Exhibit 10.3.2

 

TESSCO TECHNOLOGIES INCORPORATED

STOCK OPTION

 

THIS STOCK OPTION (this “Option”) is granted by TESSCO Technologies
Incorporated, a Delaware corporation (the “Company”), to _______________ (the
“Optionee”) effective as of___________, 20___ (the “Grant Date”).

RECITALS

 

A. The Optionee is a Key Employee of the Company. In order to provide the
Optionee additional incentive to further the Company’s growth, development, and
financial success, the Compensation Committee of the Board of Directors of the
Company (the “Committee”), pursuant to authority delegated by the Board of
Directors of the Company (the “Board”), desires to grant to the Optionee,
pursuant to the TESSCO Technologies Incorporated 2019 Stock and Incentive Plan
(as from time to time hereafter amended, the “Plan”), an option to purchase
_____ (__) shares of the Company’s Common Stock, par value $.01 per share (the
“Common Stock”), at an exercise price of $_______per share (the “Exercise
Price”), which price the Compensation Committee has determined to be the Fair
Market Value of the Common Stock as of the Grant Date.

B. This Option is granted pursuant to the Plan, which is incorporated herein by
reference for all purposes.  The Optionee acknowledges receipt of a copy of the
Plan and agrees to be bound by all of the terms and conditions hereof and
thereof, and all applicable laws and regulations.  Capitalized terms used herein
and not otherwise defined shall have the meaning ascribed thereto in the Plan.

C. This Option is not intended to, and shall not, constitute or be treated as an
“incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code.

NOW, THEREFORE, to evidence the grant of the option and to set forth the terms
and conditions governing the exercise thereof and the parties’ other agreements
relative thereto, the parties, intending to be legally bound, agree as follows:

 

SECTION 1. GRANT, TERM, AND VESTING OF OPTION

1.1. In General. The Company hereby grants to the Optionee the right, and the
Optionee shall be entitled, to purchase from the Company at any time and from
time to time after the date hereof but not later than 5:00 p.m. Baltimore,
Maryland time on _______, 20__ (the “Expiration Date”), up to ______ (___)
shares of the Company’s Common Stock (the “Option Shares”) at the Exercise
Price, all on the terms and subject to the conditions hereinafter set forth.

 

1.2. Vesting. Except as otherwise set forth (and subject to all of the other
conditions and limitations contained) in this Section 1, this Option shall
become exercisable (i.e., vest) with respect to a stated percentage or number of
Option Shares on each of the dates set forth below (each a “Vesting Date”):

 

(a) On the first yearly anniversary of the Grant Date, twenty-five percent (25%)
of the Option Shares,  or _________ Option Shares; and

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(b) On the day of the month corresponding to the Grant Date (i.e., on the 10th
day (or if there is no day, the next day)) and for each of the Thirty Six (36)
successive calendar months following the first anniversary of the Grant Date, an
additional 2.08333% of the number of Option Shares (with the number of Option
Shares rounded up or down as the Company shall determine), until the fourth
anniversary of the Grant Date, when this Option will be fully vested for all ten
thousand (___________) Option Shares;  

provided, however, that any vesting otherwise provided for hereinabove will in
any event be further subject to:

(c) Optionee’s Continuous Service through each such Vesting Date; and

(d) satisfaction of the two (2) Company-based performance milestones (the
“Milestones”) described on Schedule A attached to this Option, except that in
the event of the failure to meet only one of the two Milestones in a timely
manner, but the other is met in a timely manner, then the condition to vesting
under this clause (d) will be deemed satisfied with respect to fifty percent
(50%) of the Option Shares (the effect being that instead of this Option
terminating, it shall remain in effect, subject however to all other terms and
conditions hereof, including time based vesting requirements, in respect of
fifty percent (50%) of the Option Shares and will immediately terminate with
respect to the remain fifty percent (50%) of the Option Shares.

