CHANGE OF CONTROL AGREEMENT
Exhibit
10.1
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 Xxxxx X. Xxxxx ("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/ Xxxxxx X. Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
Chief Executive Officer
EXECUTIVE
By:
/s/
Xxxxx X.. Black
Xxxxx X. Xxxxx
