF VOTING SECURITIES BY
THE COMPANY OR ANY ENTITY CONTROLLED BY THE COMPANY AS DESCRIBED IN CLAUSE (I)
ABOVE OR BY ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) SPONSORED OR MAINTAINED
BY THE COMPANY OR ANY ENTITY CONTROLLED BY THE COMPANY AS DESCRIBED IN CLAUSE
(II) ABOVE, OR AS THE RESULT OF A REDUCTION IN THE NUMBER OF COMPANY VOTING
SECURITIES AS DESCRIBED IN CLAUSE (III) ABOVE, AND (B) SUCH PERSON, AFTER SUCH
ACQUISITION OR REDUCTION, BECOMES THE BENEFICIAL OWNER OF ANY ADDITIONAL COMPANY
VOTING SECURITIES (OTHER THAN UPON THE EXERCISE, CONVERSION, OR VESTING, AS
APPLICABLE, OF ANY OPTIONS, WARRANTS, OR OTHER RIGHTS IN RESPECT THEREOF THEN
PREVIOUSLY ISSUED OR DELIVERED TO SUCH PERSON BY THE COMPANY IN THE ORDINARY
COURSE AND WITHOUT THE INTENT OR PURPOSE OF CIRCUMVENTING THE INTENT OF THIS
CLAUSE), THEN SUCH ACQUISITION OF ADDITIONAL COMPANY VOTING SECURITIES SHALL,
UNLESS ANOTHER EXCEPTION OTHERWISE APPLIES, CONSTITUTE A CHANGE IN CONTROL; OR

 

(2)           THE CONSUMMATION BY THE COMPANY OF ANY CONSOLIDATION OR MERGER OR
SHARE EXCHANGE INVOLVING THE COMPANY, OR ANY SALE OR DISPOSITION BY THE COMPANY
OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS (DIRECTLY OR INDIRECTLY, IN ONE
TRANSACTION OR A SERIES OF TRANSACTIONS, AND INCLUDING ANY SUCH SALE OR
DISPOSITION IMPLEMENTED THROUGH A SALE OR DISPOSITION (INCLUDING BY MERGER,
CONSOLIDATION, OR SHARE EXCHANGE) INVOLVING SOME OR ALL OF THE COMPANY’S
SUBSIDIARIES OR THE ASSETS THEREOF, AND WHERE, FOR PURPOSES OF DETERMINING “ALL
OR SUBSTANTIALLY ALL,” THOSE ASSETS OWNED BY ONE OR MORE DIRECT OR INDIRECT
SUBSIDIARIES OF THE COMPANY SHALL BE DEEMED OWNED BY THE COMPANY) (EACH SUCH
CONSOLIDATION, MERGER, SHARE EXCHANGE, OR SALE OR DISPOSITION OF ASSETS A
“BUSINESS COMBINATION”), EXCEPT FOR:

 

(I)            A BUSINESS COMBINATION AS A RESULT OF WHICH THE BENEFICIAL OWNERS
OF OUTSTANDING COMPANY VOTING SECURITIES IMMEDIATELY BEFORE THE TRANSACTION
CONTINUE TO BENEFICIALLY OWN (WHETHER BECAUSE SUCH COMPANY VOTING SECURITIES
REMAIN OUTSTANDING OR BECAUSE SUCH COMPANY VOTING SECURITIES ARE CONVERTED INTO
EQUITY SECURITIES OF

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the surviving entity) immediately after the Business Combination is consummated
more than fifty percent (50%) of the voting securities of the surviving or
ongoing entity (in the case of a consolidation, merger, or share exchange) or
the acquiror of such assets (in the case of a sale or disposition of assets), or
(in either case) in any other entity that directly or indirectly owns or
controls such surviving or ongoing entity or acquiror of assets (including a
corporation or other entity that, as a result of the transaction, owns the
Company or all or substantially all of the Company’s assets, either directly or
through one or more subsidiaries) (any such surviving, ongoing, acquiring, or
other entity the “Successor Entity”)  in substantially the same proportions as
their ownership of Company Voting Securities immediately before such Business
Combination, or

 

(II)           A BUSINESS COMBINATION (A) THAT EXECUTIVE HAS EITHER (X) APPROVED
IN WRITING OR (Y) OTHERWISE UNEQUIVOCALLY INDICATED HIS APPROVAL OF (WHETHER BY
VOTING TO APPROVE THE TRANSACTION OR BY DIRECTLY OR INDIRECTLY PARTICIPATING IN
THE TRANSACTION (WHETHER OR NOT HE VOTES TO APPROVE THE TRANSACTION)), AND (B)
AS A RESULT OF WHICH THE PERCENTAGE OF THE VOTING SECURITIES OF THE SUCCESSOR
ENTITY OUTSTANDING IMMEDIATELY AFTER THE CONSUMMATION OF THE TRANSACTION
BENEFICIALLY OWNED BY EXECUTIVE IS AT LEAST ONE HUNDRED TEN PERCENT (110%) OF
HIS PERCENTAGE OWNERSHIP OF COMPANY VOTING SECURITIES IMMEDIATELY BEFORE THE
BUSINESS COMBINATION; OR

 

(3)           THE STOCKHOLDERS OF THE COMPANY APPROVE A PLAN OF COMPLETE
LIQUIDATION OF THE COMPANY.

 

(E)           “CODE OF CONDUCT” MEANS THE COMPANY’S CODE OF CONDUCT AS FROM TIME
TO TIME IN EFFECT FOR SENIOR EXECUTIVES OF THE COMPANY. THE CURRENT CODE OF
CONDUCT IS ATTACHED HERETO AS EXHIBIT A.

 

(F)            “COMPANY VOTING SECURITIES” MEANS SHARES OF THE COMPANY’S COMMON
STOCK OR OTHER SECURITIES OR INTERESTS IN THE COMPANY ENTITLED TO VOTE GENERALLY
IN THE ELECTION OF THE COMPANY’S DIRECTORS.

 

(G)           “DISABILITY” MEANS ANY PHYSICAL OR MENTAL ILLNESS OR INFIRMITY
(WHICH FOR THE AVOIDANCE OF DOUBT SHALL IN ANY EVENT BE DEEMED FOR PURPOSES OF
THIS AGREEMENT TO EXCLUDE HABITUAL USE OF ALCOHOL OR DRUGS) OF EXECUTIVE THAT
CAUSES HIM TO BE SUBSTANTIALLY UNABLE TO PERFORM HIS 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 APPLICABLE SPECIALTY
SELECTED BY 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 SELECTED BY THE PARTIES AS AFORESAID 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.

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(H)           “EXCUSABLE DISQUALIFICATION EVENT” MEANS, WITH RESPECT TO
EXECUTIVE’S SERVICE AS CHAIRMAN OR EXECUTIVE CHAIRMAN OF THE BOARD (OR, INSOFAR
AS IS NECESSARY TO SUCH SERVICE, EXECUTIVE’S MEMBERSHIP ON THE BOARD):

 

(1)           THE FAILURE OR REFUSAL OF THE COMPANY’S STOCKHOLDERS TO REELECT
EXECUTIVE TO THE BOARD (UNLESS, IN CONNECTION THEREWITH, THE COMPANY HAS
BREACHED ITS OBLIGATION TO NOMINATE EXECUTIVE FOR REELECTION TO THE BOARD AS
PROVIDED IN SECTION 4(C), BUT SUBJECT TO THE EXCEPTIONS CONTAINED IN SECTION
4(D)(1)):

 

(2)           THE FAILURE OR REFUSAL OF THE BOARD OR THE NOMINATING COMMITTEE OF
THE BOARD TO NOMINATE EXECUTIVE FOR REELECTION TO THE BOARD, BUT ONLY IF SUCH
FAILURE OR REFUSAL DOES NOT CONSTITUTE A BREACH OF THE COMPANY’S OBLIGATION TO
NOMINATE EXECUTIVE FOR REELECTION AS PROVIDED IN SECTION 4(C), BUT SUBJECT TO
THE EXCEPTIONS CONTAINED IN SECTION 4(D)(1); OR

 

(3)           THE BOARD’S DETERMINATION, MADE BY A MAJORITY OF THE DIRECTORS
(OTHER THAN EXECUTIVE) IN GOOD FAITH AFTER RECEIPT OF ADVICE OF COUNSEL, THAT
THE BOARD’S APPOINTMENT OF EXECUTIVE FROM AMONG ITS MEMBERS TO THE POSITION OF
CHAIRMAN OR EXECUTIVE CHAIRMAN, WOULD RESULT IN A VIOLATION OF ITS FIDUCIARY
DUTIES AS DIRECTORS UNDER APPLICABLE LAW.

 

(I)            “GOOD REASON” MEANS THE OCCURRENCE, WITHOUT EXECUTIVE’S EXPRESS
PRIOR WRITTEN CONSENT, OF ANY OF THE FOLLOWING:

 

(1)           THE COMPANY’S ASSIGNMENT TO EXECUTIVE OF DUTIES MATERIALLY
INCONSISTENT WITH EXECUTIVE’S POSITION, AUTHORITY, DUTIES, OR RESPONSIBILITIES
SPECIFIED HEREIN OR AS MODIFIED FROM TIME TO TIME BY WRITTEN AGREEMENT (OTHER
THAN AS A RESULT OF EXECUTIVE’S INABILITY OR INELIGIBILITY TO SERVE AS CHAIRMAN
OR EXECUTIVE CHAIRMAN, OR HIS FAILURE TO BE REELECTED TO THE BOARD, BUT ONLY IF
SUCH INABILITY OR INELIGIBILITY, OR SUCH FAILURE, IS CAUSED BY AN EXCUSABLE
DISQUALIFICATION EVENT);

 

(2)           ANY MATERIAL DIMINUTION IN THE SCOPE OF EXECUTIVE’S AUTHORITY OR
ANY CHANGE IN EXECUTIVE’S TITLE (OTHER THAN (I) AS EXPRESSLY CONTEMPLATED HEREIN
AT THE END OF THE REGULAR TERM OR (II) AS A RESULT OF EXECUTIVE’S INABILITY OR
INELIGIBILITY TO SERVE AS CHAIRMAN OR EXECUTIVE CHAIRMAN, OR HIS FAILURE TO BE
REELECTED TO THE BOARD, BUT ONLY IF SUCH INABILITY OR INELIGIBILITY, OR SUCH
FAILURE, IS CAUSED BY AN EXCUSABLE DISQUALIFICATION EVENT);

 

(3)           ANY REDUCTION IN EXECUTIVE’S BASE SALARY (OTHER THAN AS EXPRESSLY
CONTEMPLATED HEREIN AT THE END OF THE REGULAR TERM);

 

(4)           THE COMPANY’S FAILURE TO SUBSTANTIALLY PERFORM OR COMPLY WITH ANY
OTHER MATERIAL TERM OR PROVISION OF THIS AGREEMENT; OR

 

(5)           THE COMPANY’S REQUIRING EXECUTIVE TO BE BASED AT A LOCATION
OUTSIDE OF A THIRTY FIVE (35) MILE RADIUS OF EXECUTIVE’S PRESENT HOME ADDRESS,
WHICH IS 6316 MOSSWAY, BALTIMORE, MARYLAND 21212;

 

and, if the same is capable of being rectified, the failure of the Company to
rectify the same within thirty (30) days after written demand specifically
identifying the occurrence is delivered

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by Executive to the Company, or, if the same is not capable of being rectified
in such period of time, the failure of the Company 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, any
prospective action that would, if actually taken or implemented, constitute Good
Reason through application of (1) or (2) 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. In particular, and solely by way of illustration, a
material diminution in the scope of Executive’s authority or any change in
Executive’s title that would result from a prospective Change in Control shall
not, for purposes hereof, be deemed to have occurred until the Change in Control
has actually occurred.

 

(J)            “INCENTIVE COMPENSATION” MEANS, FOR ANY FISCAL YEAR OF THE
COMPANY, THE CASH INCENTIVE BONUS PAID OR PAYABLE TO EXECUTIVE PURSUANT TO THE
COMPENSATION PLAN FOR SUCH FISCAL YEAR.