Except as may otherwise be expressly provided herein, there shall be no
proportionate or partial vesting during periods prior to each Vesting Date, and
all vesting shall occur only on the appropriate Vesting Date. Without limiting
any other terms hereof or of the Plan otherwise providing for termination of
this Option in whole or in part, any unvested portion of this Option shall
terminate and be null and void upon termination of the Optionee’s Continuous
Service, and this Option shall terminate and be null and void upon the failure
for any reason to satisfy both Milestones in a timely manner.  

1.3. Termination for Cause. If the Optionee’s Continuous Service is terminated
by the Company for Cause, all rights of Optionee under this Option shall
terminate immediately, effective as of such termination.

 

1.4. Termination Without Cause or for Good Reason; Voluntary Termination.   If
the Optionee’s Continuous Service is terminated (x) by the Company other than
for Cause and other than on account of Disability or (y) by the Optionee for
Good Reason, or (z) on account of the resignation or voluntary termination of
employment by the Optionee in the absence of Cause, then, subject to Section 1.8
hereof, the Optionee shall be entitled to exercise this Option to the same
extent that it would have been exercisable on the effective date of termination
of the Optionee’s Continuous Service (and without regard to any subsequent
events) for a period of ninety (90) days thereafter (but in no event later than
the Expiration Date), whereupon all rights of Optionee under this Option shall
terminate immediately, unless the Board or the Committee in its sole and
absolute discretion determines that this Option should be exercisable to some
greater extent or remain exercisable for some longer period (ending in no event
later than the Expiration Date). 

 

1.5. Disability. If the Optionee’s Continuous Service is terminated as a result
of Disability, as determined by a medical doctor satisfactory to the Committee,
this Option shall not terminate or be forfeited and the Optionee shall remain
entitled to exercise this Option, but only to

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the same extent that it would have been exercisable on the date of termination
of the Optionee’s Continuous Service (and without regard to subsequent events),
for a period of twelve (12) months thereafter (but in any event subject to
Section 1.8 hereof, and in no event later than the Expiration Date), whereupon
all rights of Optionee under this Option shall terminate immediately, unless the
Board or the Committee in its sole and absolute discretion determines that this
Option should be exercisable to some greater extent or remain exercisable for
some longer period (ending in no event later than the Expiration Date).

 

1.6. Death. In the event of the termination of Optionee’s Continuous Service by
reason of death of Optionee, the Optionee’s personal representative or other
successor in interest shall be entitled to exercise this Option, but only to the
same extent that it would have been exercisable on the date of the Optionee’s
death (but without regard to subsequent events), for a period of twelve (12)
months thereafter (but in any event subject to Section 1.8 hereof, and in no
event later than the Expiration Date), whereupon all rights of Optionee under
this Option shall terminate immediately, unless the Board or the Committee in
its sole and absolute discretion determines that this Option should be
exercisable to some greater extent or remain exercisable for some longer period
(ending in no event later than the Expiration Date). 

 

1.7. Expiration. This Option, including any then unexercised portion of this
Option, and all rights of Optionee hereunder, shall in any event automatically
and without notice terminate on the Expiration Date, if not sooner.  

 

1.8. Change in Control.  

 

(a) Accelerated Vesting. Notwithstanding Section 1.2, if there is a Change in
Control of the Company and the Optionee’s Continuous Service is
terminated during the period beginning ninety (90) days prior to and ending one
(1) year after the date of the Change in Control, either (i) by the Company or a
successor, in either case other than for Cause and other than on account of
death or Disability, or (ii) by the Optionee for Good Reason, then this Option
shall (if not already so exercisable, and provided that this Option shall not
have previously expired or terminated for any reason, including at the
Expiration Date or upon failure to timely satisfy the Milestones) become
exercisable with respect to 100% of the total number of Option Shares. 

