MURRAY WRIGHT

August 14, 2019

Tessco Technologies Incorporated

11126 McCormick Road

Hunt Valley, Maryland 21031

Attention: Board of Directors

 

Re:Employment Agreement dated as of August 29, 2016 by and between Murray Wright
and Tessco Technologies Incorporated (the “Company”)

 

Gentlemen:

As you know, the term of my employment under the Employment Agreement referenced
above (the “Existing Agreement”) expires at the end of the Company’s fiscal year
ending in 2020, or on March 29, 2020.  Thus far, we have not come to terms on a
proposed extension of the Existing Agreement and both I, and I understand the
Board are considering various options, including the appointment by the Company
of a successor President and CEO, who the Company may desire to assume those
responsibilities prior to the expiration of my Existing Agreement. 

In order to provide the Company with the flexibility to hire a successor
President and CEO and to allow me still to serve out the remainder of my term of
employment, after some discussion with members of the Compensation Committee, I
submit this letter (the “Letter”) to offer certain modifications to the Existing
Agreement.  Capitalized terms used herein but not otherwise defined will have
the meaning assigned in the Existing Agreement. 

1.Term.  The Term as provided in the Existing Agreement will be extended from
its current expiration date of March 29, 2020 to March 31, 2020.  Assuming my
employment is not terminated either by me or by the Company at or prior to March
31, 2020, my employment will be automatically terminated by the Company without
Cause effective as of the close of business on March 31, 2020 (which shall be
the Date of Termination if no Notice of Termination providing for an earlier
date is given). As per the terms of the Existing Agreement, termination of my
employment at or following the expiration of the Term (including termination by
the Company without Cause) will not give rise to any obligation on the part of
the Company for the Severance Amount. 

2.Transition Election.  Notwithstanding anything in the Existing Agreement to
the contrary, the Company will have the right to elect (the “Transition
Election”) to require that my employment, specifically in the capacities of
Chief Executive Officer and President, terminate effective as of any date prior
to the end of the Term (as extended to March 31, 2020) in connection with the
hiring or engagement by the Company of a successor President and Chief Executive

Officer.  This Transition Election and the termination of my employment
specifically in the capacity as President and Chief Executive Officer will be
effective, without further formal notice from the Company, as of the end of the
day immediately prior to the date my successor commences to serve as described
above.  Notwithstanding the appointment of my successor and my no longer serving
as President and CEO, my employment with the Company will continue
uninterrupted, subject to and in accordance with the terms of the Existing
Agreement, as modified by this Letter, for the remainder of the Term or until my
employment is earlier terminated otherwise in accordance with the Existing
Agreement as modified hereby (such period, the “Transition Period”). During the
Transition Period, I will no longer serve as President or Chief Executive
Officer and will instead perform the duties, and will receive compensation, as
described below.

3.Resignation.  Effective as of the end of the day prior to the start of the
Transition Period, I will be deemed, without further action, to have resigned
from my position as President and Chief Executive Officer, and from the Board,
and from any other officer or director positions with the Company or any
subsidiary (but for the avoidance of doubt, not as an employee of the Company). 

4.Duties.  During the Transition Period, I will no longer serve in an officer or
similar capacity with the Company or any subsidiary, but will instead serve in
an executive capacity, and initially be responsible for transition of the
leadership of the Company to the person selected by the Board (and who will
report to the Board, not me) as my successor, and I will serve, as and to the
extent from time to time specified by the Board, as an advisor to that person to
help support the Company’s growth strategy and development. The Board may in its
discretion from time to time during the Transition Period relieve me from any or
all duties, responsibilities, or authority, and may, for example, require that I
be based or operate and pursue whatever duties I may continue to have, other
than at the offices of the Company. I agree that during the Transition Period I
will not commence employment elsewhere, although I may accept a non-employee
board position provided that my performance in such position will not result in
a violation of my obligations under Paragraph 5 of the Existing Agreement.