 

(K)           “TERMINATION DATE” MEANS THE DATE AS OF WHICH EXECUTIVE’S
EMPLOYMENT TERMINATES, WHICH MEANS (1) IF EXECUTIVE’S EMPLOYMENT IS TERMINATED
DUE TO EXECUTIVE’S DEATH, THE DATE OF EXECUTIVE’S DEATH AND (2) IF EXECUTIVE’S
EMPLOYMENT IS TERMINATED BY THE COMPANY OR BY EXECUTIVE FOR ANY OTHER REASON,
THE DATE SPECIFIED IN THE TERMINATION NOTICE GIVEN PURSUANT TO THE APPLICABLE
SUBSECTION OF SECTION 7.

 

(L)            “TERMINATION NOTICE” MEANS A WRITTEN TERMINATION NOTICE GIVEN BY
THE COMPANY OR BY EXECUTIVE AS CONTEMPLATED BY SECTION 7.

 

(M)          ADDITIONAL TERMS. THE FOLLOWING TERMS ARE DEFINED ELSEWHERE IN THIS
AGREEMENT:

 

“Board”

 

Recital B

“Business Combination”

 

Section 1(d)(2)

“Code”

 

Section 8(a)

“CEO”

 

Recital A

“Chairman”

 

Recital A

“Compensation Plan”

 

Section 5(b)(1)

“Exchange Act”

 

Section 1(d)(1)

“Excise Tax”

 

Section 8(a)

“Existing Employment Agreement”

 

Recital A

“Life Insurance Payments”

 

Section 5(d)

“Outstanding Voting Securities”

 

Section 1(d)(1)

“PSUs”

 

Section 5(f)

“Regular Term”

 

Recital B

 

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“Restricted Shares”

 

Section 5(e)

“Restriction Period”

 

Section 9(b)(2)

“SERP”

 

Section 5(g)

“Successor Entity”

 

Section 1(d)(2)(i)

“Target Bonus “

 

Section 5(b)(3)

“Term”

 

Section 3

“Transition Period”

 

Recital B

 

2.             EMPLOYMENT. THE COMPANY AGREES TO EMPLOY EXECUTIVE, AND EXECUTIVE
AGREES TO BE EMPLOYED, ON THE TERMS AND SUBJECT TO THE CONDITIONS HEREIN SET
FORTH.

 

3.             TERM. THE TERM OF EXECUTIVE’S EMPLOYMENT WITH THE COMPANY UNDER
THIS AGREEMENT (THE “TERM”) SHALL COMMENCE AS OF THE EFFECTIVE DATE AND SHALL
CONTINUE FOR A PERIOD OF TEN (10) FISCAL YEARS OF THE COMPANY, WHICH PERIOD
SHALL CONSIST OF THE REGULAR TERM AND THE TRANSITION PERIOD, UNLESS EXECUTIVE’S
EMPLOYMENT IS SOONER TERMINATED AS PROVIDED IN SECTION 7 OF THIS AGREEMENT,
WHEREUPON THE TERM SHALL END.

 

4.             DUTIES.

 

(A)           DURING THE REGULAR TERM, EXECUTIVE SHALL SERVE AS, AND HAVE
RESPONSIBILITIES AND AUTHORITY CONSISTENT WITH THE POSITION OF, FULL-TIME
PRESIDENT, CEO, AND (SUBJECT TO SECTION 4(C) BELOW) CHAIRMAN. EXECUTIVE’S
SPECIFIC RESPONSIBILITIES AND AUTHORITY SHALL BE AS FROM TIME TO TIME PROVIDED
IN THE COMPANY’S BYLAWS AND ESTABLISHED BY THE BOARD, TO WHICH EXECUTIVE SHALL
REPORT, BUT SHALL NOT WITHOUT EXECUTIVE’S WRITTEN CONSENT AND SUBJECT TO SECTION
4(C) BE MATERIALLY DIMINISHED DURING THE REGULAR TERM COMPARED WITH EXECUTIVE’S
RESPONSIBILITIES AND AUTHORITY ON THE EFFECTIVE DATE. EXECUTIVE SHALL DEVOTE
SUBSTANTIALLY ALL OF EXECUTIVE’S BUSINESS TIME, ENERGY, AND SKILL TO THE
PERFORMANCE OF HIS DUTIES UNDER THIS AGREEMENT AND SHALL DEVOTE COMMERCIALLY
REASONABLE EFFORTS AND ATTENTION TO SUCH DUTIES. NOTWITHSTANDING THE FOREGOING,
THE COMPANY ACKNOWLEDGES THAT EXECUTIVE HAS INVESTMENT, CHARITABLE, AND
PROFESSIONAL INTERESTS AND OBLIGATIONS TO WHICH HE WILL ATTEND ON A CONTINUING
BASIS, BUT EXECUTIVE REPRESENTS AND COVENANTS THAT THESE ACTIVITIES WILL NOT
MATERIALLY INTERFERE WITH THE PERFORMANCE OF HIS DUTIES HEREUNDER.

 

(B)           DURING THE TRANSITION PERIOD, EXECUTIVE SHALL SERVE IN THE ROLE OF
EXECUTIVE CHAIRMAN (IN ADDITION TO HIS SERVICE AS A MEMBER OF THE BOARD),
SUBJECT, HOWEVER, TO SECTION 4(C) BELOW. AS EXECUTIVE CHAIRMAN, EXECUTIVE SHALL
INITIALLY BE RESPONSIBLE DURING THE TRANSITION PERIOD FOR TRANSITION OF THE
LEADERSHIP OF THE COMPANY TO SUCH PERSON OR PERSONS WHO ARE SELECTED BY THE
BOARD (WHICH PERSON OR PERSONS SHALL, EXCEPT AS MAY OTHERWISE BE DETERMINED BY
THE BOARD, REPORT TO THE BOARD AND NOT TO EXECUTIVE), AND THEREAFTER DURING THE
TRANSITION PERIOD, EXECUTIVE SHALL SERVE AS A SENIOR ADVISOR TO SUCH PERSON OR
PERSONS, AND TO THE BOARD, USING HIS EXPERIENCE AND ROLE AS FOUNDER AND AS
(THEN) PAST CEO TO HELP GUIDE THE COMPANY’S GROWTH STRATEGY AND DEVELOPMENT. IN
ADDITION, EXECUTIVE SHALL HAVE SUCH OTHER SPECIFIC RESPONSIBILITIES AND
AUTHORITY AS SHALL FROM TIME TO TIME BE ESTABLISHED BY THE BOARD, TO WHICH

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Executive shall report. During the Transition Period, Executive shall not be
required to devote more than ten days per fiscal quarter to such duties, in
addition to routine duties he may have as a member of the Board.

(C)           THE COMPANY AND EXECUTIVE ACKNOWLEDGE THAT THE ABILITY OF
EXECUTIVE TO SERVE ON THE BOARD, AND HENCE TO SERVE AS AND TO HOLD THE TITLES OF
“CHAIRMAN” AND “EXECUTIVE CHAIRMAN,” IS DEPENDENT AND CONDITIONED UPON
EXECUTIVE’S BEING NOMINATED FROM TIME TO TIME BY THE BOARD (OR THE NOMINATING
COMMITTEE THEREOF) FOR ELECTION TO THE BOARD, EXECUTIVE’S THEN BEING ELECTED
FROM TIME TO TIME TO SERVE ON THE BOARD BY THE STOCKHOLDERS OF THE COMPANY, AND,
UPON THE ELECTION OF EXECUTIVE TO SERVE ON THE BOARD, THE DESIGNATION OF
EXECUTIVE BY THE BOARD TO SERVE AS CHAIRMAN OR EXECUTIVE CHAIRMAN. ACCORDINGLY,
THE COMPANY AGREES THAT, EXCEPT TO THE EXTENT PROVIDED IN SUBSECTION (D)(1),
EXECUTIVE SHALL, DURING THE TERM, CONTINUE TO BE NOMINATED TO SERVE ON THE BOARD
AS HIS TERM WOULD OTHERWISE FROM TIME TO TIME EXPIRE.

 

(D)           NOTWITHSTANDING SUBSECTIONS (A), (B), AND (C):

 

(1)           IF THE BOARD, BY A MAJORITY VOTE OF ITS MEMBERS (EXCLUDING
EXECUTIVE), DETERMINES IN GOOD FAITH AFTER RECEIPT OF ADVICE OF COUNSEL THAT
NOMINATING EXECUTIVE TO SERVE ON THE BOARD WOULD RESULT IN A BREACH OF ITS
FIDUCIARY DUTIES AS DIRECTORS UNDER APPLICABLE LAW (OR, IN THE CASE OF THE
NOMINATING COMMITTEE, A VIOLATION OF ITS CHARTER), NEITHER THE BOARD NOR THE
NOMINATING COMMITTEE SHALL HAVE ANY OBLIGATION TO NOMINATE EXECUTIVE FOR
ELECTION TO THE BOARD; AND

 

(2)           IF (I) THE STOCKHOLDERS FOR ANY REASON DO NOT REELECT EXECUTIVE TO
THE BOARD OR (II) EVEN IF EXECUTIVE IS REELECTED, THE BOARD, BY A MAJORITY VOTE
OF ITS MEMBERS (EXCLUDING EXECUTIVE), DETERMINES IN GOOD FAITH AFTER RECEIPT OF
ADVICE OF COUNSEL THAT ITS APPOINTMENT OF EXECUTIVE FROM AMONG THE MEMBERS OF
THE BOARD TO THE POSITION OF CHAIRMAN OR EXECUTIVE CHAIRMAN WOULD RESULT IN A
VIOLATION OF ITS FIDUCIARY DUTIES AS DIRECTORS UNDER APPLICABLE LAW, THEN
EXECUTIVE SHALL NOT, AND SHALL NOT BE ENTITLED TO, HOLD SUCH TITLES OR SERVE IN
SUCH CAPACITY OR POSITION BEYOND HIS THEN CURRENT TERM AS SUCH. NEVERTHELESS,
AND IN EITHER SUCH CASE, INSOFAR AS THE SAME IS NOT INCONSISTENT WITH ITS
FIDUCIARY DUTIES, THE BOARD SHALL INSTEAD PERMIT EXECUTIVE DURING SUCH PERIOD TO
HOLD A TITLE AND TO SERVE THE COMPANY IN A CAPACITY AS SIMILAR AS REASONABLY
PRACTICABLE TO THAT WHICH HE WOULD HAVE HELD OR THAT IN WHICH HE WOULD HAVE
SERVED THE COMPANY HEREUNDER HAD HE BEEN SO ELECTED OR SUCH DETERMINATION NOT
BEEN MADE, AND WITHIN THE LIMITS OF SUCH DUTIES THE BOARD WILL TAKE, OR DIRECT
THE COMPANY TO TAKE, COMMERCIALLY REASONABLY STEPS (INCLUDING OFFERING TO
EXECUTIVE OBSERVATION RIGHTS ON THE BOARD) TO SO ALLOW OR PROVIDE. IN NO EVENT,
HOWEVER, SHALL THE FACT THAT, UNDER THE SPECIFIC CIRCUMSTANCES DESCRIBED IN THIS
SUBSECTION (D), EXECUTIVE (I) IS NOT NOMINATED FOR REELECTION AS A DIRECTOR,
(II) IS NO LONGER A DIRECTOR, OR (III) IS NOT APPOINTED TO SERVE AS CHAIRMAN OR
EXECUTIVE CHAIRMAN CONSTITUTE GOOD REASON OR A BREACH OR DEFAULT BY EITHER PARTY
TO THIS AGREEMENT OR EFFECT A TERMINATION OF EXECUTIVE’S EMPLOYMENT OR THIS
AGREEMENT, OR OTHERWISE AFFECT ANY OF EXECUTIVE’S OR THE COMPANY’S RIGHTS OR
OBLIGATIONS HEREUNDER (OTHER THAN THE OBLIGATION ON THE PART OF EXECUTIVE TO
SERVE AS CHAIRMAN OR EXECUTIVE CHAIRMAN).

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5.             COMPENSATION AND BENEFITS.

 

(A)           BASE SALARY.

 

(1)           DURING THE REGULAR TERM, EXECUTIVE SHALL BE PAID A BASE SALARY AT
THE INITIAL RATE OF $600,000 PER FISCAL YEAR, SUBJECT TO ANNUAL INCREASES (BUT
NOT DECREASES) AS THE COMPENSATION COMMITTEE AND THE BOARD FROM TIME TO TIME
DETERMINE ARE APPROPRIATE, CONSISTENT WITH THE STANDARDS USED TO REVIEW AND
ADJUST THE COMPENSATION OF THE COMPANY’S OTHER SENIOR EXECUTIVES. IT IS EXPECTED
THAT THE NEXT REVIEW OF EXECUTIVE’S BASE SALARY WILL BE CONDUCTED AT THE END OF
THE COMPANY’S FISCAL YEAR ENDING IN 2009 IN RESPECT OF THE COMPANY’S FISCAL YEAR
ENDING IN 2010.

