Document:

Exhibit 10.3 Employee Stock Option Plan Agreement

    Exhibit 10.3
 

     

    THE
      STEAK N SHAKE COMPANY

    Form
      of Incentive Stock Option Agreement

    

    THIS
      AGREEMENT, made this ____
      day of
      _______, 20__ by and between THE STEAK N SHAKE COMPANY, an Indiana corporation
      with its principal office at 36 South Pennsylvania Street, Indianapolis, Indiana
      (hereinafter called "Company") and _______________________
      (hereinafter called "Grantee") pursuant to the terms, conditions and limitations
      contained in the Company's Employee Stock Option Plan (hereinafter called the
      "Plan").

     

    WITNESSETH
      THAT:

    WHEREAS,
      in the interests of affording an incentive to the Grantee to give his/her best
      efforts to the Company as a key employee, the Company wishes to provide that
      the
      Grantee shall have an option to buy shares of the common stock ("Common Stock")
      of the Company:

    

    NOW,
      THEREFORE, it is hereby mutually agreed as follows:

    

    
      	
              1.

            	
              Grant
                of Options.
                The Company hereby grants to the Grantee the right and option to
                purchase,
                on the terms and conditions hereinafter set forth, all or any part
                of an
                aggregate of ______
                shares (hereinafter called "Subject Shares") of the presently authorized,
                but unissued, or treasury Common Stock of the Company at a purchase
                price
                of $_____per share, exercisable in whole or in part from time to
                time
                subject to the limitation that no option may be exercised with respect
                to
                fewer than one hundred (100) shares unless there are fewer than one
                hundred (100) shares then subject to purchase hereunder, in which
                event
                any exercise must be as to all such shares and subject to the further
                limitation that the options represented by this Agreement shall be
                exercisable only at such times and in such amounts as are set forth
                on
                Schedule I, attached hereto and made a part hereof. The option shall
                expire as to all Subject Shares on the tenth
                anniversary date of this Agreement if not exercised on or before
                such
                date.

            

    

    

    
      	
              2.

            	
              Regulatory
                Compliance.
                This option may not be exercised until all applicable federal and
                state
                securities requirements pertaining to the offer and sale of the securities
                issued pursuant to the Plan have been met and the Company has been
                advised
                by counsel that all applicable requirements have been
                met.

            

    

    

    
      	
              3.

            	
              Exercise
                of Options.
                Subject to the limitation specified in Section 2 and Schedule I hereof,
                the Grantee may from time to time exercise this option by delivering
                a
                written notice of exercise and subscription agreement to the Secretary
                of
                the Company specifying the number of whole shares to be purchased,
                accompanied by payment in cash, by certified check, or bank cashier's
                check, of the aggregate option price of such number of shares; provided,
                however, that the Grantee may, with the approval of the Company's
                Compensation Committee (the "Committee"), make payment in the form
                of
                delivery to the Company of Common Stock of the Company owned by the
                Grantee, the fair market value of which equals the aggregate option
                price,
                or by payment partially in cash and partially in Common Stock of
                the
                aggregate option price. For this purpose, any shares so tendered
                by the
                Grantee shall be deemed to have a fair market value equal to the
                average
                of the closing sales price for the shares on the New York Stock Exchange
                for the five trading days preceding the date of the exercise of the
                option. Only the Grantee may exercise the option during the lifetime
                of
                the Grantee. No fractional shares may be purchased at any time
                hereunder.

            

    

    

    
      	
              4.

            	
              Termination
                of Employment.
                If the Grantee ceases to be an employee of the Company or any of
                its
                subsidiaries for any reason other than retirement, permanent and
                total
                disability, or death, this option shall forthwith terminate. If the
                Grantee's employment by the Company or any of its subsidiaries is
                terminated by reason of retirement (which means such termination
                of
                employment as shall entitle the Grantee to benefits under the Company's
                401k Plan or any successor plan of the Company or one of its
                subsidiaries), the Grantee may exercise this option in whole or in
                part at
                any time within three months after such retirement, but not later
                than the
                date upon which this option would otherwise expire. If the Grantee
                ceases
                to be an employee of the Company or any of its subsidiaries because
                of
                permanent or total disability, the Grantee may exercise this option
                in
                whole or in part at any time within one year after such termination
                of
                employment by reason of such disability, but not later than the date
                upon
                which this option would otherwise expire. The foregoing exercise
                provisions apply whether or not this option was otherwise vested
                at the
                date of the Grantee's retirement or termination of employment because
                of
                permanent and total disability.