 

(b) Company Right to Accelerate Vesting and Terminate Option.   If at any time
before the Expiration Date, and assuming this Option remains in effect, the
Company becomes aware of the impending occurrence of any Change in Control, then
the Company shall have the right and option (but not any obligation) to give the
Optionee written notice thereof (a “Change in Control Notice”) setting forth (if
known) the date on or about which the Change in Control is anticipated to occur.
 If a Change in Control Notice is given by the Company to the Optionee pursuant
to this subsection (b) no later than twenty (20) days before the occurrence of
the Change in Control (or the record date or other date for establishing the
holders of Common Stock entitled to the initial liquidating dividend or other
distribution in respect of any complete or partial liquidation, dissolution, or
divisive reorganization of the Company approved by the stockholders), the
Company shall have the right and option (but not any obligation) (i) to the
extent not then already vested, to cause the vesting of this Option to be
accelerated (whereupon this Option will become exercisable with respect to 100%
of the total number of Option Shares), such acceleration to be effective upon,
or immediately prior to and conditioned upon, the occurrence of the Change in
Control described in the Change in Control Notice, and on any other conditions,
qualifications or limitations stated or provided for therein (including the
right to withdraw the

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Change in Control Notice for any or no reason), and (ii) as provided in the
Change in Control Notice, and as a condition to any acceleration as contemplated
by (i) above (and for the avoidance of doubt, whether or not such acceleration
was then required to effect this Option becoming exercisable with respect to
100% of the total number of Option Shares), to terminate this Option, insofar as
still remaining unexercised, effective upon, or immediately prior to and
conditioned upon, the occurrence of the Change in Control and without any
additional notice.  As a condition to any such termination of this Option,
however, the Company shall afford the Optionee a reasonable period of time (no
less than fifteen (15) days) after the date on which the Change in Control
Notice is given to exercise this Option in whole or in part; and in the event
that, or insofar as, the Optionee does not exercise this Option prior to the
expiration of such period, then, unless the Board or the Committee (or any
successor to either) in its sole and absolute discretion determines otherwise,
this Option will terminate and expire effective upon, or immediately prior to
and conditioned upon, the occurrence of the Change in Control. Notwithstanding
the foregoing, if and in the event that the Continuous Service of the Optionee
has for any reason terminated or expired as of the date of the giving of the
Change in Control Notice or at any time prior to the Change in Control referred
to therein, and this Option (and the right to exercise this Option) has not then
otherwise expired by its terms, then the Company shall have the right and option
to deliver a Change in Control Notice as provided above without any
corresponding acceleration of the vesting of this Option, and this Option shall
then be exercisable only to the extent otherwise exercisable as of the date of
termination of Continuous Service and without acceleration, until the expiration
of the reasonable period otherwise provided for hereunder. Any acceleration of
the vesting of this Option (and the right of Optionee to exercise this Option
with respect to any Option Shares vested other than on account of the passage of
time) as described in or contemplated by a Change in Control Notice shall be,
and any exercise by the Optionee may be, in each case whether delivered pursuant
to this subsection (b) of subsection (c) below, conditioned upon the actual
occurrence or consummation of the Change in Control and satisfaction of any
other conditions, qualifications or limitations included or provided for in the
Change in Control Notice or notice of exercise. 

(c) Change in Control Agreement.  In the event of, or if in anticipation of, a
Change in Control in which the Company is not or will not be the surviving or
acquiring company, or will be liquidated or dissolved, or in which the Company
is or becomes, or will become, a wholly-owned subsidiary of another company
after the effective date of the Change in Control, in any event occurring prior
to the Expiration Date and prior to any other termination of this Option
(including upon exercise by the Company of the right and option afforded to it
subsection (b) above): (1) if there is no Change in Control Agreement (as
defined below) or if the Change in Control Agreement does not specifically
provide for the change, conversion or exchange of this Option for similar
securities of another company, the Company will deliver to Optionee a Change in
Control Notice in the manner described in (but not pursuant to) subsection (b)
above, thereby providing the Optionee with a reasonable opportunity to exercise
this Option as otherwise provided for in (but not pursuant to) subsection (b)
above, and Optionee shall thereupon have the right during the applicable period
of not less than fifteen (15) days to exercise this Option as to all or any part
of the shares covered hereby, including, if the Continuous Service of Optionee
then continues (but not otherwise), shares as to which this Option would not
otherwise be exercisable by reason of an insufficient lapse of time, and this
Option will thereupon terminate and expire as otherwise provided for in (but not
pursuant to) subsection (b) above, effective upon, or immediately prior to and
conditioned upon, the occurrence of such Change in Control; and (2) if there is
a Change in Control Agreement and if the Change in Control Agreement provides
for the change, conversion or exchange of the shares under outstanding and
unexercised stock options,  