 

(2)           DURING THE TRANSITION PERIOD, EXECUTIVE SHALL BE PAID A BASE
SALARY AT THE INITIAL RATE OF $200,000 PER FISCAL YEAR, SUBJECT TO SUCH
INCREASES (IF ANY) AS THE COMPENSATION COMMITTEE AND THE BOARD FROM TIME TO TIME
DETERMINE ARE APPROPRIATE. EXECUTIVE SHALL NOT BE ENTITLED TO RECEIVE DURING THE
TRANSITION PERIOD ANY OTHER FEES FOR ATTENDING MEETINGS OF THE BOARD OR
COMMITTEES THEREOF AS ARE OTHERWISE PROVIDED TO NONEXECUTIVE MEMBERS OF THE
BOARD, BUT EXECUTIVE SHALL BE ENTITLED TO REIMBURSEMENT OF REASONABLE EXPENSES
ON THE SAME TERMS AS APPLY TO OTHER MEMBERS OF THE BOARD.

 

(B)           INCENTIVE COMPENSATION.

 

(1)           FOR EACH FISCAL YEAR DURING THE TERM (I.E., BOTH THE REGULAR TERM
AND THE TRANSITION PERIOD), EXECUTIVE SHALL PARTICIPATE WITH THE OTHER SENIOR
EXECUTIVES OF THE COMPANY IN, AND SHALL BE ELIGIBLE TO RECEIVE CASH INCENTIVE
COMPENSATION IN ACCORDANCE WITH THE TERMS OF, THE SENIOR EXECUTIVE COMPENSATION
PLAN ADOPTED BY THE BOARD FOR THAT FISCAL YEAR (AS APPLICABLE TO EACH FISCAL
YEAR, THE “COMPENSATION PLAN”).

 

(2)           THE PARTIES ACKNOWLEDGE THAT THE STANDARDS AND CRITERIA ON WHICH
AWARDS UNDER THE COMPENSATION PLAN HAVE HISTORICALLY BEEN BASED INCLUDE BOTH
CORPORATE EARNINGS TARGETS (MEASURED AFTER ALL INCENTIVE COMPENSATION IS TAKEN
INTO ACCOUNT) AND A SOMEWHAT MORE SUBJECTIVE INDIVIDUAL PERFORMANCE FACTOR AND
THAT IT IS THE BOARD’S CURRENT EXPECTATION (BUT NOT THE BOARD’S OR THE COMPANY’S
OBLIGATION HEREUNDER) TO CONTINUE TO USE SIMILAR CRITERIA IN DETERMINING
INCENTIVE COMPENSATION FOR ALL SENIOR EXECUTIVES, INCLUDING EXECUTIVE.

 

(3)           EXECUTIVE’S MINIMUM INCENTIVE COMPENSATION OPPORTUNITY FOR EACH
FISCAL YEAR DURING THE TERM (EXECUTIVE’S “TARGET BONUS”), WHICH IS REFERRED TO
IN THE CURRENT COMPENSATION PLAN AS EXECUTIVE’S “EXPECTED REWARD OPPORTUNITY,”
SHALL BE SUCH AMOUNT (EXPRESSED EITHER AS A PERCENTAGE OF BASE SALARY, AS IS
CURRENTLY THE CASE, OR AS A STATED DOLLAR AMOUNT) AS THE BOARD (OR THE
COMPENSATION COMMITTEE OF THE BOARD, AS APPLICABLE) FROM TIME TO TIME DETERMINES
IN IT SOLE DISCRETION IS APPROPRIATE, BUT IN NO EVENT SHALL EXECUTIVE’S TARGET
BONUS FOR ANY FISCAL YEAR DURING THE TERM BE LESS THAN 100% OF EXECUTIVE’S BASE
SALARY FOR THAT FISCAL YEAR. UNDER THE CURRENT COMPENSATION PLAN, THE AMOUNT OF
INCENTIVE COMPENSATION AWARDED TO EXECUTIVE FOR A PARTICULAR FISCAL YEAR IF THE
“EXPECTED” LEVEL OF ACHIEVEMENT (BOTH CORPORATE AND INDIVIDUAL) IS ATTAINED FOR
THAT FISCAL YEAR IS (BY DEFINITION) EQUAL TO EXECUTIVE’S TARGET BONUS. THE
ACTUAL INCENTIVE COMPENSATION AWARDED TO EXECUTIVE FOR ANY PARTICULAR FISCAL

--------------------------------------------------------------------------------

year may be more or less than Executive’s Target Bonus, based on the actual
level of achievement relative to the performance metrics established for that
year by the Board .

 

(C)           BENEFIT PLANS AND FRINGE BENEFITS. EXECUTIVE SHALL CONTINUE,
DURING THE TERM, TO BE ELIGIBLE TO PARTICIPATE IN ALL BENEFIT PLANS AND BE
GRANTED THOSE BENEFITS (INCLUDING HEALTH, LIFE, LONG-TERM CARE, AND DISABILITY
COVERAGE) AND PERQUISITES THAT ARE CURRENTLY AFFORDED TO EXECUTIVE (WITH
REFERENCE IN ANY EVENT TO THE LIMITS CONTEMPLATED BY SECTION 10(M)) AND SUCH
OTHER BENEFITS AND PERQUISITES AS ARE FROM TIME TO TIME AFFORDED TO OTHER SENIOR
EXECUTIVES OF THE COMPANY GENERALLY, ALONG WITH SUCH ADDITIONAL BENEFITS AND
PERQUISITES AS THE COMPENSATION COMMITTEE OR THE BOARD FROM TIME TO TIME
DETERMINE ARE APPROPRIATE. NOTWITHSTANDING THE FOREGOING, THE GRANT OR AWARD TO
EXECUTIVE OF, AND THE ELIGIBILITY OF EXECUTIVE TO RECEIVE, EQUITY-BASED
COMPENSATION SHALL BE GOVERNED BY SUBSECTION (F) OF THIS SECTION.

 

(D)           LIFE INSURANCE PAYMENTS. IN ADDITION TO ANY OTHER BENEFITS TO
WHICH EXECUTIVE MAY BE ENTITLED, THE COMPANY SHALL CONTINUE TO PAY TO EXECUTIVE,
OR FOR EXECUTIVE’S BENEFIT, DURING THE TERM THE FOLLOWING AMOUNTS (COLLECTIVELY,
THE “LIFE INSURANCE PAYMENTS”): (I) $12,500 PER YEAR, WHICH IS THE AMOUNT OF THE
PREMIUM ON AN EXISTING $2 MILLION INSURANCE POLICY ON EXECUTIVE’S LIFE THAT IS
OWNED BY EXECUTIVE (OR AN INSURANCE TRUST CREATED BY EXECUTIVE) AND (II) $65,000
PER YEAR, WHICH IS AMOUNT PAID TO EXECUTIVE IN LIEU OF THE SECOND-TO-DIE (WITH
EXECUTIVE’S SPOUSE) SPLIT-DOLLAR LIFE INSURANCE POLICY ARRANGEMENT WITH THE
COMPANY THAT WAS CANCELLED IN MAY 2003. EXECUTIVE ACKNOWLEDGES THAT, ALTHOUGH
THE COMPANY ALSO PAYS THE PREMIUMS ON CERTAIN OTHER KEY-MAN LIFE INSURANCE
POLICIES, THESE ARE MAINTAINED FOR THE BENEFIT OF AND ARE PAYABLE TO THE
COMPANY, AND HENCE ARE NOT PART OF EXECUTIVE’S COMPENSATION ARRANGEMENTS. THE
COMPANY REMAINS FREE TO DEAL WITH SUCH POLICIES AS IT DEEMS APPROPRIATE.

 

(E)           GRANT OF RESTRICTED SHARES. THE COMPANY HAS GRANTED TO EXECUTIVE
ONE HUNDRED THOUSAND (100,000) SHARES OF THE COMPANY’S COMMON STOCK (THE
“RESTRICTED SHARES”) PURSUANT TO THE COMPANY’S AMENDED AND RESTATED 1994 STOCK
AND INCENTIVE PLAN ON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN A
RESTRICTED STOCK AWARD OF EVEN DATE HEREWITH, A COPY OF WHICH IS ATTACHED HERETO
AS EXHIBIT B.

 

(F)            ADDITIONAL EQUITY-BASED COMPENSATION. IN ADDITION TO THE GRANT OF
THE RESTRICTED SHARES DESCRIBED IN SUBSECTION (E), EXECUTIVE SHALL BE ENTITLED
TO PARTICIPATE IN ALL EQUITY-BASED COMPENSATION PROGRAMS, INCLUDING ANY AWARD OF
PERFORMANCE STOCK UNITS (“PSUS”), OF THE KIND AS MAY FROM TIME TO TIME BE
AWARDED, EXTENDED, OR MADE AVAILABLE, DURING THE REGULAR TERM, TO OTHER SENIOR
EXECUTIVES OF THE COMPANY AND, DURING THE TRANSITION TERM, TO THE NONEXECUTIVE
DIRECTORS, IN EACH CASE AS THE BOARD FROM TIME TO TIME IMPLEMENTS OR DETERMINES
IS APPROPRIATE.

 

(G)           SERP. THE COMPANY SHALL CONTINUE TO PROVIDE, AND EXECUTIVE SHALL
CONTINUE TO PARTICIPATE IN, THE 1994 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN OF
THE COMPANY, AS ESTABLISHED FOR EXECUTIVE, AS THE SAME MAY HERETOFORE HAVE BEEN
OR MAY HEREAFTER BE AMENDED WITH THE EXPRESS WRITTEN CONSENT OF EXECUTIVE,
INCLUDING ANY AMENDMENTS REQUIRED OR DETERMINED TO BE NECESSARY OR APPROPRIATE
TO COMPLY WITH ANY CHANGES OR MODIFICATIONS TO ANY PROVISIONS OF LAW OR
REGULATIONS APPLICABLE THERETO (AS SO AMENDED, THE “SERP”).

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(H)           EXPENSE REIMBURSEMENT. THE COMPANY SHALL REIMBURSE EXECUTIVE FOR
BUSINESS TRAVEL, LODGING, AND MEALS AND OTHER REASONABLE BUSINESS EXPENSES
INCURRED BY HIM IN HIS PERFORMANCE OF SERVICES HEREUNDER, SUBJECT TO SUBMISSION
OF DOCUMENTATION IN ACCORDANCE WITH THE COMPANY’S BUSINESS EXPENSE REIMBURSEMENT
POLICIES FROM TIME TO TIME APPLICABLE TO ITS SENIOR EXECUTIVES.

 

(I)            PAYMENTS: WITHHOLDING OF TAXES, ETC. PAYMENTS OF BASE SALARY
SHALL BE MADE IN BIWEEKLY OR OTHER INSTALLMENTS IN ACCORDANCE WITH THE COMPANY’S
GENERAL PAYROLL PRACTICES FROM TIME TO TIME IN EFFECT. INCENTIVE COMPENSATION
PAYMENTS FOR EACH FISCAL YEAR SHALL BE MADE ANNUALLY IN ACCORDANCE WITH THE
COMPENSATION PLAN FOR SUCH YEAR. ALL PAYMENTS TO EXECUTIVE HEREUNDER SHALL BE
REDUCED BY TAXES AND OTHER AMOUNTS THAT THE COMPANY IS REQUIRED BY LAW OR
AUTHORIZED BY EXECUTIVE TO WITHHOLD.