            

    

    

    
      	
              5.

            	
              Death
                of Grantee.
                If the Grantee dies while employed by the Company or any of its
                subsidiaries, within three months after the termination of his employment
                because of retirement, or within one year after the termination of
                his
                employment because of permanent or total disability, this option
                may be
                exercised in whole or in part by the executor, administrator, or
                estate
                beneficiaries of the Grantee at any time after the date of the Grantee's
                death but not later than the date upon which this option would otherwise
                expire. The foregoing exercise provisions apply whether or not this
                option
                was otherwise vested at the date of the Grantee's
                death.

            

    

    

    
      	
              6.

            	
              Delivery
                of Certificates.
                Upon the effective exercise of the option, or any part thereof,
                certificates representing the shares so purchased, marked fully paid
                and
                non-assessable shall be delivered to the person who exercised the
                option
                as soon as the Company is reasonably able to do so. Until certificates
                representing such shares shall have been issued and delivered, the
                Grantee
                shall not have any of the rights or privileges of a shareholder of
                the
                Company in respect of any of such
                shares.

            

    

    

    
      	
              7.

            	
              Stock
                Splits or Dividends.
                In the event that prior to the delivery by the Company of all the
                Subject
                Shares, there shall be an increase or reduction in the number of
                shares of
                Common Stock of the Company issued and outstanding by reason of any
                subdivision or consolidation of the Common Stock or any other capital
                adjustment, the number of shares then subject to this option shall
                be
                increased or decreased as provided in the
                Plan.

            

    

    

    
      	
              8.

            	
              No
                Assignment.
                The option and the rights and privileges conferred by this Option
                Agreement shall not be assigned or transferred by the Grantee in
                any
                manner except by will or under the laws of descent and distribution.
                In
                the event of any attempted assignment or transfer in violation of
                this
                paragraph, the option, rights and privileges conferred by this Stock
                Option Agreement shall become null and
                void.

            

    

     

    
      	
              9.

            	
              
                Employment
                  at Will.
                  Nothing herein contained shall be deemed to create any limitation
                  or
                  restriction upon such rights as the Company would otherwise have
                  to
                  terminate a person as an employee of the
                  Company.

              

            

    

     

    
      	
              10.

            	
              Notices.
                Any notices to be given or served under the terms of this Option
                Agreement
                shall be addressed to the Secretary of the Company at 36 South
                Pennsylvania Street, Indianapolis, Indiana, 46204, and to the Grantee
                at
                the address set forth on page one of this Stock Option Agreement,
                or such
                other address or addresses as either party may hereafter designate
                in
                writing to the other. Any such notice shall be deemed to have been
                duly
                given or served, if and when enclosed in a properly sealed envelope
                addressed as aforesaid, postage prepaid, and deposited in the United
                States mail or set via reputable overnight
                carrier.

            

    

    

    
      
        	
                11.

              	
                Interpretation
                  of Agreement and Plan.
                  The interpretation by the Committee of any provisions of the Plan
                  or of
                  this Stock Option Agreement shall be final and binding on the Grantee
                  unless otherwise determined by the Company's Board of
                  Directors.

              

      

    
      	
              12.

            	
              Controlling
                Document.
                This option is subject to all the terms, provisions and conditions
                of the
                Plan, which is incorporated herein by reference and to such regulations
                as
                may from time to time be adopted by the Committee. A copy of the
                Plan will
                be furnished to the Grantee upon request and is available for free
                on the
                Company’s web site, www.steaknshake.com
                in
                the Company’s 2006 Proxy Statement. In the event of any conflict between
                the provisions of the Plan and the provisions of this Stock Option
                Agreement, the terms, conditions and provisions of the Plan shall
                control,
                and this Stock Option Agreement shall be deemed to be modified
                accordingly.