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generally, or under this Option, for securities or other property of another
company, and provides for the change, conversion or exchange of this Option, or
the assumption or substitution of this Option, for similar securities or other
property of another company, then in connection with the Change in Control, in
lieu of this Option terminating (and, where applicable, in lieu of being
accelerated) to the extent not exercised as otherwise contemplated by clause (1)
of this subsection (c), then, and unless the Company shall have exercised its
right under subsection (b) above, this Option shall be so changed, converted or
exchanged, or assumed or substituted for, in a manner not inconsistent with the
provisions of the Change in Control Agreement for the adjustment, change,
conversion or exchange of such stock and such options (and if holders of Common
Stock were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares).   If such consideration
received in the transaction constituting a Change in Control is not solely
common stock of the successor company or its parent or subsidiary, the Committee
may, with the consent of the successor company, or its parent or subsidiary,
provide that the consideration to be received upon the exercise or vesting of
the substitute or assumed option will be solely common stock of the successor
company or its parent or subsidiary substantially equal in Fair Market Value to
the per share consideration received by holders of shares of Common Stock in the
transaction constituting a Change in Control. All adjustments and determinations
under this subsection (c), including any determination of such substantial
equality of value of consideration, shall be made by the Committee in its sole
discretion and its determination shall be conclusive and binding.
 Notwithstanding the foregoing, on such terms and conditions as may be set forth
in an award agreement, in the event of a termination of the Optionee's
employment in such successor company (other than for Cause or on account of
Disability or the comparable reasons applicable to such award agreement) within
one (1) year following such Change in Control (subject, however, to earlier
expiration as of the Expiration Date), the option held by the Optionee at the
time of the Change in Control shall be accelerated as described in Section
1.8(a) above.

1.9. Certain Definitions.

 

For purposes of this Option:

(a) “Cause” shall have the meaning ascribed thereto in the Plan and shall also
include, to the extent not already included, any act or failure to act
determined in good faith by the Committee to constitute gross misconduct by the
Optionee.

 

(b) “Change in Control Agreement” means a written plan or agreement regarding
the terms and implementation of a Change in Control in which the Company is not
the surviving or acquiring company, or in which the Company is or becomes a
wholly-owned subsidiary of another company after the effective date of the
Change in Control (and in any event excluding any liquidation).

 

(c) “Good Reason” means any of the following:

 

(1) Any material adverse change by the Company in the Optionee’s duties or
reporting responsibilities or any material reduction by the Company in the
Optionee’s authority (other than as a result of Disability of Optionee),
provided, however, that a change in authority, duties or responsibilities solely
due to the Company becoming a division, subsidiary or otherwise part of a larger
organization shall not by itself constitute Good Reason, and provided further
that the Optionee specifically objects in writing to the change or reduction

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within thirty (30) days after the change or reduction first occurs and the
Company (or its successor) does not rescind the change or reduction within a
further period of thirty (30) days; or

(2) Any material failure by the Company or its subsidiaries to make a payment
due and owing to the Optionee or to provide the Optionee with a benefit due and
owing to the Optionee, but only if the failure is not cured in all material
respects within fifteen (15) days after the Company receives written notice of
such failure; or

(3) Any reduction of Optionee’s annual base salary,  or any material reduction
in the package of benefits provided to Optionee as an employee of the Company
(excluding benefits in the nature of cash or equity incentive
compensation), except to the extent that the base salary or package of benefits
of all other officers of the Company is similarly reduced (except insofar as
such reduction would require the Company to violate a binding employment
agreement), and provided that the Optionee specifically objects in writing to
the reduction within thirty (30) days after the reduction first occurs and the
Company (or its successor) does not rescind the reduction within a further
period of thirty (30) days.