 

6.             D&O COVERAGE; INDEMNIFICATION. TO THE EXTENT AVAILABLE AT
REASONABLE RATES (AND ANY RATES FOR COMPARABLE COVERAGE NOT EXCEEDING 200% OF
THE RATES CURRENTLY PAID BY THE COMPANY SHALL IN ANY EVENT BE DEEMED REASONABLE
FOR THESE PURPOSES), THE COMPANY AGREES TO MAINTAIN AT ALL TIMES DURING THE TERM
AND FOR A PERIOD OF NOT LESS THAN SIX (6) YEARS FOLLOWING THE TERMINATION DATE,
AND TO CAUSE EXECUTIVE TO BE COVERED UNDER, ITS DIRECTOR/OFFICER AND GENERAL
LIABILITY POLICIES FOR ALL ACTS OR OMISSIONS OF EXECUTIVE WITHIN THE SCOPE OF
HIS EMPLOYMENT OCCURRING (OR ALLEGED TO HAVE OCCURRED) DURING THE TERM. WHETHER
OR NOT SUCH COVERAGE EXISTS OR IS AVAILABLE, THE COMPANY FURTHER AGREES TO
PROVIDE EXECUTIVE WITH ANY OTHER OR ADDITIONAL DIRECTOR AND OFFICER LIABILITY
INSURANCE COVERAGE, AND TO ENTER INTO AGREEMENTS WITH EXECUTIVE PROVIDING FOR
INDEMNIFICATION, TO AT LEAST THE SAME EXTENT, AND ON TERMS AT LEAST AS FAVORABLE
AS THOSE, OFFERED BY THE COMPANY TO ITS OTHER SENIOR EXECUTIVES OR DIRECTORS
FROM TIME TO TIME DURING THE TERM.

 

7.             TERMINATION.

 

(A)           IN GENERAL.

 

(1)           THE COMPANY MAY AT ANY TIME ELECT TO TERMINATE EXECUTIVE’S
EMPLOYMENT UNDER THIS AGREEMENT BY DELIVERY OF A TERMINATION NOTICE TO EXECUTIVE
FOR ANY REASON (INCLUDING ON ACCOUNT OF DISABILITY) OR NO REASON, WITH OR
WITHOUT CAUSE, IN WHICH EVENT THE TERMINATION PROVISIONS OF THIS AGREEMENT SHALL
GOVERN.

 

(2)           EXECUTIVE MAY AT ANY TIME ELECT TO TERMINATE HIS EMPLOYMENT UNDER
THIS AGREEMENT BY DELIVERY OF A TERMINATION NOTICE TO THE COMPANY FOR ANY REASON
(INCLUDING ON ACCOUNT OF DISABILITY) OR NO REASON, WITH OR WITHOUT GOOD REASON,
IN WHICH EVENT THE TERMINATION PROVISIONS OF THIS AGREEMENT SHALL GOVERN.

 

(3)           ANY TERMINATION OF EXECUTIVE’S EMPLOYMENT PURSUANT TO THE VARIOUS
SUBSECTIONS OF THIS SECTION 7 SHALL NOT BE DEEMED A BREACH OF THIS AGREEMENT.
ANY ELECTION TO TERMINATE EXECUTIVE’S EMPLOYMENT PURSUANT TO SUBSECTION (B),
(C), OR (D) SHALL BE COMMUNICATED BY THE TERMINATING PARTY BY A TERMINATION
NOTICE GIVEN AS PROVIDED IN SUCH SUBSECTION.

 

(4)           FOR THE AVOIDANCE OF DOUBT, EXECUTIVE SHALL BE ENTITLED TO PAYMENT
PURSUANT TO NO MORE THAN ONE OF SUBSECTIONS (B), (C), (D), (E), OR (F) OF THIS
SECTION 7, AS APPLICABLE, UPON AND FOLLOWING THE OCCURRENCE OF THE FIRST
TERMINATION DATE, IF ANY, AFTER THE DATE HEREOF.

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(B)           INVOLUNTARY OR FOR GOOD REASON. THE COMPANY MAY ELECT TO TERMINATE
EXECUTIVE’S EMPLOYMENT AT ANY TIME OTHER THAN FOR CAUSE OR DISABILITY BY GIVING
EXECUTIVE A TERMINATION NOTICE TO THAT EFFECT SPECIFYING A TERMINATION DATE THAT
IS NOT LESS THAN THIRTY (30) NOR MORE THAN NINETY (90) DAYS AFTER THE DATE THE
TERMINATION NOTICE IS GIVEN, AND EXECUTIVE MAY ELECT TO TERMINATE HIS EMPLOYMENT
AT ANY TIME FOR GOOD REASON BY GIVING THE COMPANY A TERMINATION NOTICE STATING
THE GROUNDS THEREFOR AND SPECIFYING A TERMINATION DATE THAT IS NOT LESS THAN
TWENTY (20) NOR MORE THAN NINETY (90) DAYS AFTER THE DATE THE TERMINATION NOTICE
IS GIVEN (OR, IF EARLIER, A TERMINATION DATE THAT IS THE DATE IMMEDIATELY
PRECEDING AN INTERVENING CHANGE IN CONTROL). IF SUCH A TERMINATION NOTICE IS
DELIVERED IN COMPLIANCE WITH AND MEETING THE CONDITIONS OF THE IMMEDIATELY
PRECEDING SENTENCE, EXECUTIVE’S EMPLOYMENT SHALL BE TERMINATED AS AND WHEN SO
PROVIDED, AND, IF THE TERMINATION NOTICE PROPERLY ESTABLISHES AS THE TERMINATION
DATE A DATE DURING THE TERM AND BEFORE THE OCCURRENCE OF A CHANGE IN CONTROL,
THE COMPANY SHALL THEN:

 

(1)           PAY TO EXECUTIVE ANY UNPAID BASE SALARY ACCRUED THROUGH THE
TERMINATION DATE AND ANY UNPAID INCENTIVE COMPENSATION TO WHICH EXECUTIVE IS
ENTITLED FOR FISCAL YEARS ENDING ON OR BEFORE THE TERMINATION DATE, WHICH
AMOUNTS SHALL BE PAID ON THE DATES SUCH AMOUNTS WOULD OTHERWISE HAVE BEEN PAID
BUT FOR THE TERMINATION;

 

(2)           PAY TO EXECUTIVE AN AMOUNT EQUAL TO THE TARGET BONUS ESTABLISHED
FOR THE FISCAL YEAR IN WHICH THE TERMINATION DATE OCCURS (BUT IN NO EVENT LESS
THAN THE GREATER OF THE TARGET BONUS FOR THE PREVIOUS FISCAL YEAR AND THE
INCENTIVE COMPENSATION ACTUALLY PAID OR PAYABLE FOR THE PREVIOUS FISCAL YEAR),
PRORATED FOR THE NUMBER OF DAYS FROM THE BEGINNING OF THE FISCAL YEAR TO THE
TERMINATION DATE, WHICH SHALL BE PAID IN A LUMP SUM WITHIN ONE (1) MONTH AFTER
THE TERMINATION DATE;

 

(3)           CONTINUE PAYING EXECUTIVE’S BASE SALARY, AT THE RATE IN EFFECT ON
THE TERMINATION DATE, FOR A PERIOD OF THREE (3) YEARS FROM THE TERMINATION DATE
(EVEN IF SUCH PERIOD EXTENDS BEYOND THE DATE THE TERM WOULD OTHERWISE HAVE
ENDED), WHICH SHALL BE PAID IN REGULAR INSTALLMENTS ON THE DATES SUCH AMOUNTS
WOULD OTHERWISE HAVE BEEN PAID BUT FOR THE TERMINATION;

 

(4)           PAY TO EXECUTIVE ANNUAL AMOUNTS IN LIEU OF INCENTIVE COMPENSATION,
EACH OF WHICH SHALL BE EQUAL TO THE TARGET BONUS ESTABLISHED FOR THE FISCAL YEAR
IN WHICH THE TERMINATION DATE OCCURS (BUT IN NO EVENT LESS THAN THE GREATER OF
THE TARGET BONUS FOR THE PREVIOUS FISCAL YEAR AND THE INCENTIVE COMPENSATION
ACTUALLY PAID OR PAYABLE FOR THE PREVIOUS FISCAL YEAR), WHICH SHALL BE PAID ON
THE FIRST, SECOND, AND THIRD ANNIVERSARIES OF THE TERMINATION DATE (EVEN IF SUCH
DATES EXTEND BEYOND THE DATE THE TERM WOULD OTHERWISE HAVE ENDED);

 

(5)           CONTINUE PROVIDING ALL BENEFITS FOR A PERIOD OF THREE (3) YEARS
FROM THE TERMINATION DATE (EVEN IF SUCH PERIOD EXTENDS BEYOND THE DATE THE TERM
WOULD OTHERWISE HAVE ENDED) OR, TO THE EXTENT THAT THE COMPANY CANNOT CONTINUE
PROVIDING ANY OF THE BENEFITS, MAKE BENEFIT EQUIVALENT PAYMENTS TO EXECUTIVE IN
REGULAR INSTALLMENTS (OR AT SUCH OTHER TIMES AS THE COMPANY DEMONSTRATES
REASONABLE BUSINESS PRACTICES WOULD DICTATE UNDER THE

--------------------------------------------------------------------------------

circumstances) generally consistent with (but in no event more than three (3)
months after) the dates the Benefits would have been provided but for the
termination; and

 

(6)           CONTINUE PAYING THE LIFE INSURANCE PAYMENTS THAT WOULD OTHERWISE
HAVE BEEN PAYABLE UNDER SECTION 5(D) (ON THE DATES SUCH AMOUNTS WOULD HAVE BEEN
PAID BUT FOR THE TERMINATION) FOR A PERIOD OF THREE (3) YEARS FROM THE
TERMINATION DATE (EVEN IF SUCH PERIOD EXTENDS BEYOND THE DATE THE TERM WOULD
OTHERWISE HAVE ENDED).

 

(7)           IN ADDITION TO THE FOREGOING: (I) THE RESTRICTED SHARES SHALL VEST
FULLY AND IMMEDIATELY IN THEIR ENTIRETY AS OF THE TERMINATION DATE AND (II) ALL
OTHER EQUITY-BASED COMPENSATION (INCLUDING ALL OTHER STOCK GRANTS AND PSUS)
SHALL VEST AS RESPECTS ANY TIME-BASED VESTING AND SHALL VEST AS RESPECTS ANY
PERFORMANCE-BASED VESTING APPLICABLE TO THE THEN CURRENT FISCAL YEAR (WITHOUT
REGARD TO ACTUAL PERFORMANCE) FULLY AND IMMEDIATELY (AND, IN THE CASE OF PSUS,
THE UNDERLYING SHARES SO VESTING SHALL IMMEDIATELY BECOME DISTRIBUTABLE) AS OF
THE TERMINATION DATE. NO SUCH VESTING WILL OCCUR TO THE EXTENT DETERMINED ON THE
BASIS OF PERFORMANCE (AS OPPOSED TO A LAPSE OF TIME), DURING ANY SUBSEQUENT
FISCAL YEAR OR YEARS, EXCEPT AS OTHERWISE PROVIDED IN THE CORRESPONDING AWARD
INSTRUMENT OR THE TERMS OTHERWISE APPLICABLE THERETO.

 

(C)           FOR CAUSE OR WITHOUT GOOD REASON. THE COMPANY MAY ELECT TO
TERMINATE EXECUTIVE’S EMPLOYMENT AT ANY TIME FOR CAUSE BY GIVING EXECUTIVE A
TERMINATION NOTICE STATING THE GROUNDS THEREFOR AND SPECIFYING A TERMINATION
DATE, WHICH MAY BE ANY DATE THAT IS ON OR AFTER (BUT NOT MORE THAN NINETY (90)
DAYS AFTER) THE DATE THE TERMINATION NOTICE IS GIVEN, AND EXECUTIVE MAY ELECT TO
TERMINATE HIS EMPLOYMENT AT ANY TIME OTHER THAN FOR GOOD REASON OR ON ACCOUNT OF
DISABILITY BY GIVING THE COMPANY A TERMINATION NOTICE TO THAT EFFECT SPECIFYING
A TERMINATION DATE THAT IS NOT LESS THAN THIRTY (30) NOR MORE THAN NINETY (90)
DAYS AFTER THE DATE THE TERMINATION NOTICE IS GIVEN. IF SUCH A TERMINATION
NOTICE IS DELIVERED IN COMPLIANCE WITH AND MEETING THE CONDITIONS OF THE
IMMEDIATELY PRECEDING SENTENCE, EXECUTIVE’S EMPLOYMENT WILL BE TERMINATED AS AND
WHEN SO PROVIDED, AND IF THE TERMINATION NOTICE PROPERLY ESTABLISHES A
TERMINATION DATE DURING THE TERM AND BEFORE THE OCCURRENCE OF A CHANGE IN
CONTROL, EXECUTIVE SHALL BE ENTITLED TO ANY UNPAID BASE SALARY ACCRUED THROUGH
THE TERMINATION DATE AND ANY INCENTIVE COMPENSATION ACCRUED BUT UNPAID FOR
FISCAL YEARS ENDING BEFORE THE TERMINATION DATE (WHICH AMOUNTS SHALL BE PAID ON
THE DATES SUCH AMOUNTS WOULD OTHERWISE HAVE BEEN PAID BUT FOR THE TERMINATION),
BUT EXECUTIVE SHALL NOT BE ENTITLED TO ANY INCENTIVE COMPENSATION FOR THE FISCAL
YEAR IN WHICH THE TERMINATION DATE OCCURS OR ANY OTHER PAYMENTS OTHERWISE DUE
HEREUNDER. IN ADDITION, ALL BENEFITS AND LIFE INSURANCE PAYMENTS SHALL CEASE AS
OF SUCH TERMINATION DATE, EXCEPT FOR EXECUTIVE’S COBRA RIGHTS OR TO THE EXTENT
THAT THE APPLICABLE BENEFIT PLAN OR APPLICABLE LAW REQUIRES THE PROVISION OF
BENEFITS FOR A LONGER PERIOD.

