Form of Restricted Stock Unit Award under the Tessco Technologies Incorporated 2019 Stock and Incentive Plan

EX-10.3.5 6 tess-20200329ex1035e00dd.htm EX-10.3.5 Ex_1035

Exhibit 10.3.5



THIS RESTRICTED STOCK UNIT AWARD (this “Award”) is made as of _______, 20__ (the “Grant Date”), by and between TESSCO TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Company”), and __________________(“Grantee”).


Grantee has been elected to serve as a member of the Board of Directors of the Company (a “Director”). As an additional incentive to Grantee to further the Company’s growth and success, the Company has agreed to grant and issue to Grantee, pursuant to the Company’s 2019 Stock and Incentive Plan, as amended (the “Plan”), three thousand (3,000) restricted stock units, each of which represents the right to receive one (1) share of the Company’s common stock, par value $0.01 per share, subject to the terms and conditions set forth in this Award. 

This Award is granted pursuant to the Plan, which is incorporated herein by reference for all purposes.  The Grantee acknowledges receipt of a copy of the Plan and agrees to be bound by all of the terms and conditions hereof and thereof, and all applicable laws and regulations.  Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Plan.

NOW, THEREFORE, in consideration of the mutual promises set forth below, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and to evidence the grant of and to set forth the terms and conditions governing the grant and vesting of the Award Shares (as defined below) and the parties’ other agreements related thereto, Grantee and the Company agree as follows:



The Company hereby grants to Grantee as of the Grant Date, and Grantee hereby accepts from the Company, pursuant to the Plan, _____________ (________) restricted stock units, each of which represents the right to receive one (1) share of Common Stock (each such share an “Award Share” and together the “Award Shares”), subject to the terms and conditions set forth in this Award. Award Shares that, as of any given time, have vested and become distributable in accordance with this Award are referred to in this Award as, and as of such time constitute, “Vested Shares.” Award Shares that have not yet vested and become distributable in accordance with this Award as of any given time constitute, as of such time, “Nonvested Shares.” All Vested Shares shall, upon issuance in accordance with this Award, be deemed fully paid and nonassessable.


The following capitalized terms have the meanings set forth below:

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 “Disability” means a physical or mental disease, injury, or infirmity that prevents Grantee (despite the provision of reasonable accommodations as required by law) from performing the substantial duties as a Director for a period of one hundred eighty (180) consecutive days as certified by a physician designated by or acceptable to the Company.

Required Resignation” means Grantee’s resignation as a Director (whether or not such resignation is accepted) pursuant to a provision of the Company’s bylaws or charter that requires an individual who has otherwise been elected to serve as a Director but who did not receive at least a majority of the votes cast for his or her election to tender his or her resignation.

Transfer” means (i) to sell, assign, transfer, convey, pledge, hypothecate, or otherwise encumber or dispose of, either voluntarily or by operation of law (whether by virtue of execution, attachment, or similar process) or (ii) a sale, assignment, transfer, conveyance, pledge, hypothecation, or other encumbrance or disposition, either voluntarily or by operation of law (whether by virtue of execution, attachment, or similar process).


3.1. In General. As of the Grant Date, all of the Award Shares shall be Nonvested Shares. Except as otherwise provided in Section 3.2 with respect to accelerated vesting and in Section 3.3 with respect to forfeiture of Nonvested Shares, twenty five percent (25%) of the original number of Award Shares (or such number of Award Shares as shall take into account any adjustment made pursuant to SECTION 4) shall vest on each of the following dates: _________, 20__,  ________, 20__, ___________. 20__, and ________, 20___ (each such date a “Vesting Date”) if the Grantee continues to be a Director on such Vesting Date. For the avoidance of doubt, the Award Shares shall vest pursuant to the foregoing sentence on an annual basis rather than on a daily basis.


3.2. Accelerated Vesting. Notwithstanding any other provision of this Award, except as expressly provided in Section 3.3, any and all Nonvested Shares shall vest immediately:


(a) If Grantee ceases to be a Director as a result of:

(i) Grantee’s Required Resignation;

(ii) Grantee’s resignation as a Director on account of Disability;

(iii) Grantee’s failure to be nominated or elected for an additional term; or

(iv) The death of Grantee.

(b) Effective upon the occurrence of a Change in Control.

3.3. Forfeiture of Rights to Nonvested Shares. If Grantee (i) voluntarily resigns as a Director before the end of Grantee’s then-current term (other than on account of Disability) or (ii) is nominated but declines a nomination for a subsequent term, any and all rights to receive Nonvested Shares shall immediately be forfeited without compensation to Grantee, and this Award shall terminate and be of no further force and effect. A Required Resignation shall not be treated as a voluntary resignation for purposes of this Section.


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In the event of any change in the number of outstanding shares of Common Stock resulting from a subdivision or consolidation of shares, whether through reorganization, recapitalization, share split, reverse share split, share distribution, or combination of shares or the payment of a share dividend, the number of then-unissued Award Shares, whether Vested Shares or Nonvested Shares, shall be adjusted pursuant to the Plan so as to be treated in such transaction in a manner that is substantially identical to the manner in which the then-outstanding shares of Common Stock are treated.