SECTION 2. EXERCISE OF OPTION

2.1. In General. In the event the Optionee desires to exercise this Option with
respect to all or any vested portion of the Option Shares, the Optionee shall
give notice to the Company in substantially the form of Exhibit A (together with
any other representations, warranties, and undertakings that may otherwise be
required by the Company of the Optionee pursuant to the terms of this Option or
the Plan). Such notice shall state the number of Option Shares with respect to
which this Option is being exercised and shall be accompanied by payment of the
Exercise Price multiplied by the number of Option Shares with respect to which
this Option is being exercised (the “Aggregate Exercise Price”).

 

2.2. Payment Options. Unless otherwise permitted by the Board or the Committee,
payment of the Aggregate Exercise Price shall be made in cash or by check
payable to the order of the Company. Notwithstanding the foregoing, if
hereinafter authorized by the Board or the Committee in its sole discretion,
payment of the Aggregate Exercise Price may also be made in whole or in part:
(i) through the retention by the Company of Option Shares that would otherwise
be issued pursuant to the exercise of this Option, (ii) by the delivery of
shares of Common Stock already owned by the Optionee with an aggregate Fair
Market Value (as defined below) equal to the Aggregate Exercise Price, or
(iii) by any other form of payment that is acceptable to the Board or the
Committee, as the case may be. If the Aggregate Exercise Price is paid in the
manner described in clause (i) above, the number of shares to be issued to the
Optionee shall be reduced by the product of (x) the total number of shares to be
acquired (determined without regard to clause (i)) times (y) the quotient of
(a) the Exercise Price divided by (b) the Fair Market Value, which reduction
shall constitute payment of the Exercise Price for the shares acquired pursuant
to clause (i).

 

2.3. Withholding Taxes. The Company shall be entitled to require as a condition
of delivery of the shares to be acquired upon exercise of this Option that the
Optionee remit to the Company an amount sufficient to satisfy all federal,
state, and other taxes or withholding requirements that may be imposed upon the
Company (“Tax Obligations”). Notwithstanding the foregoing, the Board or the
Committee may in its sole discretion authorize payment or other satisfaction of
all or any portion of such Tax Obligations to be made in a manner similar to one
or

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more of the methods referenced in Section ‎2.2 with respect to payment of the
Aggregate Exercise Price. Whether or not the Company requires the Optionee to
remit any such amounts, the Company shall have the right to withhold such
amounts from any compensation or other payments otherwise due to the Optionee.

 

2.4. Fractional Shares. The Company shall not be required to issue fractions of
shares upon exercise of this Option. If any fractional interest in a share is
otherwise deliverable upon the exercise of this Option, the Company shall
purchase the fractional interest for an amount in cash equal to the Fair Market
Value of the fractional interest.

 

2.5. Limitation on Exercise. Notwithstanding any other provision of this Option,
this Option shall not be exercisable in whole or in part, and no shares of
Common Stock shall be issuable by the Company in respect of any attempted
exercise, at any time when such exercise or issuance is prohibited by the
Company’s policies then in effect concerning transactions by officers,
directors, or employees in securities of the Company.

 

SECTION 3. MISCELLANEOUS

3.1. Entire Agreement. This Option (together with the Plan, to which it is and
shall remain subject) constitutes the entire agreement and understanding between
the parties hereto, and supersedes any prior agreement or understanding,
relating to the subject matter of this Option.

 

3.2. Conflicts with Plan; Amendments. This Option has been granted as an
“Option” (and, in particular, a “Non-Qualified Option”) under the Plan and shall
be construed consistently with the Plan. In the event of any clear conflict
between the provisions of the Plan and this Option, the provisions of the Plan
(including any such provisions that defer to an applicable award, such as this
Option) shall control. The Committee has the right, in its sole discretion, to
amend this Option from time to time in any manner for the purpose of promoting
the objectives of the Plan but only if the similar terms of all other
Non-Qualified Options under the Plan that are then in effect at the time of such
amendment and are also similarly amended with substantially the same effect. Any
such amendment of this Option will, upon adoption by the Committee, become and
be binding and conclusive on all persons affected by it without requirement for
consent or other action by any such person. The Company will give the Optionee
or other registered holder of this Option written notice of any such amendment
of this Option as promptly as practicable after it is adopted. 

