a5830850ex10_2.htm


    EXHIBIT
10.2

    


    


    ANDREA
ELECTRONICS CORPORATION

     

    AMENDED
AND RESTATED

     

    CHANGE
IN CONTROL AGREEMENT

    


    The Board
of Directors (the “Board”) of Andrea Electronics Corporation (the “Company”), a
New York corporation, desires to assure the Company of the continued services of
Corisa L. Guiffre (the “Employee”) for the benefit of the Company, particularly
in the face of a take over attempt.

    


    This
Change in Control agreement (“Agreement”) therefore sets forth those benefits
which the Company will provide to Employee in the event Employee’s employment
with the Company is terminated after a “Change in Control of the Company” (as
defined in paragraph 2) under the circumstances described below.

    


    
      	
              1)  

            	
              TERM

            


    

    


    If a
Change in Control of the Company should occur while Employee is still an
employee of the Company, then this Agreement shall continue in effect from the
date of such Change in Control of the Company for so long as Employee remains an
employee of the Company, but in no event for more than three full calendar years
following a Change in Control of the Company; provided, however, that the
expiration of the term of this Agreement shall not adversely affect Employee’s
rights under this Agreement which have accrued prior to such
expiration.  If no Change in Control of the Company occurs before
Employee’s status as an employee of the Company is terminated, this Agreement
shall expire on such date.

    


    
      	
              2)  

            	
              CHANGE
      IN CONTROL

            


    

     

    
      	
              a)  

            	
              For
      purposes hereof, a “change in control” shall be defined
  as:

            


    

     

    
      	
              i)  

            	
              The
      acquisition by any individual, entity or group (within the meaning of
      Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
      amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within
      the meaning of Rule 13D-3 promulgated under the Exchange Act) of 20% or
      more of either (A) the then outstanding shares of common stock of the
      Company (the “Outstanding Company Common Stock”) or (B) the combined
      voting power of the then outstanding voting securities of the Company
      entitled to vote generally in the election of Directors (the “Outstanding
      Company Voting Securities”); provided, however, that for purposes of this
      subsection (I), the following acquisitions shall not constitute a Change
      of Control:  (i) any acquisition directly from the Company, (ii)
      any acquisition by the Company, (iii) any acquisition by any employee
      benefit plan (or related trust) sponsored or maintained by the Company or
      any corporation controlled by the Company or (iv) any acquisition by any
      corporation pursuant to a transaction which complies with clauses (A), (B)
      and (C) of subsection (iii) below:
or

            


    

     

    
      	
              ii)  

            	
              Individuals
      who, as of the date hereof, constitute the Committee (the “Incumbent
      Board”) cease for any reason to constitute at least a majority of the
      Committee, provided, however, that any individual becoming a director
      subsequent to the date hereof whose election or nomination for election by
      the Company’s shareholders, was approved by a vote of at least a majority
      of the directors then comprising the Incumbent Board shall be considered
      as though such individual were a member of the Incumbent Board, but
      excluding, for this purpose, any such individual whose initial assumption
      of office occurs as a result of an actual or threatened election contest
      with respect to the election or removal of directors or other actual or
      threatened solicitation of proxies or consents by or on behalf of a Person
      other than the Committee; or

            


    

     

    
      	
              iii)  

            	
              Consummation
      of a reorganization, merger, consolidation or sale or other disposition of
      all or substantially all of the assets of the Company (a “Business
      Combination”), in each case, unless, following such Business Combination,
      (A) all or substantially all of the individuals and entities who were the
      beneficial owners, respectively, of the Outstanding Company Common Stock
      and Outstanding Company Voting Securities immediately prior to
      such  Business Combination beneficially own, directly or
      indirectly, more than 60% or, respectively, the then outstanding shares of
      common stock and the combined voting power of the then outstanding voting
      securities entitled to vote generally in the election of directors, as the
      case may be, of the corporation resulting from such Business Combination
      (including, without limitation, a corporation which as a result of such
      transaction owns the Company or all or substantially all of the Company’s
      assets either directly or through one or more subsidiaries) in
      substantially the same proportions as their ownership, immediately prior
      to such Business Combination of the Outstanding Company Common Stock and
      Outstanding Company Voting Securities, as the case may be, (B) no Person
      (excluding any employee benefit plan (or related trust) of the Company or
      such corporation resulting from such Business Combination) beneficially
      owns, directly or indirectly, 20% or more of, respectively, the then
      outstanding shares of common stock of the corporation resulting from such
      Business Combination or the combined voting power of the then outstanding
      voting securities of such corporation except to the extent that such
      ownership existed prior to the Business Combination and (C) at least a
      majority of the members of the board of directors of the corporation
      resulting from such Business Combination were members of the incumbent
      Board at the time of the execution of the initial agreement, or of the
      action of the Committee, providing for such Business Combination;
      or

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              iv)  

            	
              Approval
      by the shareholders of the Company of a complete liquidation or
      dissolution of the Company.