5.Good Reason.In order to allow for the transition of my employment and the
hiring by the Company of my successor, without giving rise to or serving as a
basis for a claim by me of Good Reason,  I agree that any anticipated or actual
exercise by the Company of the Transition Election, including the hiring of my
successor and transition of my employment from President and Chief Executive
Officer, my resignation from the Board, and the resulting change in or
elimination of my titles, duties, responsibilities or workplace, will not under
any circumstances (including under the terms of the Existing Agreement, the
Option, or any Performance Stock Unit Agreement or Restricted Stock Award held
by me, or otherwise) be or give rise to or grounds for a claim or assertion by
me of Good Reason, or be or be treated as a termination of my employment by the
Company without Cause, nor for the avoidance of doubt, constitute termination of
my employment or entitle me to Severance.  The use of the term “Good Reason”
provided for in the Existing Agreement (and under the terms of the Option, any
Performance Stock Unit Agreement or Restricted Stock Award, or otherwise held by
me) is to be construed, accordingly, and I waive, and agree not to assert, any
right that I may have to claim that Good Reason exists on account of any such
hiring, transition, Board resignation, changes or elimination.

6.Base Salary/ Benefit Continuation.For so long as I remain employed by the
Company and notwithstanding the making by the Company of the Transition
Election, the Company will continue to pay me my Base Salary and to provide me
with those fringe benefits and perquisites as paid or provided to me, or in
which I participated, immediately prior to the start of the Transition Period.
Any term or provision of the Existing Agreement to the contrary notwithstanding,
in no event will I be entitled to payment of any Cash Bonus for fiscal year 2021
or any portion thereof into which the Term may extend and, consistent with
Company policy, I will not accrue or receive payment for accrued vacation upon
termination of my employment. If and to the extent permitted under the terms of
the Company-provided life insurance policy, the Company will not object if I
elect to continue coverage after termination of my employment, at my own cost,
and the Company will afford me the right, insofar as required by law, to retain
my health insurance coverage following termination of my employment in
accordance with COBRA, at my own cost.   

7.Equity Compensation.  For so long as I remain employed by the Company, and
notwithstanding the making by the Company of the Transition Election, the Option
and the RSUs and PSUs currently held by me will continue to remain outstanding
and will continue to be earned or vest, as applicable, in accordance with their
respective terms, except that, in the event the Company makes the Transition
Election, the PSUs awarded to me in May 2019 with a fiscal year 2020 measurement
year will terminate and be of no further force or effect, any terms thereof to
the contrary notwithstanding. Provided that my employment is not terminated by
the Company for Cause, and I do not voluntarily resign from my employment
without Good Reason (under circumstances in which I remain able to do so), then,
upon termination of my employment, the RSUs and PSUs then earned by me will
become vested and the shares delivered to me. As of the date hereof, PSUs for
8437 shares, and as of August 21, 2019 RSUs for 10,687 shares, of Common Stock
have been (or will be) earned under the PSUs and RSUs now held by me. No
additional PSUs will be earned following the Transition Election, and additional
RSUs may be earned in respect of any dividends paid by the Company prior to the
termination of my employment, subject to and in accordance with the applicable
award agreement.  

8.Termination Following Transition Election.In the event the Company makes the
Transition Election, the terms of the Existing Agreement regarding “Termination”
and “Payment Upon Termination/ Severance” (Paragraphs 6 and 7, respectively)
will continue to apply for the remainder of the Term, except in the case of
death or disability as discussed in the next sentence, and except in connection
with or following a Change in Control, as defined and provided below.  If
following the making by the Company of the Transition Election, either (i) my
employment is terminated on account of my death or Disability prior to the
expiration of the Term, or (ii) my employment is, or is deemed as provided in
Paragraph 1 of this Letter to be, terminated by the Company without Cause upon
expiration of the Transition Period on March 31, 2020 (but not prior to, in
which case the Paragraph 7(a) of the Existing Agreement which provides for
payment of the Severance Amount will apply, except in the case of a Change in
Control, as provided below), or (iii) my employment is terminated following a
Change in Control and prior to March 31, 2020 as discussed in clause (f) below,
then, agreeing that such payments and accommodations will be my sole and
exclusive remedy for any such termination and that I will not pursue any other
remedies, the following terms will apply:

(a) Accrued Compensation and Benefits.  The Company will pay or provide the
Accrued Compensation and Benefits;

(b) Pro Rata Cash Bonus for 2020.  I will be paid, when otherwise payable to
senior executives of the Company following the end of fiscal year 2020 of the
Company, a pro rata portion of the Cash Bonus that I would have earned for the
full 2020 fiscal year of the Company, determined by multiplying (A) the amount
of Cash Bonus that would otherwise be payable for the full fiscal year 2020 of
the Company, as determined by the Compensation Committee, by (B) a fraction, the
numerator of which is the number of calendar days elapsed in fiscal year 2020 of
the Company prior to the start of the Transition Period and the denominator of
which is the number of calendar days in the fiscal year 2020 of the
Company.  This amount will be payable in lieu of any other payments in the
nature of a Cash Bonus for fiscal year 2020 of the Company, all rights thereunto
otherwise existing being waived.