 

3.3. No Rights of Stockholder. The Optionee shall not be deemed a stockholder of
the Company for any purpose until the shares issuable upon exercise of this
Option have been issued to the Optionee upon exercise of this Option. The
existence of this Option shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any adjustments,
recapitalizations, reorganizations, or other changes in the Company’s capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, or shares of capital stock with a preference ahead
of, or convertible into, or otherwise affecting the Common Stock or rights
thereof, or dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.

 

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3.4. No Rights of Continued Employment.  This Option shall not confer upon the
Optionee any right of continued employment or Continuous Service with the
Company or otherwise, nor shall it entitle the Optionee to any continued level
of base salary.

 

 

3.5. Transfer Restrictions.  Unless otherwise determined by the Committee, this
Option is not transferable, and, during the lifetime of the Optionee, the Option
shall be exercisable only by the Optionee, or the Optionee's guardian or legal
representative. In addition, this Option shall not be assigned, negotiated,
pledged or hypothecated in any way (whether by operation of law or otherwise),
and this Option shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, negotiate, pledge or hypothecate
this Option, or in the event of any levy upon this Option by reason of any
execution, attachment or similar process contrary to the provisions hereof, this
Option shall immediately become null and void. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.  

 

3.6. Notices. Any notice or communication required or permitted hereunder shall
be sufficiently given if delivered in person or by commercial courier service or
sent by first class mail, postage prepaid:

 

(a) If to the Company, addressed to it at 11126 McCormick Road, Hunt Valley, MD
21031, marked for the attention of the Chief Financial Officer, and

(b) If to the Optionee, to the address set forth below Optionee’s signature (or
if not set forth, as appearing in the records of the Company),

or in either case to such other address as any party shall notify the other in
accordance with this section.

3.7. Governing Law. This Option shall be governed by and construed in accordance
with the federal laws of the United States and 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).

 

3.8. Headings. The descriptive headings in this Option are inserted for
convenience of reference only and do not constitute a part of this Option.

 

3.9. Incorporation of Recitals and Exhibits. The recitals to this Option and any
exhibits and schedules hereto are a material part of and by this reference are
hereby incorporated into this Option.

 

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IN WITNESS WHEREOF, the parties have caused this Stock Option to be signed under
seal as of the date first above written.

 

ATTEST/WITNESS:TESSCO TECHNOLOGIES INCORPORATED

 

 

 

______________________________By: ____________________________(SEAL)

President and Chief Executive Officer

 

OPTIONEE:

 

 

____________________________________________________________________

 

Address:

_______________________________

_______________________________

 

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EXHIBIT A

TESSCO TECHNOLOGIES INCORPORATED

STOCK OPTION

NOTICE OF EXERCISE

 

______________________________
(Date)

TO:

TESSCO Technologies Incorporated
11126 McCormick Road
Hunt Valley, MD 21031
Attn: President

 

I am the holder of a Stock Option dated as of ___________ to purchase shares of
the Common Stock of TESSCO Technologies Incorporated, a Delaware corporation
(the “Company”) at a price of $______ per share. I hereby exercise that Stock
Option with respect to _________ shares, for an aggregate exercise price of
$_______________. Payment of the aggregate exercise price accompanies this
Notice of Exercise.

I acknowledge that the Company is entitled to require as a condition of
delivering the certificate representing these shares that I remit to the Company
an amount sufficient to satisfy all federal, state, and other taxes or
withholding requirements that may be imposed upon the Company. Whether or not
the Company requires me to remit any such amounts, the Company shall have the
right to withhold such amounts from any compensation or other payments otherwise
due to me.

Very truly yours,

 

________________________________
Optionee

 

 

Address:

________________________________

________________________________

 

 

 

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