 

(D)           ON ACCOUNT OF DISABILITY. EITHER THE COMPANY OR EXECUTIVE MAY
ELECT TO TERMINATE EXECUTIVE’S EMPLOYMENT ON ACCOUNT OF AND UPON DISABILITY BY
GIVING TO THE OTHER A TERMINATION NOTICE TO THAT EFFECT SPECIFYING A TERMINATION
DATE THAT IS NOT LESS THAN THIRTY (30) NOR MORE THAN NINETY (90) DAYS AFTER THE
DATE THE TERMINATION NOTICE IS GIVEN. IF SUCH A TERMINATION NOTICE PROPERLY
ESTABLISHES A TERMINATION DATE DURING THE TERM AND BEFORE THE OCCURRENCE OF A
CHANGE IN CONTROL, THEN EXECUTIVE’S EMPLOYMENT WILL BE TERMINATED AS AND WHEN SO
PROVIDED AND THE COMPANY SHALL THEN:

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(1)           PAY TO EXECUTIVE ANY UNPAID BASE SALARY ACCRUED THROUGH THE
TERMINATION DATE AND ANY UNPAID INCENTIVE COMPENSATION TO WHICH EXECUTIVE IS
ENTITLED FOR FISCAL YEARS ENDING ON OR BEFORE THE TERMINATION DATE, WHICH
AMOUNTS SHALL BE PAID ON THE DATES SUCH AMOUNTS WOULD OTHERWISE HAVE BEEN PAID
BUT FOR THE TERMINATION;

 

(2)           PAY TO EXECUTIVE AN AMOUNT EQUAL TO THE TARGET BONUS ESTABLISHED
FOR THE FISCAL YEAR IN WHICH THE TERMINATION DATE OCCURS (BUT IN NO EVENT LESS
THAN THE GREATER OF THE TARGET BONUS FOR THE PREVIOUS FISCAL YEAR AND THE
INCENTIVE COMPENSATION ACTUALLY PAID OR PAYABLE FOR THE PREVIOUS FISCAL YEAR),
PRORATED FOR THE NUMBER OF DAYS FROM THE BEGINNING OF THE FISCAL YEAR TO THE
TERMINATION DATE, WHICH SHALL BE PAID IN A LUMP SUM WITHIN ONE (1) MONTH AFTER
THE TERMINATION DATE;

 

(3)           PAY TO EXECUTIVE AN AMOUNT EQUAL TO THE GREATER OF:

 

(I)            $1,200,000 AND

 

(II)           THREE (3) TIMES THE SUM OF THE FOLLOWING AMOUNTS: (X) EXECUTIVE’S
ANNUAL BASE SALARY IN EFFECT ON THE TERMINATION DATE PLUS (Y) THE TARGET BONUS
FOR THE FISCAL YEAR IN WHICH THE TERMINATION DATE OCCURS (BUT IN NO EVENT LESS
THAN THE GREATER OF THE TARGET BONUS FOR THE PREVIOUS FISCAL YEAR AND THE
INCENTIVE COMPENSATION ACTUALLY PAID OR PAYABLE FOR THE PREVIOUS FISCAL YEAR);

 

which amount shall be payable in equal monthly installments over a period of
three (3) years commencing one (1) month after the Termination Date (even if
such period extends beyond the date the Term would otherwise have ended);

(4)           CONTINUE PROVIDING ALL BENEFITS FOR A PERIOD OF THREE (3) YEARS
FROM THE TERMINATION DATE (EVEN IF SUCH PERIOD EXTENDS BEYOND THE DATE THE TERM
WOULD OTHERWISE HAVE ENDED) OR, TO THE EXTENT THAT THE COMPANY CANNOT CONTINUE
PROVIDING ANY OF THE BENEFITS, MAKE BENEFIT EQUIVALENT PAYMENTS TO EXECUTIVE IN
REGULAR INSTALLMENTS (OR AT SUCH OTHER TIMES AS THE COMPANY DEMONSTRATES
REASONABLE BUSINESS PRACTICES WOULD DICTATE UNDER THE CIRCUMSTANCES) GENERALLY
CONSISTENT WITH (BUT IN NO EVENT MORE THAN THREE (3) MONTHS AFTER) THE DATES THE
BENEFITS WOULD HAVE BEEN PROVIDED BUT FOR THE TERMINATION; AND

 

(5)           CONTINUE PAYING THE LIFE INSURANCE PAYMENTS THAT WOULD OTHERWISE
HAVE BEEN PAYABLE UNDER SECTION 5(D) (ON THE DATES SUCH AMOUNTS WOULD HAVE BEEN
PAID BUT FOR THE TERMINATION) FOR A PERIOD OF THREE (3) YEARS FROM THE
TERMINATION DATE (EVEN IF SUCH PERIOD EXTENDS BEYOND THE DATE THE TERM WOULD
OTHERWISE HAVE ENDED).

 

(6)           IN ADDITION TO THE FOREGOING: (I) THE RESTRICTED SHARES SHALL VEST
FULLY AND IMMEDIATELY IN THEIR ENTIRETY AS OF THE TERMINATION DATE AND (II) ALL
OTHER EQUITY-BASED COMPENSATION (INCLUDING ALL OTHER STOCK GRANTS AND PSUS)
SHALL VEST AS RESPECTS ANY TIME-BASED VESTING AND SHALL VEST AS RESPECTS ANY
PERFORMANCE-BASED VESTING APPLICABLE TO THE THEN CURRENT FISCAL YEAR (WITHOUT
REGARD TO ACTUAL PERFORMANCE) FULLY AND IMMEDIATELY (AND, IN THE CASE OF PSUS,
THE UNDERLYING SHARES SO VESTING SHALL IMMEDIATELY BECOME DISTRIBUTABLE) AS OF
THE TERMINATION DATE. NO SUCH VESTING WILL OCCUR TO THE EXTENT DETERMINED ON THE
BASIS OF PERFORMANCE (AS OPPOSED TO A LAPSE OF TIME), DURING ANY SUBSEQUENT
FISCAL YEAR OR YEARS, EXCEPT AS OTHERWISE PROVIDED IN THE CORRESPONDING AWARD
INSTRUMENT OR THE TERMS OTHERWISE APPLICABLE THERETO.

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(E)           UPON DEATH OF EXECUTIVE. IF AT ANY TIME DURING THE TERM AND BEFORE
THE OCCURRENCE OF A CHANGE IN CONTROL EXECUTIVE’S EMPLOYMENT IS TERMINATED BY
REASON OF HIS DEATH, THEN THE COMPANY SHALL PAY TO EXECUTIVE’S PERSONAL
REPRESENTATIVE OR OTHER SUCCESSOR IN INTEREST (I) ANY UNPAID BASE SALARY ACCRUED
THROUGH THE TERMINATION DATE AND ANY UNPAID INCENTIVE COMPENSATION TO WHICH
EXECUTIVE IS ENTITLED FOR FISCAL YEARS ENDING ON OR BEFORE THE TERMINATION DATE,
WHICH AMOUNTS SHALL BE PAID ON THE DATES SUCH AMOUNTS WOULD OTHERWISE HAVE BEEN
PAID BUT FOR THE TERMINATION (BUT IN NO EVENT LATER THAN ONE (1) MONTH AFTER THE
TERMINATION DATE) AND (II) A CASH LUMP-SUM PAYMENT, WITHIN ONE (1) MONTH AFTER
THE TERMINATION DATE, EQUAL TO THE SUM OF THE FOLLOWING:

 

(1)           AN AMOUNT EQUAL TO THE TARGET BONUS ESTABLISHED FOR THE FISCAL
YEAR IN WHICH THE TERMINATION DATE OCCURS (BUT IN NO EVENT LESS THAN THE GREATER
OF THE TARGET BONUS FOR THE PREVIOUS FISCAL YEAR AND THE ANNUAL BONUS ACTUALLY
PAID OR PAYABLE FOR THE PREVIOUS FISCAL YEAR), PRORATED FOR THE NUMBER OF DAYS
FROM THE BEGINNING OF THE FISCAL YEAR TO THE TERMINATION DATE; PLUS

 

(2)           AN AMOUNT EQUAL TO THE GREATER OF:

 

(I)            $1,200,000 AND

 

(II)           THREE (3) TIMES THE SUM OF THE FOLLOWING AMOUNTS: (X) EXECUTIVE’S
ANNUAL BASE SALARY IN EFFECT ON THE TERMINATION DATE PLUS (Y) THE TARGET BONUS
FOR THE FISCAL YEAR IN WHICH THE TERMINATION DATE OCCURS (BUT IN NO EVENT LESS
THAN THE GREATER OF THE TARGET BONUS FOR THE PREVIOUS FISCAL YEAR AND THE
INCENTIVE COMPENSATION ACTUALLY PAID OR PAYABLE FOR THE PREVIOUS FISCAL YEAR);
PLUS

 

(3)           THE TOTAL AMOUNT OF BENEFIT EQUIVALENT PAYMENTS IN RESPECT OF THE
BENEFITS THAT WOULD HAVE BEEN AFFORDED TO EXECUTIVE FOR THE PERIOD OF THREE (3)
YEARS FOLLOWING THE TERMINATION DATE (AS THOUGH EXECUTIVE HAD NOT DIED AND THE
TERM EXTENDED AT LEAST THROUGH THE END OF SUCH THREE-YEAR PERIOD AND
NOTWITHSTANDING THAT THE COMPANY COULD HAVE CONTINUED PROVIDING SUCH BENEFITS);
PLUS

 

(4)           THE TOTAL AMOUNT OF THE LIFE INSURANCE PAYMENTS THAT WOULD HAVE
BEEN PAYABLE TO EXECUTIVE FOR THE PERIOD OF THREE (3) YEARS FOLLOWING THE
TERMINATION DATE (AS THOUGH EXECUTIVE HAD NOT DIED AND THE TERM EXTENDED AT
LEAST THROUGH THE END OF SUCH THREE-YEAR PERIOD).