(c) Option Extension.  In lieu of the Option expiring in accordance with its
terms upon or following termination of my employment, the Option will, to the
extent vested and exercisable at the date of termination of my employment, and
subject to my continued compliance with clause (e) below and to the terms of the
Option and the Plan, generally, remain exercisable from time to time until March
31, 2022, after which the Option will no longer be exercisable and will
terminate. Assuming my employment terminates on March 31, 2020 without Cause as
provided in Paragraph 1 above, the Option will then be vested for 223,958 shares
(including those shares that vest on March 31, 2020), and any further vesting
will cease.

(d) No Sale Covenant.  I agree that I will not sell, transfer or convey,
directly or indirectly (including through the use of any derivative or hedging
instrument or strategy of any kind), at any time prior July 1, 2020, any shares
of Common Stock of the Company held or controlled by me (the “No Sale
Covenant”).

(e) Release and Continued Performance.  Following termination of my employment
and as a condition to the continued extension of the exercise period of the
Option pursuant to clause (c) above, I will (i) within forty-five (45) days
deliver to the Company a release as would have otherwise been required of me
under the terms of Paragraph 7(d) of the Existing Agreement under the
circumstance described there (which release will also include a
non-disparagement obligation on my part), and (ii) at all times comply with any
other obligation I may have to the Company (including the Non-Compete Covenant
and other covenants set forth in Paragraph 5 of the Existing Agreement). In the
event any such obligation is breached, including breach of the No Sale Covenant
or failure to deliver the release, the right to exercise the Option beyond the
period otherwise provided for under its terms (and without regard to clause (c)
above) will immediately cease.

(f) Change in Control.  If, after the Transition Election but prior to March 31,
2020, in connection with or following a merger, sale of all or substantially all
assets, or other business combination or extraordinary transaction involving the
Company (a “Change in Control”), my employment is terminated without Cause by
the Company or its direct or indirect successor in the Change in Control, or by
me for Good Reason, such termination will not constitute a termination without
Cause or for Good Reason for purposes of Paragraph 7(a) of the Existing
Agreement, nor entitle me to payment of the Severance Amount or other payments
or benefits

thereunder, provided that the Company (or such successor), makes payment to me,
either when due or sooner, of an amount no less than I would have otherwise
earned (including Base Salary, any pro-rata bonus, and amounts equivalent to the
cost of any lost benefits), and provides, insofar as not otherwise already
vested in accordance with their respective terms, for the vesting of my then
outstanding PSUs and RSUs, and for the vesting and (in accordance with clause
(c) above and subject to my compliance with clause (e) above) continued
extension of my Option (or of any replacement option delivered in the Change in
Control), in each case as though my employment had not so terminated but had
instead continued until March 31, 2020. I agree that the Company may assign the
Existing Agreement as modified by this Letter, and its rights thereunder, to any
such successor provided that the assignee assumes all of the obligations of the
Company thereunder, whereupon the continued extension of the Option (or its
replacement) pursuant to clause (c) above will be conditioned on my continued
compliance with clause (e) above, for the benefit of the assignee.     

9.  Acceptance/ Existing Agreement Ratified, as Modified.  This Letter is
intended to constitute a legal offer to the Company on my part to modify the
Existing Agreement as herein provided (the “Offer”).  However, not until
acceptance by the Company of this Letter (and the Offer), by execution on behalf
of the Company and return to me of a fully executed counterpart of this Letter,
will this Letter or the agreements on my part set forth herein be effective,
legally binding or enforceable.  Upon such acceptance by the Company, this
Letter and the agreements on my part set forth herein, will become effective,
legally binding and enforceable obligations of the parties, and the Existing
Agreement will be modified accordingly, and as so modified, will thereafter be
construed in a manner consistent with this Letter.   

Should you want to discuss these terms further, please let me know. 

Very truly yours,

/s/ Murray Wright

Murray Wright

Acceptance:

TESSCO Technologies Incorporated, a Delaware corporation,
does on and as of this 18th day of August 2019,
accept the Offer and agrees to the terms of the forgoing Letter.

TESSCO Technologies Incorporated

By:/s/ John D. Beletic
Name:John D. Beletic
Title:  Lead Director