            

    

    

    
      	
              13.

            	
              Incentive
                Stock Options.
                This Stock Option Agreement is intended to grant an option which
                meets the
                requirements of stock options as defined in Section 422A of the Internal
                Revenue Code. Subject to and upon the terms, conditions and provisions
                of
                the Plan, each and every provision of this Stock Option Agreement
                shall be
                administered, construed and interpreted so that the option granted
                herein
                shall qualify as an incentive stock
                option.

            

    

    

    
      	
              14.

            	
              Governing
                Law.
                This Stock Option Agreement shall be governed by the laws of the
                State of
                Indiana. Any suit filed regarding this Agreement shall be venued
                only in
                the Federal District Court for the Southern District of Indiana,
                Indianapolis, Indiana. 

            

    

    

     

     

     

     

    IN
      WITNESS WHEREOF, the Company and the Grantee have signed this Stock Option
      Agreement as of the day and year first above written.

    

    "COMPANY"

    

    By:
      ___________________________________

    ATTEST:

    

    _________________________________            "GRANTEE"

    

    By:
      ___________________________________CHANGE OF CONTROL AGREEMENT - BARRY H. BLACK, CFO

    Exhibit
      10.1

    CHANGE
      OF CONTROL AGREEMENT

     

    THIS
      CHANGE OF CONTROL AGREEMENT (the "Agreement") is entered into as of
      January
      23, 2006, by and between Technology Research Corporation, a Florida corporation
      (the "Company"), and Barry H. Black ("Executive").

     

    

    BACKGROUND
      INFORMATION

     

    On
      January 3, 2006, the Company issued a press release announcing that Executive
      was appointed as Vice President of Finance and Chief Executive Officer of the
      Company and further noted that the Company and Executive would formalize a
      change of control agreement by January 31, 2006. Because the Company and
      Executive have agreed that should a change in control or ownership in the
      Company occur, or a change in the Chief Executive Officer of the Company occur
      and the Executive’s employment is terminated for other than Cause or his
      voluntary resignation, Executive shall be entitled to a severance payment equal
      to one year of salary, but all employee benefits will terminate on the
      Executive’s termination date. Because the Company recognizes that the
uncertainty
      which might arise in the context of a change in control of the
      Company
      or
      change in the position of the Chief Executive Officer of the Company could
      result in the distraction or departure of Executive to the detriment of the
      Company and its shareholders, the
      Company and the Executive desire to set forth in this Agreement
      the
      terms and conditions that will trigger a severance payment upon
      a
      change in the position of Chief Executive Officer or actual change
      of
      control of the Company.

    

    In
      consideration of the mutual promises herein contained, and
      for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and the Executive agree as
      follows:

    

    OPERATIVE
      PROVISIONS

    1.  DEFINITIONS

     

    1.1  "Term"
      shall
      mean the period commencing with the effective date of this Agreement and
      continuing until the Executive’s employment with the Company is
      terminated.

     

    1.2  "Cause"
      shall
      mean a termination of Executive's employment which is a result of
      Executive’s:

     

    
      	(a)  	
              felony
                conviction;

            

    

     

    
      	(b)  	
              willful
                disclosure of material trade secrets or other material confidential
                information related to the business of the Company and its subsidiaries;
                or

            

    

     

    
      	(c)  	
              willful
                and continued failure to substantially perform his duties with the
                Company
                (other than any such failure resulting from his incapacity due to
                physical
                or mental illness or any such actual or anticipated failure resulting
                from
                a resignation by Executive for Good Reason) after a written demand
                for
                performance is delivered to Executive by the Company, which demand
                specifically identifies the manner in which the Company believes
                that
                Executive has not substantially performed Executive's duties, and
                which
                performance is not substantially corrected by Executive within a
                period of
                time to be specified by the Company's Board of Directors (the “Board").
                For purposes of the previous sentence, no act or failure to act on
                Executive's part shall be deemed "willful" unless done, or omitted
                , by
                Executive in bad faith or without a good faith, reasonable belief
                that
                Executive's action or omission was in the best interest of the
                Company.