 

(F)            ON OR AFTER CHANGE IN CONTROL. NOTWITHSTANDING THE FOREGOING, IF
EXECUTIVE’S EMPLOYMENT IS TERMINATED FOR ANY REASON (OR NO REASON), WHETHER BY
THE COMPANY WITH OR WITHOUT CAUSE, OR BY EXECUTIVE, WITH OR WITHOUT GOOD REASON,
OR BY THE COMPANY OR BY EXECUTIVE ON ACCOUNT OF DISABILITY, IN ANY SUCH CASE,
PURSUANT TO A TERMINATION NOTICE PROPERLY ESTABLISHING A TERMINATION DATE DURING
THE TERM AND ON OR AFTER THE OCCURRENCE OF A CHANGE IN CONTROL AND, IN THE CASE
OF A TERMINATION NOTICE DELIVERED BY EXECUTIVE, DURING THE TERM AND NOT LATER
THAN THIRTY (30) DAYS AFTER THE FIRST ANNIVERSARY OF THE OCCURRENCE OF A CHANGE
IN CONTROL, OR IF EXECUTIVE’S EMPLOYMENT IS TERMINATED BY REASON OF THE DEATH OF
EXECUTIVE AT ANY TIME

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during the Term and on or after the occurrence of a Change in Control, the
Company shall pay to Executive (i) any unpaid base salary accrued through the
Termination Date and any unpaid Incentive Compensation to which Executive is
entitled for fiscal years ending on or before the Termination Date, which
amounts shall be paid on the dates such amounts would otherwise have been paid
but for the termination (but in no event later than one (1) month after the
Termination Date) and (ii) a cash lump-sum payment, within one (1) month after
the Termination Date, equal to the sum of the following:

 

(1)           EXECUTIVE’S BASE SALARY, AT THE RATE IN EFFECT ON THE TERMINATION
DATE, FOR THE BALANCE OF THE FISCAL YEAR IN WHICH THE TERMINATION DATE OCCURS;
PLUS

 

(2)           AN AMOUNT EQUAL TO THE TARGET BONUS ESTABLISHED FOR THE FISCAL
YEAR IN WHICH THE TERMINATION DATE OCCURS (BUT IN NO EVENT LESS THAN THE GREATER
OF THE TARGET BONUS FOR THE PREVIOUS FISCAL YEAR AND THE INCENTIVE COMPENSATION
ACTUALLY PAID OR PAYABLE FOR THE PREVIOUS FISCAL YEAR); PLUS

 

(3)           AN AMOUNT EQUAL TO THE GREATER OF:

 

(I)            $1,200,000 AND

 

(II)           THE SUM OF THE FOLLOWING AMOUNTS: (X) EXECUTIVE’S ANNUAL BASE
SALARY IN EFFECT ON THE TERMINATION DATE PLUS (Y) THE TARGET BONUS ESTABLISHED
FOR THE FISCAL YEAR IN WHICH THE TERMINATION DATE OCCURS (BUT IN NO EVENT LESS
THAN THE GREATER OF THE TARGET BONUS FOR THE PREVIOUS FISCAL YEAR AND THE
INCENTIVE COMPENSATION ACTUALLY PAID OR PAYABLE FOR THE PREVIOUS FISCAL YEAR);
PLUS

 

(4)           THE TOTAL AMOUNT OF BENEFIT EQUIVALENT PAYMENTS IN RESPECT OF THE
BENEFITS THAT WOULD HAVE BEEN AFFORDED TO EXECUTIVE FOR THE PERIOD OF ONE (1)
YEAR FOLLOWING THE TERMINATION DATE (AS THOUGH THE TERM EXTENDED AT LEAST
THROUGH THE END OF SUCH ONE-YEAR PERIOD AND NOTWITHSTANDING THAT THE COMPANY
COULD HAVE CONTINUED PROVIDING SUCH BENEFITS); PLUS

 

(5)           THE TOTAL AMOUNT OF THE LIFE INSURANCE PAYMENTS THAT WOULD HAVE
BEEN PAYABLE TO EXECUTIVE FOR THE PERIOD OF ONE (1) YEARS FOLLOWING THE
TERMINATION DATE (AS THOUGH THE TERM EXTENDED AT LEAST THROUGH THE END OF SUCH
ONE-YEAR PERIOD).

 

(G)           CHANGE IN CONTROL FOLLOWING TERMINATION. NOTWITHSTANDING THE
FOREGOING OR ANY OTHER PROVISION HEREOF, IF, AT ANY TIME AFTER THE TERMINATION
DATE IN RESPECT OF A TERMINATION OF EXECUTIVE’S EMPLOYMENT BY THE COMPANY
WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON, OR BY THE COMPANY OR EXECUTIVE ON
ACCOUNT OF DISABILITY, OR BY VIRTUE OF EXECUTIVE’S DEATH, THERE OCCURS A CHANGE
IN CONTROL, ALL AMOUNTS REMAINING PAYABLE TO EXECUTIVE AS SET FORTH ABOVE SHALL
BE ACCELERATED AND PAID TO EXECUTIVE ON THE DATE OF THE CHANGE IN CONTROL.

 

(H)           RELEASE. AS A CONDITION PRECEDENT TO RECEIVING PAYMENT OF THE
AMOUNTS PAYABLE UNDER SUBSECTIONS (B), (D), OR (F), EXECUTIVE SHALL EXECUTE AND
DELIVER TO THE COMPANY A GENERAL RELEASE (IN FORM REASONABLY SATISFACTORY TO THE
COMPANY AND TO EXECUTIVE) OF ALL CLAIMS AGAINST THE COMPANY AND ITS SUBSIDIARIES
(AND THEIR RESPECTIVE OFFICERS, DIRECTORS,

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employees, and agents) other than: (i) claims for payment of amounts due under
this section 7 or under section 8, (ii) claims for reimbursement under section
5(h) of expenses incurred on or before the Termination Date; (iii) claims
arising out of or relating to the obligations of the Company to maintain
insurance and to indemnify Executive as set forth in section 6 or in any other
document or instrument; and (iv) claims arising out of or under any other
written agreement to which the Company and Executive are parties or any employee
benefit plan (including the SERP).

 

(I)            EXCLUSIVE REMEDY. EXECUTIVE AGREES THAT THE PAYMENTS, BENEFITS,
AND ENTITLEMENTS CONTEMPLATED BY THIS SECTION 7 (AND ANY ACCELERATION OF VESTING
OF AN EQUITY-BASED AWARD IN ACCORDANCE WITH THE TERMS OF SUCH AWARD) SHALL, IF
SUCH PAYMENTS, BENEFITS, OR ENTITLEMENTS ARE ACTUALLY MADE OR PROVIDED AND SUCH
ACCELERATED VESTING AND ANY OTHER EQUITY PROVISION IS ACTUALLY EFFECTED
(INCLUDING WITH RESPECT TO DELIVERY OF SHARES) AS REQUIRED BY THE APPLICABLE
PROVISIONS OF THIS SECTION 7 (AND THE TERMS OF ANY SUCH AWARD), CONSTITUTE THE
SOLE AND EXCLUSIVE REMEDY FOR SUCH TERMINATION OF HIS EMPLOYMENT AND SEPARATION
FROM THE COMPANY, AND, PROVIDED SUCH PAYMENTS, BENEFITS, OR ENTITLEMENTS ARE
ACTUALLY MADE AS SET FORTH HEREIN AND SUBJECT TO THE TERMS AND CONDITIONS HEREOF
OTHERWISE APPLICABLE, EXECUTIVE COVENANTS NOT TO ASSERT OR PURSUE ANY OTHER
REMEDIES, AT LAW OR IN EQUITY, WITH RESPECT TO SUCH TERMINATION OF EMPLOYMENT OR
SEPARATION. THIS SUBSECTION (I) DOES NOT IN ANY WAY LIMIT ANY RIGHT OF EITHER
PARTY TO CONTEST THE CHARACTERIZATION OF A TERMINATION (FOR EXAMPLE, AND WITHOUT
LIMITATION, THE RIGHT OF EXECUTIVE TO CONTEST WHETHER THE COMPANY HAD CAUSE TO
TERMINATE EXECUTIVE’S EMPLOYMENT IN A PURPORTED TERMINATION FOR CAUSE) AND, IF
SUCCESSFUL, TO RECEIVE THE PAYMENTS, BENEFITS, OR ENTITLEMENTS DUE FOR SUCH A
TERMINATION IN ACCORDANCE WITH THE TERMS HEREOF.

 

(J)            SERP. ANY AND ALL AMOUNTS FROM TIME TO TIME DUE TO EXECUTIVE OR
HIS SPOUSE (OR THEIR RESPECTIVE SUCCESSORS) UNDER THE TERMS OF THE SERP SHALL
REMAIN PAYABLE IN ACCORDANCE WITH THE TERMS OF THE SERP, NOTWITHSTANDING ANY
TERMINATION OF EXECUTIVE’S EMPLOYMENT HEREUNDER OR EXECUTION BY EXECUTIVE OF THE
GENERAL RELEASE DESCRIBED ABOVE.

 

(K)           NO DUTY TO MITIGATE. EXECUTIVE SHALL HAVE NO DUTY TO MITIGATE HIS
DAMAGES, INCLUDING ANY DUTY TO SEEK OTHER EMPLOYMENT, IN THE EVENT OF ANY BREACH
BY THE COMPANY OF THIS AGREEMENT. IN NO EVENT SHALL ANY AMOUNT PAYABLE TO
EXECUTIVE HEREUNDER BE SUBJECT TO OFFSET FOR ANY COMPENSATION OR OTHER AMOUNT
RECEIVED FROM ANY THIRD PARTY, INCLUDING PROCEEDS OR BENEFITS RECEIVED FROM ANY
INSURANCE CARRIER.

 

8.             EXCISE TAX REIMBURSEMENT.

 

(A)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, EXCEPT AS
PROVIDED IN SUBSECTION (B), IF THE RECEIPT BY EXECUTIVE OF, OR THE VESTING OF
EXECUTIVE’S RIGHT TO RECEIVE, ANY AMOUNT FOR COMPENSATION OR BENEFITS PAYABLE
UNDER THIS AGREEMENT (INCLUDING COMPENSATION IN THE FORM OF SHARES OF THE
COMPANY’S CAPITAL STOCK) OR ANY OTHER PLAN, PROGRAM, AGREEMENT, OR ARRANGEMENT
OF THE COMPANY RELATING TO EXECUTIVE CAUSES THE IMPOSITION OF A TAX (AN “EXCISE
TAX”) ON EXECUTIVE UNDER SECTION 4999(A) OF THE INTERNAL REVENUE CODE OR ANY
SIMILAR OR SUCCESSOR PROVISION THAT MAY HEREAFTER BE ENACTED (THE “CODE”), THE
COMPANY SHALL PAY TO EXECUTIVE IN CASH SUCH ADDITIONAL AMOUNT AS IS NECESSARY SO
THAT THE TOTAL AMOUNT RECEIVED BY EXECUTIVE UNDER THIS AGREEMENT AND ANY SUCH
OTHER PLAN, PROGRAM, AGREEMENT, OR ARRANGEMENT AND RETAINED BY HIM AFTER PAYMENT
OF ANY TAXES ON SUCH TOTAL AMOUNT (INCLUDING ANY

--------------------------------------------------------------------------------

federal, state, or local income taxes and any taxes imposed by such section
4999(a) and including any taxes in respect of any amount paid to Executive under
this section 8) shall not be less than the net after-tax amount he would have
received had such Excise Tax not been imposed.

 

(B)           THE COMPANY SHALL NOT BE OR AT ANY TIME BECOME IN ANY WAY
OBLIGATED UNDER SUBSECTION (A) TO PAY ANY ADDITIONAL AMOUNTS AS DESCRIBED
THEREIN OR CONTEMPLATED THEREBY AS A RESULT OR IN RESPECT OF THE IMPOSITION FOR
ANY REASON OF AN EXCISE TAX UPON THE RECEIPT BY EXECUTIVE OF, OR THE VESTING OF
EXECUTIVE’S RIGHT TO RECEIVE, ANY AMOUNT FOR COMPENSATION OR BENEFITS PAYABLE
UNDER THIS AGREEMENT (INCLUDING COMPENSATION IN THE FORM OF SHARES OF THE
COMPANY’S CAPITAL STOCK), OR ANY OTHER PLAN, PROGRAM, AGREEMENT, OR ARRANGEMENT
OF THE COMPANY RELATING TO EXECUTIVE, THAT RESULTS FROM THE TERMINATION OF
EXECUTIVE’S EMPLOYMENT ON ACCOUNT OF THE DEATH OR DISABILITY OF EXECUTIVE.