            


    

     

    
      	
              b)  

            	
              For
      purposes hereof, “Termination” shall be defined as: involuntary
      termination or a “voluntary” termination following an event of “Good
      Reason.”  For the purposes of the this Agreement “Good Reason”
      shall mean the occurrence of any of the following events without the
      Employee’s consent::

            


    

     

    
      	
              i)  

            	
              The
      assignment to Employee of duties that constitute a material diminution of
      her authority, duties, or responsibilities (including reporting
      requirements);

            


    

     

    
      	
              ii)  

            	
              A
      material diminution in Employee’s base
salary;

            


    

     

    
      	
              iii)  

            	
              Relocation
      of Employee to a location outside a radius of 15 miles of the Company’s
      main office; or

            


    

     

    
      	
              iv)  

            	
              Any
      other action or inaction by the Company that constitutes a material breach
      of this Agreement;

            


    

     

    provided,
that within ninety (90) days after the initial existence of such event, the
Company shall be given notice and a opportunity, not less than thirty (30) days,
to effectuate a cure for such asserted “Good Reason” by
Employee.  Employee’s resignation hereunder for Good Reason shall not
occur later than one hundred fifty (150) days following the initial date of
which the event Employee claims constitutes Good Reason occurred.

     

    
      	
              c)  

            	
              Upon
      the occurrence of a Change in Control followed by the Employee’s
      Termination of employment, the Company shall pay Employee, or in the event
      of her subsequent death, her beneficiary or beneficiaries, or her estate,
      as the case may be, a sum equal to three (3) times Employee’s average
      annual compensation for the five (5) preceding taxable
      years.  Such annual compensation shall include bonuses, pension
      and profit sharing plan benefits, severance payments, retirement benefits
      and fringe benefits paid or to be paid to the Employee during such
      years.  Such annual compensation shall not include any
      commissions.  Payments will be made, at the Company’s election,
      in a lump sum or paid in equal thirty (30) monthly installments following
      the Employee’s Termination.

            


    

     

    
      	
              d)  

            	
              All
      restrictions on the restricted stock will lapse immediately, incentive
      stock options and stock appreciation rights will become immediately
      exercisable, and Performance Shares/Units will vest immediately, in full,
      in the event of a Change in
Control.

            


    

     

    
      	
              e)  

            	
              Upon
      the occurrence of a Change in Control, Employee will be entitled to
      receive benefits due her under or contributed by the Company on her behalf
      pursuant to any retirement, incentive, profit sharing, bonus, performance,
      disability or other employee benefit plan maintained by the Company on
      Employee’s behalf to the extent such benefits are not otherwise paid to
      Employee under a separate provision of this
  Agreement.

            


    

     

    
      	
              f)  

            	
              Upon
      the occurrence of a Change in Control followed by the Employee’s
      Termination of employment, the Company will cause to be continued life,
      medical, dental and disability coverage substantially identical to the
      coverage maintained by the Company for Employee prior to her severance,
      except to the extent that such coverage may be changed in its application
      for all Company employees on a nondiscriminatory basis.  Such
      coverage and payments shall cease upon the expiration of thirty-six (36)
      full calendar months following the date of
  Termination.

            


    

     

    
      	
              g)  

            	
              Any
      and all payments to be made to the Employee under this Agreement or
      otherwise as a result of a Change in Control (hereinafter referred to as
      “Change in Control Payments”), shall be made free and clear of, and
      without deduction or withholding for or on account of, any tax which may
      be payable under Section 4999 of the Code, now or hereafter imposed,
      levied, withheld or assessed (such amounts being hereinafter referred to
      as the “Excise Taxes”).  If, notwithstanding the foregoing
      provision, any Excise Taxes are withheld from any Change in Control
      Payments made or to be made to Employee, the amounts so payable to the
      Employee shall be increased to the extent necessary to yield to the
      Employee (after payment of any tax which may be payable under Section 4999
      of the Code) the full amount which he is entitled to receive pursuant to
      the terms of this Agreement or otherwise without regard to liability for
      any Excise Taxes and any other Federal, State, FICA/Medicare and
      unemployment taxes thereon.  In the event any Excise Taxes are
      now or hereafter imposed, levied, assessed, paid or collected with respect
      to the Change of Control Payments made or to be made to the Employee,
      Excise Taxes and any other Federal, State and unemployment taxes thereon
      shall be paid by the Company or, if paid by the Employee, shall be
      reimbursed to the Employee by the Company upon its receipt of satisfactory
      evidence of such payment having been
made.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              h)  

            	
              Section
      409A of the Code.

