CHANGE OF CONTROL AND SEVERANCE AGREEMENT BETWEEN THE COMPANY AND TERRY MANNING DATED AS OF 4/27/07
EXHIBIT
10.5
CHANGE
OF CONTROL AND SEVERANCE AGREEMENT BETWEEN THE COMPANY AND XXXXX XXXXXXX 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
Xxxxx Xxxxxxx (“Zoom
Executive”).
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 xxxxx xxxxx 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 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]
Agreed:
| /s/ Xxxxx Xxxxxxx | /s/ Xxxxx X. Xxxxxxx | ||
|
Zoom Executive Signature |
Signature - President or Executive VP of Zoom and the Company |
| Xxxxx Xxxxxxx | Xxxxx X. Xxxxxxx | ||
|
Zoom Executive Name (print) |
Name (print) |
||
| 4/27/2007 | 5/7/2007 | ||
| Date | Date |