 

(C)           THE COMPANY SHALL PAY ANY ADDITIONAL AMOUNT FOR WHICH IT BECOMES
OBLIGATED UNDER SUBSECTION (A) TO EXECUTIVE WITHIN ONE (1) MONTH AFTER THE DAY
ON WHICH EXECUTIVE NOTIFIES THE COMPANY THAT, AND ONLY TO THE EXTENT THAT, (I)
THE COMPANY HAS WITHHELD FROM HIM AN AMOUNT IN RESPECT OF ANY SUCH EXCISE TAX,
(II) EXECUTIVE HAS MADE A PAYMENT OF ESTIMATED TAX IN RESPECT OF ANY EXCISE TAX,
(III) EXECUTIVE HAS FILED AN INCOME TAX RETURN FOR THE YEAR FOR WHICH ANY EXCISE
TAX IS DUE SHOWING SUCH EXCISE TAX AS BEING DUE, OR (IV) AN EXCISE TAX LIABILITY
HAS BEEN ASSERTED BY THE INTERNAL REVENUE SERVICE OR OTHER TAXING AUTHORITY;
PROVIDED, HOWEVER, THAT EXECUTIVE SHALL, AT THE COMPANY’S WRITTEN REQUEST AND AT
ITS SOLE COST AND EXPENSE, TAKE SUCH STEPS AS MAY REASONABLY BE REQUIRED BY THE
COMPANY TO CONTEST ANY SUCH ASSERTION OF LIABILITY IF THE AMOUNT OF THE EXCISE
TAX TO BE CONTESTED IS AT LEAST $50,000.

 

9.             CERTAIN RESTRICTIONS.

 

(A)           CONFIDENTIALITY AND NONSOLICITATION. EXECUTIVE AGREES THAT IN THE
PERFORMANCE OF HIS DUTIES HEREUNDER HE SHALL ABIDE AND BE BOUND BY THE COMPANY’S
CODE OF CONDUCT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXECUTIVE
ACKNOWLEDGES THAT HE IS SUBJECT TO THE CONFIDENTIALITY AND NONSOLICITATION
RESTRICTIONS SET FORTH IN THE CODE OF CONDUCT.

 

(B)                  COMPETITIVE ACTIVITY.

 

(1)           IN ADDITION TO AND WITHOUT LIMITATION OF THE RESTRICTIONS IN THE
COMPANY’S CODE OF CONDUCT, EXECUTIVE AGREES THAT EXECUTIVE SHALL NOT, WITHOUT
THE PRIOR WRITTEN CONSENT OF THE COMPANY:

 

(I)            DURING THE PERIOD HE IS EMPLOYED BY THE COMPANY (THE “EMPLOYMENT
PERIOD”) AND (PROVIDED THE COMPANY IS NOT IN DEFAULT FOR MORE THAN THIRTY (30)
DAYS AFTER WRITTEN NOTICE THEREOF IN THE MAKING OF ANY PAYMENTS REQUIRED BY
SECTION 7 AS AND WHEN THE SAME ARE DUE) AFTER TERMINATION OF HIS EMPLOYMENT
DURING THE RESTRICTION PERIOD PROVIDED FOR IN PARAGRAPH (2) BELOW, DIRECTLY OR
INDIRECTLY ENGAGE OR PARTICIPATE IN (AS AN OWNER, PARTNER, STOCKHOLDER,
EMPLOYEE, DIRECTOR, OFFICER, AGENT, CONSULTANT OR OTHERWISE), WITH OR WITHOUT
COMPENSATION, ANY BUSINESS THAT IS COMPETITIVE WITH THE BUSINESS OF THE COMPANY
OR ANY OF ITS SUBSIDIARIES (X) DURING THE EMPLOYMENT PERIOD, AS IT IS BEING
CONDUCTED WHILE HE IS EMPLOYED BY THE COMPANY OR (Y) DURING THE RESTRICTION
PERIOD, AS IT IS BEING CONDUCTED AT THE TIME OF THE TERMINATION OF EXECUTIVE’S
EMPLOYMENT (A “COMPETITIVE BUSINESS”);

 

(II)           AFTER TERMINATION OF HIS EMPLOYMENT AND DURING THE RESTRICTION
PERIOD PROVIDED FOR IN PARAGRAPH (2) BELOW, DIRECTLY OR INDIRECTLY SOLICIT OR
ATTEMPT TO PERSUADE ANY PERSON OR ENTITY WHO WAS, AT ANY TIME WITHIN THE TWO (2)
YEAR PERIOD BEFORE SUCH TERMINATION AN EMPLOYEE OR INDEPENDENT CONTRACTOR OF THE
COMPANY, TO TERMINATE HIS, HER, OR ITS RELATIONSHIP WITH THE COMPANY; OR

 

(III)          AFTER TERMINATION OF HIS EMPLOYMENT AND DURING THE RESTRICTION
PERIOD PROVIDED FOR IN PARAGRAPH (2) BELOW, DIRECTLY OR INDIRECTLY EMPLOY, HIRE,
OR RETAIN ANY PERSON OR ENTITY WHO WAS AN EMPLOYEE OR INDEPENDENT CONTRACTOR OF
THE COMPANY AT ANY TIME WITHIN THE ONE (1) YEAR PERIOD BEFORE SUCH TERMINATION.

 

(2)           FOR PURPOSES HEREOF, “RESTRICTION PERIOD” MEANS THE PERIOD
BEGINNING ON THE FIRST TO OCCUR OF THE TERMINATION DATE AND TERMINATION OF
EXECUTIVE’S EMPLOYMENT WITH THE COMPANY UPON OR FOLLOWING THE EXPIRATION OF THE
TERM AND ENDING:

 

(I)            IN THE CASE OF A TERMINATION OF EXECUTIVE’S EMPLOYMENT BEFORE THE
OCCURRENCE OF A CHANGE IN CONTROL (I) BY THE COMPANY OTHER THAN ON ACCOUNT OF
DISABILITY, WHETHER WITH OR WITHOUT CAUSE OR (II) BY EXECUTIVE OTHER THAN ON
ACCOUNT OF DISABILITY, WHETHER OR NOT FOR GOOD REASON: ONE (1) YEAR AFTER THE
TERMINATION DATE;

--------------------------------------------------------------------------------

 

(II)           IN THE CASE OF A TERMINATION OF EXECUTIVE’S EMPLOYMENT BY THE
COMPANY OR BY EXECUTIVE FOR WHATEVER REASON ON OR AFTER THE DATE OF A CHANGE IN
CONTROL AS DESCRIBED IN SECTION 7(F) ABOVE: ONE (1) YEAR AFTER THE TERMINATION
DATE;

 

(III)          IN THE CASE OF A TERMINATION OF EXECUTIVE’S EMPLOYMENT BEFORE THE
OCCURRENCE OF A CHANGE IN CONTROL BY THE COMPANY OR BY EXECUTIVE ON ACCOUNT OF
DISABILITY: THREE (3) YEARS AFTER THE TERMINATION DATE; AND

 

(IV)          IN THE CASE OF A TERMINATION OF EXECUTIVE’S EMPLOYMENT FOR ANY
REASON UPON OR AFTER THE EXPIRATION OF THE TERM (AND WITHOUT REGARD TO WHETHER
SUCH TERMINATION OCCURRED PURSUANT TO THE PROVISIONS HEREOF REGARDING
TERMINATION): ONE (1) YEAR AFTER SUCH DATE OF TERMINATION.

 

(3)           NOTWITHSTANDING THE FOREGOING, EXECUTIVE MAY OWN UP TO A FIVE
PERCENT (5%) INTEREST IN A PUBLICLY TRADED CORPORATION OR OTHER ENTITY ENGAGED
IN A COMPETITIVE BUSINESS.

 

(C)           REMEDIES FOR BREACH. EXECUTIVE ACKNOWLEDGES THAT THE PROVISIONS OF
SUBSECTIONS (A) AND (B) ARE REASONABLE AND NECESSARY FOR THE PROTECTION OF THE
COMPANY AND THAT THE COMPANY MAY BE IRREVOCABLY DAMAGED IF THESE PROVISIONS ARE
NOT SPECIFICALLY ENFORCED. ACCORDINGLY, EXECUTIVE AGREES THAT, IN ADDITION TO
ANY OTHER LEGAL OR EQUITABLE RELIEF OR REMEDY AVAILABLE TO THE COMPANY, THE
COMPANY SHALL BE ENTITLED TO SEEK AND MAY OBTAIN AN APPROPRIATE INJUNCTION OR
OTHER EQUITABLE REMEDY FOR THE PURPOSES OF RESTRAINING EXECUTIVE FROM ANY ACTUAL
OR THREATENED BREACH OF OR OTHERWISE ENFORCING THESE PROVISIONS AND THAT NO BOND
OR SECURITY SHALL BE REQUIRED IN CONNECTION THEREWITH) TOGETHER WITH AN
EQUITABLE ACCOUNTING OF ALL EARNINGS, PROFITS AND OTHER BENEFITS ARISING FROM
SUCH VIOLATION, WHICH RIGHTS SHALL BE CUMULATIVE. IN ANY ACTION OR PROCEEDING
BROUGHT TO ENFORCE THE PROVISIONS OF SUBSECTIONS (A) OR (B) OF THIS SECTION 9,
THE PREVAILING PARTY SHALL BE ENTITLED TO RECEIVE FROM THE OTHER PARTY ITS

--------------------------------------------------------------------------------

reasonable costs and expenses incurred to enforce such provisions or defend
against such enforcement (as the case may be), including reasonable attorneys’
fees.

 

(D)           MODIFICATION. IF ANY PROVISION OF SUBSECTIONS (A) OR (B) IS DEEMED
ILLEGAL, INVALID, OR UNENFORCEABLE TO ANY EXTENT, UNDER ANY PRESENT OR FUTURE
LAW, SUCH PROVISION SHALL, TO THE EXTENT NOT OTHERWISE SUBJECT TO BEING REFORMED
AS PROVIDED IN THE NEXT SENTENCE, BE FULLY SEVERABLE AND THIS AGREEMENT SHALL BE
CONSTRUED AS IF SUCH ILLEGAL, INVALID, OR UNENFORCEABLE PROVISION WERE NEVER A
PART HEREOF AND THE REMAINING PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT
AND SHALL NOT BE AFFECTED BY THE ILLEGAL, INVALID, OR UNENFORCEABLE PROVISION OR
BY ITS SEVERANCE. IF, HOWEVER, A COURT DETERMINES THAT ANY OF THE RESTRICTIONS
CONTAINED IN SUBSECTION (B) ARE UNREASONABLE IN TERMS OF SCOPE, DURATION,
GEOGRAPHIC AREA, OR OTHERWISE, OR ANY OF THE PROVISIONS IN SUBSECTIONS (A) OR
(B) ARE OTHERWISE ILLEGAL, INVALID, OR UNENFORCEABLE, THEN SUCH RESTRICTIONS OR
PROVISION, AS APPLICABLE, SHALL BE REFORMED TO THE EXTENT NECESSARY SO THAT THE
SAME SHALL BE RENDERED ENFORCEABLE TO THE FULLEST EXTENT OTHERWISE PERMISSIBLE
UNDER APPLICABLE LAW, AND THE PARTIES HERETO DO HEREBY EXPRESSLY AUTHORIZE ANY
SUCH COURT TO SO PROVIDE.

 

10.          MISCELLANEOUS.

 

(A)           ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT, TOGETHER WITH THE
AGREEMENTS AND PLANS REFERENCED HEREIN AND THE EXHIBITS HERETO, SUPERSEDES ALL
PRIOR AGREEMENTS BETWEEN THE PARTIES WITH RESPECT TO ITS SUBJECT MATTER
(INCLUDING THE EXISTING EMPLOYMENT AGREEMENT, WHICH IS HEREBY TERMINATED AS OF
THE EFFECTIVE DATE OF THIS AGREEMENT), IS INTENDED AS A COMPLETE AND EXCLUSIVE
STATEMENT OF THE TERMS OF THE AGREEMENT BETWEEN THE PARTIES WITH RESPECT
THERETO, AND MAY BE AMENDED ONLY BY A WRITING SIGNED BY BOTH PARTIES.

 

(B)           CHANGE IN FISCAL YEAR. NOTWITHSTANDING ANY OTHER PROVISION HEREOF,
IN THE EVENT OF A CHANGE IN THE PERIOD OF TIME CONSTITUTING THE FISCAL YEAR OF
THE COMPANY, EQUITABLE ADJUSTMENTS SHALL BE MADE TO THOSE TERMS HEREOF THAT ARE
DEPENDENT UPON A DETERMINATION OF FISCAL YEAR, AS MAY BE REASONABLY DETERMINED
BY THE COMPANY UPON APPROVAL OF THE BOARD IN GOOD FAITH, BUT NO SUCH CHANGE IN
FISCAL YEAR SHALL MATERIALLY INCREASE OR DECREASE THE BENEFITS AND BURDENS OF
THE PARTIES HEREUNDER.

