EXHIBIT 10.3

CHANGE OF CONTROL AND SEVERANCE AGREEMENT BETWEEN THE COMPANY AND ROBERT A.
CRIST DATED AS OF 4/27/07
 
This agreement is made as of this date of __4/27/2007  by and between  Zoom
Technologies, Inc. (the “Company”), Zoom Telephonics, Inc. (“Zoom”), and Robert
A. Crist (“Zoom ExecutiveSenior Manager”). 

This agreement specifies the entire agreement between the Company, Zoom and the
Zoom Executive regarding severance pay and acceleration of stock options. This
agreement supercedes other agreements, if any, between the Company or Zoom and
the named Zoom Executive that relate to severance pay or acceleration of stock
options.

1.
In the event of a “change of control” (as defined in Section 4 below) or
liquidation of the Company, all issued and outstanding stock options issued to
the Zoom Executive after December 7, 2006 will become immediately vested, with
the right to be exercised at the grant price upon change of control. 

 

2.
The Zoom Executive will receive 6 months base salary as severance pay if:

 

(i)
the Zoom Executive is terminated without “cause” (as defined in Section 4 below)
within 6 months after a change of control; or

 

(ii)
the Zoom Executive’s job responsibilities, reporting status, or compensation are
materially diminished after change of control (including but not limited to no
longer reporting to as senior an executive position of the acquiring company)
and the Zoom Executive leaves the acquiring company within 6 months after
the change of control; or

 

(iii)
the Company is liquidated.

3.
Zoom has the right to terminate the Zoom Executive’s employment “at will”. In
the event the  Zoom Executive’s employment is terminated by Zoom for any reason
other than for cause, a change of control or liquidation of the Company, then
(i) all outstanding stock options issued to the Zoom Executive after December 7,
2006 will become immediately vested and will be exercisable for up to 30 days
after termination.; and (ii) Zoom will pay severance to the Zoom Executive in an
amount equal to the greater of either a) 3 months base salary, or b) a number of
weeks of base salary equal to the number of full years employed by Zoom divided
by 2.

4.
For the purpose of this agreement, “cause” shall mean (i) deliberate dishonesty,
illegal or unethical behavior or other willful behavior detrimental to the best
interest of the Company or its subsidiaries; (ii) conduct by the Zoom Executive
constituting an act of moral turpitude; (iii) willful disloyalty to the Company
or its subsidiaries or refusal or failure of the Zoom Executive to obey the
directions of the President or Board of Directors of the Company or its
subsidiaries; (iv) incompetent performance or substantial or continuing
inattention to or neglect of duties and responsibilities, provided that the Zoom
Executive will be notified in writing of such deficiencies and given a period of
60 days to correct them. For purposes hereof, “change of control" shall mean:
(A) any merger, consolidation, share exchange, business combination or other
similar transaction in which the shareholders of the Company would own less than
50% of the surviving entity following the consummation thereof; (B) any sale,
lease, exchange, transfer or other disposition of 50% or more of the assets of
the Company and its subsidiaries, taken as a whole, in a single transaction or
series of transactions; or (C) the acquisition by a person or entity, or any
“group” (as such term is defined under Section 13(d) of the Securities Exchange
Act of 1934) of beneficial ownership of 50% or more of the Stock whether by
tender offer, exchange offer or otherwise.

 
[Signature Page Follows on Next Page]
 

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Agreed:
 

        /s/ Robert A. Crist     /s/ Frank B. Manning

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Zoom Executive Signature    

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Signature - President or Executive VP of Zoom and the Company    

 

Robert A. Crist     Frank B. Manning

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Zoom Executive Name (print)    

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Name (print)     4/27/2007     5/7/2007 Date     Date

 

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