ANDREA ELECTRONICS
CORPORATION
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.
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.
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For purposes
hereof, a “change in control” shall be defined
as:
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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
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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
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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
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Approval by the
shareholders of the Company of a complete liquidation or
dissolution of the Company.
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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 event
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