 

(C)           INCORPORATION OF RECITALS AND EXHIBITS. THE BACKGROUND RECITALS TO
THIS AGREEMENT AND THE EXHIBITS HERETO ARE AN INTEGRAL PART OF AND BY THIS
REFERENCE ARE HEREBY INCORPORATED INTO THIS AGREEMENT.

 

(D)           NOTICES. ANY NOTICE REQUIRED OR PERMITTED HEREUNDER (INCLUDING ANY
TERMINATION NOTICE) SHALL BE IN WRITING AND SHALL BE DELIVERED IN PERSON
(INCLUDING DELIVERY BY COMMERCIAL COURIER SERVICE) OR SENT BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO THE FOLLOWING ADDRESS:

 

If to the Company:

 

Attn: Chief Financial Officer and

 

 

Attn: Chairman, Compensation Committee

 

 

of the Board of Directors

 

 

in each case at the address of the Company’s

 

 

principal office in the State of Maryland

 

--------------------------------------------------------------------------------

 

If to Executive:

 

To the address of Executive’s

 

 

principal residence in the State of Maryland

 

 

 

or to such other address of which either party has theretofore given notice in
accordance with this subsection.

 

(E)           NONWAIVER. THE FAILURE OF EITHER PARTY TO INSIST UPON STRICT
ADHERENCE TO ANY TERM OF THIS AGREEMENT ON ANY OCCASION SHALL NOT BE CONSIDERED
A WAIVER OR DEPRIVE THAT PARTY OF THE RIGHT THEREAFTER TO INSIST UPON STRICT
ADHERENCE TO THAT TERM OR ANY OTHER TERM OF THIS AGREEMENT. ANY WAIVER MUST BE
IN A WRITING SIGNED BY THE PARTY TO BE CHARGED THEREWITH.

 

(F)            ASSIGNMENT. THIS AGREEMENT SHALL INURE TO THE BENEFIT OF AND BE
BINDING UPON THE PARTIES HERETO AND THEIR RESPECTIVE HEIRS, REPRESENTATIVES,
SUCCESSORS AND ASSIGNS. THIS AGREEMENT SHALL NOT BE ASSIGNABLE BY EITHER PARTY
WITHOUT THE CONSENT OF THE OTHER. IF EXECUTIVE SHOULD DIE WHILE ANY AMOUNTS ARE
STILL PAYABLE TO EXECUTIVE HEREUNDER, ALL SUCH AMOUNTS SHALL BE PAID IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT TO EXECUTIVE’S PERSONAL
REPRESENTATIVE OR OTHER SUCCESSOR IN INTEREST.

 

(G)           COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE
COUNTERPARTS, EACH OF WHICH SHALL BE CONSIDERED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE THE SAME INSTRUMENT.

 

(H)           CERTAIN RULES OF CONSTRUCTION.

 

(1)           NUMBER. THE DEFINITIONS CONTAINED IN SECTION 1 AND ELSEWHERE IN
THIS AGREEMENT SHALL BE EQUALLY APPLICABLE TO BOTH THE SINGULAR AND PLURAL
FORMS.

 

(2)           “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.”

 

(3)           SECTION, ETC. REFERENCES. EXCEPT AS OTHERWISE SPECIFIED HEREIN,
REFERENCES HEREIN TO SECTIONS, SUBSECTIONS, AND PARAGRAPHS ARE REFERENCES TO THE
SECTIONS, SUBSECTIONS, AND PARAGRAPHS OF THIS AGREEMENT.

 

(4)           HEADINGS. THE HEADINGS AND SUBHEADINGS IN THIS AGREEMENT ARE FOR
CONVENIENCE OF REFERENCE ONLY AND SHALL NOT BE GIVEN ANY EFFECT IN THE
INTERPRETATION OF THIS AGREEMENT.

 

(I)            GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO ANY PROVISION THAT WOULD RESULT IN THE
APPLICATION OF THE LAWS OF ANY OTHER STATE OR JURISDICTION.

 

(J)            SEVERABILITY. THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION
OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER
PROVISION OF THIS AGREEMENT.

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(K)           LEGAL EXPENSES. IF THE COMPANY FAILS AT ANY TIME TO PAY OR PROVIDE
FOR PAYMENT OF ANY AMOUNT REQUIRED TO BE PAID OR PROVIDED FOR HEREUNDER,
EXECUTIVE SHALL BE ENTITLED TO CONSULT WITH INDEPENDENT COUNSEL OF HIS CHOICE,
AND THE COMPANY SHALL PAY THE REASONABLE FEES AND EXPENSE OF SUCH COUNSEL IN
CONNECTION THEREWITH AND IN OTHERWISE ADVISING HIM OR IN BRINGING ANY ACTION OR
PROCEEDING, OR IN DEFENDING ANY ACTION OR PROCEEDING, INVOLVING EXECUTIVE’S
RIGHTS UNDER THIS AGREEMENT; PROVIDED, HOWEVER, THAT IF EXECUTIVE COMMENCES ANY
SUCH ACTION OR PROCEEDING, EXECUTIVE SHALL NOT BE ENTITLED TO RECOVER SUCH FEES
AND COSTS IF IT IS EXPRESSLY DETERMINED BY THE COURT OR TRIBUNAL BEFORE WHICH
THE ACTION OR PROCEEDING IS CONDUCTED THAT EXECUTIVE BROUGHT THE CLAIM IN BAD
FAITH OR THE CLAIM WAS FRIVOLOUS. SUCH RIGHT TO REIMBURSEMENT SHALL BE IMMEDIATE
UPON THE PRESENTMENT BY EXECUTIVE OF WRITTEN BILLINGS FOR SUCH REASONABLE FEES
AND EXPENSES, BUT, IF EXECUTIVE COMMENCES ANY ACTION OR PROCEEDING AGAINST THE
COMPANY, ANY AWARD OR JUDGMENT AGAINST EXECUTIVE IN SUCH ACTION OR PROCEEDING
SHALL REQUIRE HIM TO REPAY SUCH AMOUNTS, NET OF ANY INCOME TAXES PAID OR PAYABLE
BY EXECUTIVE IN RESPECT OF SUCH AMOUNTS, IF SUCH AMOUNTS ARE INCURRED IN
CONNECTION WITH AN ACTION OR PROCEEDING COMMENCED BY EXECUTIVE AND IT IS
ULTIMATELY DETERMINED BY THE COURT OR TRIBUNAL BEFORE WHICH THE ACTION OR
PROCEEDING IS CONDUCTED THAT EXECUTIVE BROUGHT SUCH ACTION OR PROCEEDING IN BAD
FAITH OR THE CLAIM WAS FRIVOLOUS. THE COMPANY SHALL HAVE THE BURDEN OF PROVING
THAT ANY CLAIM WAS ASSERTED IN BAD FAITH OR WAS FRIVOLOUS FOR PURPOSES OF THIS
SUBSECTION. IN ADDITION, THE COMPANY AGREES TO PAY THE REASONABLE FEES AND
EXPENSES OF INDEPENDENT COUNSEL FOR EXECUTIVE IN CONNECTION WITH THE
NEGOTIATION, PREPARATION, EXECUTION, AND IMPLEMENTATION OF THIS AGREEMENT.

 

(L)            INTEREST ON OVERDUE PAYMENTS. ANY AMOUNT PAYABLE TO EXECUTIVE
UNDER THIS AGREEMENT THAT IS NOT PAID WHEN DUE SHALL BEAR INTEREST AT AN ANNUAL
RATE EQUAL TO THE PRIME RATE OF INTEREST FROM TIME TO TIME QUOTED AS SUCH IN THE
WALL STREET JOURNAL PLUS TWO PERCENT (2%).

 

(M)          COMPANY POLICIES, PLANS AND PROGRAMS. WHENEVER ANY RIGHTS UNDER
THIS AGREEMENT DEPEND ON THE TERMS OF A POLICY, PLAN, OR PROGRAM OF APPLICATION
TO ALL EMPLOYEES GENERALLY OR TO ANY SPECIFIED CLASS OF EMPLOYEES THAT IS
ESTABLISHED OR MAINTAINED BY THE COMPANY, ANY DETERMINATION OF SUCH RIGHTS WILL
BE MADE ON THE BASIS OF THE POLICY, PLAN, OR PROGRAM IN EFFECT AT THE TIME AS OF
WHICH SUCH DETERMINATION IS MADE. NO REFERENCE IN THIS AGREEMENT TO ANY POLICY,
PLAN, OR PROGRAM OF APPLICATION TO ALL EMPLOYEES GENERALLY OR TO ANY SPECIFIED
CLASS OF EMPLOYEES THAT IS ESTABLISHED OR MAINTAINED BY THE COMPANY SHALL
PRECLUDE THE COMPANY FROM PROSPECTIVELY OR RETROACTIVELY CHANGING OR AMENDING OR
TERMINATING THAT POLICY, PLAN, OR PROGRAM OR ADOPTING A NEW POLICY, PLAN, OR
PROGRAM IN LIEU OF THE THEN-EXISTING POLICY, PLAN, OR PROGRAM. THIS AGREEMENT
SHALL BE CONSTRUED IN A MANNER GENERALLY CONSISTENT WITH ANY SUCH POLICY, PLAN,
OR PROGRAM, AS EXISTING FROM TIME TO TIME, BUT IN THE EVENT OF A DIRECT CONFLICT
BETWEEN THE PROVISIONS OF THIS AGREEMENT AND THOSE OF ANY SUCH POLICY, PLAN, OR
PROGRAM, THE PROVISIONS OF THIS AGREEMENT PROVIDING ECONOMIC BENEFITS OR
PAYMENTS TO EXECUTIVE SHALL PREVAIL.

 

(N)           BOARD ACTION. ANY ACTION THAT MAY BE TAKEN HEREUNDER BY THE BOARD
OF DIRECTORS OF THE COMPANY WITH RESPECT TO THE COMPENSATION AND BENEFITS OF
EXECUTIVE MAY BE TAKEN BY AN AUTHORIZED COMMITTEE OF THE BOARD.

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(O)           CODE SECTION 409A. TO THE EXTENT THAT THIS AGREEMENT OR ANY PLAN,
PROGRAM OR AWARD OF COMPANY IN WHICH EXECUTIVE PARTICIPATES OR WHICH HAS BEEN OR
IS GRANTED BY COMPANY TO EXECUTIVE, AS APPLICABLE, IS SUBJECT TO SECTION 409A OF
THE CODE, COMPANY AND EXECUTIVE AGREE TO COOPERATE AND WORK TOGETHER IN GOOD
FAITH TO TIMELY AMEND EACH SUCH PLAN, PROGRAM OR AWARD TO COMPLY WITH SECTION
409A OF THE CODE. IN THE EVENT THAT EXECUTIVE AND COMPANY DO NOT AGREE AS TO THE
NECESSITY, TIMING, OR NATURE OF A PARTICULAR AMENDMENT INTENDED TO SATISFY
SECTION 409A OF THE CODE, REASONABLE DEFERENCE WILL BE GIVEN TO EXECUTIVE’S
REASONABLE INTERPRETATION OF SUCH PROVISIONS. NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY, IN THE EVENT THAT EXECUTIVE IS SUBJECT TO ANY PAYMENT OR BENEFIT
AT A TIME WHEN HE IS A “SPECIFIED EMPLOYEE” (WITHIN THE MEANING OF SECTION
409A), THE COMPANY SHALL DELAY THE MAKING OF SUCH PAYMENT OR BENEFIT TO THE
EXTENT REASONABLY NECESSARY TO SATISFY SECTION 409A. IN ADDITION, REFERENCES TO
PAYMENTS TO BE PAID “PROMPTLY FOLLOWING THE TERMINATION DATE” OR SIMILAR
REFERENCES SHALL MEAN NO LATER THAN TWO AND ONE-HALF MONTHS AFTER THE
TERMINATION DATE.

 

IN WITNESS WHEREOF, the parties have executed this Agreement under seal as of
the Effective Date.

 

Witness/Attest:

 

 

 

TESSCO Technologies Incorporated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/

 

 

 

By:

 

/s/ David Young

 

(seal)

 

 

 

 

 

 

David Young

 

 

 

 

 

 

 

 

Senior Vice President and

 

 

 

 

 

 

 

 

Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/

 

 

 

By:

 

/s/ Robert B. Barnhill, Jr.

 

(seal)

 

 

 

 

 

 

Robert B. Barnhill, Jr.

 

 

 

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