Grantee may not Transfer any right, whether fixed or contingent, to receive Nonvested Shares, and any purported Transfer of Nonvested Shares or any right to receive Nonvested Shares shall be ineffective. From and after the date of issuance thereof, Grantee shall have the full and unencumbered ownership of and right to Transfer and otherwise deal with all Vested Shares as Grantee deems fit, subject only to such restrictions as may be imposed by federal and state securities laws.


Grantee shall not have or be entitled to exercise any of the rights of a stockholder with respect to any Award Shares, whether Vested Shares or Nonvested Shares, until such time (if ever), and only insofar, as such Award Shares vest in accordance with SECTION 3 and are issued and distributed to Grantee, including any right to vote such Award Shares or to receive dividends or other distributions payable with respect to such Award Shares.


No certificates evidencing Nonvested Shares shall be issued in Grantee’s name. As and when Nonvested Shares from time to time vest, Grantee shall be entitled to receive possession of certificates evidencing such Vested Shares (or, if such shares are not evidenced by certificates, to have such Vested Shares registered in Grantee’s name), subject only to such restrictions as may be imposed by federal and state securities laws.


8.1. In General. The Company shall have the right to require Grantee to remit to the Company, or to withhold from other amounts payable to Grantee (as compensation, fees, or otherwise), an amount sufficient to satisfy any and all federal, state, and local withholding tax requirements when such amounts become due, if applicable.


8.2. Notice to Grantee. The Company shall endeavor to give written notice to Grantee no later than ten (10) days before the date by which the Company must collect or withhold any taxes relating to this Award of the date any such taxes must be received by the Company and an estimate of the amount of such taxes.


8.3. Surrender of Award Shares to Pay Taxes.  Grantee may elect, by written notice to the Company at least five (5) days before the date on which such taxes must be received by the Company, to surrender a whole number of Vested Shares having a Fair Market Value that

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equals the amount of the taxes that the Company is required to withhold or the Grantee desires to have withheld (in either case as determined by the Company with reference to applicable statutory rates and without regard to circumstances particular to the Grantee). To the extent that the whole number of Vested Shares so surrendered would result in excess withholding the Company shall, in lieu of issuing any fractional shares, apply such excess to the amount withheld (so long as so doing would not cause the amount withheld to exceed the maximum statutory rate) or remit to Grantee in cash the difference between the value of the Award Shares surrendered and the withheld amount as soon as administratively feasible after Grantee surrenders the Award Shares. The Board of Directors, in the exercise of its sole discretion, or the Chief Financial Officer, shall determine the date as of which such valuation occurs.


8.4. “Fair Market Value.” The “Fair Market Value” of Award Shares on any given day shall be as defined in and determined in accordance with the Plan.


8.5. Section 409A. Any payments to Grantee pursuant to this Agreement are intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, as short-term deferrals pursuant to Treasury Regulation §1.409A-1(b)(4), and for this purpose each payment shall constitute a “separately identified” amount within the meaning of Treasury Regulation §1.409A-1.



9.1. Notices. Any notice or communication required or permitted by this Award will be deemed to be received by the party to whom the notice or communication is addressed if delivered in person or by commercial courier service or sent by first class mail, postage prepaid: if to the Company, addressed to the attention of the Company’s Chief Financial Officer at the Company’s principal office in the State of Maryland and, if to Grantee, addressed to Grantee to the address set forth below Grantee’s signature to this Award or at the address reflected in the Company’s records; or in either case to such other address as either party notifies the other in accordance with this Section.


9.2. Entire Agreement. This Award contains the entire agreement between the parties, and supersedes any prior agreements or understandings between them, relating to the subject of this Award.


9.3. Governing Law. The validity, construction and effect of this Award, and any rules and regulations relating thereto, shall be determined in accordance with federal law and the laws of the State of Delaware (without regard to any provision that would result in the application of the laws of any other state or jurisdiction).


9.4. Severability. If any provision of this Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the determination of the Board of Directors, materially altering the intent of this Award, such provision shall be stricken as to such jurisdiction and the remainder of this Award shall remain in full force and effect.


9.5. Amendment of Award. This Award may not be amended except in writing and executed by both parties hereto, and no course of conduct by either party or between the parties

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will be deemed to amend the terms and conditions of this Award, unless such amendment is reduced to writing and executed by both parties. This Award is made under the Plan and shall be construed consistently with the Plan. In the event of any clear conflict between the provisions of the Plan and this Option, the provisions of the Plan (including any such provisions that defer to an applicable award, such as this one) shall control.


9.6. Waiver. The waiver of any breach of any provision of this Award by either of the parties shall not constitute or operate as a waiver of any other breach of any provision of this Award, and any failure to enforce any provision of this Award in any particular instance shall not operate as a waiver of any existing or future rights, duties, or obligations arising out of this Award.


9.7. No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to this Award, and the Board of Directors shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.


9.8. Headings. The headings and subheadings in this Award are for convenience of reference only and shall not be given any effect in the interpretation of this Award.


9.9. Counterparts. This Award may be executed in two or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. A counterpart signature page delivered by fax or other electronic means shall be effective to the same extent as an original thereof.


IN WITNESS WHEREOF, the parties have caused this Restricted Stock Award to be executed as of the Grant Date.


President and Chief Executive Officer




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