            

    

     

    1.3  "Change
      of Control"
      means
      any of the following:

     

    (i)
      the
      acquisition by any entity, person, or group of beneficial ownership, as that
      term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, of
      more
      than 35% of the voting power of the Company’s securities;

     

    (ii)
      the
      Company's shareholders approve (A) a merger of the Company with or into any
      other corporation of which the Company is not the surviving corporation or
      in
      which the Company survives as a subsidiary of another corporation, (B) a
      consolidation of the Company with any other corporation, or (C) the sale or
      disposition of all or substantially all of the Company's assets or the adoption
      of a plan of complete liquidation;

     

    (iii)
      the
      individuals who, as of the date of this Agreement, (x) constitute the Board
      (the
      "Current Directors"), (y) are individuals nominated to the Board by the Current
      Directors, or are individuals nominated by the Company for election at an annual
      meeting of the Company's stockholders, cease for any reason to constitute at
      least a majority of the Board; or

     

    (iv)
      a
      change in the Company’s Chief Executive Officer occurs, thereby resulting in the
      resignation, retirement or appointment of a successor to the Company’s current
      Chief Executive Officer.

     

    1.4  "Change
      of Control Date"
      shall
      mean the earliest of:

     

    (i) the
      date
      on which the Change of Control occurs;

     

    (ii) the
      date
      on which the Company executes an agreement, the consummation of which would
      result in the occurrence of a Change in Control; and

     

    (iii) the
      date
      the Board approves a transaction or series of transactions, the consummation
      of
      which would result in a Change in Control.

     

    1.5  "Code"
      means
      the Internal Revenue Code of 1986, as may be amended.

     

    1.6  "Disability"
      means
      the absence of the Executive from the Executive's duties with the Company on
      a
      full-time basis for 180 consecutive business days as a result of incapacity
      due
      to mental or physical illness that is determined
      to be total and permanent by a physician selected by the Company.

     

    1.7  “Good
      Reason”
shall
      mean a resignation of Executive’s employment during the eighteen month period
      commencing on the Change of Control Date as a result of any of the
      following:

     

    
      	(a)  	
              a
                meaningful and detrimental alteration in Executive’s position, or the
                nature or status of Executive’s responsibilities or in Executive’s
                reporting responsibilities from those in effect immediately prior
                to the
                Change in Control;

            

    

     

    
      	(b)  	
              a
                reduction by the Company in Executive’s annual base salary as in effect
                immediately prior to the Change in Control Date or as the same may
                be
                increased from time to time thereafter or a reduction in Executive’s
                target annual bonus below the target in effect for Executive on the
                Change
                in Control Date; or

            

    

     

    
      	(c)  	
              the
                relocation of the office of the Company where Executive is employed
                immediately prior to the Change in Control Date to a location which,
                in
                Executive’s good faith assessment, would cause a hardship in commuting
                from Executive’s principal
                residence.

            

    

     

    1.8  "Involuntary
      Termination"
      shall
      mean:

     

    
      	(a)  	
              the
                termination of Executive's employment by the Company during the Term
                other
                than for Cause, death or Disability;
                or

            

    

     

    
      	(b)  	
              Executive’s
                resignation of employment with the Company during the Term for Good
                Reason.

            

    

     

    2.  CHANGE
      OF CONTROL PAYMENT

     

    2.1  If,
      during the Term of this Agreement, a Change of Control occurs and Executive’s
      employment is Involuntarily Terminated, then the Executive shall be entitled
      to
      a severance payment of twelve (12) months of the Executive's base salary,
      payable in a lump sum payment within thirty days of Executive’s Involuntary
      Termination.