            


    

     

    
      	
              i)  

            	
              This
      Agreement is intended to comply with the requirements of Section 409A of
      the Internal Revenue Code (the “Code”), and specifically, with the
      “short-term deferral exception” under Treasury Regulation Section
      1.409A-1(b)(4) and the “separation pay exception:” under Treasury
      Regulation Section 1.409(A)-1(b)(9)(iii), and shall in all respects be
      administered in accordance with Section 409A of the Code.  If
      any payment or benefit hereunder cannot be provided or made at the time
      specified herein without incurring sanctions on Employee under Section
      409A of the Code, then such payment or benefit shall be provided in full
      at the earliest time thereafter when such sanctions will not be
      imposed.  For purposes of Section 409A of the Code, all payments
      to be made upon termination of employment under this Agreement may only be
      made upon a “separation from service” (within the meaning of such term
      under Section 409A of the Code), each payment made under this Agreement
      shall be treated as a separate payment, the right to a series of
      installment payments under this Agreement (if any) is to be treated as a
      right to a series of separate payments, and if a payment is not made by
      the designated payment date under this Agreement, the payment shall be
      made by December 31 of the calendar year in which the designated date
      occurs.  To the extent that any payment provided for hereunder
      would be subject to additional tax under Section 409A of the Code, or
      would cause the administration of this Agreement to fail to satisfy the
      requirements of Section 409A of the Code, such provision shall be deemed
      null and void to the extent permitted by applicable law, and any such
      amount shall be payable in accordance with (ii) below.  In no
      event shall Employee, directly or indirectly, designate the calendar year
      of payment.

            


    

     

    
      	
              ii)  

            	
              If
      when separation from service occurs Employee is a “specified employee”
      within the meaning of Section 409A of the Code and if the cash severance
      payment under this Agreement would be considered deferred compensation
      under Section 409A of the Code, and, finally, if an exemption from the
      6-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not
      available, the Company will make the severance payment under the Agreement
      to Employee in a single lump sum without interest of the first payroll
      date that occurs after the date that is six (6) months after the date on
      which Employee separate from
service.

            


    

     

    
      	
              iii)  

            	
              If
      (x) under the terms of the applicable policy or policies for the insurance
      or other benefits specified in this Agreement it is not possible to
      continue coverage for Employee and her dependents, or (y) when a
      separation from service occurs Employee is a “specified employee” within
      the meaning of Section 409A of the Code, and if any of the continued
      insurance coverage or other benefits specified in this Agreement would be
      considered deferred compensation under Section 409A of the Code, and,
      finally, if an exemption from the six-month delay requirement of Section
      409A(a)(2)(B)(i) of the Code is not available for that particular
      insurance or other benefit, the Company shall pay to Employee in a single
      lump sum an amount in cash equal to the present value of the Company’s
      projected cost to maintain that particular insurance benefit (and
      associated income tax gross-up benefit, if applicable) had Employee’s
      employment not terminated, assuming continued coverage for 36
      months.  The lump-sum payment shall be made thirty (30) days
      after employment termination or, if provision (ii) of this section
      applies, on the first payroll date that occurs after the date that is six
      (6) months after the date on which Employee separates from
      service.

            


    

     

    
      	
              iv)  

            	
              Reference
      in this Agreement to Section 409A of the Code include rules, regulations,
      and guidance of general application issued by the Department of the
      Treasury under Internal Revenue Section 409A.Any payments are to intended
      to comply with Section 409A of the Code.  Section 409A of the
      Code....

            


    

    


    SIGNATURES

    


    IN WITNESS WHEREOF, Andrea Electronics
Corporation has caused this Agreement to be executed and its seal to be affixed
hereunto by its duly authorized officer and its directors, and Employee has
signed this Agreement, on the 11th day of
November, 2008.

    


    


    ANDREA
ELECTRONICS CORPORATION

    By:    /s/ Jonathan
Spaet_________________________

    Jonathan
Spaet

    Chairman
of the Compensation Committee of the Board of Directors, Andrea Electronics
Corporation

    


    EMPLOYEE

    /s/ Corisa L.
Guiffre________________________

    Corisa L.
Guiffre

    Vice
President, Chief Financial Officer and Assistant Corporate
Secretary