     

    2.2  All
      Company provided benefits shall terminate at midnight on Executive’s last day of
      employment with the Company; provided, that Executive shall be eligible to
      purchase continued health insurance COBRA benefits, as provided under the
      Consolidated Omnibus Budget Reconciliation Act of 1986, at his
      expense.

     

    3.  NO
      ASSIGNMENT

     

    This
      Agreement may not be assigned by either party without the written consent of
      the
      other but shall inure to the benefit of and be enforceable by the Executive's
      personal or legal representatives, executors, administrators, successors, heirs,
      and distributees, devisees and legatees.

    

    4.  GENERAL
      PROVISIONS

     

    4.1  Notices.

     

    All
      notices or other communications required or permitted to be given pursuant
      to
      this Agreement shall be in writing and shall be made by: (a) certified mail,
      return receipt requested; (b) Federal Express, Express Mail, or similar
      overnight delivery or courier service; or (c) delivery (in person or by
      facsimile, E-Mail or similar telecommunication transmission) to the party to
      whom it is to be given, to the address appearing elsewhere in this Agreement
      or
      to such other address as any party hereto may have designated by written notice
      forwarded to the other party in accordance with the provisions of this Section
      4.1. Any notice or other communication given by certified mail shall be deemed
      given at the time of certification thereof, except for a notice changing a
      party’s address which shall be deemed given at the time of receipt thereof. Any
      notice given by other means permitted by this Section 4.1 shall be deemed given
      at the time of receipt thereof.

     

    4.2  Binding
      Agreements; Assignability.

     

    Each
      of
      the provisions and agreements herein contained shall be binding upon and enure
      to the benefit of the respective parties hereto, as well as their personal
      representatives, heirs, devisees, successors and assigns.

     

    4.3  Entire
      Agreement.

     

    This
      Agreement, and any other document referenced herein, constitute the entire
      understanding of the parties hereto with respect to the subject matter hereof,
      and no amendment, modification or alteration of the terms hereof shall be
      binding unless the same be in writing, dated subsequent to the date hereof
      and
      duly approved and executed by each of the parties hereto.

     

    4.4  Severability.

     

    Every
      provision of this Agreement is intended to be severable. If any term or
      provision hereof is illegal or invalid for any reason whatever, such illegality
      or invalidity shall not affect the validity of the remainder of this
      Agreement.

     

    4.5  Headings.

     

    The
      headings of this Agreement are inserted for convenience and identification
      only,
      and are in no way intended to describe, interpret, define or limit the scope,
      extent or intent hereof.

     

    4.6  Application
      of Florida Law.

     

    This
      Agreement, and the application or interpretation thereof, shall be governed
      exclusively by its terms and by the laws of the State of Florida. Venue for
      all
      purposes shall be deemed to lie within Pinellas County, Florida.

     

    4.7  Counterparts.

     

    This
      Agreement and any of its Exhibits may be executed in any number of counterparts,
      by means of multiple signature pages each containing less than all required
      signatures, and by means of facsimile signatures, each of which shall be deemed
      an original, but all of which together shall constitute one and the same
      document.

     

    4.8  Jurisdiction.

     

    The
      parties agree that, irrespective of any wording that might be construed to
      be in
      conflict with this paragraph, this agreement is one for performance in Florida.
      The parties to this agreement agree that they waive any objection,
      constitutional, statutory or otherwise, to a Florida court’s taking jurisdiction
      of any dispute between them. By entering into this agreement, the parties,
      and
      each of them understand that they might be called upon to answer a claim
      asserted in a Florida court.

     

    IN
      WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant
      to the authorization from its Board of Directors, the Company has caused
      these presents to be executed in its name on its behalf, all as of
      the
      day and
      year first above written.

     

    

    TECHNOLOGY
      RESEARCH CORPORATION

    

    

    By: 
      /s/ Robert S. Wiggins    

    Name:
      Robert S. Wiggins

    Title:
      Chief Executive Officer

    

    

    EXECUTIVE

    

    

                                    By: 
/s/
      Barry H.. Black        

           
      Barry H. Black

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